HK/China Healthcare Analyst (ex-Fosun Pharma)

Xinyao (Criss) Wang

Equity Capital Markets

BenQ BM Holding Cayman Corp. / Equity Capital Markets

<ul>
<li>The business model for general hospitals is not good (e.g. heavy assets, challenging operations, low profits, difficult to replicate and expand nationwide), which has never been a profitable business.</li>
<li>BenQ’s profitability is not attractive if compared with for-profit specialized hospitals. The “benefit chain” of hospitals is actually very complicated, which makes it challenging to attract/retain good medical talents.</li>
<li>BenQ’s overall revenue growth could slow down in the future. Its profit margin is also not attractive. It would be difficult for BenQ to achieve a high valuation after IPO. </li>
</ul>


The business model for general hospitals is not good (e.g. heavy assets, challenging operations, low profits, difficult to replicate and expand nationwide), which has never been a profitable business.
BenQ’s profitability is not attractive if compared with for-profit specialized hospitals. The “benefit chain” of hospitals is actually very complicated, which makes it challenging to attract/retain good medical talents.
BenQ’s overall revenue growth could slow down in the future. Its profit margin is also not attractive. It would be difficult for BenQ to achieve a high valuation after IPO. 


Pre-IPO BenQ BM Holding - Profitability Will Be Disappointing Due To "Flaws" In Business Model

Pan-Asia Index Rebalances/ Events/ Delta One, Periscope Analytics

Brian Freitas

Pan-Asia Index Rebalances/ Events/ Delta One

Periscope Analytics

Periscope Analytics focuses on event-driven trades across Asia Pacific and provides comprehensive, timely and systematic coverage of index changes to major Asia Pacific indices in a structured manner.

The analysis includes forecasted inclusions and exclusions to all major Asian indices that have significant amount of tracking assets, including estimates of passive buy/sell flow on the stocks. The service also provides commentary and impact of market consultations, ground rule changes, and other events (IPOs, spin-offs, M&A) that could lead to index changes and passive flow.

Periscope Analytics works with multi-strategy hedge funds, proprietary trading firms, stat arb trading groups and long-only investors that invest and trade in the Asia Pacific region with the data being used to trade index rebalances, avoid pre-positioning and passive flow, and to time entry into and exit from stocks.

Event-Driven Trades Across Asia Pacific

Event-Driven

<ul>
<li>At 82 index constituents currently, we expect the index committee to progress towards reaching 100 constituents. We are (highly) unlikely to reach the target this calendar year though.</li>
<li>We highlight nine stocks that have a decent chance at being added to the index over the next couple of rebalances. All companies are profitable and meet inclusion requirements.</li>
<li>The market consultation on proposed changes to the Hang Seng Industry Classification System (HSICS) could lead to more inclusions from the Information Technology sector from the June rebalance.</li>
</ul>


At 82 index constituents currently, we expect the index committee to progress towards reaching 100 constituents. We are (highly) unlikely to reach the target this calendar year though.
We highlight nine stocks that have a decent chance at being added to the index over the next couple of rebalances. All companies are profitable and meet inclusion requirements.
The market consultation on proposed changes to the Hang Seng Industry Classification System (HSICS) could lead to more inclusions from the Information Technology sector from the June rebalance.


Hang Seng Index (HSI) Rebalance Preview: Inclusion Candidates for March

<ul>
<li>The review period for the next rebalance of a global index kicks off this week and that is where a lot of eyes will be focused.</li>
<li>There were big inflows to ETFs tracking the <a href="https://www.smartkarma.com/entities/shanghai-shenzhen-csi-300-inde" target="_blank" data-smartkarma-citation="entities:22906:1" rel="noopener">Shanghai Shenzhen CSI 300 Inde (SHSZ300 INDEX)</a> while there were redemptions from the <a href="https://www.smartkarma.com/entities/hang-seng-china-enterprises-index-etf" target="_blank" data-smartkarma-citation="entities:25:1" rel="noopener">Hang Seng H Share Index ETF (2828 HK)</a>. </li>
<li>Inflows continue for <a href="https://www.smartkarma.com/entities/ishares-msci-emerging-markets-223f5da3-7054-4e4f-bc55-b7f0852c2581" target="_blank" data-smartkarma-citation="entities:31998:1" rel="noopener">iShares Emerging Markets ex China (EMXC US)</a> while there were outflows from <a href="https://www.smartkarma.com/entities/ishares-msci-acwi-etf" target="_blank" data-smartkarma-citation="entities:24402:1" rel="noopener">iShares ACWI ETF (ACWI US)</a>. </li>
</ul>


The review period for the next rebalance of a global index kicks off this week and that is where a lot of eyes will be focused.
There were big inflows to ETFs tracking the Shanghai Shenzhen CSI 300 Inde (SHSZ300 INDEX) while there were redemptions from the Hang Seng H Share Index ETF (2828 HK). 
Inflows continue for iShares Emerging Markets ex China (EMXC US) while there were outflows from iShares ACWI ETF (ACWI US). 


