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

Brian Freitas

Pan-Asia Index Rebalances/ Events/ Delta One

Index Rebalance

The Hang Seng Indexes Company Limited (HSIL) announced the results of its review of the Hang Seng Family of Indexes post market close on 26 February. The constituent changes will be effective after the close of trading on 12 March.For the Hang Seng Composite Index (HSCI) there are 36 inclusions and 29 deletions, taking the number of index constituents up to 500.Although there are almost no assets indexed to the HSCI, the index forms the basis of stocks that are eligible for Southbound Stock Connect. Stocks that are included in the HSCI and subsequently included in the Stock Connect program get inflows from mainland investors. Secondary Listings are not eligible for inclusion in the Stock Connect program.Of the 36 inclusions, 4 are already a part of Stock Connect by virtue of having listed A-shares, 2 are Secondary listings and will not be included in Stock Connect, 9 will be added to Shanghai and Shenzhen Stock Connect, while 21 stocks will only be added to Shenzhen Stock Connect.Of the 29 index deletions, 13 are not a part of Stock Connect, 7 will continue to remain a part of Stock Connect by virtue of having listed A-shares, while 9 will be deleted from the Stock Connect program.We identify 4 stocks that could sell off ahead of their removal from the Stock Connect Buy list, while Biotech stocks could be in focus ahead of their inclusion in the Stock Connect Buy and Sell list.

The Hang Seng Indexes Company Limited (HSIL) announced the results of its review of the Hang Seng Family of Indexes post market close on 26 February. The constituent changes will be effective after the close of trading on 12 March.For the Hang Seng Composite Index (HSCI) there are 36 inclusions and 29 deletions, taking the number of index constituents up to 500.Although there are almost no assets indexed to the HSCI, the index forms the basis of stocks that are eligible for Southbound Stock Connect. Stocks that are included in the HSCI and subsequently included in the Stock Connect program get inflows from mainland investors. Secondary Listings are not eligible for inclusion in the Stock Connect program.Of the 36 inclusions, 4 are already a part of Stock Connect by virtue of having listed A-shares, 2 are Secondary listings and will not be included in Stock Connect, 9 will be added to Shanghai and Shenzhen Stock Connect, while 21 stocks will only be added to Shenzhen Stock Connect.Of the 29 index deletions, 13 are not a part of Stock Connect, 7 will continue to remain a part of Stock Connect by virtue of having listed A-shares, while 9 will be deleted from the Stock Connect program.We identify 4 stocks that could sell off ahead of their removal from the Stock Connect Buy list, while Biotech stocks could be in focus ahead of their inclusion in the Stock Connect Buy and Sell list.

HSCI Index Rebalance & Stock Connect: Inclusions & Exclusions

HK/China Healthcare Analyst (ex-Fosun Pharma)

Xinyao (Criss) Wang

Equity Bottom-Up

In recent years, <a href="https://www.smartkarma.com/entities/innovent-biologics-inc" target="_blank" data-smartkarma-citation="entities:27452:1" rel="noopener">Innovent Biologics Inc (1801 HK)</a> has launched a number of successful products, and the Company's investment value has significantly increased. Innovent leads the domestic counterparts in the layout of biological drugs and adhere to the development of internationally competitive products. The Company also establishes an excellent team to ensure the efficient implementation of the strategy. Meanwhile, Innovent is gradually transforming from a biotech company to a big pharma. With dozens of products in the pipeline, the Company is focusing on mainstream areas and is in the first echelon of clinical progress. In addition, with the rapid increase of sales after the listing of PD-1, its commercialization capability has also been recognized by the market.

In recent years, Innovent Biologics Inc (1801 HK) has launched a number of successful products, and the Company's investment value has significantly increased. Innovent leads the domestic counterparts in the layout of biological drugs and adhere to the development of internationally competitive products. The Company also establishes an excellent team to ensure the efficient implementation of the strategy. Meanwhile, Innovent is gradually transforming from a biotech company to a big pharma. With dozens of products in the pipeline, the Company is focusing on mainstream areas and is in the first echelon of clinical progress. In addition, with the rapid increase of sales after the listing of PD-1, its commercialization capability has also been recognized by the market. 

