Index Rebal Trades & Special Situations, Quiddity Advisors

Janaghan Jeyakumar, CFA

Index Rebal Trades & Special Situations

Quiddity Advisors

Pan-Asia Catalysts/Events

Index Rebalance

<ul>
<li>The June 2023 index review results for the Hang Seng index can be expected after the close on 12th May 2023.</li>
<li>In <a href="https://www.smartkarma.com/insights/quiddity-leaderboard-for-hang-seng-index-mar-23-healthcare-names-could-dominate" target="_blank" data-smartkarma-citation="insights:94998" rel="noopener">Quiddity Leaderboard for Hang Seng Index Mar 23: Healthcare Names Could Dominate</a>, we expected some healthcare names to be added but there were no index changes in March 2023. </li>
<li>Although the index methodology is highly subjective and predicting index changes is extremely tricky, the HSI is an important index in the region and here are our thoughts for June. </li>
</ul>


The June 2023 index review results for the Hang Seng index can be expected after the close on 12th May 2023.
In Quiddity Leaderboard for Hang Seng Index Mar 23: Healthcare Names Could Dominate, we expected some healthcare names to be added but there were no index changes in March 2023. 
Although the index methodology is highly subjective and predicting index changes is extremely tricky, the HSI is an important index in the region and here are our thoughts for June. 


Quiddity Leaderboard for Hang Seng Index Jun 23: Beigene Looks Interesting

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 analyzed the latest HK SFC report for aggregate short position as of Mar 17th.</li>
<li>Top short increases and decreases were tabulated for one week and four week period. </li>
<li>We highlight short changes in Meituan, Gcl Tech, Link Reit, Sensetime, Trip.Com, Hsbc, Baba, Wuxi Apptec.</li>
</ul>


We analyzed the latest HK SFC report for aggregate short position as of Mar 17th.
Top short increases and decreases were tabulated for one week and four week period. 
We highlight short changes in Meituan, Gcl Tech, Link Reit, Sensetime, Trip.Com, Hsbc, Baba, Wuxi Apptec.


HK Short Interest Weekly: Meituan, Gcl Tech, Link Reit, Sensetime, Trip.Com, Hsbc, Baba, Wuxi Apptec

HK/China Healthcare Analyst (ex-Fosun Pharma)

Xinyao (Criss) Wang

Equity Bottom-Up

<ul>
<li>If WuXi Chemistry’s performance shows downward trend, the overall performance growth won’t be satisfactory. The negative growth of WuXi DDSU means that ineffective competition for domestic innovative drugs is decreasing.</li>
<li>The asset structure is shifting from light asset to heavy asset.It’s particularly crucial whether business model of "one-stop end-to-end service+royalty income" can enable WuXi AppTec to explore new growth points. </li>
<li>The current sentiment on CXO is “fragile” because CXO doesn't have performance sustainability and stability, with “risk discount” problem. Its valuation haven't reached inflection point. Without industry beta,alpha is useless.</li>
</ul>


If WuXi Chemistry’s performance shows downward trend, the overall performance growth won’t be satisfactory. The negative growth of WuXi DDSU means that ineffective competition for domestic innovative drugs is decreasing.
The asset structure is shifting from light asset to heavy asset.It’s particularly crucial whether business model of "one-stop end-to-end service+royalty income" can enable WuXi AppTec to explore new growth points. 
The current sentiment on CXO is “fragile” because CXO doesn't have performance sustainability and stability, with “risk discount” problem. Its valuation haven't reached inflection point. Without industry beta,alpha is useless.


