Index Rebal Trades & Special Situations, Quiddity Advisors

Janaghan Jeyakumar, CFA

Index Rebal Trades & Special Situations

Quiddity Advisors

Pan-Asia Catalysts/Events

Index Rebalance

<ul>
<li>In this insight, we take a look at a group of names with reasonably high likelihood of being involved in index changes for the Hang Seng Index in September 2023.</li>
<li>The index changes for the December 2023 rebalance will be announced in mid-November (17 Nov) and implemented in early-December (with effect from 4 Dec).</li>
<li>Although the Hang Seng index has a highly subjective constituent selection process and index changes are somewhat unpredictable, we will continue sharing our thoughts for each quarterly review.</li>
</ul>


In this insight, we take a look at a group of names with reasonably high likelihood of being involved in index changes for the Hang Seng Index in September 2023.
The index changes for the December 2023 rebalance will be announced in mid-November (17 Nov) and implemented in early-December (with effect from 4 Dec).
Although the Hang Seng index has a highly subjective constituent selection process and index changes are somewhat unpredictable, we will continue sharing our thoughts for each quarterly review.


Quiddity Leaderboard for Hang Seng Index Dec 23: High Conviction Names Have Decent Momentum Vs HSI

Fintech & EM-focused Analyst, KT Capital Group

Alec Tseung

Fintech & EM-focused Analyst

KT Capital Group

Principal investments and advisory firm that focuses on connecting the CIS countries with East Asia.

Principal investments and advisory firm

Equity Bottom-Up

<ul>
<li>PICC P&amp;C's thesis has materialized and played out well this year, with the stock being HK's best-performing Chinese insurer.</li>
<li>Samsung Life's share price recovered slightly since our last update as LT Korean government bond yields further increased.</li>
<li>Prudential's thesis is slowly being played out, with its P/BV discount to AIA having narrowed; but still a long way to go. </li>
</ul>


PICC P&amp;C's thesis has materialized and played out well this year, with the stock being HK's best-performing Chinese insurer.
Samsung Life's share price recovered slightly since our last update as LT Korean government bond yields further increased.
Prudential's thesis is slowly being played out, with its P/BV discount to AIA having narrowed; but still a long way to go. 


APAC Insurers Series (#3): Initial Theses At Different Stages of Being Played Out

External broker reports(aggregated public sources), CMB International

CMB International

External broker reports(aggregated public sources)

Incorporated in Hong Kong, supported by the mainland and targeting in global market, CMB International Capital Corporation Limited (“CMBI”) is an integrated financial institution providing comprehensive and professional services. As a wholly-owned subsidiary of China Merchants Bank ("CMB"), by leveraging on the Group’s synergy and coordination in domestic and overseas markets, as well as CMB’s strong resources and outstanding social reputation, CMBI and its subsidiaries have been actively implementing diversified business strategies and set up an overall layout of main business segments including Corporate Finance, Asset Management, Wealth Management, Global Markets and Structured Finance, etc. Adhering to the philosophy of “being clients oriented and increasing our own values by the way of creating value for clients”, CMBI endeavors to provide quality and integrated financial services to institutional, corporate and individual customers both domestic and overseas including Hong Kong IPO sponsorship and underwriting, share placement and rights issue for listed companies, financial advisors, bonds issuance services, asset management, direct investment, wealth management, equity sales and trading, etc.

<ul><li>Prudential PLC reported 30%/26% YoY growth of NBP (new business profit) in 1Q23 on constant/actual FX (CER/AER) basis, driven by 35%/29% YoY growth of APE (annualized premium equivalent).</li><li>If excluded the effect of economic assumption changes (i.e. interest rates movement), 1Q23 NBP growth would reach 43%/39% YoY on CER/AER basis. In terms of geographic breakdowns, the insurer recorded double-digit NBP growth across 10 markets in Asia, incl. HK/China, Thailand and the Philippines.</li><li>Looking forward, we expect strong new business momentum to sustain into 2023, given that: 1) MCV (mainland visitors) business in HK continued to drive growth since China’s reopening in Feb 2023, which will enhance the uptick throughout 2Q-4Q23 sequentially in our view; 2) recovery of demands for life insurance in mainland China boosted value creation of local agency; and 3) rebound in ASEAN markets as their local economy recovered post pandemic. </li></ul>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Prudential PLC reported 30%/26% YoY growth of NBP (new business profit) in 1Q23 on constant/actual FX (CER/AER) basis, driven by 35%/29% YoY growth of APE (annualized premium equivalent).If excluded the effect of economic assumption changes (i.e. interest rates movement), 1Q23 NBP growth would reach 43%/39% YoY on CER/AER basis. In terms of geographic breakdowns, the insurer recorded double-digit NBP growth across 10 markets in Asia, incl. HK/China, Thailand and the Philippines.Looking forward, we expect strong new business momentum to sustain into 2023, given that: 1) MCV (mainland visitors) business in HK continued to drive growth since China’s reopening in Feb 2023, which will enhance the uptick throughout 2Q-4Q23 sequentially in our view; 2) recovery of demands for life insurance in mainland China boosted value creation of local agency; and 3) rebound in ASEAN markets as their local economy recovered post pandemic. Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Prudential PLC (2378 HK) – HK NBP more than doubled in 1Q23

