In today’s briefing:
- BYD (1211 HK): God’s Eye & Potential HSTECH Index Inclusion
- Northern Star’s Acquisition of De Grey Mining: The Many Index Implications & Flows
- BYD (1211 HK) Tactical Outlook: Buy-The-Dip Scenarios With Passive Buying from HSI/HSCEI Trackers
- Shin Kong (2888 TT)/Taishin (2887 TT) Deal Gets FSC Approval – Still A Good Swap
- Nikkei 225 Sep25 Rebal: One ADD, One DELETE Still Probable Unless Kokusai Elec (6525) Offering/Split
- CATL A/H Listing – Thoughts on A/H Premium
- Korea Short Selling: What Happened on Day 1?
- Quiddity Leaderboard T50/100 Jun25: Taishin-Shin Kong Merger Could Cause Two Changes
- Tariff Transition Smoothing
- Chagee Holdings (CHA US) IPO: The Bull Case
BYD (1211 HK): God’s Eye & Potential HSTECH Index Inclusion
- BYD (1211 HK) raised US$5.6bn in a secondary offering a few weeks ago and the stock is trading a lot higher than the placement price.
- Buying from global index trackers is done, but there will be more passive buying from Hang Seng Index (HSI) and Hang Seng China Enterprises Index (HSCEI) trackers later this month.
- With the release of the God’s Eye advanced driver-assistance system (ADAS), the stock could be added to the Hang Seng TECH Index (HSTECH INDEX) in June, bringing more passive inflows.
Northern Star’s Acquisition of De Grey Mining: The Many Index Implications & Flows
- Northern Star Resources (NST AU)‘s acquisition of De Grey Mining (DEG AU) is expected to complete in the next 3 weeks.
- There will be an ad hoc inclusion to the S&P/ASX 200 (AS51 INDEX) and passive buying in Northern Star Resources (NST AU) from a bunch of trackers of different indices.
- The acquisition brings Northern Star Resources (NST AU) close to inclusion in the S&P/ASX 20 Index, but it’s not there yet.
BYD (1211 HK) Tactical Outlook: Buy-The-Dip Scenarios With Passive Buying from HSI/HSCEI Trackers
- A recent insight by Brian Freitas signals that BYD (1211 HK)buying from global index trackers is done (more passive buying from HSI/HSCEI trackers may come later this month).
- As of Tuesday, the stock is currently in the middle of a modest pullback, 1 week down, reached a support area where the probability of a bounce is around 50%.
- We are at the start of the month, it may be early to benefit from the passive buying discussed by Brian Freitas, however this pullback could support a buy-the-dips strategy.
Shin Kong (2888 TT)/Taishin (2887 TT) Deal Gets FSC Approval – Still A Good Swap
- Late Monday, The Financial Supervisory Commission approved the merger where Shin Kong Financial Holding (2888 TT) is to be absorbed by Taishin Financial Holding (2887 TT). Announcement here.
- Yesterday, the chairmen of both Shin Kong and Taishin decided the merger base date, which has been set a bit further out than even I expected, at 24 July 2025.
- The terms tightened yesterday. There is still a worthwhile switch to be done (or arb if you have cheap borrow), and NEWCO is cheap to peers, STILL.
Nikkei 225 Sep25 Rebal: One ADD, One DELETE Still Probable Unless Kokusai Elec (6525) Offering/Split
- The March 2025 Nikkei 225 review came out with a sparse set of changes. That gives us hints for the September 2025 review.
- Kokusai did NOT get added, waiting for a split, an offering, or time to pass. Only one sector change was made. So we see One ADD and One DELETE.
- The lack of effort to address sector imbalances within the rules suggests the rules are not as hard as people thought. Intra-review changes could be more interesting in years ahead.
CATL A/H Listing – Thoughts on A/H Premium
- Contemporary Amperex Technology (CATL) (300750 CH), one of the world’s largest battery solutions providers, aims to raise at least US$5bn in its H-share listing.
- CATL is the global leader in new energy vehicle battery solutions, in China and globally, as per SNE Research. Its A-shares have been listed since 2018.
- We have looked at the company’s past performance in our earlier notes. In this note, we talk about its recent updates and provide our thoughts on valuations.
Korea Short Selling: What Happened on Day 1?
- Short notional ticked higher on the KOSPI and KOSDAQ markets and is expected to continue increasing over the next few months.
- Since the resumption of short selling, foreign holdings of Korean equities have increased from 29.26% to 29.3%.
- The Korea Stock Exchange KOSPI 200 (KOSPI2 INDEX) to KOSDAQ 150 Index (KOSDQ150 INDEX) ratio has stayed stable over the last 3 trading days.
Quiddity Leaderboard T50/100 Jun25: Taishin-Shin Kong Merger Could Cause Two Changes
- The T50 index represents the top 50 largest stocks by market capitalization in the Taiwan Stock Exchange (TWSE). The T100 index represents the next 100 largest names (51-150 ranks).
- In this insight, we take a look at the potential ADDs and DELs for the June 2025 index rebal event.
- Currently, we see one change for T50 and one change for T100.
Tariff Transition Smoothing
- President Trump’s tariffs embed structural cost pressures, compounding supply chain changes and creating a stagflationary shock central banks cannot offset.
- Potential retaliation risks raising inflation expectations, constraining the extent to which monetary policy can smooth transitional pains through temporary easing.
- We still believe any dovish policy imperative is likely to be short, shallow, and reversed, with central banks forced to remain flexible and focused on shorter horizons again.
Chagee Holdings (CHA US) IPO: The Bull Case
- Chagee Holdings (CHA US), a leading premium tea drinks brand, is seeking to raise US$400-500 million through a Nasdaq IPO.
- According to iResearch, as of December 31, 2024, Chagee was the largest premium freshly made tea drink brand in China by the number of stores.
- The bull case rests on a strong brand, leading market share, peer-leading revenue growth, top-tier profitability and cash generation.
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