Innovent Biologics (1801 HK) - Have the Genes to Become a Big Pharma

On January 29th, 2021, <a href="https://www.smartkarma.com/entities/luye-pharma-group-ltd" target="_blank" data-smartkarma-citation="entities:488:1" rel="noopener">Luye Pharma (2186 HK)</a> announced a subscription agreement with Hillhouse NEV, involving HK$1.25 billion of investment from Hillhouse in exchange for issuing of new shares. The subscription price of the new shares was HK$4.28/share, a premium of approximately 10.03% over the closing price of HK$3.89/share on January 29th. Once the deals are completed, Hillhouse NEV will have a 15.60% stake in Luye, making it the second largest shareholder of the Company. The news had an immediate boost to share prices. Luye's shares opened sharply higher on Monday (February 1st), trading as high as HK$7, up 79.95% from Friday's close of HK$3.89/share. It surged again on Wednesday (February 3rd), up 11.3%, and then started to fall back on Thursday. By the end of February 5th, Luye's share price was HK$6.19. So, could the magic of Hillhouse last long?

On January 29th, 2021, Luye Pharma (2186 HK) announced a subscription agreement with Hillhouse NEV, involving HK$1.25 billion of investment from Hillhouse in exchange for issuing of new shares. The subscription price of the new shares was HK$4.28/share, a premium of approximately 10.03% over the closing price of HK$3.89/share on January 29th. Once the deals are completed, Hillhouse NEV will have a 15.60% stake in Luye, making it the second largest shareholder of the Company. The news had an immediate boost to share prices. Luye's shares opened sharply higher on Monday (February 1st), trading as high as HK$7, up 79.95% from Friday's close of HK$3.89/share. It surged again on Wednesday (February 3rd), up 11.3%, and then started to fall back on Thursday. By the end of February 5th, Luye's share price was HK$6.19. So, could the magic of Hillhouse last long?

Luye Pharma (2186.HK) - Could the Magic of Hillhouse Last Long?

Equity Analyst, LightStream Research

Shifara Samsudeen, FCMA, CGMA

Equity Analyst

Long-Short Analysis on Japan, Asia and the World

LightStream Research

LightStream conducts quantitatively rigorous and data-driven analysis with a focus on Japan and Asia.

We consistently cover the Tech, Consumer and Industrial sectors, and provide ECM and Events coverage more broadly.

We supplement traditional qualitative insights from company relationships with a robust quantitative foundation that examines as much historical data as is available.
We further refine the accuracy of our insights and calls through the use of alternative data to flesh out current trends, and through a valuation framework that emphasises non-superficial peer group selection and a proper attempt to understand the metrics and changes that have driven security valuations in the past.

Equity Capital Markets

Gracell Biotechnologies Inc / Equity Capital Markets

<a href="https://www.smartkarma.com/entities/gracell-biotechnologies-inc" target="_blank" data-smartkarma-citation="entities:31108:1" rel="noopener">Gracell Biotechnologies Inc (GRCL US)</a>  is a global clinical-stage biopharmaceutical company dedicated to discovering and developing breakthrough cell therapies to address major industry challenges and fulfil unmet medical needs in the treatment of cancer.The company has filed for an IPO to list its shares in the US and plans to raise around US$150m at the midpoint of the IPO price range of US$16-18 per ADS.The company has built two proprietary technology platforms FasTCAR and TruUCAR that disrupts conventional CAR-T cell therapies. Gracell’s lead FasTCAR autologous candidate, GC012F, is being developed for the treatment of patients with multiple myeloma and is being studied in Phase 1 trial in China.The company has two GMP-compliant manufacturing facilities in China that enable to be self-sufficient in the production of CAR-T cells for clinical development and early-stage commercialization.Gracell Biotechnologies currently does not have any products approved for commercial sale; hence the company does not generate any revenues from product sales. However, the company’s drug development pipeline includes a few strong candidates that shows good potential.

