Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

<ul>
<li>The HSCEI is well-known and well-followed but sees less passive tracking than you might expect. Quiddity teammember Janaghan had expected up to two ADDs and two DELETEs.</li>
<li>We got one ADD and one DELETE instead as <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> was "saved" from deletion by a FFW/FAF increase. </li>
<li>Relatively smaller flows here at 3% one-way with the big flows on the name changes.</li>
</ul>


The HSCEI is well-known and well-followed but sees less passive tracking than you might expect. Quiddity teammember Janaghan had expected up to two ADDs and two DELETEs.
We got one ADD and one DELETE instead as SenseTime Group (20 HK) was "saved" from deletion by a FFW/FAF increase. 
Relatively smaller flows here at 3% one-way with the big flows on the name changes.


HSCEI June 2024 Rebal - Zijin Mining (2899) ADDed, Xinyi Solar (968) DELETEd

<ul>
<li>The Hang Seng Index benchmark has been expected to see an increase in names and flows to Healthcare. We have only one ADD (IT/tech) and one DELETE.</li>
<li>But the headlined DELETE candidate in <a href="https://www.smartkarma.com/insights/quiddity-leaderboard-for-hang-seng-index-jun-24-could-country-garden-services-get-deleted" target="_blank" rel="noopener">the most recent Quiddity Leaderboard</a> was chosen to be deleted. And the ADD one of our top two.</li>
<li>Flows are somewhat restrained at capping flows, small name change flows, and then a few FFW/FAF changes to be about 1.9% one-way flows in total.</li>
</ul>


The Hang Seng Index benchmark has been expected to see an increase in names and flows to Healthcare. We have only one ADD (IT/tech) and one DELETE.
But the headlined DELETE candidate in the most recent Quiddity Leaderboard was chosen to be deleted. And the ADD one of our top two.
Flows are somewhat restrained at capping flows, small name change flows, and then a few FFW/FAF changes to be about 1.9% one-way flows in total.


HSI June 2024 Rebal - BYD Electronics (285) ADDed, Cogard Svcs (6098) DELETEd, and Capping Flows

Technical Analyst, Vermilion Research

Joe Jasper

Technical Analyst

Technical and Quantitative Research

Vermilion Research

Vermilion’s objective is to deliver timely, actionable, and unique technical research to professional investors through the application of our various technical indicators.

Our research strategists seek to highlight securities which we believe are at major inflection points, based on our various technical and quantitative indicators, and offer asymmetric risk/return profiles. Our unique research methodology, centered on relative strength, enables our strategists to deliver superior investment recommendations.

Our process begins by organizing the universe of actively traded stocks into discrete sectors, then into industry groups. We then apply our technical and quantitative tools to identify developing price trends. Once attractive trends are identified within a selected sector or group, we screen for individual stocks which we believe offer the best risk/reward profile. We provide a historical perspective that often reveals, through our long-term charts, how price patterns often repeat themselves over time.

Technical Analysis

<ul>
<li>Since mid-April we discussed how downside was limited on MSCI ACWI and EURO STOXX 50, and May 2nd discussed it was "quite possible" the lows were in.</li>
<li>Now, the MSCI ACWI, ACWI ex-US, EAFE, and EM indexes have all broken out to new multi-year highs. Our bullish outlook (since early-November 2023) remains intact; expect higher prices ahead.</li>
<li>China (MSCI China) continues to lead the EM turnaround, and we remain bullish on the space. We highlight many large-cap EM buys within Communications, Technology, Discretionary; we remain bullish miners.</li>
</ul>


Since mid-April we discussed how downside was limited on MSCI ACWI and EURO STOXX 50, and May 2nd discussed it was "quite possible" the lows were in.
Now, the MSCI ACWI, ACWI ex-US, EAFE, and EM indexes have all broken out to new multi-year highs. Our bullish outlook (since early-November 2023) remains intact; expect higher prices ahead.
China (MSCI China) continues to lead the EM turnaround, and we remain bullish on the space. We highlight many large-cap EM buys within Communications, Technology, Discretionary; we remain bullish miners.


Bullish Outlook Intact; EM and China Continue to Bottom; Buys in Comms, Tech, Discretionary, Miners

Blue Lotus Non US Internet research, Blue Lotus Research Institute

Ying Pan

Blue Lotus Non US Internet research

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

Equity Bottom-Up

<ul>
<li>Tencent reported C1Q24 revenue, IFRS operating profit, and IFRS net income in-line, 9.1%, 26% vs. our estimates and in-line, 16%, 21% vs. consensus;</li>
<li>Game revenues were below our expectations while advertising was above, leading to a gross margin beat of 2.73ppt, powered by video account and AI. </li>
<li>We raised our TP to HK$450 to reflect the shift to better-margin revenue mix and upcoming revenue acceleration.</li>
</ul>


Tencent reported C1Q24 revenue, IFRS operating profit, and IFRS net income in-line, 9.1%, 26% vs. our estimates and in-line, 16%, 21% vs. consensus;
Game revenues were below our expectations while advertising was above, leading to a gross margin beat of 2.73ppt, powered by video account and AI. 
We raised our TP to HK$450 to reflect the shift to better-margin revenue mix and upcoming revenue acceleration.


