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

Jiangsu Hoperun Software / Index Rebalance

<ul>
<li>Nearly halfway through the review period, we forecast 7 changes for the <a href="https://www.smartkarma.com/entities/chinext-index" target="_blank" data-smartkarma-citation="entities:25483:1" rel="noopener">ChiNext Index (SZ399006 INDEX EQUITY)</a> and 5 changes for the ChiNext 50 Index in June.</li>
<li>Some of the potential changes will also have passive flows from the <a href="https://www.smartkarma.com/entities/csi-smallcap-500-index-shang" target="_blank" data-smartkarma-citation="entities:35347:1" rel="noopener">CSI 500 Index</a> trackers at the same time as the <a href="https://www.smartkarma.com/entities/chinext-index" target="_blank" data-smartkarma-citation="entities:25483:1" rel="noopener">ChiNext Index</a> rebalance.</li>
<li>The potential inclusions and deletions have slipped over the last couple of months along with the <a href="https://www.smartkarma.com/entities/chinext-index" target="_blank" data-smartkarma-citation="entities:25483:1" rel="noopener">ChiNext Index</a>, but the potential inclusions have outperformed as the deletions have dropped more.</li>
</ul>


Nearly halfway through the review period, we forecast 7 changes for the ChiNext Index (SZ399006 INDEX EQUITY) and 5 changes for the ChiNext 50 Index in June.
Some of the potential changes will also have passive flows from the CSI 500 Index trackers at the same time as the ChiNext Index rebalance.
The potential inclusions and deletions have slipped over the last couple of months along with the ChiNext Index, but the potential inclusions have outperformed as the deletions have dropped more.


ChiNext/​​​ChiNext50 Index Rebalance Preview: Overlapping Names Increases Flow

Index Rebal Trades & Special Situations, Quiddity Advisors

Janaghan Jeyakumar, CFA

Index Rebal Trades & Special Situations

Quiddity Advisors

Pan-Asia Catalysts/Events

Porton Pharma Solutions / Index Rebalance

<ul>
<li>The ChiNext Index represents the performance of the 100 largest and most liquid A-share stocks listed on the ChiNext Market of the Shenzhen Stock Exchange.</li>
<li>The ChiNext 50 index is a subset of the ChiNext Index and it consists of the top 50 names in the ChiNext index with the highest daily average turnover.</li>
<li>In this insight, we take a look at the names leading the race to become ADDs and DELs in the June 2024 index rebal event.</li>
</ul>


The ChiNext Index represents the performance of the 100 largest and most liquid A-share stocks listed on the ChiNext Market of the Shenzhen Stock Exchange.
The ChiNext 50 index is a subset of the ChiNext Index and it consists of the top 50 names in the ChiNext index with the highest daily average turnover.
In this insight, we take a look at the names leading the race to become ADDs and DELs in the June 2024 index rebal event.


Quiddity Leaderboard ChiNext & ChiNext 50 Jun 24: Double Impacts for Some Names

Asia Pac IPO & Placement Research, China biotech, Aequitas Research

Ke Yan, CFA, FRM

Asia Pac IPO & Placement Research, China biotech

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

Zhaoke Ophthalmology Pharmaceutical / Equity Capital Markets

<div>
<p>Founded by Lee's Pharma, Zhaoke offers a comprehensive ophthalmic product pipeline. The company is looking to raise up to USD 200m via a Hong Kong listing.</p>
</div>
<div>
<p>In our previous note, we looked at the company's two products, namely CsA gel and ZKY001. We are of the view that CsA gel does provide advantage over Restasis, the top selling eye gel for the DED, but the forecast of market growth is too aggressive for the DED market. For another core product ZKY001, while there is no data on the efficacy from Phase I clinical trial, we do note that the licensing parnter's product which uses the same technology but on a different indication, did not meet the primary end point in Phase III clinical trial according to a recent announcement, which raises our concern on the potential of the product candidate. In addition, the company also had a long list of generic referencing top selling glaucoma drugs. The company has an OK management team but strong backing of institutional investors.  We have also provided a preliminary valuation for its core products. </p>
<p>We did research on its key competitor in the CsA segment, namely Sinqi, which is listed on the A-share market with a ticker 300573 CH. Sinqi has recently planned to place shares to fund the expansion of the manufacturing facility for the CsA product which was approved by the NMPA in June 2020. From its disclosure, we can see that the CsA market could be aggressively overstated by the third-party consultant Frost &amp; Sullivan who provided the market forecast for the company's prospectus.</p>
</div>
<div>
<h2>Our previous coverage on Zhaoke Ophthalmic</h2>
</div>
<div>
<ul style="list-style-type: disc;">
<li><a href="https://www.smartkarma.com/insights/zhaoke-ophthalmic-could-be-over-valued-for-pre-ipo-round" target="_blank" rel="noopener">Zhaoke Ophthalmic (兆科眼科): Could Be Over-Valued for Pre-IPO Round</a></li>
<li><a href="https://www.smartkarma.com/insights/zhaoke-ophthalmic-pre-ipo-thoughts-on-valuation" target="_blank" rel="noopener">Zhaoke Ophthalmic (兆科眼科) Pre-IPO: Thoughts on Valuation</a></li>
</ul>
</div>


