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

<ul>
<li>The December rebalance of the <a href="https://www.smartkarma.com/entities/kraneshares-csi-china-internet-etf" target="_blank" data-smartkarma-citation="entities:28208:1" rel="noopener">KraneShares CSI China Internet ETF (KWEB US)</a> will take place at the close of trading on 12 December.</li>
<li>
<a href="https://www.smartkarma.com/entities/alibaba-pictures-group-ltd" target="_blank" data-smartkarma-citation="entities:20724:1" rel="noopener">Alibaba Pictures</a>, <a href="https://www.smartkarma.com/entities/east-buy-holding-ltd" target="_blank" data-smartkarma-citation="entities:27796:1" rel="noopener">East Buy Holding</a>, <a href="https://www.smartkarma.com/entities/ping-an-healthcare-and-technology-company-limited" target="_blank" data-smartkarma-citation="entities:27008:1" rel="noopener">Ping An Healthcare and Technology</a>, <a href="https://www.smartkarma.com/entities/xd-inc" target="_blank" data-smartkarma-citation="entities:28283:1" rel="noopener">XD Inc.</a> and <a href="https://www.smartkarma.com/entities/caocao-inc" target="_blank" data-smartkarma-citation="entities:42803:1" rel="noopener">CaoCao (2643 HK)</a> will be added, while <a href="https://www.smartkarma.com/entities/iqiyi-inc" target="_blank" data-smartkarma-citation="entities:26755:1" rel="noopener">iQIYI Inc (IQ US)</a> will be deleted.</li>
<li>Short interest has increased in most adds recently and there could be some short covering following the announcement of the index inclusion.</li>
</ul>


The December rebalance of the KraneShares CSI China Internet ETF (KWEB US) will take place at the close of trading on 12 December.

Alibaba Pictures, East Buy Holding, Ping An Healthcare and Technology, XD Inc. and CaoCao (2643 HK) will be added, while iQIYI Inc (IQ US) will be deleted.
Short interest has increased in most adds recently and there could be some short covering following the announcement of the index inclusion.


External broker reports(aggregated public sources), CMB International

CMB International

External broker reports(aggregated public sources)

Incorporated in Hong Kong, supported by the mainland and targeting in global market, CMB International Capital Corporation Limited (“CMBI”) is an integrated financial institution providing comprehensive and professional services. As a wholly-owned subsidiary of China Merchants Bank ("CMB"), by leveraging on the Group’s synergy and coordination in domestic and overseas markets, as well as CMB’s strong resources and outstanding social reputation, CMBI and its subsidiaries have been actively implementing diversified business strategies and set up an overall layout of main business segments including Corporate Finance, Asset Management, Wealth Management, Global Markets and Structured Finance, etc. Adhering to the philosophy of “being clients oriented and increasing our own values by the way of creating value for clients”, CMBI endeavors to provide quality and integrated financial services to institutional, corporate and individual customers both domestic and overseas including Hong Kong IPO sponsorship and underwriting, share placement and rights issue for listed companies, financial advisors, bonds issuance services, asset management, direct investment, wealth management, equity sales and trading, etc.

Equity Bottom-Up

<ul><li>iQiyi reported 2Q25 results: total revenue was down by 11% YoY/8% QoQ to RMB6.62bn, in line with Bloomberg consensus/our estimate; non-GAAP operating income was RMB59mn, ahead of our estimate (RMB26mn) thanks to the prudent opex control.</li><li>Looking into 3Q25E, we expect the core membership and online advertising revenue to recover by 3% and 2% QoQ respectively , supported by the quality content offerings in summer.</li><li>However, we lower our FY25-27E total revenue forecasts by 2-3%, mainly to reflect the adjustment of certain non-core business lines. </li></ul>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

iQiyi reported 2Q25 results: total revenue was down by 11% YoY/8% QoQ to RMB6.62bn, in line with Bloomberg consensus/our estimate; non-GAAP operating income was RMB59mn, ahead of our estimate (RMB26mn) thanks to the prudent opex control.Looking into 3Q25E, we expect the core membership and online advertising revenue to recover by 3% and 2% QoQ respectively , supported by the quality content offerings in summer.However, we lower our FY25-27E total revenue forecasts by 2-3%, mainly to reflect the adjustment of certain non-core business lines. Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

IQIYI (IQ US) - 2Q25 Review: Core Membership and Advertising Businesses to Recover in 3Q25

<ul><li>We expect iQiyi 2Q25E total revenue to decrease by 11%/8% YoY/QoQ to RMB6.62bn, 8% below Bloomberg consensus estimate, mainly due to: 1) delay of certain TV dramas; 2) weaker-than-expected performance-based ad business amid soft sentiment; and 3) the decline in content distribution revenue.</li><li>That said, we expect non-GAAP operating profit of RMB26mn in 2Q25E, which is largely in line with our previous expectation, as the company has maintained prudent control in content costs and opex.</li><li>iQiyi continues to invest in mini dramas and has achieved early success in certain self-produced mini dramas, but it still takes time for mini dramas to make meaningful revenue contribution, in our view. </li></ul>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

We expect iQiyi 2Q25E total revenue to decrease by 11%/8% YoY/QoQ to RMB6.62bn, 8% below Bloomberg consensus estimate, mainly due to: 1) delay of certain TV dramas; 2) weaker-than-expected performance-based ad business amid soft sentiment; and 3) the decline in content distribution revenue.That said, we expect non-GAAP operating profit of RMB26mn in 2Q25E, which is largely in line with our previous expectation, as the company has maintained prudent control in content costs and opex.iQiyi continues to invest in mini dramas and has achieved early success in certain self-produced mini dramas, but it still takes time for mini dramas to make meaningful revenue contribution, in our view. Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