[Tencent (700 HK, BUY, TP HK$450) TP Change]: Market Finally Starting to Recognize Tencent’s Value

Thematic (Sector/Industry)

<ul>
<li>NTES US : NetEase's &lt;Marvel Rivals&gt; has commenced its first round of testing, with players providing positive feedback.（+）</li>
<li>4689 JP/4755 JP/4385 JP: PayPay QR-code system crashed for three hours (-/+/+)</li>
<li>BABA US /BIDU US/700 HK: China's generative AI starts price war mode, led by ByteDance and High-Flyer（/////）</li>
</ul>


NTES US : NetEase's &lt;Marvel Rivals&gt; has commenced its first round of testing, with players providing positive feedback.（+）
4689 JP/4755 JP/4385 JP: PayPay QR-code system crashed for three hours (-/+/+)
BABA US /BIDU US/700 HK: China's generative AI starts price war mode, led by ByteDance and High-Flyer（/////）


[Blue Lotus Daily - TMT Update]:NTES US/4689 JP/4755 JP/4385 JP/BABA US /BIDU US/700 HK

China

Tencent Holdings Limited operates as an investment holding company. The Company, through its subsidiaries, provides Internet and mobile value-added services (VAS), online advertising, and e-commerce transactions. Tencent Holdings offers services to users worldwide.

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Tencent (700 HK)

HSCEI June 2024 Rebal - Zijin Mining (2899) ADDed, Xinyi Solar (968) DELETEd

The HSCEI Index sees one add and one delete. The ADD of Zijin was expected. Quiddity expected Xinyi Solar to be deleted, and Sensetime too, but it...

Travis Lundy

HSI June 2024 Rebal - BYD Electronics (285) ADDed, Cogard Svcs (6098) DELETEd, and Capping Flows

Hang Seng rebals are usually difficult to predict because the whims and fancies of the index committee are tough to know. We got the DELETE right....

Travis Lundy

Bullish Outlook Intact; EM and China Continue to Bottom; Buys in Comms, Tech, Discretionary, Miners

Bullish Outlook Intact $ACWI; EM and China Continue to Lead; U.S. Dollar (DXY), WTI Crude Oil, and Gasoline Prices Rolling Over; Buys in: Comms,...

Vermilion Research

[Tencent (700 HK, BUY, TP HK$450) TP Change]: Market Finally Starting to Recognize Tencent’s Value

Tencent's C1Q24 revenue and profit in-line with estimates, boosted by advertising and better-margin revenue mix, leading to raised TP of HK$450.

Blue Lotus Research Institute

[Blue Lotus Daily - TMT Update]:NTES US/4689 JP/4755 JP/4385 JP/BABA US /BIDU US/700 HK

NetEase's receives positive feedback during first round of testing, PayPay QR-code system crashes for three hours in Japan.China's generative AI...

Blue Lotus Research Institute

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

HSCEI June 2024 Rebal - Zijin Mining (2899) ADDed, Xinyi Solar (968) DELETEd

The HSCEI Index sees one add and one delete. The ADD of Zijin was expected. Quiddity expected Xinyi Solar to be deleted, and Sensetime too, but it...

Travis Lundy

HSI June 2024 Rebal - BYD Electronics (285) ADDed, Cogard Svcs (6098) DELETEd, and Capping Flows

Hang Seng rebals are usually difficult to predict because the whims and fancies of the index committee are tough to know. We got the DELETE right....

Travis Lundy

Bullish Outlook Intact; EM and China Continue to Bottom; Buys in Comms, Tech, Discretionary, Miners

Bullish Outlook Intact $ACWI; EM and China Continue to Lead; U.S. Dollar (DXY), WTI Crude Oil, and Gasoline Prices Rolling Over; Buys in: Comms,...

Vermilion Research

[Tencent (700 HK, BUY, TP HK$450) TP Change]: Market Finally Starting to Recognize Tencent’s Value

​Tencent's C1Q24 revenue and profit in-line with estimates, boosted by advertising and better-margin revenue mix, leading to raised TP of HK$450.

Blue Lotus Research Institute

[Blue Lotus Daily - TMT Update]:NTES US/4689 JP/4755 JP/4385 JP/BABA US /BIDU US/700 HK

​NetEase's receives positive feedback during first round of testing, PayPay QR-code system crashes for three hours in Japan.China's generative AI...

Blue Lotus Research Institute

Tencent's C1Q24 revenue and profit in-line with estimates, boosted by advertising and better-margin revenue mix, leading to raised TP of HK$450.

NetEase's receives positive feedback during first round of testing, PayPay QR-code system crashes for three hours in Japan.China's generative AI...