Pan-Asia Index Rebalances/ Events/ Delta One, Periscope Analytics

Brian Freitas

Pan-Asia Index Rebalances/ Events/ Delta One

Periscope Analytics

Periscope Analytics focuses on event-driven trades across Asia Pacific and provides comprehensive, timely and systematic coverage of index changes to major Asia Pacific indices in a structured manner.

The analysis includes forecasted inclusions and exclusions to all major Asian indices that have significant amount of tracking assets, including estimates of passive buy/sell flow on the stocks. The service also provides commentary and impact of market consultations, ground rule changes, and other events (IPOs, spin-offs, M&A) that could lead to index changes and passive flow.

Periscope Analytics works with multi-strategy hedge funds, proprietary trading firms, stat arb trading groups and long-only investors that invest and trade in the Asia Pacific region with the data being used to trade index rebalances, avoid pre-positioning and passive flow, and to time entry into and exit from stocks.

Event-Driven Trades Across Asia Pacific

Event-Driven

<ul>
<li>The announcement of the inclusion of <a href="https://www.smartkarma.com/entities/uber-technologies-inc" target="_blank" data-smartkarma-citation="entities:430:1" rel="noopener">Uber Technologies (UBER US)</a> in the <a href="https://www.smartkarma.com/entities/s-p-500-index" target="_blank" data-smartkarma-citation="entities:22886:1" rel="noopener">S&amp;P 500 INDEX</a> was a big one last week. There were announcements for some other indices too.</li>
<li>There are many indices in China that will be rebalanced at the close on Friday, the biggest being the <a href="https://www.smartkarma.com/entities/shanghai-shenzhen-csi-300-inde" target="_blank" data-smartkarma-citation="entities:22906:1" rel="noopener">CSI 300</a>, <a href="https://www.smartkarma.com/entities/csi-smallcap-500-index-shang" target="_blank" data-smartkarma-citation="entities:35347:1" rel="noopener">CSI 500</a>, <a href="https://www.smartkarma.com/entities/sse-science-and-technology-innovation-board-50-index" target="_blank" data-smartkarma-citation="entities:29279:1" rel="noopener">STAR50</a>, <a href="https://www.smartkarma.com/entities/shanghai-stock-exchange-sse-50-a-share-index" target="_blank" data-smartkarma-citation="entities:31073:1" rel="noopener">SSE50</a> and <a href="https://www.smartkarma.com/entities/kraneshares-csi-china-internet-etf" target="_blank" data-smartkarma-citation="entities:28208:1" rel="noopener">KWEB US</a>.</li>
<li>Relatively quiet in ETF world with net inflows to China focused ETFs and net outflows for Japan.</li>
</ul>


The announcement of the inclusion of Uber Technologies (UBER US) in the S&amp;P 500 INDEX was a big one last week. There were announcements for some other indices too.
There are many indices in China that will be rebalanced at the close on Friday, the biggest being the CSI 300, CSI 500, STAR50, SSE50 and KWEB US.
Relatively quiet in ETF world with net inflows to China focused ETFs and net outflows for Japan.


Index Rebalance & ETF Flow Recap: KWEB, CSI300/500, STAR50, SSE50, ChiNext, SET50, Chips, Denso, SPX

<ul>
<li>There are 4 changes for the CSI Medical Service Index that will be implemented at the close on 8 December.</li>
<li>The constituent changes plus capping result in one-way turnover of 5.9% and in a one-way trade of CNY 1.86bn (US$261m).</li>
<li>Some stocks will have passive flows from global trackers at the end of November while there will be flows from other local passive trackers at the close on 8 December.</li>
</ul>


There are 4 changes for the CSI Medical Service Index that will be implemented at the close on 8 December.
The constituent changes plus capping result in one-way turnover of 5.9% and in a one-way trade of CNY 1.86bn (US$261m).
Some stocks will have passive flows from global trackers at the end of November while there will be flows from other local passive trackers at the close on 8 December.


CSI Medical Service Index Rebalance: Chunky Flows for Some Stocks

HK/China Healthcare Analyst (ex-Fosun Pharma)

Xinyao (Criss) Wang

Equity Bottom-Up

Aier Eye Hospital Group / Equity Bottom-Up

<ul>
<li>Aier’s 23Q3 profit growth exceeded expectations. Considering the low base in 22Q4, Aier’s 23Q4 performance could show an obvious rebound. Then, the 2023 full-year results would be more certain.</li>
<li>Aier has a considerable amount of "off-balance-sheet profits" that can be incorporated into statements in the future. So, although Aier's growth rate has decreased, it wouldn’t collapse in short term.</li>
<li>More hidden problems would be exposed in the process of transferring off-balance sheet profits to the on-balance sheet. All the repurchased shares should be cancelled to reduce Aier’s registered capital.</li>
</ul>


Aier’s 23Q3 profit growth exceeded expectations. Considering the low base in 22Q4, Aier’s 23Q4 performance could show an obvious rebound. Then, the 2023 full-year results would be more certain.
Aier has a considerable amount of "off-balance-sheet profits" that can be incorporated into statements in the future. So, although Aier's growth rate has decreased, it wouldn’t collapse in short term.
More hidden problems would be exposed in the process of transferring off-balance sheet profits to the on-balance sheet. All the repurchased shares should be cancelled to reduce Aier’s registered capital.