WuXi AppTec (2359.HK/603259.CH) 2022 Results- Say Goodbye to High Growth and Get Used to True Colors

Thematic (Sector/Industry)

<ul>
<li>National centralized procurement on ophthalmology and orthopedics would be carried out soon, including ICL and sports medicine. Products in neuro-intervention/neurosurgery/peripheral intervention/IVD reagents would be included in 2023 VBP as well.</li>
<li>After NRDL negotiation/VBP/DRGs policies are fully mature, it is expected to see the emergence of some high-price-oriented payment system for innovative products. Only then will the industry beta really emerge.</li>
<li>If long-term money doesn't have enough understanding of the trend of long-term interest rates, the expected return and valuation model of healthcare companies can't be adjusted in time (e.g. CXO).</li>
</ul>


National centralized procurement on ophthalmology and orthopedics would be carried out soon, including ICL and sports medicine. Products in neuro-intervention/neurosurgery/peripheral intervention/IVD reagents would be included in 2023 VBP as well.
After NRDL negotiation/VBP/DRGs policies are fully mature, it is expected to see the emergence of some high-price-oriented payment system for innovative products. Only then will the industry beta really emerge.
If long-term money doesn't have enough understanding of the trend of long-term interest rates, the expected return and valuation model of healthcare companies can't be adjusted in time (e.g. CXO).


China Healthcare Weekly (Mar.17) - VBP on ICL/Sports Medicine, New Payment System, Time to Long CXO?

<ul>
<li>We analyze the weekly Shanghai/Shenzhen northbound Connect flows with our data engine for holding position as of March 10th.</li>
<li>We estimate the weekly outflows to be US$1,487.9 million, led by financials, materials, and offset by industrials, health care, utilities.</li>
<li>We highlight flows for China Tourism Group Duty Free, Kweichow Moutai, Byd, China Merchants Bank, Inner Mongolia Yili Industrial, Longi Green Energy Technology, Tongwei, Luxshare Precision Industry.</li>
</ul>


We analyze the weekly Shanghai/Shenzhen northbound Connect flows with our data engine for holding position as of March 10th.
We estimate the weekly outflows to be US$1,487.9 million, led by financials, materials, and offset by industrials, health care, utilities.
We highlight flows for China Tourism Group Duty Free, Kweichow Moutai, Byd, China Merchants Bank, Inner Mongolia Yili Industrial, Longi Green Energy Technology, Tongwei, Luxshare Precision Industry.


Northbound Flows (Mar 10th): CTG, Moutai, Byd, CMB, Yili, Longi Green Energy, Tongwei, Luxshare

China

WuXi AppTec Co., Ltd. manufactures medical products. The Company produces biological agents, antibodies, biological diagnostic reagents, and other products. WuXi AppTec also provides biological analysis, technical study, and other services.

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WuXi AppTec (603259 CH)

Quiddity Leaderboard for Hang Seng Index Jun 23: Beigene Looks Interesting

I have presented 24 Names from Healthcare, Consumer Discretionary, Properties, Utilities, and Conglomerates as high-likelihood names. Quiddity's...

Janaghan Jeyakumar, CFA

HK Short Interest Weekly: Meituan, Gcl Tech, Link Reit, Sensetime, Trip.Com, Hsbc, Baba, Wuxi Apptec

We analyzed the latest HK SFC report for aggregate short position as of Mar 17th and highlight short interest changes in Meituan, Gcl Tech, Link...

Ke Yan, CFA, FRM

WuXi AppTec (2359.HK/603259.CH) 2022 Results- Say Goodbye to High Growth and Get Used to True Colors

Investors may need to get used to low performance growth in post-COVID era. WuXi AppTec's performance may recover in 2024 but high growth like...

Xinyao (Criss) Wang

China Healthcare Weekly (Mar.17) - VBP on ICL/Sports Medicine, New Payment System, Time to Long CXO?

National VBP on ICL/sports medicine and other fields is coming.It's expected to see the emergence of high-price-oriented payment system for...

Xinyao (Criss) Wang

Northbound Flows (Mar 10th): CTG, Moutai, Byd, CMB, Yili, Longi Green Energy, Tongwei, Luxshare

We analyzed northbound Shanghai/Shenzhen connect flows in the past week and highlight flows for CTG, Moutai, Byd, CMB, Yili, Longi Green Energy,...

Ke Yan, CFA, FRM

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