Asia Pac ECM and Index Rebal, Shenton Research

Ke Yan, CFA, FRM

Asia Pac ECM and Index Rebal

Asia Pac IPO & Placement Research, China Biotech

DZT Research

DZT Research is an independent Asia Pacific equity specialist. Our quantitative research covers index rebalancing flows, alongside exchange data analytics accross Asia Pacific. On the equity capital markets side, we focus on Asia Pacific ECM, especially biotech and TMT. Our lead analyst is frequently cited by international media.

Quantitative Analysis

<ul>
<li>We analyzed the changes in margin trading positions of A-share stocks as of Jul 3rd. The aggregated net margin trading position is USD406,502m.</li>
<li>We tabulate league tables for top/bottom net long/short of margin trading by value, net margin buy as multiple of ADT.</li>
<li>We highlight net margin buy/sell changes in TONGHUA GOLDEN-HORSE PHARMACEUTICAL INDUSTRY, ZHEJIANG XINAN CHEMICAL INDUSTRIAL, GUOTAI HAITONG SECURITIES, OMNIVISOIN INTEGRATED CIRCUITS, BOE.</li>
</ul>


We analyzed the changes in margin trading positions of A-share stocks as of Jul 3rd. The aggregated net margin trading position is USD406,502m.
We tabulate league tables for top/bottom net long/short of margin trading by value, net margin buy as multiple of ADT.
We highlight net margin buy/sell changes in TONGHUA GOLDEN-HORSE PHARMACEUTICAL INDUSTRY, ZHEJIANG XINAN CHEMICAL INDUSTRIAL, GUOTAI HAITONG SECURITIES, OMNIVISOIN INTEGRATED CIRCUITS, BOE.


A-Share Margin Trading Weekly (Jul 3rd): TONGHUA GOLDEN-HORSE PHARMACEUTICAL INDUSTRY, BOE

Pan-Asia Index Rebalances/ Events/ Delta One, Periscope Analytics

Brian Freitas

Pan-Asia Index Rebalances/ Events/ Delta One

Index Rebalance

<p>Post market close on 27 August, the Shanghai Stock Exchange and China Securities Index Company announced the changes to the <a href="https://www.smartkarma.com/entities/sse-science-and-technology-innovation-board-50-index" target="_blank" data-smartkarma-citation="entities:29279:1" rel="noopener">SSE STAR 50 (STAR50 INDEX)</a>. The changes will be effective after the close of trading on 10 September.</p><p>There are 5 inclusions and 5 exclusions in the review. The inclusions are <a href="https://www.smartkarma.com/entities/pylon-technologies-co-ltd" target="_blank" data-smartkarma-citation="entities:33153:1" rel="noopener">Pylon Technologies Co Ltd (688063 CH)</a>, <a href="https://www.smartkarma.com/entities/3peak-inc" target="_blank" data-smartkarma-citation="entities:33460:1" rel="noopener">3peak (688536 CH)</a>, <a href="https://www.smartkarma.com/entities/bestechnic-shanghai-co-ltd" target="_blank" data-smartkarma-citation="entities:33459:1" rel="noopener">Bestechnic Shanghai (688608 CH)</a>, <a href="https://www.smartkarma.com/entities/zhejiang-supcon-technology-co" target="_blank" data-smartkarma-citation="entities:33457:1" rel="noopener">Zhejiang Supcon Technology (688777 CH)</a> and <a href="https://www.smartkarma.com/entities/tianneng-battery-group-co-ltd" target="_blank" data-smartkarma-citation="entities:33458:1" rel="noopener">Tianneng Battery Group (688819 CH)</a>, while the deletions are <a href="https://www.smartkarma.com/entities/guangzhou-fangbang-electronics-a" target="_blank" data-smartkarma-citation="entities:30313:1" rel="noopener">Guangzhou Fangbang Electronics-A (688020 CH)</a>, <a href="https://www.smartkarma.com/entities/piesat-information-technology-co-ltd" target="_blank" data-smartkarma-citation="entities:30328:1" rel="noopener">Piesat Information Technology (688066 CH)</a>, <a href="https://www.smartkarma.com/entities/shanghai-shen-lian-biomedical" target="_blank" data-smartkarma-citation="entities:30339:1" rel="noopener">Shanghai Shen Lian Biomedical (688098 CH)</a>, <a href="https://www.smartkarma.com/entities/shenzhen-lifotronic-technology-a" target="_blank" data-smartkarma-citation="entities:30395:1" rel="noopener">Shenzhen Lifotronic Technology-A (688389 CH)</a> and <a href="https://www.smartkarma.com/entities/farasis-energy-gan-zhou-co-a" target="_blank" data-smartkarma-citation="entities:28385:1" rel="noopener">Farasis Energy Gan Zhou Co-A (688567 CH)</a>. </p><p>The changes imply that a 6 month minimum listing was used. This is surprising (but not totally unexpected) since there were 141 stocks that were listed for longer than 1 year and that number was at the upper end of the 100-150 range where the methodology would change to use a minimum 12 month listing history.</p><p>Even more surprising is the deletion of <a href="https://www.smartkarma.com/entities/farasis-energy-gan-zhou-co-a" target="_blank" data-smartkarma-citation="entities:28385:1" rel="noopener">Farasis Energy Gan Zhou Co-A (688567 CH)</a>. The stock ranks much higher than other index constituents and we cannot see any reason for its deletion from the index.</p><p>The inclusions, exclusions and capping changes will result in a one-way turnover of 10.46% and result in a one-way trade of CNY4.05bn.</p>

