Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

Pan-Asia Catalysts/Events

Quiddity Advisors

Index Rebalance

<ul>
<li>HSTECH sees one ADD, one DELETE and several capping and re-capping actions. One of the re-caps is already an un-recap (i.e. a new capping), to be updated.</li>
<li>The ADD is <a href="https://www.smartkarma.com/entities/asm-pacific-technology-ltd" target="_blank" data-smartkarma-citation="entities:15061:1" rel="noopener">ASM Pacific Technology (522 HK)</a>, as expected, with significant ADV impact to buy. The DELETE is <a href="https://www.smartkarma.com/entities/ping-an-healthcare-and-technol" target="_blank" data-smartkarma-citation="entities:27008:1" rel="noopener">Ping An Healthcare and Technol (1833 HK)</a>, also a big sell.</li>
<li>Across the three major indices, <a href="https://www.smartkarma.com/entities/alibaba-group-holding-ltd-d7b798e2-202d-4e01-9a1e-799e2ae8f0c7" target="_blank" data-smartkarma-citation="entities:28434:1" rel="noopener">Alibaba Group Holding (9988 HK)</a> is the big dollar sell and HSTECH changes are the biggies in terms of ADV impact.</li>
</ul>


HSTECH sees one ADD, one DELETE and several capping and re-capping actions. One of the re-caps is already an un-recap (i.e. a new capping), to be updated.
The ADD is ASM Pacific Technology (522 HK), as expected, with significant ADV impact to buy. The DELETE is Ping An Healthcare and Technol (1833 HK), also a big sell.
Across the three major indices, Alibaba Group Holding (9988 HK) is the big dollar sell and HSTECH changes are the biggies in terms of ADV impact.


Sep24 HSTECH Index Rebal - ASMPT (522 HK) ADDed as Expected, After Post-Earnings Fall

Asian Hedge Fund Manager, Long Short Equity, Macro

David Mudd

Cross Asset Strategy

<ul>
<li>Japan equity ETF flows have not recovered from the carry trade sell off.  Hong Kong Southbound Connect flows continue to be positive this month.</li>
<li>
<a href="https://www.smartkarma.com/entities/qifu-technology-inc" target="_blank" data-smartkarma-citation="entities:36657:1" rel="noopener">Qifu Technology (3660 HK)</a> , <a href="https://www.smartkarma.com/entities/q-technology-group-co-ltd" target="_blank" data-smartkarma-citation="entities:79:1" rel="noopener">Q Technology Group (1478 HK)</a> and <a href="https://www.smartkarma.com/entities/jd-logistics-inc" target="_blank" data-smartkarma-citation="entities:31500:1" rel="noopener">JD Logistics (2618 HK)</a> all advanced on strong 2Q earnings announcements. 
</li>
<li>
<a href="https://www.smartkarma.com/entities/tencent-music-entertainment-group" target="_blank" data-smartkarma-citation="entities:36601:1" rel="noopener">Tencent Music Entertainment Group (1698 HK)</a> disappointed on earnings and monthly user numbers.  <a href="https://www.smartkarma.com/entities/country-garden-services-holdin" target="_blank" data-smartkarma-citation="entities:27343:1" rel="noopener">Country Garden Services (6098 HK)</a> declined in anticipation of a large drop in earnings in 2Q 2024.
</li>
</ul>


Japan equity ETF flows have not recovered from the carry trade sell off.  Hong Kong Southbound Connect flows continue to be positive this month.

Qifu Technology (3660 HK) , Q Technology Group (1478 HK) and JD Logistics (2618 HK) all advanced on strong 2Q earnings announcements. 


Tencent Music Entertainment Group (1698 HK) disappointed on earnings and monthly user numbers.  Country Garden Services (6098 HK) declined in anticipation of a large drop in earnings in 2Q 2024.



