Asia Pac ECM and Index Rebal, Shenton Research

Ke Yan, CFA, FRM

Asia Pac ECM and Index Rebal

Asia Pac IPO & Placement Research, China Biotech

DZT Research

DZT Research is an independent Asia Pacific equity specialist. Our quantitative research covers index rebalancing flows, alongside exchange data analytics accross Asia Pacific. On the equity capital markets side, we focus on Asia Pacific ECM, especially biotech and TMT. Our lead analyst is frequently cited by international media.

Index Rebalance

<ul>
<li>Primary conversion. Baidu (9888 HK) announced on 16 Jul 2026 that its board approved pursuing dual-primary conversion. This note assesses the Connect path, conditions, and timeline.</li>
<li>ADD timing. Baidu retains WVR through conversion, so the ADD path runs through the regular semi-annual cycle. We assess whether the September 2026 regular batch ADD is attainable.</li>
<li>Trading perspective. Prior Connect ADD cases show positive southbound flows in all five peers and positive 10-day returns in all five.</li>
</ul>


Primary conversion. Baidu (9888 HK) announced on 16 Jul 2026 that its board approved pursuing dual-primary conversion. This note assesses the Connect path, conditions, and timeline.
ADD timing. Baidu retains WVR through conversion, so the ADD path runs through the regular semi-annual cycle. We assess whether the September 2026 regular batch ADD is attainable.
Trading perspective. Prior Connect ADD cases show positive southbound flows in all five peers and positive 10-day returns in all five.


Baidu-SW: Primary Conversion and Connect Inclusion Timeline Analysis

Research on Tech Companies

Evelyn Zhang

Thematic (Sector/Industry)

The recent fall in price of many so called “China concept shares” of US listed Chinese companies, has largely been triggered by the passing of the "Holding Foreign Company Accountability Act" (HFCAA).A flock of US listed Chinese companies have since decided to relist in HKSE due to a few reasons:<ol>
<li>The HFCAA causing conflicting compliance requirements with Chinese regulations.</li>
<li>Fear among investors of forced delisting in the US.</li>
<li>HKEX deregulation allowing more Chinese companies to be listed.</li>
<li>The valuation in HK is in sync with the U.S. stock market.</li>
<li>HK attracting more Chinese funds to operate in HKEX.</li>
</ol>

The recent fall in price of many so called “China concept shares” of US listed Chinese companies, has largely been triggered by the passing of the "Holding Foreign Company Accountability Act" (HFCAA).A flock of US listed Chinese companies have since decided to relist in HKSE due to a few reasons:
The HFCAA causing conflicting compliance requirements with Chinese regulations.
Fear among investors of forced delisting in the US.
HKEX deregulation allowing more Chinese companies to be listed.
The valuation in HK is in sync with the U.S. stock market.
HK attracting more Chinese funds to operate in HKEX.


Exit the Dragon – the Mass Exodus of US Listed Chinese Companies

HK/China Equity Long-Short

Osbert Tang, CFA

The recent rise in local COVID-19 cases in China has made domestic air travel market more challenging in the near term, and this has already reflected on slowing traffic in Dec 2020. <a href="https://www.smartkarma.com/entities/china-southern-airlines-co-ltd" target="_blank" data-smartkarma-citation="entities:1078:1" rel="noopener">China Southern Airlines (1055 HK)</a> has the best performance in Dec and FY20 but we see headwinds given its significant domestic exposure. The government has advised minimising cross-province travel in the Spring Chinese New Year Travel Peak Season and many schools are suggesting the same.We think there are two trades to capture such trend. One, "Long <a href="https://www.smartkarma.com/entities/air-china-ltd-h" target="_blank" data-smartkarma-citation="entities:8239:1" rel="noopener">Air China Ltd (H) (753 HK)</a>, short <a href="https://www.smartkarma.com/entities/china-southern-airlines-co-ltd" target="_blank" data-smartkarma-citation="entities:1078:1" rel="noopener">China Southern Airlines (1055 HK)</a>" as positive expectations on CSA's domestic exposure provides room for disappointment. Two, go long on domestic consumption names as savings in transportation and lodging expenses may be re-directed to F&amp;B and consumer discretionary. These include <a href="https://www.smartkarma.com/entities/haidilao-international-holding-ltd" target="_blank" data-smartkarma-citation="entities:27044:1" rel="noopener">Haidilao (6862 HK)</a>, <a href="https://www.smartkarma.com/entities/jiumaojiu-international-holdings-limited" target="_blank" data-smartkarma-citation="entities:28293:1" rel="noopener">Jiumaojiu (9922 HK)</a>, <a href="https://www.smartkarma.com/entities/yum-china-holdings-inc-0533692c-6dae-4014-baa1-ed0b050638f2" target="_blank" data-smartkarma-citation="entities:29259:1" rel="noopener">Yum China Holdings Inc (9987 HK)</a>, <a href="https://www.smartkarma.com/entities/anta-sports-products-ltd" target="_blank" data-smartkarma-citation="entities:10261:1" rel="noopener">Anta Sports Products (2020 HK)</a>, <a href="https://www.smartkarma.com/entities/li-ning-co-ltd" target="_blank" data-smartkarma-citation="entities:6047:1" rel="noopener">Li Ning Co Ltd (2331 HK)</a> and <a href="https://www.smartkarma.com/entities/topsports-international" target="_blank" data-smartkarma-citation="entities:28153:1" rel="noopener">Topsports International (6110 HK)</a>. Meanwhile, <a href="https://www.smartkarma.com/entities/meituan-dianping" target="_blank" data-smartkarma-citation="entities:26970:1" rel="noopener">Meituan (3690 HK)</a> may benefit on both the revenue and cost sides.