Founded by Lee's Pharma, Zhaoke offers a comprehensive ophthalmic product pipeline. The company is looking to raise up to USD 200m via a Hong Kong listing.


In our previous note, we looked at the company's two products, namely CsA gel and ZKY001. We are of the view that CsA gel does provide advantage over Restasis, the top selling eye gel for the DED, but the forecast of market growth is too aggressive for the DED market. For another core product ZKY001, while there is no data on the efficacy from Phase I clinical trial, we do note that the licensing parnter's product which uses the same technology but on a different indication, did not meet the primary end point in Phase III clinical trial according to a recent announcement, which raises our concern on the potential of the product candidate. In addition, the company also had a long list of generic referencing top selling glaucoma drugs. The company has an OK management team but strong backing of institutional investors.  We have also provided a preliminary valuation for its core products. 
We did research on its key competitor in the CsA segment, namely Sinqi, which is listed on the A-share market with a ticker 300573 CH. Sinqi has recently planned to place shares to fund the expansion of the manufacturing facility for the CsA product which was approved by the NMPA in June 2020. From its disclosure, we can see that the CsA market could be aggressively overstated by the third-party consultant Frost &amp; Sullivan who provided the market forecast for the company's prospectus.


Our previous coverage on Zhaoke Ophthalmic



Zhaoke Ophthalmic (兆科眼科): Could Be Over-Valued for Pre-IPO Round
Zhaoke Ophthalmic (兆科眼科) Pre-IPO: Thoughts on Valuation



Zhaoke Ophthalmic (兆科眼科) Pre-IPO: Beware of Aggressive "Guidance"

HK/China Healthcare Analyst (ex-Fosun Pharma)

Xinyao (Criss) Wang

<p>On December 18<sup>th</sup> 2020, <a href="https://www.smartkarma.com/entities/lee-s-pharmaceutical-hldgs" target="_blank" data-smartkarma-citation="entities:14616:1" rel="noopener">Lee's Pharmaceutical (950 HK)</a> announced that it had submitted an application to the Hong Kong Stock Exchange for approval to list <a href="https://www.smartkarma.com/entities/zhaoke-ophthalmology-pharmaceutical" target="_blank" data-smartkarma-citation="entities:31495:1" rel="noopener">Zhaoke Ophthalmology Pharmaceutical (ZKO HK)</a> on the main board of the HKEX. It is worth mentioning that, before the IPO, Lee's Pharmaceuticals holds 34.1% shares in Zhaoke, and Zhaoke is the affiliated company of the group. After the spin-off and listing, Lee's Pharmaceuticals would no longer be Zhaoke's controlling shareholder, but would still be its single largest shareholder. Meanwhile, at present, there are some good listed companies in the ophthalmology industry in the secondary capital market, such as <a href="https://www.smartkarma.com/entities/chengdu-kanghong-pharmaceu-a" target="_blank" data-smartkarma-citation="entities:24723:1" rel="noopener">Chengdu Kanghong Pharmaceu-A (002773 CH)</a> and <a href="https://www.smartkarma.com/entities/shenyang-xingqi-pharmaceut-a" target="_blank" data-smartkarma-citation="entities:29617:1" rel="noopener">Shenyang Xingqi Pharmaceut-A (300573 CH)</a>. As a "new force", how would Zhaoke perform compared with its strong peers in this industry?</p>

On December 18th 2020, Lee's Pharmaceutical (950 HK) announced that it had submitted an application to the Hong Kong Stock Exchange for approval to list Zhaoke Ophthalmology Pharmaceutical (ZKO HK) on the main board of the HKEX. It is worth mentioning that, before the IPO, Lee's Pharmaceuticals holds 34.1% shares in Zhaoke, and Zhaoke is the affiliated company of the group. After the spin-off and listing, Lee's Pharmaceuticals would no longer be Zhaoke's controlling shareholder, but would still be its single largest shareholder. Meanwhile, at present, there are some good listed companies in the ophthalmology industry in the secondary capital market, such as Chengdu Kanghong Pharmaceu-A (002773 CH) and Shenyang Xingqi Pharmaceut-A (300573 CH). As a "new force", how would Zhaoke perform compared with its strong peers in this industry?

