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

Index Rebalance

Anker Innovations Technology / Index Rebalance

<ul>
<li>There could be 1 constituent change (maybe 2) for the STAR&amp;CHINEXT 50 Index in June. The announcement of the potential change will be made after market close on Friday.</li>
<li>
<a href="https://www.smartkarma.com/entities/anker-innovations-technology-co-ltd" target="_blank" data-smartkarma-citation="entities:36238:1" rel="noopener">Anker Innovations Technology</a> could replace <a href="https://www.smartkarma.com/entities/suzhou-maxwell-technologies-co" target="_blank" data-smartkarma-citation="entities:29819:1" rel="noopener">Suzhou Maxwell Technologies</a> in the index. If AVIC Chengdu Aircraft is added to the index, <a href="https://www.smartkarma.com/entities/wuxi-lead-intelligent-equipmen" target="_blank" data-smartkarma-citation="entities:27971:1" rel="noopener">Wuxi Lead Intelligent Equipment</a> could be deleted.</li>
<li>
<a href="https://www.smartkarma.com/entities/anker-innovations-technology-co-ltd" target="_blank" data-smartkarma-citation="entities:36238:1" rel="noopener">Anker Innovations Technology</a> could have opposite flow and <a href="https://www.smartkarma.com/entities/suzhou-maxwell-technologies-co" target="_blank" data-smartkarma-citation="entities:29819:1" rel="noopener">Suzhou Maxwell Technologies</a> could have same way flow from passive trackers of other indices on the same day.</li>
</ul>


There could be 1 constituent change (maybe 2) for the STAR&amp;CHINEXT 50 Index in June. The announcement of the potential change will be made after market close on Friday.

Anker Innovations Technology could replace Suzhou Maxwell Technologies in the index. If AVIC Chengdu Aircraft is added to the index, Wuxi Lead Intelligent Equipment could be deleted.

Anker Innovations Technology could have opposite flow and Suzhou Maxwell Technologies could have same way flow from passive trackers of other indices on the same day.


STAR&CHINEXT 50 Index Rebalance Preview: One Set of Change; Maybe Two

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>Innolight has announced 1Q25 results. Revenue was up 38% YoY and 2% QoQ to RMB6.7bn, driven by continued global cloud capex and growing demand for 400G/800G optical transceivers.</li><li>NP was up 57% YoY and 12% QoQ to RMB1.6bn, driven by growth in orders and a better margin.</li><li>GPM improved to 36.7% (vs. 32.8%/35.1% in 1Q24/4Q24), significantly above BBG consensus of 31.9% despite that 1Q GPM was normally lower due to seasonality and price adjustments. </li></ul>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.

Innolight has announced 1Q25 results. Revenue was up 38% YoY and 2% QoQ to RMB6.7bn, driven by continued global cloud capex and growing demand for 400G/800G optical transceivers.NP was up 57% YoY and 12% QoQ to RMB1.6bn, driven by growth in orders and a better margin.GPM improved to 36.7% (vs. 32.8%/35.1% in 1Q24/4Q24), significantly above BBG consensus of 31.9% despite that 1Q GPM was normally lower due to seasonality and price adjustments. 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.

Innolight (300308 CH) - Solid 1Q25 Earnings W/ Strong Beat on Margins

<ul><li>Innolight released its FY24 prelim. results. The company expects NP to go up by 111.6%-166.9% to RMB4.6bn-5.8bn.</li><li>Mid-point value of RMB5.2bn implies 139.2% YoY growth and is largely in-line with consensus and our estimate (3.2%/1.4% below, respectively).</li><li>We continue to view Innolight as a key domestic beneficiary amid the ongoing AI infra. investment cycle driven by resilient demand for more computing power globally. </li></ul>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.

Innolight released its FY24 prelim. results. The company expects NP to go up by 111.6%-166.9% to RMB4.6bn-5.8bn.Mid-point value of RMB5.2bn implies 139.2% YoY growth and is largely in-line with consensus and our estimate (3.2%/1.4% below, respectively).We continue to view Innolight as a key domestic beneficiary amid the ongoing AI infra. investment cycle driven by resilient demand for more computing power globally. 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.

