Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

<p>The role of lock-ups in IPOs is, as one journal <a href="https://www.jstor.org/stable/1262724?seq=1" target="_blank" rel="noopener">put it</a>, a "<em>commitment device to alleviate moral hazard problems</em>".</p>
<p>Lock-ups can be entered into and negotiated with underwriters, as is the case for secondary listings for <a href="https://www.smartkarma.com/entities/netease" target="_blank" data-smartkarma-citation="entities:29030:1" rel="noopener">NetEase (9999 HK)</a>, <a href="https://www.smartkarma.com/entities/jd-com-inc" target="_blank" data-smartkarma-citation="entities:29043:1" rel="noopener">JD.com (HK) (9618 HK)</a>, amongst others. For primary listings in Hong Kong, there are standard rules as to the lock-up duration.</p>
<p>According to <a href="https://en-rules.hkex.com.hk/rulebook/1007-0" target="_blank" rel="noopener">Main Board Rule 10.07(1)</a> (or <a href="https://en-rules.hkex.com.hk/rulebook/1316a" target="_blank" rel="noopener">GEM rule 13.16A(1)</a>), if a person/group of persons is/are listed as the controlling shareholder(s) of the issuer's listing application, shall not (apart from any offer of shares for sale discussed in the listing document):</p>
<ol>
<li>dispose of shares (nor enter into agreements) in a period commencing on the date by reference to which disclosure of the shareholding of the controlling shareholder is made in the listing document and ending on the date which is 6 months from the date of listing (the “<strong>First Six-month Period</strong>”); and</li>
<li>dispose of shares in the period of 6 months commencing on the date on which the First Six-month Period expires, if immediately following such disposal that person or group of persons would cease to be a controlling shareholder (the “<strong>Second Six-month Period</strong>”).</li>
</ol>
<p>An example of such wording can be found in Yadong's Group (1795 HK)'s (the most recent Main Board listing) "<a href="https://www1.hkexnews.hk/listedco/listconews/sehk/2020/1117/9515120/2020111700040.pdf" target="_blank" rel="noopener"><em>Share Offer - Announcement of allotment results</em></a>".</p>
<p>For cornerstone investors, the following is often stated in the share offer document:</p>
<blockquote>
<p>Each of the Cornerstone Investors has agreed that it will not, whether directly or indirectly, at any time during the period of six months following the Listing Date, dispose of any of the Offer Shares it has purchased pursuant to the relevant Cornerstone Investment Agreement, save for certain limited circumstances ...</p>
</blockquote>
<p>Every week in my Event SPACE wrap, I flag large moves (~10%) in CCASS holdings over the past week or so, moves that are often outside normal market transactions.  These may be indicative of share pledges.  Or potential takeovers. Or simply help understand volume swings. </p>
<p>Large movement(s) concerning recently listed companies are <em>likely</em> lock-up related. </p>
<p>This insight looks at companies that have been listed for nearly six months or 12 months, as a guide to when insiders/controlling shareholders are permitted to sell, potentially depressing prices and creating an overhang.</p>
<p><em>A summary of Main Board listings in 2020 is attached at the bottom of this insight.</em></p>

The role of lock-ups in IPOs is, as one journal put it, a "commitment device to alleviate moral hazard problems".
Lock-ups can be entered into and negotiated with underwriters, as is the case for secondary listings for NetEase (9999 HK), JD.com (HK) (9618 HK), amongst others. For primary listings in Hong Kong, there are standard rules as to the lock-up duration.
According to Main Board Rule 10.07(1) (or GEM rule 13.16A(1)), if a person/group of persons is/are listed as the controlling shareholder(s) of the issuer's listing application, shall not (apart from any offer of shares for sale discussed in the listing document):

dispose of shares (nor enter into agreements) in a period commencing on the date by reference to which disclosure of the shareholding of the controlling shareholder is made in the listing document and ending on the date which is 6 months from the date of listing (the “First Six-month Period”); and
dispose of shares in the period of 6 months commencing on the date on which the First Six-month Period expires, if immediately following such disposal that person or group of persons would cease to be a controlling shareholder (the “Second Six-month Period”).

