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>There are 24 adds and 22 deletes for the Hang Seng Composite Index (HSCI) at the September rebalance to take the number of index constituents up to 504.</li>
<li>We expect 20 of the 24 HSCI inclusions to be Stock Connect adds from the open on 8 September. 19 of the 22 deletions could be removed from Stock Connect.</li>
<li>On average, stocks that are expected to be added to Southbound Stock Connect have outperformed stocks that are expected to be removed from Southbound Stock Connect.</li>
</ul>


There are 24 adds and 22 deletes for the Hang Seng Composite Index (HSCI) at the September rebalance to take the number of index constituents up to 504.
We expect 20 of the 24 HSCI inclusions to be Stock Connect adds from the open on 8 September. 19 of the 22 deletions could be removed from Stock Connect.
On average, stocks that are expected to be added to Southbound Stock Connect have outperformed stocks that are expected to be removed from Southbound Stock Connect.


HSCI Index Rebalance: 24 Adds, 22 Deletes, Changes to Southbound Stock Connect & BIG Outperformance

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.

Event-Driven

<ul>
<li>
<a href="https://www.smartkarma.com/entities/enn-natural-gas-co-ltd" target="_blank" data-smartkarma-citation="entities:16456:1" rel="noopener">ENN Natural Gas (600803 CH)</a> has made steady progress in satisfying the precondition for its <a href="https://www.smartkarma.com/entities/enn-energy-holdings-ltd" target="_blank" data-smartkarma-citation="entities:316:1" rel="noopener">ENN Energy (2688 HK)</a> offer. On 22 August, NDRC approval was obtained. </li>
<li>The appraised offer HK$80.00 value is the key debating point. Based on several methodologies, I estimate a realistic offer value of HK$74.44 (range of HK$67.84 to HK$83.64). </li>
<li>The protest votes for director re-elections at the 23 May AGM are a risk. On balance, the scheme vote should pass as the offer is reasonable and strategically sensible.   </li>
</ul>



ENN Natural Gas (600803 CH) has made steady progress in satisfying the precondition for its ENN Energy (2688 HK) offer. On 22 August, NDRC approval was obtained. 
The appraised offer HK$80.00 value is the key debating point. Based on several methodologies, I estimate a realistic offer value of HK$74.44 (range of HK$67.84 to HK$83.64). 
The protest votes for director re-elections at the 23 May AGM are a risk. On balance, the scheme vote should pass as the offer is reasonable and strategically sensible.   


ENN Energy (2688 HK): Chipping Away at the Precondition

Asia Pac IPO & Placement Research, China biotech, Aequitas Research

Ke Yan, CFA, FRM

Asia Pac IPO & Placement Research, China biotech

IPOs and Placements coverage across Asia Pacific

Aequitas Research

We cover all listing across the Asia Pacific along with follow-up placements. As of Dec 2020, our team had covered 539 IPOs with a hit rate of 73.5% and 685 placements with a hit rate of 66.8%.

We combine fundamental bottom-up views with our proprietary quantitative framework to provide a holistic coverage across new listings and placements. Our coverage includes pre-IPO notes before the deal is launched, follow-up analysis once the deal is live and post-listing trading analysis as well.

Quantitative Analysis

<ul>
<li>We analyse the changes of A-H premium on 157 stocks over the last week. The average A-H premium was 58.0% as of Aug 22nd.</li>
<li>The average A-H premium changed by 3.6ppt week-on-week, led by consumer staples, real estate, materials.</li>
<li>We highlight weekly changes in A-H premium for Air China, Cosco Shipping Development, Ganfeng Lithium, Fuyao Glass.</li>
</ul>


We analyse the changes of A-H premium on 157 stocks over the last week. The average A-H premium was 58.0% as of Aug 22nd.
The average A-H premium changed by 3.6ppt week-on-week, led by consumer staples, real estate, materials.
We highlight weekly changes in A-H premium for Air China, Cosco Shipping Development, Ganfeng Lithium, Fuyao Glass.


A-H Premium Weekly (Aug 22nd): Air China, Cosco Shipping Development, Ganfeng Lithium, Fuyao Glass

HK/China Healthcare Analyst (ex-Fosun Pharma)

Xinyao (Criss) Wang

Equity Capital Markets

Ascletis Pharma Inc / Equity Capital Markets

<ul>
<li>The 25H1 results of JD Health beat expectations. Due to the strong financial position/positive growth outlook, reasonable valuation of JD Health is P/S of 3 to 4x.</li>
<li>Ascletis announced Share Placing.If ASC30's Phase IIa data remain excellent, potential BD/licensing deal would drive valuation to HK$25bn. However, if clinical data is disappointing, valuation may fall below HK$12 billion.</li>
<li>Reasonable valuation of Hansoh is about RMB108-111 billion. So, the Placing Price of HK$36.30 per Placing Share is expensive. We think the valuation of Hansoh should be lower than BeiGene.</li>
</ul>


The 25H1 results of JD Health beat expectations. Due to the strong financial position/positive growth outlook, reasonable valuation of JD Health is P/S of 3 to 4x.
Ascletis announced Share Placing.If ASC30's Phase IIa data remain excellent, potential BD/licensing deal would drive valuation to HK$25bn. However, if clinical data is disappointing, valuation may fall below HK$12 billion.
Reasonable valuation of Hansoh is about RMB108-111 billion. So, the Placing Price of HK$36.30 per Placing Share is expensive. We think the valuation of Hansoh should be lower than BeiGene.