IQIYI (IQ US) - 2Q25E Preview: Total Revenue Under Pressure but Earnings Outlook Intact

Independent research on the U.S. markets, Baptista Research

Baptista Research

Independent research on the U.S. markets

Baptista Research is an independent financial research house focused on the U.S. markets. We provide equity research as well as credit research reports on the top-listed U.S. companies with most of our focus on technology, consumer goods and services, automobiles, industrials, oil and gas, pharma, and healthcare. Our research has served more than 3000 institutional investors including mutual funds, hedge funds, banks, family offices, and various buy-side firms. We operate a research subscription service where institutions, as well as retail investors, can have priority access to all our research. We also have a wide distribution of our research reports across some of the top global financial platforms. Apart from equity research and credit research, we also provide advisory services with respect to mergers & acquisitions (M&A), private equity/ venture capital fundraising, valuation reports, and investment management services for corporates.
Baptista Research is owned and managed by Ishan Majumdar, an ex-Venture Capitalist/ Investment Banker, a Chartered Accountant, and a Masters’ degree holder in Management from HEC Paris. Ishan has nearly a decade of experience in Mergers and Acquisitions, Leveraged Buyouts (LBOs), Venture Capital Investing, Corporate Strategy, and Valuation in front-office roles at the likes of BNP Paribas CIB, Credit Agricole CIB, Groupe Danone, and TIW Private Equity. He has worked on and closed multiple acquisition deals, leveraged buyouts, and start-up investment transactions.

<ul><li>iQIYI's first-quarter 2025 results exhibited growth across several key business segments, though certain challenges remain.</li><li>The company experienced sequential growth in total revenues, largely attributed to their emphasis on premium content production and strong performance in long-form and micro-dramas.</li><li>This focus has effectively positioned iQIYI as a leading platform for both long-form and short-form entertainment content, contributing positively to user engagement and content consumption.</li></ul>

iQIYI's first-quarter 2025 results exhibited growth across several key business segments, though certain challenges remain.The company experienced sequential growth in total revenues, largely attributed to their emphasis on premium content production and strong performance in long-form and micro-dramas.This focus has effectively positioned iQIYI as a leading platform for both long-form and short-form entertainment content, contributing positively to user engagement and content consumption.

iQIYI Inc.: Growing Its Content Ecosystem & Executing Overseas Market Expansion to Help Alter The Playing Field?

<ul><li>iQiyi announced 1Q25 results: total revenue declined by 9% YoY but grew by 9% QoQ to RMB7.19bn, in line with Bloomberg consensus estimate; non-GAAP operating income was down by 58% YoY but recovered by 13% QoQ to RMB459mn, also in line with the consensus estimate.</li><li>Looking ahead in 2Q25E, we model total revenue to be largely flat QoQ, but non-GAAP OPM to decline QoQ, as the company has stepped up investment in content ecosystem and micro-drama user acquisition.</li><li>We expect investment in micro dramas to impact margins in the short term, but in the long term, it will complement iQiyi content ecosystem and generate incremental monetization opportunities. </li></ul>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

iQiyi announced 1Q25 results: total revenue declined by 9% YoY but grew by 9% QoQ to RMB7.19bn, in line with Bloomberg consensus estimate; non-GAAP operating income was down by 58% YoY but recovered by 13% QoQ to RMB459mn, also in line with the consensus estimate.Looking ahead in 2Q25E, we model total revenue to be largely flat QoQ, but non-GAAP OPM to decline QoQ, as the company has stepped up investment in content ecosystem and micro-drama user acquisition.We expect investment in micro dramas to impact margins in the short term, but in the long term, it will complement iQiyi content ecosystem and generate incremental monetization opportunities. Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

IQIYI (IQ US) - Inline 1Q25 Results; Stepped-Up Content & Marketing Investment Impacts ST Margin

China

iQIYI, Inc. offers video entertainment services. The Company provides movies, television dramas, variety shows, and other video contents. iQIYI offers services worldwide.

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iQIYI Inc (IQ US)

KWEB Index Rebalance: 5 Adds & A Delete

There are 5 adds and 1 delete for the KWEB ETF in Dec. Most of the changes were forecast but short covering and positioning could take the stocks...

Brian Freitas

IQIYI (IQ US) - 2Q25 Review: Core Membership and Advertising Businesses to Recover in 3Q25

iQiyi reported 2Q25 results: total revenue was down by 11% YoY/8% QoQ to RMB6.62bn, in line with Bloomberg consensus/our estimate

CMB International

IQIYI (IQ US) - 2Q25E Preview: Total Revenue Under Pressure but Earnings Outlook Intact

We lower our target price to US$2.25 based on 13x 3Q25-2Q26E non-GAAP EPS (previous: US$2.45 based on 13x 3Q25-2Q26E non-GAAP EPS). Maintain BUY.

CMB International

iQIYI Inc.: Growing Its Content Ecosystem & Executing Overseas Market Expansion to Help Alter The Playing Field?

iQIYI's first-quarter 2025 results exhibited growth across several key business segments, though certain challenges remain. The company...

Baptista Research

IQIYI (IQ US) - Inline 1Q25 Results; Stepped-Up Content & Marketing Investment Impacts ST Margin

The company currently trades at 8x FY26E PE, which still has a safety margin compared to peers in our view. Maintain BUY.

CMB International

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