In today’s briefing:
- What if China ADRs Are Delisted from US Exchanges?
- China ETF Inflows & Implications: Central Huijin’s Huge Buying
- De Grey Mining/Northern Star Resources: The Passive Flows
- Fast Retailing (9983 JP): More Capping-Led Selling in September (And Maybe More in March)
- CES China Semiconductor Chips Index Rebalance Preview: Multiple Adds for Some Stocks Increase Flow
- CNI Semiconductor Chips Index Rebalance Preview: One Change in June
- Chagee Holdings (CHA US) IPO: Global Index Inclusion Timeline
- Shibaura Electronics (6957 JP): No Messing Around as Yageo (2327 TT) Returns with a JPY5,400 Offer
- Smartkarma Webinar | ASEAN Markets Outlook: Drivers, Policies & Risks in 2025
- Shein: London Approves IPO but Tariffs and End Of “De Minimis” Exemption to Lower Valuation
What if China ADRs Are Delisted from US Exchanges?
- We see 281 Chinese companies listed on U.S Stock Exchanges with a total market cap of US$869bn. 32 of these companies are listed on the HKEX (388 HK).
- If the rumours of Chinese stocks being delisted from U.S. Exchanges gathers steam, we could see a wave of secondary listings in Hong Kong.
- PDD Holdings, Full Truck Alliance, Vipshop Holdings, TAL Education and ZEEKR are the largest China ADRs with no HK listing and could come under pressure.
China ETF Inflows & Implications: Central Huijin’s Huge Buying
- Nearly US$22bn has flowed into mainland China listed ETFs over the last 3 trading days, reversing outflows that started in mid February.
- Central Huijin has announced that it will be increasing its ETF holdings to maintain smooth operation of China’s capital markets. The rest of the National Team will be buying too.
- There are multiple implications of the huge ETF creations in a short time frame and a reversal of flows will lead to a reversion in a bunch of trades.
De Grey Mining/Northern Star Resources: The Passive Flows
- With De Grey Mining (DEG AU) shareholders approving the acquisition by Northern Star Resources (NST AU), we move to the phase of passive index flows.
- As expected, Generation Development Group (GDG AU) will be added to the S&P/ASX 200 (AS51 INDEX) at the close on 23 April to replace De Grey Mining (DEG AU).
- There will be passive inflows for Northern Star Resources (NST AU) from some local and global index trackers due to the increase in the number of shares outstanding.
Fast Retailing (9983 JP): More Capping-Led Selling in September (And Maybe More in March)
- Fast Retailing (9983 JP)‘s weight in the Nikkei 225 (NKY INDEX) has increased to 10.81% which will lead to another reduction in the CPAF in September.
- Even after the reduction in CPAF and an increase in BayCurrent Consulting‘s PAF in September, there is a possibility of Fast Retailing being capped again in March 2026.
- The continued passive selling sets up interesting trading opportunities after periods of Fast Retailing (9983 JP) outperformance versus the other index constituents.
CES China Semiconductor Chips Index Rebalance Preview: Multiple Adds for Some Stocks Increase Flow
- There could be three changes for the CES China Semiconductor Chips Index at the close of trading on 13 June.
- Based on the assets tracking the index, passive trackers will need to trade between 0.1-0.4x ADV in the stocks.
- Bestechnic Shanghai (688608 CH) and Suzhou Kematek (301611 CH) will also have net inflows from passive trackers of other indices at the same time, adding to the flow.
CNI Semiconductor Chips Index Rebalance Preview: One Change in June
- There could be one change for the CNI Semiconductor Chips Index with Nexchip Semiconductor (688249 CH) replacing Amlogic Shanghai (688099 CH) in June.
- Passive trackers are estimated to buy 1.4x ADV in Nexchip Semiconductor and sell 0.8x ADV in Amlogic Shanghai. There will be buying in Semiconductor Manufacturing International Corporation (SMIC) due to capping.
- The forecast add and delete have performed in line since the start of the year but there has been a move higher in the last few weeks.
Chagee Holdings (CHA US) IPO: Global Index Inclusion Timeline
- Chagee Holdings (CHA US) is looking to raise up to US$473m in its IPO, valuing the company at up to US$5.2bn. The offering is expected to price today, list tomorrow.
- Media reports indicate that cornerstone investors have indicated demand for US$205m of the offering. There is no mention of a lock-up on those investors yet.
- The stock could be added in one global index in August (with a higher probability of inclusion in November), while inclusion in the other global index is likely in December.
Shibaura Electronics (6957 JP): No Messing Around as Yageo (2327 TT) Returns with a JPY5,400 Offer
- Yageo Corporation (2327 TT) has revised its hostile preconditional tender offer for Shibaura Electronics (6957 JP) to JPY5,400, representing a 20.0% premium to Minebea Mitsumi (6479 JP)’s JPY4,500 offer.
- All the other terms remain unchanged. In response to the revised Yageo offer, the Board will commence a sincere review to determine if the Yageo offer will enhance corporate value.
- There is a 50/50 chance that Minebea walks or revises its offer. Yageo’s revised offer is marginally above the midpoint of Minebea IFA’s DCF range, potentially justifying a higher offer.
Smartkarma Webinar | ASEAN Markets Outlook: Drivers, Policies & Risks in 2025
In the next installment of our Webinar series, in collaboration with ASEAN Exchanges, we go live with Smartkarma Insight Provider Manishi Raychaudhuri.
- The ASEAN region is expected to witness positive economic growth in the coming years, driven by robust domestic demand, increasing foreign investments, and government initiatives to boost economic activities.
However, challenges like trade turmoil, poor consumer confidence, and potential deflation need to be addressed to sustain and enhance the markets’ attractiveness.
Join us as Dr. Manishi Raychaudhuri shares his outlook on capital markets across ASEAN, including timely insights on sector trends, policy shifts, and future risks shaping investment opportunities in the ASEAN-6.
The webinar will be hosted on Monday, 28 April 2025, 16:30 SGT/HKT.
Dr. Manishi Raychaudhuri possesses nearly three decades of experience in Asian Equities in the roles of APAC Head of Equity Research, Asian Equity Strategist and Analyst across various sectors, brings a unique cross border and cross-industry perspective to the process of investment strategy and asset allocation. He worked in senior leadership roles at BNP Paribas and UBS across Mumbai and Hong Kong. Prior to UBS, he was with ICICI Securities, then a JV with JP Morgan. Manishi marries top-down macro-economic outlook with bottom-up sector themes to create unique alpha generative portfolios for clients.
Shein: London Approves IPO but Tariffs and End Of “De Minimis” Exemption to Lower Valuation
- In the past week, Reuters reported that Shein has received approval from the UK’s Financial Conduct Authority (FCA) for its IPO in London.
- In February 2025, Reuters reported Shein could cut its valuation in a potential listing to around $50 billion, which would be 24% lower than the previous private market funding round.
- Tariff war and ending de minimis for shipments from China to US are likely to result in further reduction in the valuation of Shein, much lower than $50 billion.
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