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>Hang Seng Indexes announces changes to the <a href="https://www.smartkarma.com/entities/hong-kong-hang-seng-index" target="_blank" data-smartkarma-citation="entities:22899:1" rel="noopener">Hang Seng Index</a>, <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</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</a>, HSIII Index, HSHKBIO Index and HSCI Index post market close tomorrow.</li>
<li>The net round-trip trade across the stocks is estimated to be HK$54.3bn (US$6.9bn) with big impact in a lot of names.</li>
<li>The largest inflows will be in <a href="https://www.smartkarma.com/entities/geely-automobile-holdings-ltd" target="_blank" data-smartkarma-citation="entities:127:1" rel="noopener">Geely Auto</a> if added to the <a href="https://www.smartkarma.com/entities/hang-seng-tech-index" target="_blank" data-smartkarma-citation="entities:31367:1" rel="noopener">HSTECH</a>, <a href="https://www.smartkarma.com/entities/pop-mart-international-group-l" target="_blank" data-smartkarma-citation="entities:29016:1" rel="noopener">Pop Mart</a> if added to the <a href="https://www.smartkarma.com/entities/hang-seng-china-enterprises-index" target="_blank" data-smartkarma-citation="entities:22900:1" rel="noopener">HSCEI</a> and <a href="https://www.smartkarma.com/entities/hong-kong-hang-seng-index" target="_blank" data-smartkarma-citation="entities:22899:1" rel="noopener">HSI</a>, and <a href="https://www.smartkarma.com/entities/horizon-robotics-inc" target="_blank" data-smartkarma-citation="entities:35637:1" rel="noopener">Horizon Robotics</a> due to a FAF increase.</li>
</ul>


Hang Seng Indexes announces changes to the Hang Seng Index, Hang Seng China Enterprises Index, Hang Seng TECH Index, HSIII Index, HSHKBIO Index and HSCI Index post market close tomorrow.
The net round-trip trade across the stocks is estimated to be HK$54.3bn (US$6.9bn) with big impact in a lot of names.
The largest inflows will be in Geely Auto if added to the HSTECH, Pop Mart if added to the HSCEI and HSI, and Horizon Robotics due to a FAF increase.


Hang Seng Indexes: Announcement Tomorrow; Potential Changes & Updated Flows

<ul>
<li>Post market close on Friday, Hang Seng Indexes will announce the changes for the <a href="https://www.smartkarma.com/entities/hong-kong-hang-seng-index" target="_blank" data-smartkarma-citation="entities:22899:1" rel="noopener">Hang Seng Index (HSI INDEX)</a> that will be implemented at the close on 5 September.</li>
<li>We highlight 6 stocks that have a higher probability of being added to the index. With the index committee entitled to a lot of discretion, there will be differences.</li>
<li>
<a href="https://www.smartkarma.com/entities/contemporary-amperex-technology-catl-co-limited" target="_blank" data-smartkarma-citation="entities:45179:1" rel="noopener">CATL</a> completes 3 months of listing just prior to the review meeting date and is a dark horse candidate, though the committee could let the stock season for another quarter.</li>
</ul>


Post market close on Friday, Hang Seng Indexes will announce the changes for the Hang Seng Index (HSI INDEX) that will be implemented at the close on 5 September.
We highlight 6 stocks that have a higher probability of being added to the index. With the index committee entitled to a lot of discretion, there will be differences.

CATL completes 3 months of listing just prior to the review meeting date and is a dark horse candidate, though the committee could let the stock season for another quarter.


Hang Seng Index (HSI) Rebalance Preview: Inclusion Candidates for Sep25

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.

Thematic (Sector/Industry)

<ul><li>We believe the price floor of RMB1.4/parcel shipment set by the Guangdong’s authority is a forceful move to put the brakes on the price war in the express delivery sector.</li><li>Most importantly, we believe Guangdong, being the largest province in terms of both parcel volume and revenue, will set an example of “anti-involution”, which will potentially trigger more provinces to follow suit.</li><li>We reiterate our view that this round of “anti-involution” campaign will be similar to the one in 2021, which will boost parcel price hike and serve as a positive catalyst over the coming 3-6 months. </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 believe the price floor of RMB1.4/parcel shipment set by the Guangdong’s authority is a forceful move to put the brakes on the price war in the express delivery sector.Most importantly, we believe Guangdong, being the largest province in terms of both parcel volume and revenue, will set an example of “anti-involution”, which will potentially trigger more provinces to follow suit.We reiterate our view that this round of “anti-involution” campaign will be similar to the one in 2021, which will boost parcel price hike and serve as a positive catalyst over the coming 3-6 months. 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.

Logistics - Price Floor in Guangdong Likely Set an Example for Other Regions...