Gracell Biotechnologies Inc (GRCL US)  is a global clinical-stage biopharmaceutical company dedicated to discovering and developing breakthrough cell therapies to address major industry challenges and fulfil unmet medical needs in the treatment of cancer.The company has filed for an IPO to list its shares in the US and plans to raise around US$150m at the midpoint of the IPO price range of US$16-18 per ADS.The company has built two proprietary technology platforms FasTCAR and TruUCAR that disrupts conventional CAR-T cell therapies. Gracell’s lead FasTCAR autologous candidate, GC012F, is being developed for the treatment of patients with multiple myeloma and is being studied in Phase 1 trial in China.The company has two GMP-compliant manufacturing facilities in China that enable to be self-sufficient in the production of CAR-T cells for clinical development and early-stage commercialization.Gracell Biotechnologies currently does not have any products approved for commercial sale; hence the company does not generate any revenues from product sales. However, the company’s drug development pipeline includes a few strong candidates that shows good potential.

Gracell Biotechnologies IPO: Promising Early Trial Results but Nowhere Close to Commercialisation

Bio-Thera Solutions Ltd / Equity Capital Markets

In February 2020, <a href="https://www.smartkarma.com/entities/bio-thera-solutions-ltd" target="_blank" data-smartkarma-citation="entities:29127:1" rel="noopener">Bio-Thera Solutions Ltd (688177 CH)</a> completed its listing on the SSE STAR Market. Then in 2020/2H, Bio-Thera planned to list on the Hong Kong Stock Exchange, becoming another biopharmaceutical company with "A+H" listing. Currently the Company’s market value was about RMB13.5 billion. So how about this company? The following provides the insights on its pipeline and related competitive landscape.

In February 2020, Bio-Thera Solutions Ltd (688177 CH) completed its listing on the SSE STAR Market. Then in 2020/2H, Bio-Thera planned to list on the Hong Kong Stock Exchange, becoming another biopharmaceutical company with "A+H" listing. Currently the Company’s market value was about RMB13.5 billion. So how about this company? The following provides the insights on its pipeline and related competitive landscape. 

Pre-IPO Bio-Thera Solutions - Insights on Pipeline and the Competitive Landscape

China

Edding Genor Group is an integrated specialty biopharmaceutical company focused on oncology, autoimmune diseases, cardiovascular diseases, respiratory diseases, and anti-infectives. It discovers, develops, manufactures, and commercializes biopharmaceutical products, primarily through acquiring branded drug assets and licensing patented drugs. The company is headquartered in Shanghai, China, and was founded in 2001.

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Edding Genor Group (6998 HK)

HSCI Index Rebalance & Stock Connect: Inclusions & Exclusions

There are 36 inclusions/ 29 exclusions for the Hang Seng Composite Index. 9 stocks will be deleted from the Stock Connect Buy list & there are a...

Brian Freitas

Innovent Biologics (1801 HK) - Have the Genes to Become a Big Pharma

This article mainly analyzed Innovent in terms of its current listed products (Sintilimab, Bevacizumab, Adalimumab and Rituximab), its pipeline,...

Xinyao (Criss) Wang

Luye Pharma (2186.HK) - Could the Magic of Hillhouse Last Long?

This article analyzed Luye Pharma after the subscription agreement with Hillhouse in terms of the past performance, insights on recent changes, and...

Xinyao (Criss) Wang

Gracell Biotechnologies IPO: Promising Early Trial Results but Nowhere Close to Commercialisation

Gracell Biotechnologies is a clinical-stage biopharmaceutical company dedicated to developing breakthrough cell therapies for treating cancer. In...

Shifara Samsudeen, FCMA, CGMA

Pre-IPO Bio-Thera Solutions - Insights on Pipeline and the Competitive Landscape

This article summarized the insights on major products of Bio-Thera Solutions in the pipeline and related competitive landscape with other key...

Xinyao (Criss) Wang

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