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

<ul>
<li>As expected, <a href="https://www.smartkarma.com/entities/horizon-robotics-inc" target="_blank" data-smartkarma-citation="entities:35637:1" rel="noopener">Horizon Robotics (9660 HK)</a> replaces <a href="https://www.smartkarma.com/entities/east-buy-holding-ltd" target="_blank" data-smartkarma-citation="entities:27796:1" rel="noopener">East Buy Holding (1797 HK)</a> in the <a href="https://www.smartkarma.com/entities/hang-seng-tech-index" target="_blank" data-smartkarma-citation="entities:31367:1" rel="noopener">Hang Seng TECH Index (HSTECH INDEX)</a> in March.</li>
<li>In a surprise, <a href="https://www.smartkarma.com/entities/tencent-music-entertainment-group" target="_blank" data-smartkarma-citation="entities:36601:1" rel="noopener">Tencent Music Entertainment Group (1698 HK)</a> will be added and <a href="https://www.smartkarma.com/entities/zhongan-online-p-c-insurance-c" target="_blank" data-smartkarma-citation="entities:23681:1" rel="noopener">ZhongAn Online P&amp;C Insurance C (6060 HK)</a> will be deleted.</li>
<li>
<a href="https://www.smartkarma.com/entities/horizon-robotics-inc" target="_blank" data-smartkarma-citation="entities:35637:1" rel="noopener">Horizon Robotics (9660 HK)</a> is also an inclusion to the HSIII Index and HSCI Index and will be added to Southbound Stock Connect in May.</li>
</ul>


As expected, Horizon Robotics (9660 HK) replaces East Buy Holding (1797 HK) in the Hang Seng TECH Index (HSTECH INDEX) in March.
In a surprise, Tencent Music Entertainment Group (1698 HK) will be added and ZhongAn Online P&amp;C Insurance C (6060 HK) will be deleted.

Horizon Robotics (9660 HK) is also an inclusion to the HSIII Index and HSCI Index and will be added to Southbound Stock Connect in May.


HSTECH Index Rebalance: Horizon Robotics, Tencent Music Replace East Buy, ZA Online; US$2.3bn Trade

Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

<ul>
<li>In the post-CNY return, SOUTHBOUND gross trading activity was stronger per day than the previous several weeks, but SB Net Buying was not. </li>
<li>Tech ended up being a big net buy, but <a href="https://www.smartkarma.com/entities/tencent-holdings-ltd" target="_blank" data-smartkarma-citation="entities:26:1" rel="noopener">Tencent (700 HK)</a> a big net sell. </li>
<li>Lower-Than-Expected tariff rates against China meant foreigners are back to buying Chinese stocks for the time being which may lower SB net buys near-term.</li>
</ul>


In the post-CNY return, SOUTHBOUND gross trading activity was stronger per day than the previous several weeks, but SB Net Buying was not. 
Tech ended up being a big net buy, but Tencent (700 HK) a big net sell. 
Lower-Than-Expected tariff rates against China meant foreigners are back to buying Chinese stocks for the time being which may lower SB net buys near-term.


HK Connect SOUTHBOUND Flows (To 7 Feb 2025); Busy Start Post CNY But Clear Selling of High Div SOEs

Head of Research, IPOs & Placements, Aequitas Research

Sumeet Singh

Head of Research, IPOs & Placements

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.

Equity Capital Markets

Mao Geping Cosmetics / Equity Capital Markets

<ul>
<li>Aequitas Research's weekly update on the IPOs, placements, lockup expiry and other ECM linked events that were covered by the team over the past week.</li>
<li>On the IPO front, a number of offerings were live in India, in a bid to beat the year-end lull.</li>
<li>On the placements front, there was a large placement for <a href="https://www.smartkarma.com/entities/sensetime-group-inc" target="_blank" data-smartkarma-citation="entities:34319:1" rel="noopener">SenseTime Group (20 HK)</a> and a number of smaller deals in India.</li>
</ul>


Aequitas Research's weekly update on the IPOs, placements, lockup expiry and other ECM linked events that were covered by the team over the past week.
On the IPO front, a number of offerings were live in India, in a bid to beat the year-end lull.
On the placements front, there was a large placement for SenseTime Group (20 HK) and a number of smaller deals in India.


ECM Weekly (16th Dec 2024) - LG CNS, Mao Geping, Digico, Kioxia, Vishal Mega, IGI, Sai Life, Quantum

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.

Equity Bottom-Up

<ul><li>SenseTime announced (4 Dec) the completion of a strategic organizational restructuring, after which the company has established a new “1+X” structure: 1) “1” stands for the core business, which will focus on AI cloud services, integration of large models &amp; AI applications, development of general computer vision (CV) models</li><li>2) “X” stands for other ecological businesses within the group including smart auto, domestic robot, smart healthcare, smart retail, etc.</li><li>Each ecological business will 1) designate an independent CEO; 2) have a flexible incentive mechanism and financing channels; 3) use SenseTime’s AI infrastructure &amp; large models (and pay SenseTime on an arm's length transaction basis) to develop AI applications in their respective fields. </li></ul><p><em>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.</em></p>

SenseTime announced (4 Dec) the completion of a strategic organizational restructuring, after which the company has established a new “1+X” structure: 1) “1” stands for the core business, which will focus on AI cloud services, integration of large models &amp; AI applications, development of general computer vision (CV) models2) “X” stands for other ecological businesses within the group including smart auto, domestic robot, smart healthcare, smart retail, etc.Each ecological business will 1) designate an independent CEO; 2) have a flexible incentive mechanism and financing channels; 3) use SenseTime’s AI infrastructure &amp; large models (and pay SenseTime on an arm's length transaction basis) to develop AI applications in their respective fields. 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.

