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

Event-Driven

<ul>
<li>There are 35 adds and 28 deletes for the Hang Seng Composite Index (HSCI) at the March rebalance to take the number of index constituents up to 527.</li>
<li>We expect 29 of the 35 inclusions to the HSCI will be added to Stock Connect, while 20 of the 28 HSCI deletions will be removed from Southbound Stock Connect.</li>
<li>19 stocks could be deleted from Stock Connect only since their average market cap has dropped below HK$5bn- unless the new threshold of HK$4bn is approved in the next week.</li>
</ul>


There are 35 adds and 28 deletes for the Hang Seng Composite Index (HSCI) at the March rebalance to take the number of index constituents up to 527.
We expect 29 of the 35 inclusions to the HSCI will be added to Stock Connect, while 20 of the 28 HSCI deletions will be removed from Southbound Stock Connect.
19 stocks could be deleted from Stock Connect only since their average market cap has dropped below HK$5bn- unless the new threshold of HK$4bn is approved in the next week.


HSCI Index Rebalance: 35 Adds, 28 Deletes & Changes to Southbound Stock Connect

HK/China Healthcare Analyst (ex-Fosun Pharma)

Xinyao (Criss) Wang

Equity Capital Markets

<ul>
<li>The decline in revenue from multiple categories of drugs due to VBP indicates that <a href="https://www.smartkarma.com/entities/luye-pharma-group-ltd" target="_blank" data-smartkarma-citation="entities:488:1" rel="noopener">Luye Pharma (2186 HK)</a> urgently needs a group of new products to reverse the overall weak performance. </li>
<li>Without the advantages in R&amp;D efficacy and product competitiveness, the current pipeline would generate little value. It’s hard to convince people that the fundamentals of Luye have truly changed.</li>
<li>We are not optimistic about Luye’s outlook, which lacks long investment logic. Meanwhile, we think that this Placement is not cost-effective due to more potential downside to valuation.</li>
</ul>


The decline in revenue from multiple categories of drugs due to VBP indicates that Luye Pharma (2186 HK) urgently needs a group of new products to reverse the overall weak performance. 
Without the advantages in R&amp;D efficacy and product competitiveness, the current pipeline would generate little value. It’s hard to convince people that the fundamentals of Luye have truly changed.
We are not optimistic about Luye’s outlook, which lacks long investment logic. Meanwhile, we think that this Placement is not cost-effective due to more potential downside to valuation.


Luye Pharma Placement (2186.HK) - The Potential Downside to Valuations Is Large

Equity Bottom-Up

Hangzhou Tigermed Consulting C / Equity Bottom-Up

<ul>
<li>The centralized procurement of interprovincial dental implants results were released. In our view, most of the profits from the midstream circulation and terminal sales of dental implants will be cleared.</li>
<li>We analyzed some key points of <a href="https://www.smartkarma.com/entities/hangzhou-tigermed-consulting-co-ltd-1008d609-73bd-4d76-8315-b29502a448ff" target="_blank" data-smartkarma-citation="entities:29212:1" rel="noopener">Hangzhou Tigermed Consulting (H) (3347 HK)</a>, <a href="https://www.smartkarma.com/entities/hbm-holdings-limited" target="_blank" data-smartkarma-citation="entities:29717:1" rel="noopener">HBM Holdings Limited (2142 HK)</a>, <a href="https://www.smartkarma.com/entities/brii-biosciences" target="_blank" data-smartkarma-citation="entities:33014:1" rel="noopener">Brii Biosciences (2137 HK) and </a><a href="https://www.smartkarma.com/entities/jacobio-pharmaceuticals" target="_blank" data-smartkarma-citation="entities:29696:1" rel="noopener">Jacobio Pharmaceuticals (1167 HK).</a>
</li>
<li>Many “successful investors” may not realize that their huge returns in the past are mainly due to unexpected capital market exit channel dividends, which is hard to be copied.</li>
</ul>


The centralized procurement of interprovincial dental implants results were released. In our view, most of the profits from the midstream circulation and terminal sales of dental implants will be cleared.
We analyzed some key points of Hangzhou Tigermed Consulting (H) (3347 HK), HBM Holdings Limited (2142 HK), Brii Biosciences (2137 HK) and Jacobio Pharmaceuticals (1167 HK).

Many “successful investors” may not realize that their huge returns in the past are mainly due to unexpected capital market exit channel dividends, which is hard to be copied.


China Healthcare Weekly (Jan.13)- Tigermed, HBM, Brii, Jacobio, Dental Implant, Successful Investors

Shandong BoAn Biotechnology  / Equity Capital Markets

<ul>
<li>Without the advantages in product efficacy, production capacity, clinical progress and speed of approval, Boan's products have lost their pricing power in both China and overseas markets.</li>
<li>Due to the lack of differentiation and frontier enough target layout, the product commercialization potential is bound to be more easily questioned, with limited value in the long term.</li>
<li>Even if Boan could go public successfully, investors may not be able to achieve the expected returns because of the unfriendly market sentiment and a lack of liquidity in HKEX. </li>
</ul>


Without the advantages in product efficacy, production capacity, clinical progress and speed of approval, Boan's products have lost their pricing power in both China and overseas markets.
Due to the lack of differentiation and frontier enough target layout, the product commercialization potential is bound to be more easily questioned, with limited value in the long term.
Even if Boan could go public successfully, investors may not be able to achieve the expected returns because of the unfriendly market sentiment and a lack of liquidity in HKEX. 


Pre-IPO Shandong Boan Biotechnology - Conservative About the Outlook

China

Shandong BoAn Biotechnology Co., Ltd. operates as a fully-integrated biopharmaceutical company. The Company specializes in the research and development, manufacturing and, commercialization of therapeutic antibodies, which are mainly focused on key therapeutic areas including oncology, metabolism, autoimmunity, and ophthalmology.

Shandong BoAn Biotechnology (6955 HK)

HSCI Index Rebalance: 35 Adds, 28 Deletes & Changes to Southbound Stock Connect

There are 35 adds & 28 deletes for the HSCI in March leading to 29 adds & 20 deletes for Stock Connect. 19 index constituents could be dropped from...

Brian Freitas

Luye Pharma Placement (2186.HK) - The Potential Downside to Valuations Is Large

Luye's weak share price is due to poor performance. Without good products, the fundamentals of Luye haven't truly changed. The Placement isn't cost...

Xinyao (Criss) Wang

China Healthcare Weekly (Jan.13)- Tigermed, HBM, Brii, Jacobio, Dental Implant, Successful Investors

Dental implants VBP results were released-Time to say goodbye to high margins. We analyzed key points of Tigermed/HBM/Brii/Jacobio.Core factors of...

Xinyao (Criss) Wang

Pre-IPO Shandong Boan Biotechnology - Conservative About the Outlook

Due to lack of differentiated/frontier enough target layout and slow progress, Boan's product commercialization potential is highly uncertain....

Xinyao (Criss) Wang