In today’s briefing:
- HSTECH Index Rebalance: BYD (1211 HK) To Replace China Literature (772 HK) As Trade Hits US$6bn
- Alibaba (BABA): 4Q25, Main Business Growth Recovered to 12% YoY, Buy
- A/H Premium Tracker (To 16 May 2025): AH Premia Contract Small Again. BYD and CMB Go Negative.
- Hang Seng Index (HSI) Rebalance: Midea (300 HK) & ZTO Express (2057 HK) Added; Inching Towards a 100
- [Quiddity Index] Six Hang Seng Index Family Indices: Flows for June 6 Rebal
- Weekly Deals Digest (18 May) – CATL, Hengrui, ESR, OneConnect, Mayne, Nissin, Nippon Road, TechnoPro
- HK Connect SOUTHBOUND Flows (To 16 May 2025); Volumes Pick Up, Net Flows Drop; Banks Still Strong
- CATL (3750 HK): Fast-Entry to Global Indices Unlikely Despite $150B Market Cap
- KE (BEKE): In 1Q25, Rental and New Home Revenues Up by 94% and 64%
- ECM Weekly (19 May 2025) – CATL, Hengrui, Green Tea, SMPP, Unisound, Renesas, Genda, GMO, PayTM
HSTECH Index Rebalance: BYD (1211 HK) To Replace China Literature (772 HK) As Trade Hits US$6bn
- As expected, BYD (1211 HK) will be added to the Hang Seng TECH Index (HSTECH INDEX) in June following the launch of God’s Eye, its Advanced Driver-Assistance System (ADAS).
- BYD (1211 HK)‘s inclusion results in China Literature (772 HK) being deleted from the index. China Literature stock should drop over the near-term.
- Estimated one-way turnover at the rebalance is 13% resulting in a round-trip trade of HK$46.5bn (US$5.95bn). There are 16 stocks that have at least 1x ADV to trade from passives.
Alibaba (BABA): 4Q25, Main Business Growth Recovered to 12% YoY, Buy
- Management claimed 4Q25 total revenue should grow by 10% YoY excluding two sold subsidiaries.
- The growth rate of customer management revenue rose to two digits in 4Q25.
- The main business margin was stable and most of the minor business margins rose YoY in 4Q25.
A/H Premium Tracker (To 16 May 2025): AH Premia Contract Small Again. BYD and CMB Go Negative.
- AH spreads are slightly narrower, but performance is concentrated in fewer names and broad spread volatility is up. BYD (1211 HK) AH is negative now, maybe on HSTECH inclusion expectations.
- I didn’t expect much out of Geneva last weekend. I was wrong in that there was a big announcement, but maybe not wrong because content was pretty slim.
- The data tables below update on a daily basis in the Tools section of Smartkarma. The SOUTHBOUND Flow Monitor and AH Monitor are both there free for SK readers.
Hang Seng Index (HSI) Rebalance: Midea (300 HK) & ZTO Express (2057 HK) Added; Inching Towards a 100
- Midea Group (300 HK) and ZTO Express Cayman (2057 HK) will be added to the Hang Seng Index (HSI INDEX) in June to take us up to 85 index constituents.
- Estimated one-way turnover is 2.9% and the estimated round-trip trade is HK$11.3bn (US$1.44bn) with over 1x ADV to trade in the adds and in one stock with a FAF increase.
- There could be a short-term drop in the AH premium for Midea Group while this inclusion ensures ZTO Express Cayman is a member of all major indices where eligible.
[Quiddity Index] Six Hang Seng Index Family Indices: Flows for June 6 Rebal
- In this insight, we present the flows to buy and sell for each of the top 6 Hang Seng Index Family indices based on estimated tracking AUM.
- The indices: Hang Seng Index (HSI), HS Tech Index (HSTECH), HS China Enterprise Index (HSCEI), HS HK Biotech (HSHKBIO), HS Internet & Infotech (HSIII), and HS Healthcare Index (HSHCI).
- By Quiddity calculations based on the 16 May close, there is one-way flow across these six indices of HK$34,556,596,089.99 (approximately), to trade on 6 June.
Weekly Deals Digest (18 May) – CATL, Hengrui, ESR, OneConnect, Mayne, Nissin, Nippon Road, TechnoPro
- A weekly summary of key developments across ECM and Event-Driven names tracked by us across Hong Kong, Australia, New Zealand, Singapore, Japan, Indonesia, Malaysia, Thailand, Korea, India and Chinese ADRs.
- ECM developments: Contemporary Amperex Technology (3750 HK) and Jiangsu Hengrui Pharmaceuticals (1276 HK) launch H Share listings.
- Event-Driven developments: ESR Group (1821 HK), Oneconnect Financial Technology (6638 HK), Mayne Pharma (MYX AU), Nissin Corp (9066 JP), Nippon Road (1884 JP), Technopro Holdings (6028 JP).
HK Connect SOUTHBOUND Flows (To 16 May 2025); Volumes Pick Up, Net Flows Drop; Banks Still Strong
- Gross SOUTHBOUND volumes averaged more than HK$100bn a day this past week, which gets us back above halfway to the peak earlier this spring. Net flows were negative HK$8bn+.
- Among the top buys as a percentage of volume, financials, utilities, and energy REALLY stand out. Among top sells, industrials, info tech, and consumer discretionary are tops.
- The data tables below update on a daily basis in the Tools section of Smartkarma. The SOUTHBOUND Flow Monitor and AH Monitor are both there free for SK readers.
CATL (3750 HK): Fast-Entry to Global Indices Unlikely Despite $150B Market Cap
- CATL (3750 HK) is forecasted to fail the fast-entry float cap threshold of both global indices due to unlisted shares, locked cornerstone investors and domestic offering.
- Stock price needs to rise by ~30% on the first trading day to achieve fast-entry to one global index. Offer price is 263HKD and the adjustment option has been exercised.
- The security is expected to be added to Global Standard in August 2025 and to Global All-World in December 2025, with an elevated free float following the 6-month cornerstone lock-up.
KE (BEKE): In 1Q25, Rental and New Home Revenues Up by 94% and 64%
- In 1Q25, BEKE’s active stores increased by 29% YoY and total revenue increased by 42% YoY.
- New home revenue and rental revenue grew by 64% YoY and 94% YoY in 1Q25.
- We believe the stock price can double and is undervalued for the concerns on the general property market.
ECM Weekly (19 May 2025) – CATL, Hengrui, Green Tea, SMPP, Unisound, Renesas, Genda, GMO, PayTM
- Aequitas Research’s weekly update on the IPOs, placements, lockup expiry and other ECM linked events that were covered by the team over the past week.
- On the IPO front, Contemporary Amperex Technology (CATL) (300750 CH) and Jiangsu Hengrui Medicine (600276 CH) will remain in the spotlight in the coming week as well.
- On the placements front, Japan deals appear to be picking up again.
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