China New Economy Equity Analyst, Blue Lotus Research Institute

Robert McKay

China New Economy Equity Analyst

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

Thematic (Sector/Industry)

<ul>
<li>Despite wide-spread social media expectations of China's electronics industry benefiting from Middle East supply chain disruptions following explosive incidents, September trade data suggested otherwise;</li>
<li>Middle East exports declined 2.1% yoy, underperforming other regions, while electronics were worse, declining 7.0% yoy. Communication device exports to Iran, Palestine and Lebanon were among the worst performing categories;</li>
<li>This suggests terrorist related trade was a negligible portion. As customs data are two-way verifiable, we believe we can safely conclude China doesn't benefit from the war in Mid East.</li>
</ul>


Despite wide-spread social media expectations of China's electronics industry benefiting from Middle East supply chain disruptions following explosive incidents, September trade data suggested otherwise;
Middle East exports declined 2.1% yoy, underperforming other regions, while electronics were worse, declining 7.0% yoy. Communication device exports to Iran, Palestine and Lebanon were among the worst performing categories;
This suggests terrorist related trade was a negligible portion. As customs data are two-way verifiable, we believe we can safely conclude China doesn't benefit from the war in Mid East.


Did China Exports Really Benefit from the Israel/Lebanon Pager Attack?

External broker reports(aggregated public sources), CMB International

CMB International

External broker reports(aggregated public sources)

Incorporated in Hong Kong, supported by the mainland and targeting in global market, CMB International Capital Corporation Limited (“CMBI”) is an integrated financial institution providing comprehensive and professional services. As a wholly-owned subsidiary of China Merchants Bank ("CMB"), by leveraging on the Group’s synergy and coordination in domestic and overseas markets, as well as CMB’s strong resources and outstanding social reputation, CMBI and its subsidiaries have been actively implementing diversified business strategies and set up an overall layout of main business segments including Corporate Finance, Asset Management, Wealth Management, Global Markets and Structured Finance, etc. Adhering to the philosophy of “being clients oriented and increasing our own values by the way of creating value for clients”, CMBI endeavors to provide quality and integrated financial services to institutional, corporate and individual customers both domestic and overseas including Hong Kong IPO sponsorship and underwriting, share placement and rights issue for listed companies, financial advisors, bonds issuance services, asset management, direct investment, wealth management, equity sales and trading, etc.

Equity Bottom-Up

<ul><li>Wingtech 1H24 sales were up 15% YoY to RMB33.6bn, driven by strong ODM sales (up 27% YoY), partially offset by weaker semiconductor sales (down 8% YoY).</li><li>NP declined 89% YoY to RMB140mn, as GPM deteriorated to 9.5% in 1H24 (vs. 17.6%/14.7% in 1H23/2H23).</li><li>Semi. GPM showed signs of recovery (up 7.7ppt in 2Q). We expect ODM GPM to improve in 2H24 to 5.0% from 2.5% in 1H24. </li></ul><p><em>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.</em></p>

Wingtech 1H24 sales were up 15% YoY to RMB33.6bn, driven by strong ODM sales (up 27% YoY), partially offset by weaker semiconductor sales (down 8% YoY).NP declined 89% YoY to RMB140mn, as GPM deteriorated to 9.5% in 1H24 (vs. 17.6%/14.7% in 1H23/2H23).Semi. GPM showed signs of recovery (up 7.7ppt in 2Q). We expect ODM GPM to improve in 2H24 to 5.0% from 2.5% in 1H24. Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Wingtech (600745 CH) - 1H24 Results Review: Challenging 1H; Looking for Recovery in 2H

Index Rebal Trades & Special Situations, Quiddity Advisors

Janaghan Jeyakumar, CFA

Index Rebal Trades & Special Situations

Quiddity Advisors

Pan-Asia Catalysts/Events

Index Rebalance

Hainan Airport Infrastructure / Index Rebalance

<ul>
<li>After market close on Friday 24th November 2023, the December 2023 index review results for CSI 300/500 and SSE 50/180 were announced.</li>
<li>CSI 300 and CSI will have 14 and 50 changes while SSE 50 and SSE 180 will have 5 and 18 changes respectively. There are many overlapping flows.</li>
<li>In this insight, I have presented the details of the index changes and aggregated the expected flows attributable to the four indices mentioned above.</li>
</ul>


After market close on Friday 24th November 2023, the December 2023 index review results for CSI 300/500 and SSE 50/180 were announced.
CSI 300 and CSI will have 14 and 50 changes while SSE 50 and SSE 180 will have 5 and 18 changes respectively. There are many overlapping flows.
In this insight, I have presented the details of the index changes and aggregated the expected flows attributable to the four indices mentioned above.


Quiddity Aggregation of CSI300/500 and SSE50/180 Index Flows for Dec 2023: US$4.2bn One-Way!