An example of such wording can be found in Yadong's Group (1795 HK)'s (the most recent Main Board listing) "Share Offer - Announcement of allotment results".
For cornerstone investors, the following is often stated in the share offer document:

Each of the Cornerstone Investors has agreed that it will not, whether directly or indirectly, at any time during the period of six months following the Listing Date, dispose of any of the Offer Shares it has purchased pursuant to the relevant Cornerstone Investment Agreement, save for certain limited circumstances ...

Every week in my Event SPACE wrap, I flag large moves (~10%) in CCASS holdings over the past week or so, moves that are often outside normal market transactions.  These may be indicative of share pledges.  Or potential takeovers. Or simply help understand volume swings. 
Large movement(s) concerning recently listed companies are likely lock-up related. 
This insight looks at companies that have been listed for nearly six months or 12 months, as a guide to when insiders/controlling shareholders are permitted to sell, potentially depressing prices and creating an overhang.
A summary of Main Board listings in 2020 is attached at the bottom of this insight.

Travis Lundy

Quantitative Analysis

<div>
<p>The H-Share/A-Share monitor is published every weekend for the data ending the last trading day of the previous week. It includes all H-Share/A-Share pairs where the H-Share has a 90-day average daily value-traded of US$1.0mm or more. It shows basic data per H/A spread stock by sector, with...</p>
</div>
<div>
<ul style="list-style-type: disc;">
<li>H/A Discount,</li>
<li>movement in H/A Discount over 5 and 20 days,</li>
<li>a 52-week Z-score for the spread,</li>
<li>A chart showing evolution of the H/A spread over the last 20 days,</li>
<li>Southbound shares held (millions of shares), Net Change in Southbound (Shanghai and Shenzhen combined) shares held by millions of shares, and contribution of Net Southbound Volume to HK-traded volume over the past five days and 20 days, </li>
<li>There is also a chart showing the average sector spread and the individual spreads within each sector over the last three years. </li>
</ul>
<p>New this week is a label on the name which shows the possible status of H/A-share companies in the monitor which are subject to the Trump Executive Order on Chinese Military Companies. They are separated into three types (Possible Direct Qualifying Entity, Possible Indirect Qualifying Entity, and 20+%-owned by Qualifying Entity). They are color-coded as below.</p>
</div>
<section class="figure">
<figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/171/435/original/Screenshot%202020-11-14%20at%204.23.22%20PM.png?1605342376" class="editor-image img-responsive" data-smartkarma-image-id="171435"></figure>
</section>
<p>For more on the list of names, please see <a href="https://www.smartkarma.com/insights/trump-s-executive-order-on-chinese-military-companies" target="_blank" data-smartkarma-citation="insights:45259" rel="noopener">Trump's Executive Order on Chinese Military Companies</a>. </p>
<p>Changed this week is that I have removed the spreads from the sector charts when the H-shares have low ADV</p>
<hr>
<div>
<p>The first sector discussed is <strong>Consumer</strong>, where H/A spreads narrowed on average 1.4% for the week, after running 0.6% wider the previous week. Individual stock movement in the sector was striking. <a href="https://www.smartkarma.com/entities/byd-co-ltd-h" target="_blank" data-smartkarma-citation="entities:20962:1" rel="noopener">BYD (1211 HK)</a>, <a href="https://www.smartkarma.com/entities/great-wall-motor-co-ltd-cb302af9-398c-4d2d-ba39-023e43287eef" target="_blank" data-smartkarma-citation="entities:128:1" rel="noopener">Great Wall Motor (2333 HK)</a>, and <a href="https://www.smartkarma.com/entities/guangzhou-automobile-group-co-ltd" target="_blank" data-smartkarma-citation="entities:11082:1" rel="noopener">Guangzhou Automobile Group (2238 HK)</a> narrowed again on very weak A-share performance in the week, and <a href="https://www.smartkarma.com/entities/tsingtao-brewery-co-ltd-h" target="_blank" data-smartkarma-citation="entities:1296:1" rel="noopener">Tsingtao Brewery Co Ltd H (168 HK)</a> narrowed despite strong performance on the week. The Tsingtao spread remains 4% wider through four weeks but is now at 33%. Performance was volatile in the cluster on the week, but on average the liquid Hs in the cluster are up 19% in 4 weeks and 27% since the start of the Golden Week holiday. </p>
</div>
<div>
<p>Southbound investors through the Shenzhen-HK and Shanghai-HK Connect were heavy net sellers on the week with most of the net selling in the sector coming from Southbound selling of BYD.  <a href="https://www.smartkarma.com/entities/hisense-home-appliances-group-co-ltd-h" target="_blank" data-smartkarma-citation="entities:20107:1" rel="noopener">Hisense Home Appliances Group Co., Ltd. H (921 HK)</a> is substantially less liquid, but net southbound selling on the week accounted for a remarkable 65% of volume.</p>
</div>
<div>
<p><a href="https://www.smartkarma.com/entities/byd-co-ltd-h" target="_blank" data-smartkarma-citation="entities:20962:1" rel="noopener">BYD (1211 HK)</a> remains at the overbought end of the 52-week range. <a href="https://www.smartkarma.com/entities/great-wall-motor-co-ltd-cb302af9-398c-4d2d-ba39-023e43287eef" target="_blank" data-smartkarma-citation="entities:128:1" rel="noopener">Great Wall Motor (2333 HK)</a>, and <a href="https://www.smartkarma.com/entities/tsingtao-brewery-co-ltd-h" target="_blank" data-smartkarma-citation="entities:1296:1" rel="noopener">Tsingtao Brewery Co Ltd H (168 HK)</a> are at or near 52-week wides.</p>
</div>
<div>
<p>There were no sector spread recommendations last week in this sector, for the second week in a row. This week I recommend going long the H vs A on Great Wall Motor (2333 HK).</p>
<section class="figure">
<figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/171/448/original/Screenshot%202020-11-14%20at%205.22.52%20PM.png?1605345797" class="editor-image img-responsive" data-smartkarma-image-id="171448"></figure>
<p></p>
</section>
<p>For Energy, Financials &amp; Real Estate, Health Care, Tech, Industrials, Materials, and Utilities, please read on.</p>
</div>


