Asia Pac ECM and Index Rebal, Shenton Research

Ke Yan, CFA, FRM

Asia Pac ECM and Index Rebal

Asia Pac IPO & Placement Research, China Biotech

DZT Research

DZT Research is an independent Asia Pacific equity specialist. Our quantitative research covers index rebalancing flows, alongside exchange data analytics accross Asia Pacific. On the equity capital markets side, we focus on Asia Pacific ECM, especially biotech and TMT. Our lead analyst is frequently cited by international media.

Quantitative Analysis

<ul>
<li>We analyze the weekly Hong Kong Connect flows with our data engine for holding position as of May 19th.</li>
<li>The top stocks by inflows and outflows were tabulated for all market, HSCEI, mid cap and s/mid cap groups.</li>
<li>We highlight flows for Tencent, China Construction Bank, China Mobile, Li Auto.</li>
</ul>


We analyze the weekly Hong Kong Connect flows with our data engine for holding position as of May 19th.
The top stocks by inflows and outflows were tabulated for all market, HSCEI, mid cap and s/mid cap groups.
We highlight flows for Tencent, China Construction Bank, China Mobile, Li Auto.


Hong Kong Connect Flows (May 19th): Tencent, China Construction Bank, China Mobile, Li Auto

<ul>
<li>We analyze the weekly Hong Kong Connect flows with our data engine for holding position as of April 28th.</li>
<li>The top stocks by inflows and outflows were tabulated for all market, HSCEI, mid cap and s/mid cap groups.</li>
<li>We estimate the inflows to be USD 201m and highlight flows for Meituan, China Construction Bank.</li>
</ul>


We analyze the weekly Hong Kong Connect flows with our data engine for holding position as of April 28th.
The top stocks by inflows and outflows were tabulated for all market, HSCEI, mid cap and s/mid cap groups.
We estimate the inflows to be USD 201m and highlight flows for Meituan, China Construction Bank.


Hong Kong Connect Flows (Apr 28th): Meituan, China Construction Bank

<ul>
<li>We analyze the weekly Hong Kong Connect flows with our data engine for holding position as of February 17th.</li>
<li>The top stocks by inflows and outflows were tabulated for all market, HSCEI, mid cap and s/mid cap groups.</li>
<li>We estimate the total inflows to be USD 960m and  highlight flows for Meituan, Xiaomi, Tencent.</li>
</ul>


We analyze the weekly Hong Kong Connect flows with our data engine for holding position as of February 17th.
The top stocks by inflows and outflows were tabulated for all market, HSCEI, mid cap and s/mid cap groups.
We estimate the total inflows to be USD 960m and  highlight flows for Meituan, Xiaomi, Tencent.


Hong Kong Connect Flows (Feb 17th): Meituan, Xiaomi, Tencent

<ul>
<li>We analyze statistics on top repurchases over one week, one month, one quarter and one year periods ended on Dec 3rd based on HKEx daily reports.</li>
<li>In the past 7 days, the top 3 companies that repurchased the most shares from the market were China Gas (384 HK), Xiaomi (1810 HK), Lee&amp;Man (2314 HK).</li>
<li>In the past 30 days, the top 3 companies that repurchased the most shares from the market were Skyworth (751 HK), China Gas (384 HK), China Medical System (867 HK).</li>
</ul>


We analyze statistics on top repurchases over one week, one month, one quarter and one year periods ended on Dec 3rd based on HKEx daily reports.
In the past 7 days, the top 3 companies that repurchased the most shares from the market were China Gas (384 HK), Xiaomi (1810 HK), Lee&amp;Man (2314 HK).
In the past 30 days, the top 3 companies that repurchased the most shares from the market were Skyworth (751 HK), China Gas (384 HK), China Medical System (867 HK).