Post market close on 27 August, the Shanghai Stock Exchange and China Securities Index Company announced the changes to the SSE STAR 50 (STAR50 INDEX). The changes will be effective after the close of trading on 10 September.There are 5 inclusions and 5 exclusions in the review. The inclusions are Pylon Technologies Co Ltd (688063 CH), 3peak (688536 CH), Bestechnic Shanghai (688608 CH), Zhejiang Supcon Technology (688777 CH) and Tianneng Battery Group (688819 CH), while the deletions are Guangzhou Fangbang Electronics-A (688020 CH), Piesat Information Technology (688066 CH), Shanghai Shen Lian Biomedical (688098 CH), Shenzhen Lifotronic Technology-A (688389 CH) and Farasis Energy Gan Zhou Co-A (688567 CH). The changes imply that a 6 month minimum listing was used. This is surprising (but not totally unexpected) since there were 141 stocks that were listed for longer than 1 year and that number was at the upper end of the 100-150 range where the methodology would change to use a minimum 12 month listing history.Even more surprising is the deletion of Farasis Energy Gan Zhou Co-A (688567 CH). The stock ranks much higher than other index constituents and we cannot see any reason for its deletion from the index.The inclusions, exclusions and capping changes will result in a one-way turnover of 10.46% and result in a one-way trade of CNY4.05bn.

STAR50 Index Rebalance: If You Obey All The Rules, You Miss All The Fun

Beijing Huafeng Test & Control / Index Rebalance

Beijing Huafeng Test & Control (688200 CH)