The H-Share/A-Share monitor is published every weekend for the data ending the last trading day of the previous week. It includes all H-Share/A-Share pairs where the H-Share has a 90-day average daily value-traded of US$1.0mm or more. It shows basic data per H/A spread stock by sector, with...



H/A Discount,
movement in H/A Discount over 5 and 20 days,
a 52-week Z-score for the spread,
A chart showing evolution of the H/A spread over the last 20 days,
Southbound shares held (millions of shares), Net Change in Southbound (Shanghai and Shenzhen combined) shares held by millions of shares, and contribution of Net Southbound Volume to HK-traded volume over the past five days and 20 days, 
There is also a chart showing the average sector spread and the individual spreads within each sector over the last three years. 

New this week is a label on the name which shows the possible status of H/A-share companies in the monitor which are subject to the Trump Executive Order on Chinese Military Companies. They are separated into three types (Possible Direct Qualifying Entity, Possible Indirect Qualifying Entity, and 20+%-owned by Qualifying Entity). They are color-coded as below.




For more on the list of names, please see Trump's Executive Order on Chinese Military Companies. 
Changed this week is that I have removed the spreads from the sector charts when the H-shares have low ADV


The first sector discussed is Consumer, where H/A spreads narrowed on average 1.4% for the week, after running 0.6% wider the previous week. Individual stock movement in the sector was striking. BYD (1211 HK), Great Wall Motor (2333 HK), and Guangzhou Automobile Group (2238 HK) narrowed again on very weak A-share performance in the week, and Tsingtao Brewery Co Ltd H (168 HK) narrowed despite strong performance on the week. The Tsingtao spread remains 4% wider through four weeks but is now at 33%. Performance was volatile in the cluster on the week, but on average the liquid Hs in the cluster are up 19% in 4 weeks and 27% since the start of the Golden Week holiday. 


