HK/China Equity Long-Short

Osbert Tang, CFA

Thematic (Sector/Industry)

<ul>
<li>Chinese government will continue to boost the slowing domestic economy by supporting consumption. The A-share consumer staples sector, which is less volatile than discretionary, will be benefited.</li>
<li>We see attractive stories for <a href="https://www.smartkarma.com/entities/shanxi-xinghuacun-fen-wine-factory-co" target="_blank" data-smartkarma-citation="entities:9288:1" rel="noopener">Shanxi Xinghuacun Fen Wine (600809 CH)</a>, <a href="https://www.smartkarma.com/entities/foshan-haitian-flavouring-food-co-ltd" target="_blank" data-smartkarma-citation="entities:15577:1" rel="noopener">Foshan Haitian Flavouring (603288 CH)</a>, <a href="https://www.smartkarma.com/entities/inner-mongolia-yili-indus-a" target="_blank" data-smartkarma-citation="entities:3220:1" rel="noopener">Inner Mongolia Yili Industrial (600887 CH)</a> and <a href="https://www.smartkarma.com/entities/fu-jian-anjoy-foods-co-ltd" target="_blank" data-smartkarma-citation="entities:30110:1" rel="noopener">Fu Jian Anjoy Foods (603345 CH)</a>.  </li>
<li>While they are trading on high-end of peer multiples, their earnings quality, leadership status and product premiumisation provide good justifications for valuation. Also, all of them have solid financial position.  </li>
</ul>


Chinese government will continue to boost the slowing domestic economy by supporting consumption. The A-share consumer staples sector, which is less volatile than discretionary, will be benefited.
We see attractive stories for Shanxi Xinghuacun Fen Wine (600809 CH), Foshan Haitian Flavouring (603288 CH), Inner Mongolia Yili Industrial (600887 CH) and Fu Jian Anjoy Foods (603345 CH).  
While they are trading on high-end of peer multiples, their earnings quality, leadership status and product premiumisation provide good justifications for valuation. Also, all of them have solid financial position.  


China A-Share Consumer Staples: An Analysis of the Opportunities Ahead

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 analysed the earning revision of component stocks of CSI 300 in the past month.</li>
<li>We tabulated stocks with the top impact on index's EPS, stocks' EPS revision, and revenue revision.</li>
<li>We highlighted EPS revision on DAWNING INFORMATION INDUSTRY, PING AN INSURANCE, JIANGSU EASTERN SHENGHONG, BOE, SPDB, CHINA VANKE, NATIONAL SILICON INDUSTRY.</li>
</ul>


We analysed the earning revision of component stocks of CSI 300 in the past month.
We tabulated stocks with the top impact on index's EPS, stocks' EPS revision, and revenue revision.
We highlighted EPS revision on DAWNING INFORMATION INDUSTRY, PING AN INSURANCE, JIANGSU EASTERN SHENGHONG, BOE, SPDB, CHINA VANKE, NATIONAL SILICON INDUSTRY.


CSI 300 Index Earning Revision (Nov): DAWNING INFORMATION INDUSTRY, PING AN INSURANCE

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

Gansu Huangtai Wine Mktg Ind Co., / Index Rebalance

<ul>
<li>There is 1 add for the CSI Liquor Index and 1 add/ 2 deletes for the CSI Alcoholic Drink Index in June.</li>
<li>
<a href="https://www.smartkarma.com/entities/gansu-huangtai-wine-mktg-ind-co-ltd" target="_blank" data-smartkarma-citation="entities:15244:1" rel="noopener">Gansu Huangtai Wine Mktg Ind Co., (000995 CH)</a> will be added to the CSI Liquor Index and the CSI Alcoholic Drink Index.</li>
<li>There will be big selling in <a href="https://www.smartkarma.com/entities/kweichow-moutai-co-ltd-a" target="_blank" data-smartkarma-citation="entities:1553:1" rel="noopener">Kweichow Moutai (600519 CH)</a> due to the stock being capped in both indices. Smaller capping flows in the other stocks.</li>
</ul>


There is 1 add for the CSI Liquor Index and 1 add/ 2 deletes for the CSI Alcoholic Drink Index in June.

Gansu Huangtai Wine Mktg Ind Co., (000995 CH) will be added to the CSI Liquor Index and the CSI Alcoholic Drink Index.
There will be big selling in Kweichow Moutai (600519 CH) due to the stock being capped in both indices. Smaller capping flows in the other stocks.


