In today’s briefing:
- Hang Seng Internet & IT Index (HSIII) Rebalance Preview: Methodology Change Leads to US$1.25bn Trade
- CSI300 Index Rebalance Preview: 12 Changes a Side as Trade Nears US$10bn
- CSI Medical Service Index Rebalance Preview: Six Potential Changes in December
- BYD (1211): Time to Sell
- ECM Weekly (10 November 2025) – Seres, Pony, WeRide, Joyson, DIY, Maynilad, Northsand, Softcare
- Softcare (2698 HK): Where Should It Be Traded?
- Sichuan Biokin Pharmaceutical IPO: Well-Positioned to Ride Oncology Focused Global ADC Wave
- Sichuan Biokin A/H Listing: Stretched Valuation
- Earnings Volatility Preview: Options Price Sharp Swings in China Tech Earnings Week
- Softcare IPO Trading Note: Strong Insti Sub, Midteens Upside
Hang Seng Internet & IT Index (HSIII) Rebalance Preview: Methodology Change Leads to US$1.25bn Trade
- Following the methodology update for the HSIII Index, there could be up to 5 constituent changes in December.
- Estimated one-way turnover is 12.8% and that will result in a round-trip trade of HK$9.8bn (US$1.25bn).
- Xiaomi (1810 HK) is the biggest beneficiary of the new methodology while there will be large funding outflows for a lot of the current index constituents.
CSI300 Index Rebalance Preview: 12 Changes a Side as Trade Nears US$10bn
- There could be 12 changes at the December rebalance with the Information Technology sector gaining 2 index spots and a smaller number of changes in the other sectors.
- We estimate one-way turnover of 2.7% at the rebalance leading to a round-trip trade of CNY 69.8bn (US$9.8bn). There are 8 stocks with over 2x ADV to trade.
- The forecast adds have outperformed the CSI 300 Index over the last 5 months while the forecast deletes have underperformed the index.
CSI Medical Service Index Rebalance Preview: Six Potential Changes in December
- There could be up to 6 changes for the CSI Medical Service Index at the December rebalance with the number of changes mainly driven by the inclusions.
- Estimated one-way turnover is 6.9% and the round-trip trade is estimated at CNY 4.11bn (US$578m). There are 8 stocks with over 1x ADV to trade from passive trackers.
- The forecast adds have outperformed the forecast deletes since June but have underperformed in the short-term. With the review period complete and announcement in 3 weeks, positioning could resume.
BYD (1211): Time to Sell
- BYD (1211 HK) has produced an enviable growth rate for the last 2 decades in the NEV sector.
- Berkshire Hathaway Inc Cl A (BRK/A US) has completed selling all its holding in BYD.
- The growth rate is no longer as high as before, and therefore demands a new way to evaluate the stock as its PEG increases.
ECM Weekly (10 November 2025) – Seres, Pony, WeRide, Joyson, DIY, Maynilad, Northsand, Softcare
- 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, the deal flow continues unabated, although a lot of listing in Hong Kong didn’t do to well last week.
- On the placements front, there were a number of deals, with a few right at lockup expiry.
Softcare (2698 HK): Where Should It Be Traded?
- Softcare (2698 HK)‘s IPO price was fixed at HK$26.20, or 16.4x FY26F PER, with overwhelming positive responses in both the Hong Kong IPO and international offer.
- We calculate its fair value at HK$26.07-29.43, based on a 50% premium to Hengan International Group (1044 HK) and a 20% discount to the US peers, leaving limited upside.
- Its tiny public shareholder ownership (15%) and the potential of being an M&A target will elevate its valuations. However, anything above the US peers (i.e. 20.5x PER) is expensive.
Sichuan Biokin Pharmaceutical IPO: Well-Positioned to Ride Oncology Focused Global ADC Wave
- Sichuan Biokin Pharmaceutical has launched HK IPO to raise ~$430M by offering 8.6M shares at HK$389 per share. Subscriptions will close on November 12, with expected listing on November 17.
- Lead candidate, iza-bren is the world’s first and only EGFR × HER3 bispecific ADC to have entered Phase 3 trial. Biokin has co-development and co-commercialization agreement with BMS for iza-bren.
- The company is already listed on China’s A-share market in Shanghai. Biokin shares have been a strong performer since it went public and rose 77% over the last one year.
Sichuan Biokin A/H Listing: Stretched Valuation
- Sichuan Biokin, a China-based commercial stage biotech company, aims to raise around USD 432 million via a Hong Kong listing.
- In our previous note, we have examined the company’s fundamentals and latest development.
- In this note, we look at the deal term. We think the company’s valuation is demanding, despite its clinical breakthrough.
Earnings Volatility Preview: Options Price Sharp Swings in China Tech Earnings Week
- Context: Some of Hong Kong’s largest and most prominent companies will report in the coming days, representing 20% of the Hang Seng Index (HSI INDEX)
- Highlight: This Insight quantifies option-implied swings which serve as a gauge for post-earnings reactions.
- Why Read: Prepare for a busy earnings week by understanding where single-stock and broader market volatility may be elevated.
Softcare IPO Trading Note: Strong Insti Sub, Midteens Upside
- Softcare (2698 HK) (SC) raised around US$307m in its upcoming Hong Kong IPO.
- Softcare (SC) is an international hygiene product corporation engaged in the development, manufacturing and sales of baby and feminine hygiene products.
- We have covered various aspects of the deal in our previous note. In this note, we will talk about the demand and trading dynamics.
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