The Heat Is On: News Flow and Sentiment in CHINA / HONG KONG (August 16)

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>JD.com (JD) reported (15 Aug) better-than-expected 2Q24 results: revenue was RMB291.4bn, up 1% YoY, in line with our forecast and Bloomberg consensus; non-GAAP net income was RMB14.5bn, ahead of our forecast/consensus estimates at RMB9.9bn/9.6bn, thanks to stronger-than-expected GPM expansion aided by scale effect, as well as better-than-expected generation from other income.</li><li>Guided by stringent ROI target and benefited from the increasing economies of scale, we remain positive on JD’s earnings growth trajectory in 2H24.</li><li>However, apart from the additional benefits brought by nationwide home appliance trade-in activities, since the current share repurchase program has been largely utilized, JD needs to convince the market with its ability in retaining market share in core electronics and home appliance (E&amp;HA) category, in order to drive for further valuation rerating amid current market environment, in our view. Our DCF-based TP was unchanged at US$51.9. </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.

JD.com (JD) reported (15 Aug) better-than-expected 2Q24 results: revenue was RMB291.4bn, up 1% YoY, in line with our forecast and Bloomberg consensus; non-GAAP net income was RMB14.5bn, ahead of our forecast/consensus estimates at RMB9.9bn/9.6bn, thanks to stronger-than-expected GPM expansion aided by scale effect, as well as better-than-expected generation from other income.Guided by stringent ROI target and benefited from the increasing economies of scale, we remain positive on JD’s earnings growth trajectory in 2H24.However, apart from the additional benefits brought by nationwide home appliance trade-in activities, since the current share repurchase program has been largely utilized, JD needs to convince the market with its ability in retaining market share in core electronics and home appliance (E&amp;HA) category, in order to drive for further valuation rerating amid current market environment, in our view. Our DCF-based TP was unchanged at US$51.9. 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.

JD.com (JD US) - Stringent ROI Target on Investments Brings Better-Than-Expected 2Q Earnings Growth

Blue Lotus Non US Internet research, Blue Lotus Research Institute

Ying Pan

Blue Lotus Non US Internet research

China growth and global non-US Internet equities

Blue Lotus Research Institute

Blue Lotus Research is a Hong Kong Type 4 Licensed investment advisory firm focusing on Chinese growth equities and global non-US Internet equities

Thematic (Sector/Industry)

<ul>
<li>700 HK: Based on &lt;DnF Mobile&gt; Developer Nexon's 2Q24 Financial Report, the Game Generated around RMB 7bn in Revenue During the Quarter (+)</li>
<li>700 HK: &lt;League of Legends&gt; to Introduce Another PVE Game Mode (+)</li>
<li>BILI US: Bilibili's &lt;Aether Gazer&gt; to Shut Down on November 12 (/)</li>
</ul>


700 HK: Based on &lt;DnF Mobile&gt; Developer Nexon's 2Q24 Financial Report, the Game Generated around RMB 7bn in Revenue During the Quarter (+)
700 HK: &lt;League of Legends&gt; to Introduce Another PVE Game Mode (+)
BILI US: Bilibili's &lt;Aether Gazer&gt; to Shut Down on November 12 (/)


[Blue Lotus Daily-TMT Update]:700 HK/BILI US/BABA US/PDD US/JD/3690HK/ZTO/1519HK/2352 CH/SHEIN/TCOM

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

<ul>
<li>The constituent changes for the <a href="https://www.smartkarma.com/entities/hang-seng-china-enterprises-index" target="_blank" data-smartkarma-citation="entities:22900:1" rel="noopener">Hang Seng China Enterprises Index (HSCEI INDEX)</a>, <a href="https://www.smartkarma.com/entities/hang-seng-tech-index" target="_blank" data-smartkarma-citation="entities:31367:1" rel="noopener">Hang Seng TECH Index (HSTECH INDEX)</a> and HSIII Index will be announced after market close on Friday.</li>
<li>We forecast 2 changes for the <a href="https://www.smartkarma.com/entities/hang-seng-china-enterprises-index" target="_blank" data-smartkarma-citation="entities:22900:1" rel="noopener">Hang Seng China Enterprises Index (HSCEI INDEX)</a>, 1 change for the <a href="https://www.smartkarma.com/entities/hang-seng-tech-index" target="_blank" data-smartkarma-citation="entities:31367:1" rel="noopener">Hang Seng TECH Index (HSTECH INDEX)</a> and 3 changes for the HSIII Index.</li>
<li>With same-way and opposing flow on stocks from different passive trackers, the one-way trade is currently estimated at HK$5.2bn (US$672m). That will change with final capping done on 3 September.</li>
</ul>


The constituent changes for the Hang Seng China Enterprises Index (HSCEI INDEX), Hang Seng TECH Index (HSTECH INDEX) and HSIII Index will be announced after market close on Friday.
We forecast 2 changes for the Hang Seng China Enterprises Index (HSCEI INDEX), 1 change for the Hang Seng TECH Index (HSTECH INDEX) and 3 changes for the HSIII Index.
With same-way and opposing flow on stocks from different passive trackers, the one-way trade is currently estimated at HK$5.2bn (US$672m). That will change with final capping done on 3 September.


