In today’s briefing:
- SSE50/SSE180 Index Rebalance: Some Surprises Among the Adds; Deletes as Expected
- KWEB Index Rebalance: HealthyWay In; East Buy Out
- CSI300/CSI500/CSI1000 Index Rebalance: Changes Lead to US$12bn Trade
- STAR50/STAR100 Index Rebalance: 10 Changes and US$1.4bn Trade
- Quiddity CSI 1000 Jun25 Results: 200 Changes; US$2Bn+ One-Way
- ECM Weekly (2 June 2025) -Indigo, ITC, EBOS, Isuzu, Foshan Haitian, Lens Tech, Seres, Schloss, Aegis
- Zijin Mining (601899 CH / 2899 HK): Evaluating the Impact of Kakula Suspension
- China Healthcare Weekly (Jun.1)-Akeso/Summit’s Disappointing Ph3 Readout,Valuation Outlook of Biokin
- Water Oasis H1 FY25 Results: An Improvement In Profitability And Cash 90% of Market Capitalization
- Pre-IPO Softcare – Strong Performance Growth Momentum Would Continue
SSE50/SSE180 Index Rebalance: Some Surprises Among the Adds; Deletes as Expected
- There are 4 changes for the SSE50 Index (SSE50 INDEX) and 18 changes for the SSE180 Index that will be implemented at the close on 13 June.
- The SSE50 Index (SSE50 INDEX) deletes were in line with forecasts, and the index committee has used some discretion while picking the index inclusions.
- The SSE50 Index adds have outperformed the deletes over the last few months and there could be a further move higher in the ‘surprise’ adds to the index.
KWEB Index Rebalance: HealthyWay In; East Buy Out
- The June rebalance of the KraneShares CSI China Internet ETF (KWEB US) will take place at the close of trading on 13 June.
- HealthyWay (2587 HK) will be added to the ETF while East Buy Holding (1797 HK) will be deleted. The passive trading will offer an opportunity to exit positions.
- There is a huge lock-up expiry in HealthyWay (2587 HK) on 30 June and the stock could drop ahead of that. Then it could drop some more after lock-up expiry.
CSI300/CSI500/CSI1000 Index Rebalance: Changes Lead to US$12bn Trade
- There are 7 changes for the CSI 300 Index, 50 changes for the CSI 500 Index and 100 changes for the CSI1000 Index that will be implemented on 13 June.
- There are 240 unique names that are adds or deletes and the round-trip trade across all 3 indices is close to US$12bn.
- The adds have outperformed the deletes for the CSI 300 Index and the CSI 1000 Index but underperformed for the CSI 500 Index.
STAR50/STAR100 Index Rebalance: 10 Changes and US$1.4bn Trade
- There is 1 constituent change for the STAR50 INDEX and 4 changes for the STAR100 Index at the next rebalance that will be implemented at the close on 13 June.
- We estimate turnover of 2.35% for the SSE STAR50 (STAR50 INDEX) and 4.9% for the STAR100 Index. The estimated round-trip trade is CNY 9.8bn (US$1.35bn).
- There are multiple stocks that are adds or deletes for other indices and the passive flows will be a lot larger than just for the STAR50/STAR100 indices.
Quiddity CSI 1000 Jun25 Results: 200 Changes; US$2Bn+ One-Way
- The June 2025 index review results for China’s CSI 1000 index were announced after market close on Friday 30th May 2025.
- There will be 100 ADDs/DELs for CSI 1000 in the June 2025 rebalance.
- The CSI 1000 index rebal event could trigger US$2.2bn in one-way flow.
ECM Weekly (2 June 2025) -Indigo, ITC, EBOS, Isuzu, Foshan Haitian, Lens Tech, Seres, Schloss, Aegis
- 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, Foshan Haitian Flavouring & Food (603288 CH) might launch its A/H listing this week.
- On the placements front, there were a number of large deals across the region, with notable ones in ITC Ltd (ITC IN) and InterGlobe Aviation Ltd (INDIGO IN).
Zijin Mining (601899 CH / 2899 HK): Evaluating the Impact of Kakula Suspension
- A 4–6 month Kakula disruption could reduce Zijin’s 2025 copper output by 4–8%, cutting EBITDA by ~7–11%.
- Ramp-Ups at Julong and Čukaru Peki can offset ~60–70% of the lost volume and partially protect margins.
- Lithium is expected to grow from 8% to 20% of EBITDA by 2028, driven by 300kt LCE capacity from low-cost brine assets.
China Healthcare Weekly (Jun.1)-Akeso/Summit’s Disappointing Ph3 Readout,Valuation Outlook of Biokin
- CR Sanjiu plans to transfer 49.8967% equity of Sanjiu (Anguo) and pay more attention to the quality of external M&As. China Resources+Tasly+KPC will be the core drivers of future performance.
- Akeso’s first global phase 3 readout for ivonescimab was disappointing, which cast shadow on the final FDA approval. We shared our views on the outlook and valuation ahead.
- The failure of HER3-DXd cast shadow over the outlook of HER3. We think Biokin is overvalued. Its valuation should be lower than Akeso and Kelun Bio.
Water Oasis H1 FY25 Results: An Improvement In Profitability And Cash 90% of Market Capitalization
- Water Oasis (1161 HK) H1 FY25 results were encouraging and a step in the positive direction as revenue/PAT improved by -2.5%/116% YoY
- The company declared a semi-annual dividend of 3.5 cents (6.7% annualized yield) for a 43% payout ratio. Net cash of 633 million HKD represents 90% of the market capitalization.
- Trading at 6.0x FY25 PE with earnings stabilization, this is a great name to explore, although we would like to see an improvement in capital allocation.
Pre-IPO Softcare – Strong Performance Growth Momentum Would Continue
- Softcare has established its core competitiveness of “low price + localization”, and has achieved success in Africa. Softcare hopes to replicate its business model in Africa to other markets.
- Emerging Markets have seen sustained growth in market penetration of baby/feminine hygiene products. We’re optimistic about Softcare’s future performance growth due to “demographic dividend + consumption upgrade” in Emerging Markets.
- Softcare has strong fundamentals and promising outlook. We think valuation of Softcare should be higher than Hengan International Group (1044 HK) due to higher profit margin and future growth potential.
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