<div><p>The <a href="https://www.smartkarma.com/entities/sse-science-and-technology-innovation-board-50-index" target="_blank" data-smartkarma-citation="entities:29279:1" rel="noopener">SSE STAR 50 (STAR50 INDEX)</a> is a free float market cap weighted and is made up of the 50 largest stocks based on full market cap that are listed on the STAR Market.</p></div><div><p>The review period for the September rebalance ends on 31 July, the results of the rebalance will be announced towards the end of August and the changes will be implemented at the close of trading on 10 September.</p></div><div>
<p>With only 2 trading days left in the review period, we see <a href="https://www.smartkarma.com/entities/shanghai-shen-lian-biomedical" target="_blank" data-smartkarma-citation="entities:30339:1" rel="noopener">Shanghai Shen Lian Biomedical (688098 CH)</a>, <a href="https://www.smartkarma.com/entities/piesat-information-technology" target="_blank" data-smartkarma-citation="entities:30328:1" rel="noopener">Piesat Information Technology (688066 CH)</a>, <a href="https://www.smartkarma.com/entities/guangzhou-fang-bang-electr-a" target="_blank" data-smartkarma-citation="entities:30313:1" rel="noopener">Guangzhou Fang Bang Electr-A (688020 CH)</a>, <a href="https://www.smartkarma.com/entities/shenzhen-lifotronic-techno-a" target="_blank" data-smartkarma-citation="entities:30395:1" rel="noopener">Shenzhen Lifotronic Techno-A (688389 CH)</a> and <a href="https://www.smartkarma.com/entities/appotronics-corp-ltd" target="_blank" data-smartkarma-citation="entities:28235:1" rel="noopener">Appotronics Corp Ltd (688007 CH)</a> as high probability deletions from the index.</p>
<p>Coming up with a definitive list of inclusions is tougher given the subjectivity of the index rules for this review. The subjectivity comes from the whether the index committee uses a minimum listing history period of 12 months or 6 months.</p>
<p>Higher probability inclusions (<em>if a 12 month minimum listing history is used</em>) are <a href="https://www.smartkarma.com/entities/eyebright-medical-technology-beijing-co-ltd" target="_blank" data-smartkarma-citation="entities:33455:1" rel="noopener">Eyebright Medical Technology Beijing (688050 CH)</a>, <a href="https://www.smartkarma.com/entities/sinocelltech-group-ltd" target="_blank" data-smartkarma-citation="entities:33456:1" rel="noopener">Sinocelltech Group (688520 CH)</a>, <a href="https://www.smartkarma.com/entities/beijing-huafeng-test-control-technology-a" target="_blank" data-smartkarma-citation="entities:30367:1" rel="noopener">Beijing Huafeng Test &amp; Control Technology-A (688200 CH)</a>, <a href="https://www.smartkarma.com/entities/zhejiang-orient-gene-biotech-a" target="_blank" data-smartkarma-citation="entities:30379:1" rel="noopener">Zhejiang Orient Gene Biotech-A (688298 CH)</a> and <a href="https://www.smartkarma.com/entities/tinavi-medical-technologies-co-ltd" target="_blank" data-smartkarma-citation="entities:33453:1" rel="noopener">Tinavi Medical Technologies (688277 CH)</a>.</p>
<p>Lower probability inclusions (<em>if a 6 month minimum listing history is used</em>) are <a href="https://www.smartkarma.com/entities/zhejiang-supcon-technology-co" target="_blank" data-smartkarma-citation="entities:33457:1" rel="noopener">Zhejiang Supcon Technology (688777 CH)</a>, <a href="https://www.smartkarma.com/entities/tianneng-battery-group-co-ltd" target="_blank" data-smartkarma-citation="entities:33458:1" rel="noopener">Tianneng Battery Group (688819 CH)</a>, <a href="https://www.smartkarma.com/entities/bestechnic-shanghai-co-ltd" target="_blank" data-smartkarma-citation="entities:33459:1" rel="noopener">Bestechnic Shanghai (688608 CH)</a>, <a href="https://www.smartkarma.com/entities/3peak-inc" target="_blank" data-smartkarma-citation="entities:33460:1" rel="noopener">3peak (688536 CH)</a> and <a href="https://www.smartkarma.com/entities/pylon-technologies-co-ltd" target="_blank" data-smartkarma-citation="entities:33153:1" rel="noopener">Pylon Technologies Co Ltd (688063 CH)</a>.</p>
<p>The inclusions, exclusions and capping changes will result in a one-way turnover of 8.45% and result in a one-way trade of CNY3.3bn.</p>
</div>

The SSE STAR 50 (STAR50 INDEX) is a free float market cap weighted and is made up of the 50 largest stocks based on full market cap that are listed on the STAR Market.The review period for the September rebalance ends on 31 July, the results of the rebalance will be announced towards the end of August and the changes will be implemented at the close of trading on 10 September.
With only 2 trading days left in the review period, we see Shanghai Shen Lian Biomedical (688098 CH), Piesat Information Technology (688066 CH), Guangzhou Fang Bang Electr-A (688020 CH), Shenzhen Lifotronic Techno-A (688389 CH) and Appotronics Corp Ltd (688007 CH) as high probability deletions from the index.
Coming up with a definitive list of inclusions is tougher given the subjectivity of the index rules for this review. The subjectivity comes from the whether the index committee uses a minimum listing history period of 12 months or 6 months.
Higher probability inclusions (if a 12 month minimum listing history is used) are Eyebright Medical Technology Beijing (688050 CH), Sinocelltech Group (688520 CH), Beijing Huafeng Test &amp; Control Technology-A (688200 CH), Zhejiang Orient Gene Biotech-A (688298 CH) and Tinavi Medical Technologies (688277 CH).
Lower probability inclusions (if a 6 month minimum listing history is used) are Zhejiang Supcon Technology (688777 CH), Tianneng Battery Group (688819 CH), Bestechnic Shanghai (688608 CH), 3peak (688536 CH) and Pylon Technologies Co Ltd (688063 CH).
The inclusions, exclusions and capping changes will result in a one-way turnover of 8.45% and result in a one-way trade of CNY3.3bn.


