In today’s briefing:
- Alibaba – How to Position Post Earnings Amid Sticky Volatility
- Hang Seng Internet & IT Index Rebalance: Five Changes with First De-SPAC Listing In
- Hang Seng Index (HSI) Rebalance: Does Anyone Know What the Index Committee Is Thinking?
- [Bilibili Inc. (BILI US, BUY, TP US$24) Target Price Change]: C3Q24 Review: Game Slowdown from C2Q25
- HSCI Index Rebalance: 29 Adds, 41 Deletes & Changes to Southbound Stock Connect
- China Healthcare Weekly (Feb.23)-Ping An Good Doctor Shares Surge, China Healthcare Has Bottomed Out
Alibaba – How to Position Post Earnings Amid Sticky Volatility
- Alibaba had a super charged move this week, risking 14.56% on its earnings release.
- We look at how price movement and volatility evolve in the month after earnings releases.
- Recommendations are made on how to position through options in this environment of enhanced volatility.
Hang Seng Internet & IT Index Rebalance: Five Changes with First De-SPAC Listing In
- There will be 5 changes for the Hang Seng Internet & Information Technology Index (HSIII Index) at the March rebalance. There is one surprise for us with Synagistics being added.
- Estimated one-way turnover at the rebalance is 6.5% resulting in a round-trip trade of HK$3.74bn (US$482m). 4 stocks will have over 1x ADV to trade.
- Horizon Robotics (9660 HK) is an add to the HSIII, Hang Seng TECH Index and HSCI. Inclusion in Southbound Stock Connect will take place in May.
Hang Seng Index (HSI) Rebalance: Does Anyone Know What the Index Committee Is Thinking?
- We continue to be led down the garden path – no constituent changes for the Hang Seng Index (HSI INDEX) in March means we remain at 83 members.
- Despite having an opportunity to add stocks to the index without increasing turnover, the index committee have done nothing. Which begs the question – what exactly are they waiting for?
- Float and capping changes result in an estimated one-way turnover of 3.8% and the resulting round-trip trade is HK$16.7bn (US$2.15bn).
[Bilibili Inc. (BILI US, BUY, TP US$24) Target Price Change]: C3Q24 Review: Game Slowdown from C2Q25
- Bilibili (BILI) reported C4Q24 revenue and GAAP operating profit in line, 87% vs. our estimates and in line, 130% vs. consensus.
- We see BILI’s content strategy to be working to drive higher and better traffic, benefiting the ads business.
- We BUY and raised our TP to US$24 awaiting further details on game pipeline. The stock trading at 2025 PE of 31x.
HSCI Index Rebalance: 29 Adds, 41 Deletes & Changes to Southbound Stock Connect
- There are 29 adds and 41 deletes for the Hang Seng Composite Index (HSCI) at the March rebalance to take the number of index constituents down to 505.
- We expect 27 of the 29 HSCI inclusions to be added to Stock Connect from the open on 10 March while Horizon Robotics (9660 HK) should be added in May.
- We expect 28 of the 41 HSCI deletions will be removed from Stock Connect and there has been increased Southbound holding in a lot of the stock this calendar year.
China Healthcare Weekly (Feb.23)-Ping An Good Doctor Shares Surge, China Healthcare Has Bottomed Out
- In 2025, the NHSA will continue to deepen the VBP of drugs and centralized procurement of medical consumables, covering 700 drug varieties in total.
- Valuation of the entire industry has been sluggish for three years. With the positive changes, we think it is the time to be optimistic on China healthcare in 2025.
- Due to the craze for DeepSeek/AI, PAGD’s stock price surged.Although this is a great story, the extent to which DeepSeek can bring substantial benefits to PAGD remains to be verified.
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