Aier Eye Hospital (300015.CH) 23Q3 - While Enjoy the Rebound, Recognize the Endgame Behind the Story

<ul>
<li>3Q23 is expected to achieve over 40% YoY growth. 2023 overall performance would be better than previous guidance- Revenue up 40+% YoY and adjusted net profit up about 45% YoY.</li>
<li>With abundant cash flow, Gushengtang has increased dividend payouts and share buyback, indicating that the current stock price is undervalued and has not yet reflected its high growth expectations/healthy fundamentals.</li>
<li>Gushengtang has cross-regional expansion capability. The "sustainability" + "high growth" of performance are worth noting. Depressed sentiment/complex external environment provide a good buying opportunity. Rebound in stock price is expected.</li>
</ul>


3Q23 is expected to achieve over 40% YoY growth. 2023 overall performance would be better than previous guidance- Revenue up 40+% YoY and adjusted net profit up about 45% YoY.
With abundant cash flow, Gushengtang has increased dividend payouts and share buyback, indicating that the current stock price is undervalued and has not yet reflected its high growth expectations/healthy fundamentals.
Gushengtang has cross-regional expansion capability. The "sustainability" + "high growth" of performance are worth noting. Depressed sentiment/complex external environment provide a good buying opportunity. Rebound in stock price is expected.


Gushengtang (2273.HK) - 2023 Full-Year Performance Would Exceed Expectations

<ul>
<li>Aier’s revenue would be up 20%+ YoY in 2023, but one risk is the slowing growth rate of refractive/other consumption upgrading projects in the context of sluggish consumption in 23H2.</li>
<li>The positive impact of aging on performance would not be able to hedge against the negative impact of declining birth rate, ultimately leading to a decline in overall performance growth.</li>
<li>When Aier's external expansion model fails and endogenous growth is lower-than-expectation, we suggest that Aier increase dividends/stock buybacks instead of ineffective expansion. This would make Aier more attractive to investors.</li>
</ul>


Aier’s revenue would be up 20%+ YoY in 2023, but one risk is the slowing growth rate of refractive/other consumption upgrading projects in the context of sluggish consumption in 23H2.
The positive impact of aging on performance would not be able to hedge against the negative impact of declining birth rate, ultimately leading to a decline in overall performance growth.
When Aier's external expansion model fails and endogenous growth is lower-than-expectation, we suggest that Aier increase dividends/stock buybacks instead of ineffective expansion. This would make Aier more attractive to investors.


Aier Eye Hospital Group (300015.CH) 23H1 - Time to Face the Gap Between Ideal and Reality

China

Aier Eye Hospital Group Co., Ltd provides ophthalmological services.  The Company's services include ophthalmological diagnosis and treatments.

Price Gauge
52-week Range	0.00 - 0.00
Market Cap (USDm)	0.00
P/E	0.00
Dividend (Yield)	0.00

Aier Eye Hospital Group (300015 CH)

Index Rebalance & ETF Flow Recap: KWEB, CSI300/500, STAR50, SSE50, ChiNext, SET50, Chips, Denso, SPX

This recap highlights Insights covering Asian index rebalances (announcements/ forecasts/ IPO Fast Entry/ M&A driven changes). We also highlight...

Brian Freitas

CSI Medical Service Index Rebalance: Chunky Flows for Some Stocks

There are 4 changes for the CSI Medical Service Index in Dec. There are chunky flows on some stocks. There is overlap between global and local...

Brian Freitas

Aier Eye Hospital (300015.CH) 23Q3 - While Enjoy the Rebound, Recognize the Endgame Behind the Story

Aier's share price rebounded after 23Q3 results was released, but 2024 performance growth could be lower-than-expected. The contribution brought by...

Xinyao (Criss) Wang

Gushengtang (2273.HK) - 2023 Full-Year Performance Would Exceed Expectations

Based on strong growth momentum, the management has raised 2023 full-year guidance. Special dividend/share payback indicates Gushengtang is...

Xinyao (Criss) Wang

Aier Eye Hospital Group (300015.CH) 23H1 - Time to Face the Gap Between Ideal and Reality

Aier will continue to underperform because the growth rate of total retail sales of consumer goods is falling too fast. This means Aier's...

Xinyao (Criss) Wang

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)