Southbound investors through the Shenzhen-HK and Shanghai-HK Connect were heavy net sellers on the week with most of the net selling in the sector coming from Southbound selling of BYD.  Hisense Home Appliances Group Co., Ltd. H (921 HK) is substantially less liquid, but net southbound selling on the week accounted for a remarkable 65% of volume.


BYD (1211 HK) remains at the overbought end of the 52-week range. Great Wall Motor (2333 HK), and Tsingtao Brewery Co Ltd H (168 HK) are at or near 52-week wides.


There were no sector spread recommendations last week in this sector, for the second week in a row. This week I recommend going long the H vs A on Great Wall Motor (2333 HK).




For Energy, Financials &amp; Real Estate, Health Care, Tech, Industrials, Materials, and Utilities, please read on.


Quiddity Weekly H/A: Share Spread Monitor 13 Nov 2020

<div>
<p>The H-Share/A-Share monitor is published every weekend for the data ending the last trading day of the previous week. It includes all H-Share/A-Share pairs where the H-Share has a 90-day average daily value-traded of US$1.0mm or more. It shows basic data per H/A spread stock by sector, with...</p>
</div>
<div>
<ul style="list-style-type: disc;">
<li>H/A Discount,</li>
<li>movement in H/A Discount over 5 and 20 days,</li>
<li>a 52-week Z-score for the spread,</li>
<li>A chart showing evolution of the H/A spread over the last 20 days,</li>
<li>Southbound shares held (millions of shares), Net Change in Southbound (Shanghai and Shenzhen combined) shares held by millions of shares, and contribution of Net Southbound Volume to HK-traded volume over the past five days and 20 days, </li>
<li>There is also a chart showing the average sector spread and the individual spreads within each sector over the last three years. </li>
</ul>
</div>
<div>
<hr>
<p>The first sector is <strong>Consumer</strong>, where H/A spreads widened on average 0.6% for the week, after running 3.5% wider the previous week. Individual stock movement in the sector was striking. <a href="https://www.smartkarma.com/entities/byd-co-ltd-h" target="_blank" data-smartkarma-citation="entities:20962:1" rel="noopener">BYD (1211 HK)</a> and <a href="https://www.smartkarma.com/entities/guangzhou-automobile-group-co-ltd" target="_blank" data-smartkarma-citation="entities:11082:1" rel="noopener">Guangzhou Automobile Group (2238 HK)</a> narrowed on strong H-share performance in the week, and <a href="https://www.smartkarma.com/entities/great-wall-motor-co-ltd-cb302af9-398c-4d2d-ba39-023e43287eef" target="_blank" data-smartkarma-citation="entities:128:1" rel="noopener">Great Wall Motor (2333 HK)</a> and <a href="https://www.smartkarma.com/entities/tsingtao-brewery-co-ltd-h" target="_blank" data-smartkarma-citation="entities:1296:1" rel="noopener">Tsingtao Brewery Co Ltd H (168 HK)</a> widened, though Great Wall had a great week. The entire sector has had an absolutely phenomenal post-Golden Week run with all the auto-related stocks doing VERY well (but all of them seeing their H/A spreads widen over the period. The average H-share in the sector gained 10.5% last week and has gained 27.8% since the start of the Golden Week holiday.</p>
</div>
<div>
<p>Southbound investors through the Shenzhen-HK and Shanghai-HK Connect were net purchasers on the week, especially in the auto-related H-shares. The only liquid H in the sector which saw net selling by Southbound investors was <a href="https://www.smartkarma.com/entities/hisense-home-appliances-group-co-ltd-h" target="_blank" data-smartkarma-citation="entities:20107:1" rel="noopener">Hisense Home Appliances Group Co., Ltd. H (921 HK)</a>. </p>
</div>
<div>
<p><a href="https://www.smartkarma.com/entities/hisense-home-appliances-group-co-ltd-h" target="_blank" data-smartkarma-citation="entities:20107:1" rel="noopener">Hisense Home Appliances Group Co., Ltd. H (921 HK)</a> and <a href="https://www.smartkarma.com/entities/byd-co-ltd-h" target="_blank" data-smartkarma-citation="entities:20962:1" rel="noopener">BYD (1211 HK)</a> remain at the overbought end of the 52-week range. <a href="https://www.smartkarma.com/entities/great-wall-motor-co-ltd-cb302af9-398c-4d2d-ba39-023e43287eef" target="_blank" data-smartkarma-citation="entities:128:1" rel="noopener">Great Wall Motor (2333 HK)</a>, <a href="https://www.smartkarma.com/entities/guangzhou-automobile-group-co-ltd" target="_blank" data-smartkarma-citation="entities:11082:1" rel="noopener">Guangzhou Automobile Group (2238 HK)</a> are at or near 52-week wides, and Tsingtao is pretty close. </p>
</div>
<div>
<p>There were no sector spread recommendations last week in this sector. </p>
</div>
<div>
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<figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/169/975/original/Screenshot%202020-11-08%20at%205.44.58%20PM.png?1604828712" class="editor-image img-responsive" data-smartkarma-image-id="169975"></figure>
</section>
</section>
</div>
<div>
<p>For Energy, Financials &amp; Real Estate, Health Care, Tech, Industrials, Materials, and Utilities, please read on.</p>
</div>