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

<ul>
<li>The announcement of the inclusion of <a href="https://www.smartkarma.com/entities/uber-technologies-inc" target="_blank" data-smartkarma-citation="entities:430:1" rel="noopener">Uber Technologies (UBER US)</a> in the <a href="https://www.smartkarma.com/entities/s-p-500-index" target="_blank" data-smartkarma-citation="entities:22886:1" rel="noopener">S&amp;P 500 INDEX</a> was a big one last week. There were announcements for some other indices too.</li>
<li>There are many indices in China that will be rebalanced at the close on Friday, the biggest being the <a href="https://www.smartkarma.com/entities/shanghai-shenzhen-csi-300-inde" target="_blank" data-smartkarma-citation="entities:22906:1" rel="noopener">CSI 300</a>, <a href="https://www.smartkarma.com/entities/csi-smallcap-500-index-shang" target="_blank" data-smartkarma-citation="entities:35347:1" rel="noopener">CSI 500</a>, <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">STAR50</a>, <a href="https://www.smartkarma.com/entities/shanghai-stock-exchange-sse-50-a-share-index" target="_blank" data-smartkarma-citation="entities:31073:1" rel="noopener">SSE50</a> and <a href="https://www.smartkarma.com/entities/kraneshares-csi-china-internet-etf" target="_blank" data-smartkarma-citation="entities:28208:1" rel="noopener">KWEB US</a>.</li>
<li>Relatively quiet in ETF world with net inflows to China focused ETFs and net outflows for Japan.</li>
</ul>


The announcement of the inclusion of Uber Technologies (UBER US) in the S&amp;P 500 INDEX was a big one last week. There were announcements for some other indices too.
There are many indices in China that will be rebalanced at the close on Friday, the biggest being the CSI 300, CSI 500, STAR50, SSE50 and KWEB US.
Relatively quiet in ETF world with net inflows to China focused ETFs and net outflows for Japan.


Index Rebalance & ETF Flow Recap: KWEB, CSI300/500, STAR50, SSE50, ChiNext, SET50, Chips, Denso, SPX

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.

Quantitative Analysis

<ul>
<li>We analyze the weekly Shanghai/Shenzhen northbound Connect flows with our data engine for holding position as of November 24th.</li>
<li>We estimate the weekly outflows to be US$432.1 million, led by information technology, materials, and offset by health care, consumer discretionary, consumer staples.</li>
<li>We highlight flows for Chongqing Changan Automobile, Chongqing Sokon Industry Group Stock, Sungrow Power Supply, BYD.</li>
</ul>


We analyze the weekly Shanghai/Shenzhen northbound Connect flows with our data engine for holding position as of November 24th.
We estimate the weekly outflows to be US$432.1 million, led by information technology, materials, and offset by health care, consumer discretionary, consumer staples.
We highlight flows for Chongqing Changan Automobile, Chongqing Sokon Industry Group Stock, Sungrow Power Supply, BYD.


Northbound Flows (Nov 24th): Chongqing Changan Automobile, Sokon, Sungrow Power, BYD

China

Wingtech Technology Co.,Ltd manufactures communications equipment. The Company produces mobile phones, tablets, smart devices, and other equipment. Wingtech Technology also operates real estate development, hotel management, financing, and other businesses.

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Wingtech Technology (600745 CH)

Wingtech (600745 CH) - 1H24 Results Review: Challenging 1H; Looking for Recovery in 2H

Wingtech 1H24 sales were up 15% YoY to RMB33.6bn, driven by strong ODM sales (up 27% YoY), partially offset by weaker semiconductor sales (down 8%...

CMB International

Quiddity Aggregation of CSI300/500 and SSE50/180 Index Flows for Dec 2023: US$4.2bn One-Way!

Large Mainland China index flows coming up. I expect the CSI300/500 and the SSE50/180 Inclusion and Exclusion events to take place at the close of...

Janaghan Jeyakumar, CFA

Index Rebalance & ETF Flow Recap: KWEB, CSI300/500, STAR50, SSE50, ChiNext, SET50, Chips, Denso, SPX

This recap highlights Insights covering Asian index rebalances (announcements/ forecasts/ IPO Fast Entry/ M&A driven changes). We also highlight...

Brian Freitas

Northbound Flows (Nov 24th): Chongqing Changan Automobile, Sokon, Sungrow Power, BYD

We analyzed northbound Shanghai/Shenzhen connect flows in the past week and highlight flows for Chongqing Changan Automobile, Sokon, Sungrow Power...

Ke Yan, CFA, FRM

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

Did China Exports Really Benefit from the Israel/Lebanon Pager Attack?

Despite expectations, China's Middle East exports have yet to see benefit from the pager attacks. On the contrary, electronics and communication...

Blue Lotus Research Institute

Wingtech (600745 CH) - 1H24 Results Review: Challenging 1H; Looking for Recovery in 2H

Wingtech 1H24 sales were up 15% YoY to RMB33.6bn, driven by strong ODM sales (up 27% YoY), partially offset by weaker semiconductor sales (down 8%...

CMB International

Quiddity Aggregation of CSI300/500 and SSE50/180 Index Flows for Dec 2023: US$4.2bn One-Way!

Large Mainland China index flows coming up. I expect the CSI300/500 and the SSE50/180 Inclusion and Exclusion events to take place at the close of...

Janaghan Jeyakumar, CFA

Index Rebalance & ETF Flow Recap: KWEB, CSI300/500, STAR50, SSE50, ChiNext, SET50, Chips, Denso, SPX

This recap highlights Insights covering Asian index rebalances (announcements/ forecasts/ IPO Fast Entry/ M&A driven changes). We also highlight...

Brian Freitas

Northbound Flows (Nov 24th): Chongqing Changan Automobile, Sokon, Sungrow Power, BYD

We analyzed northbound Shanghai/Shenzhen connect flows in the past week and highlight flows for Chongqing Changan Automobile, Sokon, Sungrow Power...

Ke Yan, CFA, FRM