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

Index Rebalance

Zhejiang Leapmotor Technologie / Index Rebalance

<ul>
<li>We see three new listings as potential inclusions to the HSCI in December. One is already in Stock Connect, one will be added to Stock Connect while one will not.</li>
<li>Given the large market moves, there will be many changes to the HSCI in March 2023. Quite a few stocks could remain in the HSCI but drop out of Connect.</li>
<li>Some of the potential deletions/ Stock Connect drops have large Southbound holdings and some of these positions could be pared back over the next few months.</li>
</ul>


We see three new listings as potential inclusions to the HSCI in December. One is already in Stock Connect, one will be added to Stock Connect while one will not.
Given the large market moves, there will be many changes to the HSCI in March 2023. Quite a few stocks could remain in the HSCI but drop out of Connect.
Some of the potential deletions/ Stock Connect drops have large Southbound holdings and some of these positions could be pared back over the next few months.


HSCI Index Rebalance and Stock Connect: Potential Changes in December & March (There's a Lot!)

IPOs and Catalysts/Events, Global Equity Research Ltd

Arun George

IPOs and Catalysts/Events

Uncompromised, Independent, Conflict-Free Research

Global Equity Research Ltd

Global Equity Research was started in 2017 by a group of experienced research professionals. It was founded on a passionate belief in the importance and the need for uncompromised, independent, conflict-free research. We aim to provide differentiated and actionable primary and bottom up fundamental research.

Equity Capital Markets

<ul>
<li>
<a href="https://www.smartkarma.com/entities/qingci-games" target="_blank" data-smartkarma-citation="entities:35240:1" rel="noopener">Qingci Games (6633 HK)</a> is a mobile game developer and publisher in China. It aims to raise net proceeds of US$125.5 million at the mid-point of the IPO price range.</li>
<li>In <a href="https://www.smartkarma.com/insights/qingci-games-ipo-future-imperfect-and-tense" target="_blank" data-smartkarma-citation="insights:62199" rel="noopener">Qingci Games IPO: Future, Imperfect and Tense</a>, we stated that it is uncertain if the declining trends in the key title can be offset by a new blockbuster title.  </li>
<li>Our valuation analysis suggests that the IPO price range is unattractive. Consequently, we give the IPO a pass. </li>
</ul>



Qingci Games (6633 HK) is a mobile game developer and publisher in China. It aims to raise net proceeds of US$125.5 million at the mid-point of the IPO price range.
In Qingci Games IPO: Future, Imperfect and Tense, we stated that it is uncertain if the declining trends in the key title can be offset by a new blockbuster title.  
Our valuation analysis suggests that the IPO price range is unattractive. Consequently, we give the IPO a pass. 


<ul>
<li>
<a href="https://www.smartkarma.com/entities/qingci-games" target="_blank" data-smartkarma-citation="entities:35240:1" rel="noopener">Qingci Games (6633 HK)</a> is a mobile game developer and publisher in China. It aims to raise net proceeds of US$125.5 million at the mid-point of the IPO price range.</li>
<li>The past is perfect and characterised by exponential growth and rising margins. However, the future is tense with a material decline in profitability flagged for 2H21.  </li>
<li>It is uncertain if the declining trends in the key title can be offset by a new blockbuster title. We discuss valuation in our next note. </li>
</ul>



Qingci Games (6633 HK) is a mobile game developer and publisher in China. It aims to raise net proceeds of US$125.5 million at the mid-point of the IPO price range.
The past is perfect and characterised by exponential growth and rising margins. However, the future is tense with a material decline in profitability flagged for 2H21.  
It is uncertain if the declining trends in the key title can be offset by a new blockbuster title. We discuss valuation in our next note. 


Qingci Games IPO: Future, Imperfect and Tense

Quality-first, Business-perspective Strategy, Urbem (HK) Limited

Steven Chen

Quality-first, Business-perspective Strategy

Equity Bottom-Up

<ul>
<li>The Shenzhen-based game developer trades at an attractive valuation;</li>
<li>Meanwhile, the business has been growing at a nearly triple-digit rate while maintaining an above 30% return on equity and invested capital;</li>
<li>Should investors buy into this (seemingly quality) growth story?  We want to take a deep dive.</li>
</ul>


The Shenzhen-based game developer trades at an attractive valuation;
Meanwhile, the business has been growing at a nearly triple-digit rate while maintaining an above 30% return on equity and invested capital;
Should investors buy into this (seemingly quality) growth story?  We want to take a deep dive.


<ul>
<li>Another victim of the pandemic, Tang Palace, appears attractive with a single-digit P/E and a juicy FCF yield based on pre-COVID financials;</li>
<li>However, investors should, by no means, draw their deep-value conclusion without a full examination of the business economics;</li>
<li>We employ the same framework as we did with other names previously to assess the value-trap risks.</li>
</ul>


Another victim of the pandemic, Tang Palace, appears attractive with a single-digit P/E and a juicy FCF yield based on pre-COVID financials;
However, investors should, by no means, draw their deep-value conclusion without a full examination of the business economics;
We employ the same framework as we did with other names previously to assess the value-trap risks.


Singapore

IGG Inc. is an online games developer and operator. The Company offers multi-language browser games, client-based games and mobile games to players globally.

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IGG Inc (799 HK)

HSCI Index Rebalance and Stock Connect: Potential Changes in December & March (There's a Lot!)

There could be 3 adds in December while there will be MANY more changes in March. The adds should outnumber the deletes, but there will be many...

Brian Freitas

Qingci Games IPO: Valuation Insights

Our valuation analysis suggests that the IPO price range is unattractive. Consequently, we give the IPO a pass. Pricing is set for 9 Dec and...

Arun George

Qingci Games IPO: Future, Imperfect and Tense

Qingci aims to raise net proceeds of US$125.5 million at the mid-point of the IPO price range. Overall, we believe the negatives outweigh the...

Arun George

Fire Rock: A Value Play or Value Trap?

Another superior-return, fast-growing gaming business trading at an attractive level. Should investors buy into this (seemingly quality) growth...

Steven Chen

Tang Palace: Deep Value or Value Trap

Current share price points to juicy yields on a pre-COVID basis, but is there any value trap? We examine business economics in detail.

Steven Chen

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