The H-Share/A-Share monitor is published every weekend for the data ending the last trading day of the previous week. It includes all H-Share/A-Share pairs where the H-Share has a 90-day average daily value-traded of US$1.0mm or more. It shows basic data per H/A spread stock by sector, with...



H/A Discount,
movement in H/A Discount over 5 and 20 days,
a 52-week Z-score for the spread,
A chart showing evolution of the H/A spread over the last 20 days,
Southbound shares held (millions of shares), Net Change in Southbound (Shanghai and Shenzhen combined) shares held by millions of shares, and contribution of Net Southbound Volume to HK-traded volume over the past five days and 20 days, 
There is also a chart showing the average sector spread and the individual spreads within each sector over the last three years. 




The first sector is Consumer, where H/A spreads widened on average 0.6% for the week, after running 3.5% wider the previous week. Individual stock movement in the sector was striking. BYD (1211 HK) and Guangzhou Automobile Group (2238 HK) narrowed on strong H-share performance in the week, and Great Wall Motor (2333 HK) and Tsingtao Brewery Co Ltd H (168 HK) widened, though Great Wall had a great week. The entire sector has had an absolutely phenomenal post-Golden Week run with all the auto-related stocks doing VERY well (but all of them seeing their H/A spreads widen over the period. The average H-share in the sector gained 10.5% last week and has gained 27.8% since the start of the Golden Week holiday.


Southbound investors through the Shenzhen-HK and Shanghai-HK Connect were net purchasers on the week, especially in the auto-related H-shares. The only liquid H in the sector which saw net selling by Southbound investors was Hisense Home Appliances Group Co., Ltd. H (921 HK). 


Hisense Home Appliances Group Co., Ltd. H (921 HK) and BYD (1211 HK) remain at the overbought end of the 52-week range. Great Wall Motor (2333 HK), Guangzhou Automobile Group (2238 HK) are at or near 52-week wides, and Tsingtao is pretty close. 


There were no sector spread recommendations last week in this sector. 









For Energy, Financials &amp; Real Estate, Health Care, Tech, Industrials, Materials, and Utilities, please read on.