Index Rebalance & ETF Flow Recap: HSI, LQ45, FXI, 2823 HK, SENSEX

Concord Healthcare Group / Equity Capital Markets

<ul>
<li>Concord’s financial performance seems improving on the surface,but a closer look reveals that the sudden explosive revenue increase in 2021 was mainly due to an acquisition, with potential risks behind.</li>
<li>We've doubts about Concord's endogenous growth capability. If Concord’s hospitals cannot make a profit, then any further expansion is just a beautiful story and cannot bring expected returns to investors. </li>
<li>Concord conducted a total of four rounds of financing, with a valuation of approximately RMB7.2 billion. However, based on our analysis, its valuation could be lower than peers.</li>
</ul>


Concord’s financial performance seems improving on the surface,but a closer look reveals that the sudden explosive revenue increase in 2021 was mainly due to an acquisition, with potential risks behind.
We've doubts about Concord's endogenous growth capability. If Concord’s hospitals cannot make a profit, then any further expansion is just a beautiful story and cannot bring expected returns to investors. 
Concord conducted a total of four rounds of financing, with a valuation of approximately RMB7.2 billion. However, based on our analysis, its valuation could be lower than peers.


Pre-IPO Concord Healthcare Group (PHIP Updates) - Some Points Worth the Attention

<ul>
<li>The move from 80 index constituents to 100 could take most of next year (and possibly even the year after that) to manage turnover and add profitable companies.</li>
<li>Foreign companies will be eligible for inclusion in the index from the December rebalance. That makes <a href="https://www.smartkarma.com/entities/samsonite-international-sa" target="_blank" data-smartkarma-citation="entities:12790:1" rel="noopener">Samsonite (1910 HK)</a> a high probability inclusion candidate.</li>
<li>We highlight 8 potential inclusions to the index with passive trading impact varying from 1.6-4.3 days of ADV. There are large shorts on some of the stocks.</li>
</ul>


The move from 80 index constituents to 100 could take most of next year (and possibly even the year after that) to manage turnover and add profitable companies.
Foreign companies will be eligible for inclusion in the index from the December rebalance. That makes Samsonite (1910 HK) a high probability inclusion candidate.
We highlight 8 potential inclusions to the index with passive trading impact varying from 1.6-4.3 days of ADV. There are large shorts on some of the stocks.


Hang Seng Index Rebalance Preview: Foreign Companies Eligible from December

China

Hygeia is a China based oncology healthcare group.

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Hygeia Healthcare Group (6078 HK)

Pre-IPO BenQ BM Holding - Profitability Will Be Disappointing Due To "Flaws" In Business Model

General hospitals like BenQ face challenges due to their business model, with low profits and difficulty attracting/retaining talent, leading to...

Xinyao (Criss) Wang

Hang Seng Index (HSI) Rebalance Preview: Inclusion Candidates for March

The announcement of the inclusions to the HSI at the March rebalance will be made post market close today. Most stocks are trading lower which is...

Brian Freitas

Index Rebalance & ETF Flow Recap: HSI, LQ45, FXI, 2823 HK, SENSEX

This recap highlights Insights covering Asian index rebalances (announcements/ forecasts/ IPO Fast Entry/ M&A driven changes). We also highlight...

Brian Freitas

Pre-IPO Concord Healthcare Group (PHIP Updates) - Some Points Worth the Attention

An acquisition stimulated the growth of Concord and brought its revenue scale to a new level. But concerns on endogenous growth capability and...

Xinyao (Criss) Wang

Hang Seng Index Rebalance Preview: Foreign Companies Eligible from December

There are 8 trading days to the announcement of the December rebalance results. With foreign companies newly eligible, Samsonite is a high...

Brian Freitas

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

Pre-IPO BenQ BM Holding - Profitability Will Be Disappointing Due To "Flaws" In Business Model

​General hospitals like BenQ face challenges due to their business model, with low profits and difficulty attracting/retaining talent, leading to...

Xinyao (Criss) Wang

Hang Seng Index (HSI) Rebalance Preview: Inclusion Candidates for March

The announcement of the inclusions to the HSI at the March rebalance will be made post market close today. Most stocks are trading lower which is...

Brian Freitas

Index Rebalance & ETF Flow Recap: HSI, LQ45, FXI, 2823 HK, SENSEX

This recap highlights Insights covering Asian index rebalances (announcements/ forecasts/ IPO Fast Entry/ M&A driven changes). We also highlight...

Brian Freitas

Pre-IPO Concord Healthcare Group (PHIP Updates) - Some Points Worth the Attention

An acquisition stimulated the growth of Concord and brought its revenue scale to a new level. But concerns on endogenous growth capability and...

Xinyao (Criss) Wang

Hang Seng Index Rebalance Preview: Foreign Companies Eligible from December

There are 8 trading days to the announcement of the December rebalance results. With foreign companies newly eligible, Samsonite is a high...

Brian Freitas

General hospitals like BenQ face challenges due to their business model, with low profits and difficulty attracting/retaining talent, leading to...