SenseTime (20 HK) - Restructuring to Focus on Gen AI Business and Accelerate Breakeven Progress

Analyst - Media&Entertainment Sector, Blue Lotus Research Institute

Stan Zhao

Analyst - Media&Entertainment Sector

China growth and global non-US Internet equities

Blue Lotus Research Institute

Blue Lotus Research is a Hong Kong Type 4 Licensed investment advisory firm focusing on Chinese growth equities and global non-US Internet equities

<ul>
<li>Tesla's Cybercab is expected to be under $30,000 in price, with production costs of  ~$25,000 and operating costs of 30-40 cents per mile.</li>
<li>We found Baidu's robotaxi to be faces 50% higher daily total costs and runs a fleet of 600 autonomous vehicles.</li>
<li>To compete with Tesla’s Cybercab by 2026, Baidu must significantly reduce its operating costs. Tesla's lower price and efficiency could capture a larger market share.</li>
</ul>


Tesla's Cybercab is expected to be under $30,000 in price, with production costs of  ~$25,000 and operating costs of 30-40 cents per mile.
We found Baidu's robotaxi to be faces 50% higher daily total costs and runs a fleet of 600 autonomous vehicles.
To compete with Tesla’s Cybercab by 2026, Baidu must significantly reduce its operating costs. Tesla's lower price and efficiency could capture a larger market share.


A Comparison of Tesla’s Cybercab and Baidu’s Apollo Shows the Latter Must Improve

China

SenseTime is a leading artificial intelligence software company that researches, develops, and sells AI software platforms. It provides AI technologies across generative AI, traditional AI, and smart auto, enabling digital transformation for enterprises, smart city management, and applications in IoT, Metaverse, smart health, and automotive. The company was founded in 2014 and is headquartered in Hong Kong.

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SenseTime (20 HK)

HSTECH Index Rebalance: Horizon Robotics, Tencent Music Replace East Buy, ZA Online; US$2.3bn Trade

Horizon Robotics and TME replace East Buy and Za Online. Estimated one-way turnover at the rebalance is 5.6% resulting in a round-trip trade of...

Brian Freitas

HK Connect SOUTHBOUND Flows (To 7 Feb 2025); Busy Start Post CNY But Clear Selling of High Div SOEs

Post Chinese New Year, SOUTHBOUND activity is heavy but with low net buying. Tech was net bought last week, and high div SOEs were sold. Foreigners...

Travis Lundy

ECM Weekly (16th Dec 2024) - LG CNS, Mao Geping, Digico, Kioxia, Vishal Mega, IGI, Sai Life, Quantum

Aequitas Research's weekly update on the IPOs, placements, lockup expiry and other ECM linked events that were covered by the team over the past week.

Sumeet Singh

SenseTime (20 HK) - Restructuring to Focus on Gen AI Business and Accelerate Breakeven Progress

SenseTime announced (4 Dec) the completion of a strategic organizational restructuring, after which the company has established a new “1+X” structure

CMB International

A Comparison of Tesla’s Cybercab and Baidu’s Apollo Shows the Latter Must Improve

Baidu's robotaxi Apollo faces higher costs to build and operate than Tesla's Cybercab and Baidu must reduce operating costs to compete effectively...

Blue Lotus Research Institute

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

HSTECH Index Rebalance: Horizon Robotics, Tencent Music Replace East Buy, ZA Online; US$2.3bn Trade

Horizon Robotics and TME replace East Buy and Za Online. Estimated one-way turnover at the rebalance is 5.6% resulting in a round-trip trade of...

Brian Freitas

HK Connect SOUTHBOUND Flows (To 7 Feb 2025); Busy Start Post CNY But Clear Selling of High Div SOEs

Post Chinese New Year, SOUTHBOUND activity is heavy but with low net buying. Tech was net bought last week, and high div SOEs were sold. Foreigners...

Travis Lundy

ECM Weekly (16th Dec 2024) - LG CNS, Mao Geping, Digico, Kioxia, Vishal Mega, IGI, Sai Life, Quantum

Aequitas Research's weekly update on the IPOs, placements, lockup expiry and other ECM linked events that were covered by the team over the past week.

Sumeet Singh

SenseTime (20 HK) - Restructuring to Focus on Gen AI Business and Accelerate Breakeven Progress

SenseTime announced (4 Dec) the completion of a strategic organizational restructuring, after which the company has established a new “1+X” structure

CMB International

A Comparison of Tesla’s Cybercab and Baidu’s Apollo Shows the Latter Must Improve

​Baidu's robotaxi Apollo faces higher costs to build and operate than Tesla's Cybercab and Baidu must reduce operating costs to compete effectively...

Blue Lotus Research Institute

Baidu's robotaxi Apollo faces higher costs to build and operate than Tesla's Cybercab and Baidu must reduce operating costs to compete effectively...