The recent rise in local COVID-19 cases in China has made domestic air travel market more challenging in the near term, and this has already reflected on slowing traffic in Dec 2020. China Southern Airlines (1055 HK) has the best performance in Dec and FY20 but we see headwinds given its significant domestic exposure. The government has advised minimising cross-province travel in the Spring Chinese New Year Travel Peak Season and many schools are suggesting the same.We think there are two trades to capture such trend. One, "Long Air China Ltd (H) (753 HK), short China Southern Airlines (1055 HK)" as positive expectations on CSA's domestic exposure provides room for disappointment. Two, go long on domestic consumption names as savings in transportation and lodging expenses may be re-directed to F&amp;B and consumer discretionary. These include Haidilao (6862 HK), Jiumaojiu (9922 HK), Yum China Holdings Inc (9987 HK), Anta Sports Products (2020 HK), Li Ning Co Ltd (2331 HK) and Topsports International (6110 HK). Meanwhile, Meituan (3690 HK) may benefit on both the revenue and cost sides. 

Chinese Airlines: Domestic Market Gets a Little Challenging in the Near Term, How to Play It?

Index Rebal/Special Situations, Quiddity Advisors

Janaghan Jeyakumar, CFA

Index Rebal/Special Situations

Quiddity Advisors

Pan-Asia Catalysts/Events

<ul>
<li>HSCEI serves as a benchmark to reflect the overall performance of the top 50 "Mainland China" securities listed in Hong Kong.</li>
<li>The reference period is now complete. We have presented our final expectations in this insight.</li>
<li>We expect one ADD/DEL and we estimate one-way flows of ~US$267mn.</li>
</ul>


HSCEI serves as a benchmark to reflect the overall performance of the top 50 "Mainland China" securities listed in Hong Kong.
The reference period is now complete. We have presented our final expectations in this insight.
We expect one ADD/DEL and we estimate one-way flows of ~US$267mn.


Quiddity Leaderboard HSCEI Sep26: Final Ranks; One Change Expected

<ul>
<li>NetEase (9999 HK) announced on 26 Jun 2026 that its HK primary conversion will be effective on 30 Jun 2026. This note assesses the Connect eligibility path and inclusion timeline.</li>
<li>NetEase has no WVR, but Alibaba's recent regular-cycle ADD keeps September as the base case.</li>
<li>Prior Connect ADD cases show southbound inflows after ADD and positive returns post inclusion.</li>
</ul>


NetEase (9999 HK) announced on 26 Jun 2026 that its HK primary conversion will be effective on 30 Jun 2026. This note assesses the Connect eligibility path and inclusion timeline.
NetEase has no WVR, but Alibaba's recent regular-cycle ADD keeps September as the base case.
Prior Connect ADD cases show southbound inflows after ADD and positive returns post inclusion.


NetEase: Primary Conversion and Connect Inclusion Analysis

China

Yum China operates and franchises a diverse portfolio of restaurant brands across the People's Republic of China, including KFC, Pizza Hut, Taco Bell, Lavazza, Little Sheep, and Huang Ji Huang. The company also provides online food delivery services. Yum China Holdings, Inc. was spun off from Yum! Brands in 2016 and is headquartered in Shanghai, China.

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Yum China (9987 HK)

Baidu-SW: Primary Conversion and Connect Inclusion Timeline Analysis

Baidu confirmed it will pursue conversion to dual-primary listing, effective within 2026. WVR precedent points to a regular-cycle Connect ADD, and...

Ke Yan, CFA, FRM

Exit the Dragon – the Mass Exodus of US Listed Chinese Companies

Is US-China financial decoupling affecting the US stock market? What's the future of US listed Chinese companies l? How can investors in China...

Evelyn Zhang

Chinese Airlines: Domestic Market Gets a Little Challenging in the Near Term, How to Play It?

Slowed domestic air traffic in Dec and rise in local COVID-19 cases mean more challenging environment in the next two months. "Long Air China,...

Osbert Tang, CFA

Quiddity Leaderboard HSCEI Sep26: Final Ranks; One Change Expected

The highest-ranked potential ADD Hua Hong Semiconductor (1347 HK) is ranked 38th and we see this as an ADD. The stock is up 520% over the past year...

Janaghan Jeyakumar, CFA

NetEase: Primary Conversion and Connect Inclusion Analysis

NetEase (9999 HK) announced HK primary conversion effective 30 Jun 2026. Non-WVR precedent points to possible ad-hoc Connect ADD, but September is...

Ke Yan, CFA, FRM

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