Innolight (300308 CH) - Solid Results Despite Supply Chain Constraints

<ul><li>Innolight released its 3Q results. Revenue went up by 115.2% YoY/9.4% QoQ, while net profit went up by 104.4% YoY/3.3% QoQ, in-line with our expectations.</li><li>Mgmt. attributed the slower sequential revenue growth (9.4% in 3Q24 vs. 31.3%/23% in 1Q/2Q24) to two main factors: 1) supply chain bottlenecks of key components (like DSPs &amp; EMLs), and 2) unfavorable fluctuations in the USD/RMB exchange rate during 3Q.</li><li>Excluding the impact of exchange rate movements, the company still achieved double-digit revenue growth in 3Q.</li></ul>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.

Innolight released its 3Q results. Revenue went up by 115.2% YoY/9.4% QoQ, while net profit went up by 104.4% YoY/3.3% QoQ, in-line with our expectations.Mgmt. attributed the slower sequential revenue growth (9.4% in 3Q24 vs. 31.3%/23% in 1Q/2Q24) to two main factors: 1) supply chain bottlenecks of key components (like DSPs &amp; EMLs), and 2) unfavorable fluctuations in the USD/RMB exchange rate during 3Q.Excluding the impact of exchange rate movements, the company still achieved double-digit revenue growth in 3Q.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.

Innolight (300308 CH) - Solid 3Q with Intact Near-Term Prospects; Maintain BUY

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.

Quantitative Analysis

<ul>
<li>We analyze the 3Q2024 Shanghai/Shenzhen northbound Connect flows with our data engine as the exchange changed the rule to only disclose north bound position once a quarter.</li>
<li>We estimate that the inflows in 3Q were US$7,684 million and holdings were USD340bn.</li>
<li>We highlight flows for Midea, Moutai, Ping An Insurance, Catl, Yangtze Power.</li>
</ul>


We analyze the 3Q2024 Shanghai/Shenzhen northbound Connect flows with our data engine as the exchange changed the rule to only disclose north bound position once a quarter.
We estimate that the inflows in 3Q were US$7,684 million and holdings were USD340bn.
We highlight flows for Midea, Moutai, Ping An Insurance, Catl, Yangtze Power.


Northbound Flows (3Q2024): Wait and See Mode

China

Zhongji Innolight Co., Ltd. manufactures and distributes industrial machines and machine parts. The Company produces motor stator windings, insulating machines, coil winding equipment, automatic production lines, and more. Zhongji Innolight mainly conducts businesses domestically.

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Zhongji Innolight (300308 CH)

STAR&CHINEXT 50 Index Rebalance Preview: One Set of Change; Maybe Two

There should be 1 index change in June. Possibly 2. Anker Innovations is a potential CSI300 delete while Suzhou Maxwell is a global index deletion...

Brian Freitas

Innolight (300308 CH) - Solid 1Q25 Earnings W/ Strong Beat on Margins

Innolight has announced 1Q25 results. Revenue was up 38% YoY and 2% QoQ to RMB6.7bn, driven by continued global cloud capex and growing demand for...

CMB International

Innolight (300308 CH) - Solid Results Despite Supply Chain Constraints

We continue to view Innolight as a key domestic beneficiary amid the ongoing AI infra. investment cycle driven by resilient demand for more...

CMB International

Innolight (300308 CH) - Solid 3Q with Intact Near-Term Prospects; Maintain BUY

Innolight released its 3Q results. Revenue went up by 115.2% YoY/9.4% QoQ, while net profit went up by 104.4% YoY/3.3% QoQ, in-line with our...

CMB International

Northbound Flows (3Q2024): Wait and See Mode

We analyzed Northbound connect data for 3Q2024 and highlight flows for Moutai, Midea, Wuliangye, Catl, Gree Electric Appliances.

Ke Yan, CFA, FRM

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