STAR50 Index Rebalance Preview: Big Turnover in a Volatile Market

HK/China Healthcare Analyst (ex-Fosun Pharma)

Xinyao (Criss) Wang

Equity Bottom-Up

Shenzhen Lifotronic Technology-A / Equity Bottom-Up

Shenzhen Lifotronic Technology-A (688389 CH)

<p>Since this year, major shareholders of <a href="https://www.smartkarma.com/entities/shenzhen-lifotronic-techno-a" target="_blank" data-smartkarma-citation="entities:30395:1" rel="noopener">Shenzhen Lifotronic Techno-A (688389 CH)</a> have reduced their holdings by 4.22 million shares, which still hasn't affected the performance of its stock price. Lifotronic’s share price was up about 34.6% by the end of June 11, 2021, thanks to the Company's strong growth. From 2016 to 2020, Lifotronic's revenue increased from RMB175 million to RMB554 million, with a CAGR of 33.47%. The net profit increased from RMB33.4 million (excluding the share-based payment of RMB23.5 million) in 2016 to RMB144 million in 2020, with a CAGR of 44.12%. The operating cash flow increased from RMB28 million in 2016 to RMB136 million in 2020, with a CAGR of 48.57%. Considering Lifotronic’s solid performance for years, this company deserves investors’ following.</p>

Since this year, major shareholders of Shenzhen Lifotronic Techno-A (688389 CH) have reduced their holdings by 4.22 million shares, which still hasn't affected the performance of its stock price. Lifotronic’s share price was up about 34.6% by the end of June 11, 2021, thanks to the Company's strong growth. From 2016 to 2020, Lifotronic's revenue increased from RMB175 million to RMB554 million, with a CAGR of 33.47%. The net profit increased from RMB33.4 million (excluding the share-based payment of RMB23.5 million) in 2016 to RMB144 million in 2020, with a CAGR of 44.12%. The operating cash flow increased from RMB28 million in 2016 to RMB136 million in 2020, with a CAGR of 48.57%. Considering Lifotronic’s solid performance for years, this company deserves investors’ following.

Shenzhen Lifotronic Technology (688389.CH)-A Dark Horse in Both IVD and Therapeutical Medical Device

<div><p>The <a href="https://www.smartkarma.com/entities/sse-science-and-technology-innovation-board-50-index" target="_blank" data-smartkarma-citation="entities:29279:1" rel="noopener">SSE STAR 50 (STAR50 INDEX)</a> is a free float market cap weighted and is made up of the 50 largest stocks based on full market cap that are listed on the STAR Market.</p></div><div>
<p>The review period for the September rebalance ends on 31 July, the results of the rebalance will be announced towards the end of August and the changes will be implemented at the close of trading on 10 September.</p>
<p>A maximum of 5 changes are permitted in a single review.</p>
<p>At the September review, potential deletions include <a href="https://www.smartkarma.com/entities/shanghai-shen-lian-biomedical" target="_blank" data-smartkarma-citation="entities:30339:1" rel="noopener">Shanghai Shen Lian Biomedical (688098 CH)</a>, <a href="https://www.smartkarma.com/entities/piesat-information-technology" target="_blank" data-smartkarma-citation="entities:30328:1" rel="noopener">Piesat Information Technology (688066 CH)</a>, <a href="https://www.smartkarma.com/entities/guangzhou-fang-bang-electr-a" target="_blank" data-smartkarma-citation="entities:30313:1" rel="noopener">Guangzhou Fang Bang Electr-A (688020 CH)</a>, <a href="https://www.smartkarma.com/entities/shenzhen-lifotronic-techno-a" target="_blank" data-smartkarma-citation="entities:30395:1" rel="noopener">Shenzhen Lifotronic Techno-A (688389 CH)</a> and <a href="https://www.smartkarma.com/entities/appotronics-corp-ltd" target="_blank" data-smartkarma-citation="entities:28235:1" rel="noopener">Appotronics Corp Ltd (688007 CH)</a>. </p>
<p>With index rules that are not specific, there are two sets of possible inclusions depending on the minimum listing history used for the stocks.</p>
<p>The likelier inclusions are Eyebright Medical Technology Beijing Co Ltd (688050 CH), Sinocelltech Group Ltd (688520 CH), <a href="https://www.smartkarma.com/entities/beijing-huafeng-test-con-a" target="_blank" data-smartkarma-citation="entities:30367:1" rel="noopener">Beijing Huafeng Test &amp; Con-A (688200 CH)</a>, <a href="https://www.smartkarma.com/entities/tinavi-medical-technologies-co-ltd" target="_blank" data-smartkarma-citation="entities:33453:1" rel="noopener">Tinavi Medical Technologies (688277 CH)</a> and <a href="https://www.smartkarma.com/entities/zhejiang-orient-gene-biotech-a" target="_blank" data-smartkarma-citation="entities:30379:1" rel="noopener">Zhejiang Orient Gene Biotech-A (688298 CH)</a>. </p>
<p>The less likely inclusions are Zhejiang Supcon Technology Co Ltd (688777 CH), Tianneng Battery Group Co Ltd (688819 CH), Bestechnic Shanghai Co Ltd (688608 CH), 3Peak Inc (688536 CH) and <a href="https://www.smartkarma.com/entities/pylon-technologies-co-ltd" target="_blank" data-smartkarma-citation="entities:33153:1" rel="noopener">Pylon Technologies Co Ltd (688063 CH)</a>.</p>
<p>We think it is likelier that the index committee uses a 12 month minimum listing history and the estimated one-way turnover will be 6.36%.</p>
</div>