Independent research on the U.S. markets, Baptista Research

Baptista Research

Independent research on the U.S. markets

Baptista Research is an independent financial research house focused on the U.S. markets. We provide equity research as well as credit research reports on the top-listed U.S. companies with most of our focus on technology, consumer goods and services, automobiles, industrials, oil and gas, pharma, and healthcare. Our research has served more than 3000 institutional investors including mutual funds, hedge funds, banks, family offices, and various buy-side firms. We operate a research subscription service where institutions, as well as retail investors, can have priority access to all our research. We also have a wide distribution of our research reports across some of the top global financial platforms. Apart from equity research and credit research, we also provide advisory services with respect to mergers & acquisitions (M&A), private equity/ venture capital fundraising, valuation reports, and investment management services for corporates.
Baptista Research is owned and managed by Ishan Majumdar, an ex-Venture Capitalist/ Investment Banker, a Chartered Accountant, and a Masters’ degree holder in Management from HEC Paris. Ishan has nearly a decade of experience in Mergers and Acquisitions, Leveraged Buyouts (LBOs), Venture Capital Investing, Corporate Strategy, and Valuation in front-office roles at the likes of BNP Paribas CIB, Credit Agricole CIB, Groupe Danone, and TIW Private Equity. He has worked on and closed multiple acquisition deals, leveraged buyouts, and start-up investment transactions.

<ul><li>This is our first report on Prudential, a major provider of life and health insurance.</li><li>Prudential had a very strong quarter with 19% sales growth.</li><li>Despite slower revenue recognition in the life insurance market, the company has been witnessing strong cash flows and returned over $800 million to shareholders in the latest quarter.</li></ul>

This is our first report on Prudential, a major provider of life and health insurance.Prudential had a very strong quarter with 19% sales growth.Despite slower revenue recognition in the life insurance market, the company has been witnessing strong cash flows and returned over $800 million to shareholders in the latest quarter.

Prudential PLC: Initiation of Coverage – Expansion In Emerging Markets & Other Drivers

<ul><li>Prudential plc reported in line results for FY22, with NBP excl. HK up 5% YoY on constant exchange rates (CER) basis.</li><li>The group NBP declined 11% on CER basis in FY22, mainly dragged by interest rate assumption changes.</li><li>Excluding the impact of negative economic assumption changes, the insurer’s group NBP decreased 4% YoY in FY22.</li></ul>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Prudential plc reported in line results for FY22, with NBP excl. HK up 5% YoY on constant exchange rates (CER) basis.The group NBP declined 11% on CER basis in FY22, mainly dragged by interest rate assumption changes.Excluding the impact of negative economic assumption changes, the insurer’s group NBP decreased 4% YoY in FY22.Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Prudential Plc. (2378 HK) – 15% APE Growth in 2M23

Hong Kong

Prudential Public Limited Company provides long term savings and protection products. The Company offers life and health insurance for long term business including asset management services. Prudential serves customers in Asia and Africa.

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Prudential (2378 HK)

Quiddity Leaderboard for Hang Seng Index Dec 23: High Conviction Names Have Decent Momentum Vs HSI

The Hang Seng Index changes for Dec 23 will be published after the close on Friday 17th November 2023. In this insight, you can see Quiddity's...

Janaghan Jeyakumar, CFA

APAC Insurers Series (#3): Initial Theses At Different Stages of Being Played Out

Theses for the three insurers we highlighted are at different stages of being played out: PICC P&C's has most materialized while Pru's still has a...

Alec Tseung

Prudential PLC (2378 HK) – HK NBP more than doubled in 1Q23

Prudential PLC reported 30%/26% YoY growth of NBP (new business profit) in 1Q23 on constant/actual FX (CER/AER) basis, driven by 35%/29% YoY growth...

CMB International

Prudential PLC: Initiation of Coverage – Expansion In Emerging Markets & Other Drivers

This is our first report on Prudential, a major provider of life and health insurance. Prudential had a very strong quarter with 19% sales...

Baptista Research

Prudential Plc. (2378 HK) – 15% APE Growth in 2M23

Prudential plc reported in line results for FY22, with NBP excl. HK up 5% YoY on constant exchange rates (CER) basis. The group NBP declined 11% on...

CMB International

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