CSI Liquor/ Alcoholic Drink Index Rebalance: Adds, Deletes & Capping Changes

<ul>
<li>The review period ended on 31 October, the changes should be announced on 29 November and will be effective after the close of trading on 13 December.</li>
<li>There could be 2 adds for the CSI Liquor Index and 4 adds/ 2 deletes for the CSI Alcoholic Drink Index.</li>
<li>Some stocks could be added to both indices, increasing the flow and impact. Based on the passive assets tracking the indices, the estimated round-trip trade is CNY 3.4bn (US$477m).</li>
</ul>


The review period ended on 31 October, the changes should be announced on 29 November and will be effective after the close of trading on 13 December.
There could be 2 adds for the CSI Liquor Index and 4 adds/ 2 deletes for the CSI Alcoholic Drink Index.
Some stocks could be added to both indices, increasing the flow and impact. Based on the passive assets tracking the indices, the estimated round-trip trade is CNY 3.4bn (US$477m).


CSI Liquor/ Alcoholic Drink Index Rebalance Preview: Getting Tipsy with It

<ul>
<li>We analyze the weekly Shanghai/Shenzhen northbound Connect flows with our data engine for holding position as of May 24th.</li>
<li>We estimate the weekly inflows to be US$654.7 million, led by utilities, financials, industrials sectors, and offset by health care, consumer discretionary, communication services.</li>
<li>We highlight flows for CATL, China Yangtze Power, Bank Of Ningbo, Nari Technology, Jiangsu Hengrui Medicine, Weichai Power.</li>
</ul>


We analyze the weekly Shanghai/Shenzhen northbound Connect flows with our data engine for holding position as of May 24th.
We estimate the weekly inflows to be US$654.7 million, led by utilities, financials, industrials sectors, and offset by health care, consumer discretionary, communication services.
We highlight flows for CATL, China Yangtze Power, Bank Of Ningbo, Nari Technology, Jiangsu Hengrui Medicine, Weichai Power.


Northbound Flows (May 24th): CATL, China Yangtze Power, Bank Of Ningbo, Nari Technology, Hengrui

China

Jiangsu Yanghe Brewery Joint-Stock Company Ltd. manufactures spirits. The Company's products include white spirits, top-graded gifts liquor, and liquor for daily consumption.

Price Gauge
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Jiangsu Yanghe Brewery A (002304 CH)

CSI 300 Index Earning Revision (Nov): DAWNING INFORMATION INDUSTRY, PING AN INSURANCE

We analyzed CSI 300's consensus for Nov 2025 and highlighted changes of EPS in DAWNING INFORMATION INDUSTRY (603019 CH), PING AN INSURANCE (601318...

Ke Yan, CFA, FRM

CSI Liquor/ Alcoholic Drink Index Rebalance: Adds, Deletes & Capping Changes

Gansu Huangtai Wine Mktg will be added to the CSI Liquor Index and the CSI Alcoholic Drink Index. There are 2 deletes for the Alcohol Index. Large...

Brian Freitas

CSI Liquor/ Alcoholic Drink Index Rebalance Preview: Getting Tipsy with It

There could be 2 adds for the Liquor Index and 4 adds/2 deletes for the Alcoholic Drink Index. Estimated round-trip trade is CNY 3.4bn (US$477m)....

Brian Freitas

Northbound Flows (May 24th): CATL, China Yangtze Power, Bank Of Ningbo, Nari Technology, Hengrui

We analyzed northbound Shanghai/Shenzhen connect flows in the past week and highlight flows for CATL, China Yangtze Power, Bank Of Ningbo, Nari...

Ke Yan, CFA, FRM

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

China A-Share Consumer Staples: An Analysis of the Opportunities Ahead

With the recent IPOs of Foshan Haitian Flavouring and Fujian Anjoy Foods (planned), we think the interest in China's consumer staples sector will...

Osbert Tang, CFA

CSI 300 Index Earning Revision (Nov): DAWNING INFORMATION INDUSTRY, PING AN INSURANCE

We analyzed CSI 300's consensus for Nov 2025 and highlighted changes of EPS in DAWNING INFORMATION INDUSTRY (603019 CH), PING AN INSURANCE (601318...

Ke Yan, CFA, FRM

CSI Liquor/ Alcoholic Drink Index Rebalance: Adds, Deletes & Capping Changes

Gansu Huangtai Wine Mktg will be added to the CSI Liquor Index and the CSI Alcoholic Drink Index. There are 2 deletes for the Alcohol Index. Large...

Brian Freitas

CSI Liquor/ Alcoholic Drink Index Rebalance Preview: Getting Tipsy with It

There could be 2 adds for the Liquor Index and 4 adds/2 deletes for the Alcoholic Drink Index. Estimated round-trip trade is CNY 3.4bn (US$477m)....

Brian Freitas

Northbound Flows (May 24th): CATL, China Yangtze Power, Bank Of Ningbo, Nari Technology, Hengrui

We analyzed northbound Shanghai/Shenzhen connect flows in the past week and highlight flows for CATL, China Yangtze Power, Bank Of Ningbo, Nari...

Ke Yan, CFA, FRM