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

Brian Freitas

Pan-Asia Index Rebalances/ Events/ Delta One

Index Rebalance

<p>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.</p><p>For the <a href="https://www.smartkarma.com/entities/hong-kong-hang-seng-index" target="_blank" data-smartkarma-citation="entities:22899:1" rel="noopener">Hong Kong Hang Seng Index (HSI INDEX)</a>, there are 3 inclusions - <a href="https://www.smartkarma.com/entities/alibaba-health-information-technology-ltd" target="_blank" data-smartkarma-citation="entities:453:1" rel="noopener">Alibaba Health Information Technology (241 HK)</a>, <a href="https://www.smartkarma.com/entities/longfor-properties" target="_blank" data-smartkarma-citation="entities:8149:1" rel="noopener">Longfor Properties (960 HK)</a> and <a href="https://www.smartkarma.com/entities/haidilao-international-holding-ltd" target="_blank" data-smartkarma-citation="entities:27044:1" rel="noopener">Haidilao (6862 HK)</a>. This takes the number of index constituents to 55 and sets the stage for a further increase in the number of stocks as a part of the market consultation, the conclusions of which are to be announced on 1 March.</p><p>One-way turnover is estimated at 2.65% and will result in a one-way trade of HK$6.08bn. The highest impact is on <a href="https://www.smartkarma.com/entities/longfor-properties" target="_blank" data-smartkarma-citation="entities:8149:1" rel="noopener">Longfor Properties (960 HK)</a> while the impact on <a href="https://www.smartkarma.com/entities/alibaba-health-information-technology-ltd" target="_blank" data-smartkarma-citation="entities:453:1" rel="noopener">Alibaba Health Information Technology (241 HK)</a> and <a href="https://www.smartkarma.com/entities/haidilao-international-holding-ltd" target="_blank" data-smartkarma-citation="entities:27044:1" rel="noopener">Haidilao (6862 HK)</a> is lower, though still substantial.</p><p>There are only 10 trading days to implementation of the changes, so the three stocks should move up on Monday and outperform their peers till implementation date.</p><p>Hang Seng Indexes is scheduled to announce the conclusions of the market consultation on Monday, 1 March and there will be a lot more changes to the index. These changes should commence at the June 2021 review and will most likely be implemented in 4 tranches, concluding at the March 2022 review.</p>

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 Hong Kong Hang Seng Index (HSI INDEX), there are 3 inclusions - Alibaba Health Information Technology (241 HK), Longfor Properties (960 HK) and Haidilao (6862 HK). This takes the number of index constituents to 55 and sets the stage for a further increase in the number of stocks as a part of the market consultation, the conclusions of which are to be announced on 1 March.One-way turnover is estimated at 2.65% and will result in a one-way trade of HK$6.08bn. The highest impact is on Longfor Properties (960 HK) while the impact on Alibaba Health Information Technology (241 HK) and Haidilao (6862 HK) is lower, though still substantial.There are only 10 trading days to implementation of the changes, so the three stocks should move up on Monday and outperform their peers till implementation date.Hang Seng Indexes is scheduled to announce the conclusions of the market consultation on Monday, 1 March and there will be a lot more changes to the index. These changes should commence at the June 2021 review and will most likely be implemented in 4 tranches, concluding at the March 2022 review.

Hang Seng Index Rebalance: Three Adds; Market Consultation Conclusions on 1 March

HK/China Healthcare Analyst (ex-Fosun Pharma)

Xinyao (Criss) Wang

Equity Bottom-Up

Lepu Medical Technology A / Equity Bottom-Up

<p><a href="https://www.smartkarma.com/entities/lepu-medical-technology-a" target="_blank" data-smartkarma-citation="entities:16654:1" rel="noopener">Lepu Medical Technology A (300003 CH)</a> did not perform well in 2020/2H mainly due to the intensive procurement of high-value medical consumables (the coronary stents). The market was concerned about the Company's uncertainty in business and subsequent decline in performance, leading to the continuous decrease of its stock price. Over the past six months, the share price of Lepu fell from around RMB47/share in July last year to around RMB26/share. However, the stock price has rebounded recently, reaching as high as RMB34.68/share. So is Lepu still worth looking forward to in the long term?</p>

Lepu Medical Technology A (300003 CH) did not perform well in 2020/2H mainly due to the intensive procurement of high-value medical consumables (the coronary stents). The market was concerned about the Company's uncertainty in business and subsequent decline in performance, leading to the continuous decrease of its stock price. Over the past six months, the share price of Lepu fell from around RMB47/share in July last year to around RMB26/share. However, the stock price has rebounded recently, reaching as high as RMB34.68/share. So is Lepu still worth looking forward to in the long term?

Lepu Medical Technology A (300003 CH) - Does Not Have High Moat

Founder

Kemp Dolliver, CFA

Cherrystone Hill Research

Equity Capital Markets

MicroPort CardioFlow / Equity Capital Markets

<p>We think that the proposed valuation for MicroPort CardioFlow's HKEX listing is pricey based on our DCF analysis, but the business has very good momentum resulting from a favorable product cycle and adoption of a new procedure. We would take the deal.</p>

We think that the proposed valuation for MicroPort CardioFlow's HKEX listing is pricey based on our DCF analysis, but the business has very good momentum resulting from a favorable product cycle and adoption of a new procedure. We would take the deal.