Hong Kong Buybacks: China Gas, Xiaomi, Lee & Man

Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

B-shares - remember them?
Created in 1992 to attract foreign investors,  their introduction, which followed the launch of A-shares, was a precursor to wider market access reforms for foreigners, as China integrated itself with the global economy.
Fast forward and years of market liberalisation provide foreign investors access to 3,000+ companies with A-shares. As a result, the combined market value of B shares accounts for less than 0.2% of the capitalisation of A-shares issued by companies in Shanghai. More importantly, the average daily trading volume for B-shares is ~0.1% of its peers.
Over the last decade, the HSI is up 30%. The Shanghai Exchange is up 18%, whereas the Shanghai B-share index is down 22%. For Shenzhen, the main index is up 70% versus 37% for the B-share index. 
<figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/194/975/original/image_19472098951615942317700.png?1615942320" class="editor-image img-responsive" data-smartkarma-image-id="194975"></figure>
<div style="text-align: left;" class="content-caption">Source: CapIQ</div>
B shares have become a sort of zombie market for foreigners. 
The authorities could merge the B and A shares, which would result in a spike in the Bs, given their historical trading discount.
Alternatively, B shares can be transferred into H-shares for trading on the Hong Kong exchange, as seen in <a href="https://www.smartkarma.com/entities/china-international-marine-cntnrs-gp-ltd" target="_blank" data-smartkarma-citation="entities:11752:1" rel="noopener">China International Marine Cntnrs Gp (2039 HK)</a>, <a href="https://www.smartkarma.com/entities/china-vanke-co-ltd-h" target="_blank" data-smartkarma-citation="entities:18368:1" rel="noopener">China Vanke Co Ltd (H) (2202 HK)</a>, and <a href="https://www.smartkarma.com/entities/livzon-pharmaceutical-group-inc" target="_blank" data-smartkarma-citation="entities:18726:1" rel="noopener">Livzon Pharmaceutical Group (1513 HK)</a>.
<h3>The New News</h3>
On the 29 January 2021, <a href="https://www.smartkarma.com/entities/shandong-chenming-paper-a" target="_blank" data-smartkarma-citation="entities:19264:1" rel="noopener">Shandong Chenming Paper A (000488 CH)/(1812 HK)</a> <a href="https://www1.hkexnews.hk/listedco/listconews/sehk/2021/0201/2021020100079.pdf" target="_blank" rel="noopener">announced</a> the proposed listing of its domestic (B-shares) on the Hong Kong Stock Exchange, as H-shares. The circular is <a href="https://www1.hkexnews.hk/listedco/listconews/sehk/2021/0221/2021022100021.pdf" target="_blank" rel="noopener">here</a>, and shareholders approved the transfer on the <a href="https://www1.hkexnews.hk/listedco/listconews/sehk/2021/0314/2021031400011.pdf" target="_blank" rel="noopener">9 March</a>.
B-shares closed yesterday at HK$5.49/share. Yet the H-shares - in which the B-shares will be converted into - are trading at HK$6.70/share.
More below the fold ...

B-shares - remember them?
Created in 1992 to attract foreign investors,  their introduction, which followed the launch of A-shares, was a precursor to wider market access reforms for foreigners, as China integrated itself with the global economy.
Fast forward and years of market liberalisation provide foreign investors access to 3,000+ companies with A-shares. As a result, the combined market value of B shares accounts for less than 0.2% of the capitalisation of A-shares issued by companies in Shanghai. More importantly, the average daily trading volume for B-shares is ~0.1% of its peers.
Over the last decade, the HSI is up 30%. The Shanghai Exchange is up 18%, whereas the Shanghai B-share index is down 22%. For Shenzhen, the main index is up 70% versus 37% for the B-share index. 

Source: CapIQ
B shares have become a sort of zombie market for foreigners. 
The authorities could merge the B and A shares, which would result in a spike in the Bs, given their historical trading discount.
Alternatively, B shares can be transferred into H-shares for trading on the Hong Kong exchange, as seen in China International Marine Cntnrs Gp (2039 HK), China Vanke Co Ltd (H) (2202 HK), and Livzon Pharmaceutical Group (1513 HK).
The New News
On the 29 January 2021, Shandong Chenming Paper A (000488 CH)/(1812 HK) announced the proposed listing of its domestic (B-shares) on the Hong Kong Stock Exchange, as H-shares. The circular is here, and shareholders approved the transfer on the 9 March.
B-shares closed yesterday at HK$5.49/share. Yet the H-shares - in which the B-shares will be converted into - are trading at HK$6.70/share.
More below the fold ...

Shandong Chenming Paper (1812 HK): The H/B Convergence Trade

Hong Kong

Lee & Man Paper Manufacturing is a major paper and pulp producer specializing in containerboard, tissue paper, and corrugating medium for various industrial and consumer applications. The company operates a vertically integrated model, producing a wide array of paper products from raw materials to finished goods. Headquartered in Hong Kong, the company was established in 1994.

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Lee & Man Paper Manufacturing (2314 HK)

Hong Kong Connect Flows (May 19th): Tencent, China Construction Bank, China Mobile, Li Auto

We analyzed southbound Hong Kong connect flows in the past week and highlight flows for Tencent, China Construction Bank, China Mobile, Li Auto.

Ke Yan, CFA, FRM

Hong Kong Connect Flows (Apr 28th): Meituan, China Construction Bank

We analyzed southbound Hong Kong connect flows in the past week and highlight flows for Meituan, China Construction Bank.

Ke Yan, CFA, FRM

Hong Kong Connect Flows (Feb 17th): Meituan, Xiaomi, Tencent

We analyzed the Hong Kong Connect Scheme for last week and highlight inflows for Meituan, Xiaomi and outflows from Tencent.

Ke Yan, CFA, FRM

Hong Kong Buybacks: China Gas, Xiaomi, Lee & Man

We highlight the top 3 companies that repurchased the most shares in HK were China Gas (384 HK), Xiaomi (1810 HK), Lee & Man (2314 HK) in the past...

Ke Yan, CFA, FRM

Shandong Chenming Paper (1812 HK): The H/B Convergence Trade

On the expectation of a 3-6 month timeline, if you can source borrow on the H's, do so, and buy the Bs. Hearing borrow costs of 10-20%,

David Blennerhassett

Price Gauge

52-week Range

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