HSCEI/HSTECH/HSIII Index Rebalance Preview: Potential Changes, Flow & Positioning

China

JD.com, Inc. is an online direct sales company in China. The Company offers a wide selection of products through its website and mobile applications. JD.com sells appliances, computers, digital products, communication products, garments, books, and household items to consumers and vendors.

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JD.com (9618 HK)

Sep24 HSTECH Index Rebal - ASMPT (522 HK) ADDed as Expected, After Post-Earnings Fall

The HSTECH Index Rebalance is as expected - one ADD and one DELETE. Both are big in terms of ADV at 10+ days to buy and sell, respectively.

Travis Lundy

The Heat Is On: News Flow and Sentiment in CHINA / HONG KONG (August 16)

Japan ETF flows have been light after the massive outflow from carry trade unwind. Qifu Tech, Q Tech and JDL all had positive earnings announcement...

David Mudd

JD.com (JD US) - Stringent ROI Target on Investments Brings Better-Than-Expected 2Q Earnings Growth

JD.com (JD) reported (15 Aug) better-than-expected 2Q24 results: revenue was RMB291.4bn, up 1% YoY, in line with our forecast and Bloomberg consensus

CMB International

[Blue Lotus Daily-TMT Update]:700 HK/BILI US/BABA US/PDD US/JD/3690HK/ZTO/1519HK/2352 CH/SHEIN/TCOM

Nexon's <dnf mobile> game generates RMB 7bn, League of Legends adds new PVE mode, Bilibili's <aether gazer> shutting down on November 12.<...

Blue Lotus Research Institute

HSCEI/HSTECH/HSIII Index Rebalance Preview: Potential Changes, Flow & Positioning

We expect 2 changes for the HSCEI, 1 for the HSTECH, 2 for the HSIII. Tne-way trade is estimated at HK$5.2bn (US$672m). There is same-way and...

Brian Freitas

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

Sep24 HSTECH Index Rebal - ASMPT (522 HK) ADDed as Expected, After Post-Earnings Fall

The HSTECH Index Rebalance is as expected - one ADD and one DELETE. Both are big in terms of ADV at 10+ days to buy and sell, respectively.

Travis Lundy

The Heat Is On: News Flow and Sentiment in CHINA / HONG KONG (August 16)

Japan ETF flows have been light after the massive outflow from carry trade unwind. Qifu Tech, Q Tech and JDL all had positive earnings announcement...

David Mudd

JD.com (JD US) - Stringent ROI Target on Investments Brings Better-Than-Expected 2Q Earnings Growth

JD.com (JD) reported (15 Aug) better-than-expected 2Q24 results: revenue was RMB291.4bn, up 1% YoY, in line with our forecast and Bloomberg consensus

CMB International

[Blue Lotus Daily-TMT Update]:700 HK/BILI US/BABA US/PDD US/JD/3690HK/ZTO/1519HK/2352 CH/SHEIN/TCOM

​Nexon's <dnf mobile> game generates RMB 7bn, League of Legends adds new PVE mode, Bilibili's <aether gazer> shutting down on November 12.<...

Blue Lotus Research Institute

HSCEI/HSTECH/HSIII Index Rebalance Preview: Potential Changes, Flow & Positioning

We expect 2 changes for the HSCEI, 1 for the HSTECH, 2 for the HSIII. Tne-way trade is estimated at HK$5.2bn (US$672m). There is same-way and...

Brian Freitas

Nexon's <dnf mobile> game generates RMB 7bn, League of Legends adds new PVE mode, Bilibili's <aether gazer> shutting down on November 12.<...