MicroPort CardioFlow: What You Have to Assume

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.

<div><p><a href="https://www.smartkarma.com/entities/microport-cardioflow-medtech-corporation" target="_blank" data-smartkarma-citation="entities:31084:1" rel="noopener">MicroPort CardioFlow (1844972D HK)</a> is a leading transcatheter heart valve medical device company in China. It started as an incubation project within <a href="https://www.smartkarma.com/entities/microport-scientific-corp" target="_blank" data-smartkarma-citation="entities:4487:1" rel="noopener">Microport Scientific (853 HK)</a>, the controlling shareholder. At the proposed IPO price range of HK$11.10-12.20 per share, MicroPort will have a market cap of HK$26,264.5-28,867.2 ($3.4-3.7 billion). At the mid-point of the IPO price range, the total net proceeds are HK$2,247.5 million ($290 million). </p></div><div><p>Sixteen cornerstone investors will subscribe for $125 million of the offer shares (40.5% of the offer shares at the mid-point of the IPO price range). The five largest cornerstone investors are CPE Fund, Hillhouse Capital, Lake Bleu Capital, GIC and Taikang Life. </p></div><div><div><div class="content-highlight"><p>In <a href="https://www.smartkarma.com/insights/microport-cardioflow-ipo-initiation-to-save-a-life" target="_blank" data-smartkarma-citation="insights:47200" rel="noopener">MicroPort CardioFlow IPO Initiation: To Save a Life</a>, we stated that with a large addressable market opportunity and VitaFlow’s potentially best-in-class clinical data, we believe that MicroPort is another attractive play on the China TAVR (transcatheter aortic heart valve replacement) market. Overall, we think that the IPO price range is reasonable.</p></div></div></div>

MicroPort CardioFlow (1844972D HK) is a leading transcatheter heart valve medical device company in China. It started as an incubation project within Microport Scientific (853 HK), the controlling shareholder. At the proposed IPO price range of HK$11.10-12.20 per share, MicroPort will have a market cap of HK$26,264.5-28,867.2 ($3.4-3.7 billion). At the mid-point of the IPO price range, the total net proceeds are HK$2,247.5 million ($290 million). Sixteen cornerstone investors will subscribe for $125 million of the offer shares (40.5% of the offer shares at the mid-point of the IPO price range). The five largest cornerstone investors are CPE Fund, Hillhouse Capital, Lake Bleu Capital, GIC and Taikang Life. In MicroPort CardioFlow IPO Initiation: To Save a Life, we stated that with a large addressable market opportunity and VitaFlow’s potentially best-in-class clinical data, we believe that MicroPort is another attractive play on the China TAVR (transcatheter aortic heart valve replacement) market. Overall, we think that the IPO price range is reasonable.

MicroPort CardioFlow IPO: Valuation Insights

<p><a href="https://www.smartkarma.com/entities/microport-cardioflow-medtech-corporation" target="_blank" data-smartkarma-citation="entities:31084:1" rel="noopener">MicroPort CardioFlow (1844972D HK)</a> has filed a PHIP in conjunction with its planned listing on the HKEX. This Insight discusses the incremental disclosures; developments in the TAVR market; and the nascent TMV opportunity. We tag this Insight as Bullish pending announcement of the offering's terms. </p>

MicroPort CardioFlow (1844972D HK) has filed a PHIP in conjunction with its planned listing on the HKEX. This Insight discusses the incremental disclosures; developments in the TAVR market; and the nascent TMV opportunity. We tag this Insight as Bullish pending announcement of the offering's terms. 

MicroPort CardioFlow: PHIP Updates and More on TMV

China

MicroPort Scientific is a leading global medical device company that innovates, manufactures, and markets high-end medical devices. The company provides solutions across twelve therapeutic areas, including cardiovascular, orthopedics, cardiac rhythm management, electrophysiology, endovascular, neurovascular, and surgical robotics. It was founded in 1998 and is headquartered in Shanghai, China.

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MicroPort Scientific (853 HK)

Hang Seng Index Rebalance: Three Adds; Market Consultation Conclusions on 1 March

There are 3 inclusions to the HSI - Ali Health, Longfor Prop and Haidilao. With 10 days to implementation, the stocks should outperform....

Brian Freitas

Lepu Medical Technology A (300003 CH) - Does Not Have High Moat

This article analyzed Lepu Medical's poor performance in the past six months, deep dive its development mode, financial position, and indicate...

Xinyao (Criss) Wang

MicroPort CardioFlow: What You Have to Assume

We think that the proposed valuation for MicroPort CardioFlow's HKEX listing is pricey, but the business has very good momentum. We would take the...

Kemp Dolliver, CFA

MicroPort CardioFlow IPO: Valuation Insights

MicroPort aims to raise total net proceeds of $290 million at the mid-point of the IPO price range of HK$11.10-12.20 per share. Overall, we think...

Arun George

MicroPort CardioFlow: PHIP Updates and More on TMV

MicroPort CardioFlow plans an HKEX listing. This Insight discusses updated disclosures in its PHIP filing; developments in the TAVR market; the...

Kemp Dolliver, CFA

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