Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

<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

HK/China Equity Long-Short

Osbert Tang, CFA

Thematic (Sector/Industry)

<ul>
<li>Surging by 19.4% since the trough on 19-Apr, the HSI is now only 3.2% shy away from the psychological resistance of 20,000. We look at some potential profit-taking names. </li>
<li>Heavy-Weights like <a href="https://www.smartkarma.com/entities/meituan" target="_blank" data-smartkarma-citation="entities:26970:1" rel="noopener">Meituan (3690 HK)</a> and <a href="https://www.smartkarma.com/entities/tencent-holdings-ltd" target="_blank" data-smartkarma-citation="entities:26:1" rel="noopener">Tencent (700 HK)</a> are among the best-performing ones YTD and since the trough. Hence they are more exposed, particularly for Meituan.</li>
<li>
<a href="https://www.smartkarma.com/entities/haidilao-international-holding" target="_blank" data-smartkarma-citation="entities:27044:1" rel="noopener">Haidilao International Holding (6862 HK)</a> and <a href="https://www.smartkarma.com/entities/enn-energy-holdings-ltd" target="_blank" data-smartkarma-citation="entities:316:1" rel="noopener">ENN Energy (2688 HK)</a> are another two on the list. Their valuations are no longer inexpensive relative to 3-year earnings CAGR.</li>
</ul>


Surging by 19.4% since the trough on 19-Apr, the HSI is now only 3.2% shy away from the psychological resistance of 20,000. We look at some potential profit-taking names. 
Heavy-Weights like Meituan (3690 HK) and Tencent (700 HK) are among the best-performing ones YTD and since the trough. Hence they are more exposed, particularly for Meituan.

Haidilao International Holding (6862 HK) and ENN Energy (2688 HK) are another two on the list. Their valuations are no longer inexpensive relative to 3-year earnings CAGR.


HK Strategy: To Sell or Not to Sell, that Is the Question

Index Rebal Trades & Special Situations, Quiddity Advisors

Janaghan Jeyakumar, CFA

Index Rebal Trades & Special Situations

Index Rebalance

<ul>
<li>The HSCEI serves as a benchmark to reflect the overall performance of the top 50 "Mainland China" securities listed in Hong Kong.</li>
<li>The index changes and indicative weights for the June 2024 index rebal event will be announced after market close on Friday 17th May 2024.</li>
<li>In this insight, we take a look at the potential index changes and our latest flow expectations.</li>
</ul>


The HSCEI serves as a benchmark to reflect the overall performance of the top 50 "Mainland China" securities listed in Hong Kong.
The index changes and indicative weights for the June 2024 index rebal event will be announced after market close on Friday 17th May 2024.
In this insight, we take a look at the potential index changes and our latest flow expectations.


Quiddity HSCEI Jun 24 Final Expectations: 2 Changes Likely; US$496mn One-Way Flow

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

Zijin Mining Group Co Ltd H / Index Rebalance

<ul>
<li>
<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> is a potential deletion in June while <a href="https://www.smartkarma.com/entities/zijin-mining-group-co-ltd-h" target="_blank" data-smartkarma-citation="entities:6358:1" rel="noopener">Zijin Mining Group Co Ltd H (2899 HK)</a> is a potential inclusion.</li>
<li>For yet another review, <a href="https://www.smartkarma.com/entities/beigene-ltd" target="_blank" data-smartkarma-citation="entities:27352:1" rel="noopener">BeiGene (6160 HK)</a> is a close add with the Velocity Test determining if the stock will be added to the index or not.</li>
<li>Estimated one-way turnover at the rebalance is 2.95% resulting in a one-way trade of HK$1.6bn. Official capping will be based off the close of trading on 4 June.</li>
</ul>



SenseTime Group (20 HK) is a potential deletion in June while Zijin Mining Group Co Ltd H (2899 HK) is a potential inclusion.
For yet another review, BeiGene (6160 HK) is a close add with the Velocity Test determining if the stock will be added to the index or not.
Estimated one-way turnover at the rebalance is 2.95% resulting in a one-way trade of HK$1.6bn. Official capping will be based off the close of trading on 4 June.


HSCEI Index Rebalance Preview: One Change or Two in June?

