ChinaDaily Briefs

China: Chinasoft International, Tencent, BeiGene Ltd, Agung Podomoro Land and more

In today’s briefing:

  • MSCI Aug 2021 Index Rebalance Preview: Potential Changes After Week 1; Positioning at Work
  • Tencent (700 HK): Juvenile Internet Usage Will Not Decrease
  • Pre-IPO BeiGene Ltd – Concerns on Commercialization
  • Morning Views Asia: Agung Podomoro Land, Anton Oilfield, Bright Scholar Education, Future Retail Ltd

MSCI Aug 2021 Index Rebalance Preview: Potential Changes After Week 1; Positioning at Work

By Brian Freitas

MSCI is scheduled to announce the results of the August 2021 Quarterly Index Review (QIR) on 11 August (early morning of 12 August Asia time) with the changes implemented after the close of trading on 31 August.

The review period for price cut-off began on 19 July and will run through to 30 July. After the end of week 1 of the review period, most of the changes are expected in China with a few changes for Hong Kong, Taiwan, Korea and Thailand.

Most of the names appear on the add/delete list every day during the review period, while a few names appear/drop out of the list of potential changes. The final list will depend on the day that MSCI chooses. Based on historical data, there is over a 90% probability that MSCI chooses a day from week 1 to compute the market cap for the stocks that will determine the list of inclusions and exclusions.

Post week1 of the review period, potential inclusions to the MSCI Standard Index are SITC International (1308 HK)Huabao International Holdings (336 HK)Momo.Com Inc (8454 TT)Chinasoft International (354 HK)China United Network A (600050 CH)Ecopro BM Co Ltd (247540 KS), SK IE Technology (361610 KS), CRRC Corp Ltd A (601766 CH)Beijing Wantai Biological-A (603392 CH)Beijing Kingsoft Office Software-A (688111 CH)Beijing Roborock Technology-A (688169 CH)Imeik Technology Development (300896 CH)StarPower Semiconductor Ltd (603290 CH)Advanced Micro-Fabrication Equipment-A (688012 CH), Ginlong Technologies Co Ltd (300763 CH) and China Baoan (000009 CH).

Potential exclusions are Bangkok Bank PCL (BBL/F TB), Bank of East Asia (23 HK), Taiwan Business Bank (2834 TT), KMW Co Ltd (032500 KS), Perennial Energy Holdings Ltd (2798 HK), Douyu International Holdings (DOYU US) and Gaotu Techedu (GOTU US).

The August QIR will also implement tranche 2 of Sea Ltd (SE US)‘s inclusion in the MSCI indices and will result in the index inclusion factor increasing from 0.05 to 0.25.

There is also a very high probability of a 75% reduction in the  SK Telecom (017670 KS)‘s Foreign Inclusion Factor (FIF) due to a drop in the availability of foreign room on the stock.


Tencent (700 HK): Juvenile Internet Usage Will Not Decrease

By Ming Lu

  • We do not believe the juveniles will reduce internet usage in the future.
  • The authorities forbid tutoring schools so that juveniles have more time to spend on internet.
  • Parents went back to their office so they cannot stop their children from using internet.

Pre-IPO BeiGene Ltd – Concerns on Commercialization

By Xinyao (Criss) Wang

After listing on NASDAQ and HKEX, BeiGene Ltd (6160 HK) will be listed on the SSE STAR market again in the near future. Meanwhile, after successive years of losses, BeiGene finally turned profitable for the first time in the first quarter of 2021. By the end of July 23, 2021, the market value of BeiGene in HKEX and NASDAQ was about HK$226.5 billion and US$29.2 billion, respectively. It is highly probable that the market value of the BeiGene in the SSE STAR market would exceed RMB200 billion after its listing as well. Behind the successful capital operation, what challenges would BeiGene face in the future?


Morning Views Asia: Agung Podomoro Land, Anton Oilfield, Bright Scholar Education, Future Retail Ltd

By Charles Macgregor

Lucror Analytics Morning Views comprise our fundamental credit analysis, opinions and trade recommendations on high yield issuers in the region, based on key company-specific developments in the past 24 hours. Our Morning Views include a section with a brief market commentary, key market indicators and a macroeconomic and corporate event calendar.


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