The SSE STAR 50 (STAR50 INDEX) is a free float market cap weighted and is made up of the 50 largest stocks based on full market cap that are listed on the STAR Market.
The review period for the September rebalance ends on 31 July, the results of the rebalance will be announced towards the end of August and the changes will be implemented at the close of trading on 10 September.
A maximum of 5 changes are permitted in a single review.
At the September review, potential deletions include Shanghai Shen Lian Biomedical (688098 CH), Piesat Information Technology (688066 CH), Guangzhou Fang Bang Electr-A (688020 CH), Shenzhen Lifotronic Techno-A (688389 CH) and Appotronics Corp Ltd (688007 CH). 
With index rules that are not specific, there are two sets of possible inclusions depending on the minimum listing history used for the stocks.
The likelier inclusions are Eyebright Medical Technology Beijing Co Ltd (688050 CH), Sinocelltech Group Ltd (688520 CH), Beijing Huafeng Test &amp; Con-A (688200 CH), Tinavi Medical Technologies (688277 CH) and Zhejiang Orient Gene Biotech-A (688298 CH). 
The less likely inclusions are Zhejiang Supcon Technology Co Ltd (688777 CH), Tianneng Battery Group Co Ltd (688819 CH), Bestechnic Shanghai Co Ltd (688608 CH), 3Peak Inc (688536 CH) and Pylon Technologies Co Ltd (688063 CH).
We think it is likelier that the index committee uses a 12 month minimum listing history and the estimated one-way turnover will be 6.36%.


STAR Board - STAR50 Index Rebalance Sep Preview: Stocks On The Move

China

Shenzhen Lifotronic Technology Co., Ltd. produces and sells medical equipment. The Company manufactures and sells glycated hemoglobin analyzer, lateral flow immunoassay, nephelometry, and other products. Shenzhen Lifotronic Technology markets its products throughout China.

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Shenzhen Lifotronic Technology-A (688389 CH)

STAR50 Index Rebalance: If You Obey All The Rules, You Miss All The Fun

There are 5 changes to the STAR Index at the Sep rebalance. The index provider has used a 6 month minimum listing history. One-way turnover is in...

Brian Freitas

STAR50 Index Rebalance Preview: Big Turnover in a Volatile Market

We see 5 changes at the September rebalance and expect CSI/SSE to use a 12 month minimum listing history. One way turnover is around 8.45% and most...

Brian Freitas

Shenzhen Lifotronic Technology (688389.CH)-A Dark Horse in Both IVD and Therapeutical Medical Device

This article analyzed "a dark horse" in IVD and therapeutical medical device, Lifotronic, including business analysis, drivers for revenue,...

Xinyao (Criss) Wang

STAR Board - STAR50 Index Rebalance Sep Preview: Stocks On The Move

Another STAR50 review that will max out of the changes permitted at a review & result in high turnover. Assets indexed to the STAR50 continue to...

Brian Freitas

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

A-Share Margin Trading Weekly (Jul 3rd): TONGHUA GOLDEN-HORSE PHARMACEUTICAL INDUSTRY, BOE

We analyzed A-share margin trading positions report for the past week and highlighted TONGHUA GOLDEN-HORSE PHARMACEUTICAL INDUSTRY (000766 CH),...

Ke Yan, CFA, FRM

STAR50 Index Rebalance: If You Obey All The Rules, You Miss All The Fun

There are 5 changes to the STAR Index at the Sep rebalance. The index provider has used a 6 month minimum listing history. One-way turnover is in...

Brian Freitas

STAR50 Index Rebalance Preview: Big Turnover in a Volatile Market

We see 5 changes at the September rebalance and expect CSI/SSE to use a 12 month minimum listing history. One way turnover is around 8.45% and most...

Brian Freitas

Shenzhen Lifotronic Technology (688389.CH)-A Dark Horse in Both IVD and Therapeutical Medical Device

This article analyzed "a dark horse" in IVD and therapeutical medical device, Lifotronic, including business analysis, drivers for revenue,...

Xinyao (Criss) Wang

STAR Board - STAR50 Index Rebalance Sep Preview: Stocks On The Move

Another STAR50 review that will max out of the changes permitted at a review & result in high turnover. Assets indexed to the STAR50 continue to...

Brian Freitas