Quiddity Weekly H/​​​A: Share Spread Monitor 6 Nov 2020

HK/China Healthcare Analyst (ex-Fosun Pharma)

Xinyao (Criss) Wang

Equity Bottom-Up

Hangzhou Tigermed Consulting C / Equity Bottom-Up

<p style="text-align: justify;"><a target="_blank"></a><a href="https://www.smartkarma.com/entities/hangzhou-tigermed-consulting-h" target="_blank" data-smartkarma-citation="entities:29212:1" rel="noopener">Hangzhou Tigermed Consulting (H) (3347 HK)</a> released the third quarter report of 2020. In the first three quarters of 2020, Q1-Q3 accumulated revenue reached RMB2.33 billion, with a YoY growth rate of 13.27%. Net income attributed to shareholders in the first three quarters reached RMB1.318 billion, up 149.57% YoY. Net income after deducting non-recurring gains and losses in Q1-Q3 was RMB498 million, up 13.57% YoY. The company's Q3 single quarter revenue reached RMB848 million, up 22.31% YoY. Net income attributed to shareholders in Q3 was RMB319 million, up 81.37% YoY. Net income after deducting non-recurring gains and losses in Q3 reached RMB195 million, up 29.35% YoY. Tigermed has gradually recovered from the epidemic with strong performance in Q3. </p>
<figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/169/276/original/image_94552562551604465156309.png?1604465157" class="editor-image img-responsive" data-smartkarma-image-id="169276"></figure>
<p style="text-align: justify;"><em>Source: WIND</em></p>

Hangzhou Tigermed Consulting (H) (3347 HK) released the third quarter report of 2020. In the first three quarters of 2020, Q1-Q3 accumulated revenue reached RMB2.33 billion, with a YoY growth rate of 13.27%. Net income attributed to shareholders in the first three quarters reached RMB1.318 billion, up 149.57% YoY. Net income after deducting non-recurring gains and losses in Q1-Q3 was RMB498 million, up 13.57% YoY. The company's Q3 single quarter revenue reached RMB848 million, up 22.31% YoY. Net income attributed to shareholders in Q3 was RMB319 million, up 81.37% YoY. Net income after deducting non-recurring gains and losses in Q3 reached RMB195 million, up 29.35% YoY. Tigermed has gradually recovered from the epidemic with strong performance in Q3. 

Source: WIND

Tigermed (300347.CN/03347.HK) - Q3 Performance Recovered with Optimistic Future Development

<div>
<p>The H-Share/A-Share monitor is published every weekend for the data ending the last trading day of the previous week. It includes all H-Share/A-Share pairs where the H-Share has a 90-day average daily value-traded of US$1.0mm or more. It shows basic data per H/A spread stock by sector, with...</p>
</div>
<div>
<ul style="list-style-type: disc;">
<li>H/A Discount,</li>
<li>movement in H/A Discount over 5 and 20 days,</li>
<li>a 52-week Z-score for the spread,</li>
<li>A chart showing evolution of the H/A spread over the last 20 days,</li>
<li>Southbound shares held (millions of shares), Net Change in Southbound (Shanghai and Shenzhen combined) shares held by millions of shares, and contribution of Net Southbound Volume to HK-traded volume over the past five days and 20 days, </li>
<li>There is also a chart showing the average sector spread and the individual spreads within each sector over the last three years. </li>
</ul>
</div>
<div>
<p>The first sector is <strong>Consumer</strong>, where H/A spreads widened on average 3.5% for the week. Individual stock movement in the sector was striking. All five liquid spreads widened, but <a href="https://www.smartkarma.com/entities/great-wall-motor-co-ltd-cb302af9-398c-4d2d-ba39-023e43287eef" target="_blank" data-smartkarma-citation="entities:128:1" rel="noopener">Great Wall Motor (2333 HK)</a> and <a href="https://www.smartkarma.com/entities/tsingtao-brewery-co-ltd-h" target="_blank" data-smartkarma-citation="entities:1296:1" rel="noopener">Tsingtao Brewery Co Ltd H (168 HK)</a> widened because the H-shares were down, and the other four widened because of extraordinary gains in the A-Shares. </p>
</div>
<div>
<p>Southbound investors through the Shenzhen-HK and Shanghai-HK Connect were net purchasers on the week, especially in the auto-related H-shares. </p>
</div>
<div>
<p><a href="https://www.smartkarma.com/entities/hisense-home-appliances-group-co-ltd-h" target="_blank" data-smartkarma-citation="entities:20107:1" rel="noopener">Hisense Home Appliances Group Co., Ltd. H (921 HK)</a> and <a href="https://www.smartkarma.com/entities/byd-co-ltd-h" target="_blank" data-smartkarma-citation="entities:20962:1" rel="noopener">BYD (1211 HK)</a> remain at the overbought end of the 52-week range. <a href="https://www.smartkarma.com/entities/great-wall-motor-co-ltd-cb302af9-398c-4d2d-ba39-023e43287eef" target="_blank" data-smartkarma-citation="entities:128:1" rel="noopener">Great Wall Motor (2333 HK)</a>, <a href="https://www.smartkarma.com/entities/guangzhou-automobile-group-co-ltd" target="_blank" data-smartkarma-citation="entities:11082:1" rel="noopener">Guangzhou Automobile Group (2238 HK)</a> are at or near 52-week wides, and Tsingtao is pretty close. </p>
</div>
<div>
<div>
<div class="content-highlight">
<p>Last week's recommendation was to continue to unwind the Hisense H/A spread, which widened 6% on the week. I also noted Great Wall and Guangzhou were worth a buy on a spread basis and they widened 2.9% on average. They were worth holding onto as spreads.</p>
</div>
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<section class="figure">
<figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/168/642/original/Screenshot%202020-11-01%20at%2012.23.49%20PM.png?1604204650" class="editor-image img-responsive" data-smartkarma-image-id="168642"></figure>
<p></p>
</section>
</section>
<p>For Energy, Financials &amp; Real Estate, Health Care, Tech, Industrials, Materials, and Utilities, please read on.</p>


