ChinaDaily Briefs

Daily Brief China: Haier Smart Home Co Ltd, Semiconductor Manufacturing International Corp (SMIC), China Construction Bank H, Weimob Inc., Bilibili, Galaxy Entertainment Group, Zhangzhou Pientzehuang Pharmaceutical Co., Ltd. and more

In today’s briefing:

  • Hang Seng Index Dec22 Rebal – 3 IN, None Out (The March to 80 Continues)
  • Hang Seng TECH Index Rebalance: Float & Capping Changes
  • HSCEI Dec 2022 Rebalance – 4 IN, 4 OUT, 3% One-Way Flow
  • Weimob (2013 HK): Strategic Patience Will Be Rewarded (Part 2)
  • Hang Seng Tech Rebalance Dec 2022 – No Name Changes, Decent Flow
  • Galaxy Entertainment Group: Its 4.5% of Wynn Shares Key if the Stock Is in Play
  • Zhangzhou Pientzehuang Pharmaceutical (600436.CH) – Disappointing Performance Is Just the Beginning

Hang Seng Index Dec22 Rebal – 3 IN, None Out (The March to 80 Continues)

By Travis Lundy


Hang Seng TECH Index Rebalance: Float & Capping Changes

By Brian Freitas

  • As expected, there are no adds or deletes for the Hang Seng Tech Index (HSTECH INDEX) in December. However, there are plenty of capping and float changes to drive flows.
  • The December rebalance is expected to have a one-way turnover of 2.3% resulting in a one-way trade of HK$1.9bn.
  • Short interest is greater than 5% of float on a few stocks and a continued recovering in markets could lead to a squeeze higher.


Weimob (2013 HK): Strategic Patience Will Be Rewarded (Part 2)

By Eric Chen

  • Weimob has emerged from the pandemic stronger and leaner, further consolidating its leadership in China’s e-commerce SaaS market. 
  • Drawing insights into the supply side (merchants/brands) on  Alibaba platform, our bottom-up analysis suggests that Weimob potentially has a US$600mn revenue opportunity by 2025.
  • We value Weimob at US$3bn assigning 5xPS on its US$600mn revenue by 2025,  implying 25% CAGR over 3-year period. Patience needed to navigate high-inflation environment which pressures growth assets. 

Hang Seng Tech Rebalance Dec 2022 – No Name Changes, Decent Flow

By Travis Lundy

  • The Hang Seng Tech Index Review was announced on Friday after the close. There are no name changes but there is decent flow. 3% one-way turnover.
  • There are five capping changes and one very large share count change making things interesting.
  • All told, this is less impactful than it was last time, and less impactful than the other index rebalances announced. 

Galaxy Entertainment Group: Its 4.5% of Wynn Shares Key if the Stock Is in Play

By Howard J Klein

  • In 2018, shortly after the departure of Wynn founder Steve Wynn, Galaxy bought 4.9% of his shares atUS$175. The shares have been under water. But a new player has entered.
  • Gaming, restaurant and sports entrepreneur Tillman Fertitta has just bought 6.1% of Wynn shares setting up a possible play on the shares, or a total takeover move.
  • There are three scenarios that could play bullish for Galaxy if Wynn is in play. All auger well for movement on the stock.

Zhangzhou Pientzehuang Pharmaceutical (600436.CH) – Disappointing Performance Is Just the Beginning

By Xinyao (Criss) Wang

  • Zhangzhou Pientzehuang Pharmaceutical Co., Ltd. (600436 CH)’s 22Q3 performance was disappointing because its strategy of “stabilizing” performance growth by raising prices has been ineffective.
  • Endogenous growth problem would finally be reflected in the decline of company’s valuation. We recommend to think about long-term logic from a broader perspective,not simply tracking performance of individual companies.
  • Pien Tze Huang’s valuation still has a lot of downward space. When the bubble bursts or its valuation is lower than Kweichow Moutai, it’s time to go long again.

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