Pre-IPO Zhaoke Ophthalmology Pharmaceutical - It Remains to Be Seen How to Find Its Way Out

Founder

Kemp Dolliver, CFA

Cherrystone Hill Research

HBM Holdings Limited / Equity Capital Markets

<p>Pre-revenue biotechnology company Harbour Biomed looks to raise US$230 million in an IPO on the HKEX. Because of the short timetable for the offering, the analysis in this Insight will be shorter than normal. We think that the proposed pre-money valuation of US$950 -1,043MM is fair, and the company has rich newsflow and numerous catalysts ahead in 2021/22. We would take the deal.</p>

Pre-revenue biotechnology company Harbour Biomed looks to raise US$230 million in an IPO on the HKEX. Because of the short timetable for the offering, the analysis in this Insight will be shorter than normal. We think that the proposed pre-money valuation of US$950 -1,043MM is fair, and the company has rich newsflow and numerous catalysts ahead in 2021/22. We would take the deal.

Harbour Biomed IPO: Positive Thoughts in Brief

China

Shenyang Xingqi Pharmaceutical Co., Ltd. is a pharmaceutical company. The Company researches, produces, and distributes ophthalmic medicines including anti-bacterial products, allergy medicines, cataract preventions, and glaucoma treatments.

Shenyang Xingqi Pharmaceutical (300573 CH)

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Shenyang Xingqi Pharmaceutical (300573 CH)

ChiNext/ChiNext50 Index Rebalance Preview: Overlapping Names Increases Flow

There could be 7 changes for the ChiNext and 5 changes for the ChiNext50. Round trip trade is estimated at US$636m. There is overlap between the...

Brian Freitas

Quiddity Leaderboard ChiNext & ChiNext 50 Jun 24: Double Impacts for Some Names

I see four ADDs/DELs for the ChiNext index and three ADDs/DELs for the ChiNext 50 index. Collectively, I expect these changes to cause US$259mn one...

Janaghan Jeyakumar, CFA

Zhaoke Ophthalmic (兆科眼科) Pre-IPO: Beware of Aggressive "Guidance"

We did research on its key competitor in the CsA segment and think that Frost & Sullivan grossly underestimates the competition and overestimates...

Ke Yan, CFA, FRM

Pre-IPO Zhaoke Ophthalmology Pharmaceutical - It Remains to Be Seen How to Find Its Way Out

The article analyzed Zhaoke Ophthalmology in terms of pipeline, competitive landscape, financial position and also included concerns for the future...

Xinyao (Criss) Wang

Harbour Biomed IPO: Positive Thoughts in Brief

This Insight includes a brief analysis of Harbour Biomed and its proposed listing on the HKEX. We like the deal at the price range offered.

Kemp Dolliver, CFA

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

ChiNext/​​​ChiNext50 Index Rebalance Preview: Overlapping Names Increases Flow

There could be 7 changes for the ChiNext and 5 changes for the ChiNext50. Round trip trade is estimated at US$636m. There is overlap between the...

Brian Freitas

Quiddity Leaderboard ChiNext & ChiNext 50 Jun 24: Double Impacts for Some Names

I see four ADDs/DELs for the ChiNext index and three ADDs/DELs for the ChiNext 50 index. Collectively, I expect these changes to cause US$259mn one...

Janaghan Jeyakumar, CFA

Zhaoke Ophthalmic (兆科眼科) Pre-IPO: Beware of Aggressive "Guidance"

We did research on its key competitor in the CsA segment and think that Frost & Sullivan grossly underestimates the competition and overestimates...

Ke Yan, CFA, FRM

Pre-IPO Zhaoke Ophthalmology Pharmaceutical - It Remains to Be Seen How to Find Its Way Out

The article analyzed Zhaoke Ophthalmology in terms of pipeline, competitive landscape, financial position and also included concerns for the future...

Xinyao (Criss) Wang

Harbour Biomed IPO: Positive Thoughts in Brief

This Insight includes a brief analysis of Harbour Biomed and its proposed listing on the HKEX. We like the deal at the price range offered.

Kemp Dolliver, CFA

ChiNext/ChiNext50 Index Rebalance Preview: Overlapping Names Increases Flow