The H-Share/A-Share monitor is published every weekend for the data ending the last trading day of the previous week. It includes all H-Share/A-Share pairs where the H-Share has a 90-day average daily value-traded of US$1.0mm or more. It shows basic data per H/A spread stock by sector, with...



H/A Discount,
movement in H/A Discount over 5 and 20 days,
a 52-week Z-score for the spread,
A chart showing evolution of the H/A spread over the last 20 days,
Southbound shares held (millions of shares), Net Change in Southbound (Shanghai and Shenzhen combined) shares held by millions of shares, and contribution of Net Southbound Volume to HK-traded volume over the past five days and 20 days, 
There is also a chart showing the average sector spread and the individual spreads within each sector over the last three years. 



The first sector is Consumer, where H/A spreads widened on average 3.5% for the week. Individual stock movement in the sector was striking. All five liquid spreads widened, but Great Wall Motor (2333 HK) and Tsingtao Brewery Co Ltd H (168 HK) widened because the H-shares were down, and the other four widened because of extraordinary gains in the A-Shares. 


Southbound investors through the Shenzhen-HK and Shanghai-HK Connect were net purchasers on the week, especially in the auto-related H-shares. 


Hisense Home Appliances Group Co., Ltd. H (921 HK) and BYD (1211 HK) remain at the overbought end of the 52-week range. Great Wall Motor (2333 HK), Guangzhou Automobile Group (2238 HK) are at or near 52-week wides, and Tsingtao is pretty close. 




Last week's recommendation was to continue to unwind the Hisense H/A spread, which widened 6% on the week. I also noted Great Wall and Guangzhou were worth a buy on a spread basis and they widened 2.9% on average. They were worth holding onto as spreads.









For Energy, Financials &amp; Real Estate, Health Care, Tech, Industrials, Materials, and Utilities, please read on.

Quiddity Weekly H/​​A: Share Spread Monitor 30 Oct 2020

China

Pharmaron Beijing Co., Ltd. engages in discovery, development, and manufacturing spectrum for small molecule drugs, cell therapies, and gene therapies as well as providing testing services for medical devices and clinic research. The Company offers laboratory, clinical development, chemistry manufactory and control, and other services. Pharmaron Beijing conducts businesses based in China.

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Pharmaron Beijing (3759 HK)

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