<ul>
<li>Many have missed out on the 14%, or 2,300 points, rally of the HSI in the last 9 trading days. There are still several stocks that look interesting now.</li>
<li>
<a href="https://www.smartkarma.com/entities/li-auto-inc-3dbe6187-544f-40dd-b9f9-72fba9c0110e" target="_blank" data-smartkarma-citation="entities:33811:1" rel="noopener">Li Auto (2015 HK)</a>, <a href="https://www.smartkarma.com/entities/link-reit" target="_blank" data-smartkarma-citation="entities:872:1" rel="noopener">Link REIT (823 HK)</a>, <a href="https://www.smartkarma.com/entities/china-mengniu-dairy-co" target="_blank" data-smartkarma-citation="entities:354:1" rel="noopener">China Mengniu Dairy Co (2319 HK)</a>, <a href="https://www.smartkarma.com/entities/hang-lung-properties-ltd" target="_blank" data-smartkarma-citation="entities:49:1" rel="noopener">Hang Lung Properties (101 HK)</a> and <a href="https://www.smartkarma.com/entities/galaxy-entertainment-group-limited" target="_blank" data-smartkarma-citation="entities:806:1" rel="noopener">Galaxy Entertainment Group (27 HK)</a> are massive laggards YTD.</li>
<li>As they have only experienced limited rebounds from the 19-Apr trough, they are set to catch up. Also, their earnings prospects look positive this year. </li>
</ul>


Many have missed out on the 14%, or 2,300 points, rally of the HSI in the last 9 trading days. There are still several stocks that look interesting now.

Li Auto (2015 HK), Link REIT (823 HK), China Mengniu Dairy Co (2319 HK), Hang Lung Properties (101 HK) and Galaxy Entertainment Group (27 HK) are massive laggards YTD.
As they have only experienced limited rebounds from the 19-Apr trough, they are set to catch up. Also, their earnings prospects look positive this year. 


HK Strategy: Where Are the Short-Term Opportunities?

China

Xinyi Solar Holdings Limited manufactures solar glass.  The Company produces ultra-clear photovoltaic raw glass and ultra-clear photovoltaic processed glass. Xinyi Solar Holdings offers its products to major solar product component manufactures both domestically and internationally.

Price Gauge
52-week Range	0.00 - 0.00
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Xinyi Solar Holdings (968 HK)

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

HK Strategy: To Sell or Not to Sell, that Is the Question

HSI surges by 19.4% nearing the 20,000 resistance, potential profit-taking names include Meituan, Tencent, Haidilao, and ENN Energy due to strong...

Osbert Tang, CFA

Quiddity HSCEI Jun 24 Final Expectations: 2 Changes Likely; US$496mn One-Way Flow

SenseTime Group (20 HK) and Xinyi Solar Holdings (968 HK) are Expected DELs while Zijin Mining Group Co Ltd H (2899 HK) and PICC Property &...

Janaghan Jeyakumar, CFA

HSCEI Index Rebalance Preview: One Change or Two in June?

Announcement is in 4 trading days. Among the potential deletes, SenseTime has soared while Xinyi Glass has dropped. Zijin Mining, Beigene and PICC...

Brian Freitas

HK Strategy: Where Are the Short-Term Opportunities?

Li Auto, Link REIT, China Mengniu, Hang Lung Properties, and Galaxy Entertainment are massive laggards YTD but the recent rebound from the trough...

Osbert Tang, CFA

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

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

HK Strategy: To Sell or Not to Sell, that Is the Question

​HSI surges by 19.4% nearing the 20,000 resistance, potential profit-taking names include Meituan, Tencent, Haidilao, and ENN Energy due to strong...

Osbert Tang, CFA

Quiddity HSCEI Jun 24 Final Expectations: 2 Changes Likely; US$496mn One-Way Flow

SenseTime Group (20 HK) and Xinyi Solar Holdings (968 HK) are Expected DELs while Zijin Mining Group Co Ltd H (2899 HK) and PICC Property &...

Janaghan Jeyakumar, CFA

HSCEI Index Rebalance Preview: One Change or Two in June?

Announcement is in 4 trading days. Among the potential deletes, SenseTime has soared while Xinyi Glass has dropped. Zijin Mining, Beigene and PICC...

Brian Freitas

HK Strategy: Where Are the Short-Term Opportunities?

Li Auto, Link REIT, China Mengniu, Hang Lung Properties, and Galaxy Entertainment are massive laggards YTD but the recent rebound from the trough...

Osbert Tang, CFA

HSI surges by 19.4% nearing the 20,000 resistance, potential profit-taking names include Meituan, Tencent, Haidilao, and ENN Energy due to strong...