In today’s briefing:
- CSI300 Index Rebalance Preview: 30 Potential Changes as Sector Rotation Continues
- Shenzhen Intl (152 HK): It’s the Ability to Realise Underlying Value that Matters
- PAG Pre-IPO – The Positives – Past Record Has Been Decent
- Suchuang Gas (1430 HK): 10th June Court Meeting As Shares Remain Suspended
- Jiangsu Hengrui Medicine (600276.CH) 2021/2022Q1 Results – Can You Afford to Wait?
CSI300 Index Rebalance Preview: 30 Potential Changes as Sector Rotation Continues
- We expect the maximum permitted 30 changes at a single review to take place at the June rebalance. Most changes are high probability.
- We estimate a one-way turnover of 4.25% at the rebalance leading to a one-way trade of CNY 10.677bn.
- Industrials, Information Technology and Materials sectors are expected to have the most net inclusions, while Health Care and Financials are expected to have the most net deletions.
Shenzhen Intl (152 HK): It’s the Ability to Realise Underlying Value that Matters
- Shenzhen International (152 HK) has secured pre-tax gain of HK$2.8bn from deemed disposal of Qianhai Business and this is another example for its ability to realise underlying asset value.
- SZI still holds a 50% stake in Qianhai Business, allowing it to capture further upside from this project. The transaction should also improve cash flow as land fees are repaid.
- Other logistics transformation projects like the South China Logistics Park, which has an area even larger than Qianhai Business, will provide upside for the longer term.
PAG Pre-IPO – The Positives – Past Record Has Been Decent
- PAG aims to raise around US$2bn via its Hong Kong IPO.
- PAG is an alternative investment firm focused on Asia-Pacific (APAC), it had approximately US$50bn in assets under management (AUM), as of Dec 21.
- In this note, we will talk about the positive aspects of the deal.
Suchuang Gas (1430 HK): 10th June Court Meeting As Shares Remain Suspended
- Suchuang Gas Corp (1430 HK)‘s Scheme Document is now out. The Scheme Meeting will be held on the 10th June with expected payment on or before the 21 June.
- The Independent Financial Advisor (Essence International) has concluded the offer by CR Gas (1193 HK) is fair and reasonable.
- The pain is almost over for shareholders. This is as good a deal one can expect under the circumstances. Shareholders should vote through the Offer resolutions and pocket the cash.
Jiangsu Hengrui Medicine (600276.CH) 2021/2022Q1 Results – Can You Afford to Wait?
- The 2021 report is the worst ever annual report of Hengrui, with double drop in both revenue and net profit.2021Q4 and 2022Q1 are also the worst two quarters so far.
- Although Hengrui has invested heavily in R&D and internationalization, it’s still trying to follow an established model with better security.Essentially, Hengrui is still the same Hengrui. Nothing has changed fundamentally.
- For now, Hengrui hasn’t released any signal for “a reversal”. If going bottom fishing, investors may have to take a long, uncertain journey with Hengrui. Can you afford to wait?
Before it’s here, it’s on Smartkarma