China Healthcare Weekly (Aug.24)-JD Health 25H1 Results, Hansoh Placement, Ascletis Pharma Placement

Head of Research, IPOs & Placements, Aequitas Research

Sumeet Singh

Head of Research, IPOs & Placements

<ul>
<li>A group of shareholders are looking to raise up to US$1.2bn via selling most of their stake in <a href="https://www.smartkarma.com/entities/daiichi-sankyo-co-ltd" target="_blank" data-smartkarma-citation="entities:3014:1" rel="noopener">Daiichi Sankyo (4568 JP)</a> .</li>
<li>While the deal shouldn’t come as a surprise, given the ongoing cross-shareholding unwind,  the last deal in the stock didn’t do well.</li>
<li>In this note, we will talk about the placement and run the deal through our ECM framework.</li>
</ul>


A group of shareholders are looking to raise up to US$1.2bn via selling most of their stake in Daiichi Sankyo (4568 JP) .
While the deal shouldn’t come as a surprise, given the ongoing cross-shareholding unwind,  the last deal in the stock didn’t do well.
In this note, we will talk about the placement and run the deal through our ECM framework.


Daiichi Sankyo Placement - US$1.2bn Deal but Momentum Isn’t the Best, Last Deal Didn’t Do Well

China

Jiangsu Hengrui Pharmaceuticals Co.,Ltd develops, manufactures, and markets medicines and medicine packing materials. The Company produces anti-tumor medicines, pain-killers, anti-infection medicines, aluminum foils, and other related products. Jiangsu Hengrui Pharmaceuticals conducts business in China, America, Japan, Korea, Europe, and Australia.

Jiangsu Hengrui Pharmaceuticals (1276 HK)

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52-week Range	0.00 - 0.00
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Jiangsu Hengrui Pharmaceuticals (1276 HK)

HSCI Index Rebalance: 24 Adds, 22 Deletes, Changes to Southbound Stock Connect & BIG Outperformance

There are 24 adds and 22 deletes for the HSCI in Sep. 20 stocks could be added to Stock Connect and 19 removed. The Connect adds have outperformed...

Brian Freitas

ENN Energy (2688 HK): Chipping Away at the Precondition

NDRC approval suggests that the precondition will be satisfied. The appraised value (HK$80.00) is a key sticking point. I estimate a realistic...

Arun George

A-H Premium Weekly (Aug 22nd): Air China, Cosco Shipping Development, Ganfeng Lithium, Fuyao Glass

We analyzed A-H premium changes in the past week and highlight A-H premium changes for Air China, Cosco Shipping Development, Ganfeng Lithium,...

Ke Yan, CFA, FRM

China Healthcare Weekly (Aug.24)-JD Health 25H1 Results, Hansoh Placement, Ascletis Pharma Placement

JD Health 25H1 strong financial position and positive growth outlook support 3-4x P/S.Ascletis' potential valuation hinges on ASC30's clinical...

Xinyao (Criss) Wang

Daiichi Sankyo Placement - US$1.2bn Deal but Momentum Isn’t the Best, Last Deal Didn’t Do Well

A group of shareholders are looking to raise up to US$1.2bn via selling most of their stake in Daiichi Sankyo (4568 JP) . In this note, we talk...

Sumeet Singh

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

HSCI Index Rebalance: 24 Adds, 22 Deletes, Changes to Southbound Stock Connect & BIG Outperformance

There are 24 adds and 22 deletes for the HSCI in Sep. 20 stocks could be added to Stock Connect and 19 removed. The Connect adds have outperformed...

Brian Freitas

ENN Energy (2688 HK): Chipping Away at the Precondition

NDRC approval suggests that the precondition will be satisfied. The appraised value (HK$80.00) is a key sticking point. I estimate a realistic...

Arun George

A-H Premium Weekly (Aug 22nd): Air China, Cosco Shipping Development, Ganfeng Lithium, Fuyao Glass

We analyzed A-H premium changes in the past week and highlight A-H premium changes for Air China, Cosco Shipping Development, Ganfeng Lithium,...

Ke Yan, CFA, FRM

China Healthcare Weekly (Aug.24)-JD Health 25H1 Results, Hansoh Placement, Ascletis Pharma Placement

​JD Health 25H1 strong financial position and positive growth outlook support 3-4x P/S.Ascletis' potential valuation hinges on ASC30's clinical...

Xinyao (Criss) Wang

Daiichi Sankyo Placement - US$1.2bn Deal but Momentum Isn’t the Best, Last Deal Didn’t Do Well

A group of shareholders are looking to raise up to US$1.2bn via selling most of their stake in Daiichi Sankyo (4568 JP) . In this note, we talk...

Sumeet Singh

JD Health 25H1 strong financial position and positive growth outlook support 3-4x P/S.Ascletis' potential valuation hinges on ASC30's clinical...