Equity Analyst, LightStream Research

Shifara Samsudeen, FCMA, CGMA

Equity Analyst

Long-Short Analysis on Japan, Asia and the World

LightStream Research

LightStream conducts quantitatively rigorous and data-driven analysis with a focus on Japan and Asia.

We consistently cover the Tech, Consumer and Industrial sectors, and provide ECM and Events coverage more broadly.

We supplement traditional qualitative insights from company relationships with a robust quantitative foundation that examines as much historical data as is available.
We further refine the accuracy of our insights and calls through the use of alternative data to flesh out current trends, and through a valuation framework that emphasises non-superficial peer group selection and a proper attempt to understand the metrics and changes that have driven security valuations in the past.

Equity Bottom-Up

Sipai Health Technology / Equity Bottom-Up

<ul>
<li>Sipai Health Tech’s shares have been up more than 35% since its HKEx IPO in December 2022. Shares were priced at HK$18.6 a piece and are trading close to HK$33.55.</li>
<li>The company’s largest business segment commands very lower margins while high-margin insurance business is facing stiff competition with negligible contribution to consolidated earnings.</li>
<li>Closest peer Beijing Yuanxin Tech has applied for an IPO and Yuanxin’s deteriorating performance could have partly driven the current rally in Sipai’s share price since its IPO.</li>
</ul>


Sipai Health Tech’s shares have been up more than 35% since its HKEx IPO in December 2022. Shares were priced at HK$18.6 a piece and are trading close to HK$33.55.
The company’s largest business segment commands very lower margins while high-margin insurance business is facing stiff competition with negligible contribution to consolidated earnings.
Closest peer Beijing Yuanxin Tech has applied for an IPO and Yuanxin’s deteriorating performance could have partly driven the current rally in Sipai’s share price since its IPO.


Sipai Health Tech: Market Overreacts to a Mediocre Business

HK/China Healthcare Analyst (ex-Fosun Pharma)

Xinyao (Criss) Wang

<ul>
<li>The sustainability/stability of Sipai’s performance and growth potential are worrying. Sipai doesn’t have a business with core competitiveness as its foundation, thus leading to potential problems in its business model.</li>
<li>It is useless to have fast revenue growth because Sipai’s profitability is very weak, which is actually closely related to its business characteristics. Sipai is far from being breakeven.</li>
<li>Sipai is overvalued. Such high valuation is not reasonable based on our analysis. We are conservative about Sipai's outlook and we think there are much better investment opportunities.</li>
</ul>


The sustainability/stability of Sipai’s performance and growth potential are worrying. Sipai doesn’t have a business with core competitiveness as its foundation, thus leading to potential problems in its business model.
It is useless to have fast revenue growth because Sipai’s profitability is very weak, which is actually closely related to its business characteristics. Sipai is far from being breakeven.
Sipai is overvalued. Such high valuation is not reasonable based on our analysis. We are conservative about Sipai's outlook and we think there are much better investment opportunities.


Sipai Health Technology (314.HK) - Unjustified Valuation and Problematic Business Model

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>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

China

Sipai Health Technology is a medical technology and health management company operating in China. It provides specialty pharmacy services, physician research assistance for clinical trials, and health insurance services. The company was founded in 2014 and is headquartered in Shanghai, China.

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Sipai Health Technology (314 HK)

Sipai Health Tech: Market Overreacts to a Mediocre Business

Sipai's shares have rallied more than 35% since its IPO. Largest biz segment commands very lower GPM and high-margin insurance biz's contribution...

Shifara Samsudeen, FCMA, CGMA