HK/China Equity Long-Short

Osbert Tang, CFA

<ul>
<li>For 1H25, the companies under our coverage will report a 16.8% earnings growth. Breaking down by quarter, 2Q25 growth will accelerate to 30.8%, from 14.1% in 1Q25. </li>
<li>The best growth rates are at <a href="https://www.smartkarma.com/entities/china-national-building-ma-h" target="_blank" data-smartkarma-citation="entities:184:1" rel="noopener">China National Building Material (3323 HK)</a>, <a href="https://www.smartkarma.com/entities/china-international-capital-corporation-ltd" target="_blank" data-smartkarma-citation="entities:1071:1" rel="noopener">CICC (3908 HK)</a>, <a href="https://www.smartkarma.com/entities/beijing-capital-international-airport-bcia" target="_blank" data-smartkarma-citation="entities:10626:1" rel="noopener">Beijing Capital Intl Airport (694 HK)</a>, <a href="https://www.smartkarma.com/entities/tongcheng-travel-holdings-ltd" target="_blank" data-smartkarma-citation="entities:27363:1" rel="noopener">Tongcheng Travel (780 HK)</a>, and <a href="https://www.smartkarma.com/entities/sitc-international-holdings" target="_blank" data-smartkarma-citation="entities:15301:1" rel="noopener">SITC Intl (1308 HK)</a>. </li>
<li>The worst ones are <a href="https://www.smartkarma.com/entities/china-travel-international-investment-hong-kong" target="_blank" data-smartkarma-citation="entities:3879:1" rel="noopener">China Travel Intl (308 HK)</a>, <a href="https://www.smartkarma.com/entities/cosco-shipping-energy-tran-h" target="_blank" data-smartkarma-citation="entities:646:1" rel="noopener">Cosco Shipping Energy Transp (1138 HK)</a>, <a href="https://www.smartkarma.com/entities/china-southern-airlines-co-ltd" target="_blank" data-smartkarma-citation="entities:1078:1" rel="noopener">China Southern Airlines (1055 HK)</a>, <a href="https://www.smartkarma.com/entities/china-tourism-group-duty-free" target="_blank" data-smartkarma-citation="entities:36229:1" rel="noopener">CTG Duty Free (1880 HK)</a>, and <a href="https://www.smartkarma.com/entities/pacific-basin-shipping-ltd" target="_blank" data-smartkarma-citation="entities:929:1" rel="noopener">Pacific Basin (2343 HK)</a>. </li>
</ul>


For 1H25, the companies under our coverage will report a 16.8% earnings growth. Breaking down by quarter, 2Q25 growth will accelerate to 30.8%, from 14.1% in 1Q25. 
The best growth rates are at China National Building Material (3323 HK), CICC (3908 HK), Beijing Capital Intl Airport (694 HK), Tongcheng Travel (780 HK), and SITC Intl (1308 HK). 
The worst ones are China Travel Intl (308 HK), Cosco Shipping Energy Transp (1138 HK), China Southern Airlines (1055 HK), CTG Duty Free (1880 HK), and Pacific Basin (2343 HK). 


China & HK Strategy: 1H25 Preview - Where Are the Upside and Downside Surprises?

<ul><li>We believe the Chinese government’s aspiration to promote “anti-involution”, followed by the meeting held by the State Post Bureau with express delivery operators as well as the comments by NDRC last week to propose a revision of the price law, will serve as a positive catalyst for the express delivery sector over the coming 3-6 months.</li><li>We see chances for a moderate parcel ASP hike going forward, though not as strong as the uptrend in 2022 after the government’s intervention.</li><li>Government actions to curb price war. On 29 Jul, the State Post Bureau held a meeting with major express delivery operators to address the "involution" competition in the industry.</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 believe the Chinese government’s aspiration to promote “anti-involution”, followed by the meeting held by the State Post Bureau with express delivery operators as well as the comments by NDRC last week to propose a revision of the price law, will serve as a positive catalyst for the express delivery sector over the coming 3-6 months.We see chances for a moderate parcel ASP hike going forward, though not as strong as the uptrend in 2022 after the government’s intervention.Government actions to curb price war. On 29 Jul, the State Post Bureau held a meeting with major express delivery operators to address the "involution" competition in the industry.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.

Logistics - Strong Policy Momentum to Curb Price War; a Similar Price Hike Story like 2022

China

JD Logistics, Inc. offers logistics services. The Company provides cargo transportation, cargo distribution, warehousing, and other services. JD Logistics is located in China.

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JD Logistics (2618 HK)

Hang Seng Indexes: Announcement Tomorrow; Potential Changes & Updated Flows

Hang Seng announces after market close on Friday. The net round-trip trade across the stocks is estimated at HK$54.3bn. There is positioning in the...

Brian Freitas

Hang Seng Index (HSI) Rebalance Preview: Inclusion Candidates for Sep25

We highlight 6 potential adds to the HSI in Sep. CATL has an outside chance of inclusion. Estimated turnover is less than 3% and the trade is...

Brian Freitas

Logistics - Price Floor in Guangdong Likely Set an Example for Other Regions...

We believe the price floor of RMB1.4/parcel shipment set by the Guangdong’s authority is a forceful move to put the brakes on the price war in the...

CMB International

China & HK Strategy: 1H25 Preview - Where Are the Upside and Downside Surprises?

The companies under our coverage are expected to report 16.8% earnings growth for 1H25, with 2Q25 accelerating to 30.8%. Top performers include...

Osbert Tang, CFA

Logistics - Strong Policy Momentum to Curb Price War; a Similar Price Hike Story like 2022

We see chances for a moderate parcel ASP hike going forward, though not as strong as the uptrend in 2022 after the government’s intervention.

CMB International

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