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>Last week we had the implementation of the first two tranches of the <a href="https://www.smartkarma.com/entities/nikkei-225" target="_blank" data-smartkarma-citation="entities:22909:1" rel="noopener">Nikkei 225 (NKY INDEX)</a> rebalance with the third tranche to be implemented at the close on Monday.</li>
<li>Thursday saw the NIFTY indices implementation while Friday marked the end of the review period for the December rebalance of the Hang Seng family of indices.</li>
<li>There were large inflows to China, Taiwan, Korea and Hong Kong ETFs during the week while there were some outflows from Japan.</li>
</ul>


Last week we had the implementation of the first two tranches of the Nikkei 225 (NKY INDEX) rebalance with the third tranche to be implemented at the close on Monday.
Thursday saw the NIFTY indices implementation while Friday marked the end of the review period for the December rebalance of the Hang Seng family of indices.
There were large inflows to China, Taiwan, Korea and Hong Kong ETFs during the week while there were some outflows from Japan.


Index Rebalance & ETF Flow Recap: S&P/ASX, China A50, SET50, Bilibili, Leapmotor, Onewo, CALB

HK/China Healthcare Analyst (ex-Fosun Pharma)

Xinyao (Criss) Wang

Thematic (Sector/Industry)

<ul>
<li>The plunge in medical beauty sector last week was due to the industry-wide overhaul and investigation resulting from the increase in business bribery/tax evasion/medical malpractice/customer complaints.</li>
<li>We found an interesting phenomenon – Investors dare not buy biotech, opting instead for Traditional Chinese Medicine (TCM) companies, scientific research service companies and medical service companies.</li>
<li>If investors still want to trade CXO, here are two suggestions.</li>
</ul>


The plunge in medical beauty sector last week was due to the industry-wide overhaul and investigation resulting from the increase in business bribery/tax evasion/medical malpractice/customer complaints.
We found an interesting phenomenon – Investors dare not buy biotech, opting instead for Traditional Chinese Medicine (TCM) companies, scientific research service companies and medical service companies.
If investors still want to trade CXO, here are two suggestions.


China Healthcare Weekly (Sep.25) - CXO Trading Strategy, Plunge in Medical Beauty, Belief in Biotech

Equity Bottom-Up

Aier Eye Hospital Group / Equity Bottom-Up

<ul>
<li>The fundamental changes in the population structure will lead to a decline in the growth rate of the total retail sales of consumer goods. The long logic doesn't exist.</li>
<li>Aier has hit a growth ceiling. As the endogenous demand will be stepped downward gradually, the performance of Aier will further decline. The downward elasticity of valuation is greater.</li>
<li>It is still difficult for healthcare sector to have its own independent growth logic. The bottom of healthcare sector would appear after the collapse of Aier’s valuation.</li>
</ul>


The fundamental changes in the population structure will lead to a decline in the growth rate of the total retail sales of consumer goods. The long logic doesn't exist.
Aier has hit a growth ceiling. As the endogenous demand will be stepped downward gradually, the performance of Aier will further decline. The downward elasticity of valuation is greater.
It is still difficult for healthcare sector to have its own independent growth logic. The bottom of healthcare sector would appear after the collapse of Aier’s valuation.


Aier Eye Hospital (300015.CH) 22H1 - More Downside Ahead; The Long Logic Doesn't Exist

Asset Allocation & Fund Positioning, Copley Fund Research

Steven Holden

Asset Allocation & Fund Positioning

Copley Fund Research

Copley Fund Research provide research and data on asset allocation among Global and Emerging Market equity funds.  The analysis details absolute and relative positioning across countries, sectors and industries together with highly granular data on single stock and single fund allocations.  The data is updated monthly with time series going back to January 2011.

Global Research - Analysis of 165 prominent Global equity funds, combined AUM $335bn
GEM Research - Analysis of 127 prominent global EM equity funds, combined AUM $250bn

Asset Allocation - Global and GEM Equity

Cross Asset Strategy

<ul>
<li>The growth in China A-Share exposure has slowed as we approach full ownership across the EM active fund universe.</li>
<li>China A-Share allocations have remained solid throughout this year’s volatility and heavy country rotation.</li>
<li>Midea Group, Kweichow Moutai and Contemporary Amperex Technology remain the most widely held stocks, but others are starting to make their mark.</li>
</ul>


The growth in China A-Share exposure has slowed as we approach full ownership across the EM active fund universe.
China A-Share allocations have remained solid throughout this year’s volatility and heavy country rotation.
Midea Group, Kweichow Moutai and Contemporary Amperex Technology remain the most widely held stocks, but others are starting to make their mark.


China A-Share Deep Dive:  Growth Slows, but EM Funds Remain Well Invested

<ul>
<li>We still haven’t seen the “industry clearing”. When an industry no longer has entry barriers/first mover advantage, it will inevitably bring about the collapse of expectations for the future.</li>
<li>If the total retail sales of consumer goods do not maintain well, the probability of endogenous growth problems is high, which will be reflected in the decline of companies’ valuation.</li>
<li>It’s more reasonable for the share prices of those companies that have entered VBP to rise. For those that haven’t been included in VBP, the risk is much higher.</li>
</ul>


We still haven’t seen the “industry clearing”. When an industry no longer has entry barriers/first mover advantage, it will inevitably bring about the collapse of expectations for the future.
If the total retail sales of consumer goods do not maintain well, the probability of endogenous growth problems is high, which will be reflected in the decline of companies’ valuation.
It’s more reasonable for the share prices of those companies that have entered VBP to rise. For those that haven’t been included in VBP, the risk is much higher.


China Healthcare Weekly (Sep.16) - Industry Clearing, Bottom of Healthcare Sector, Endogenous Growth

China

Shanghai Pharmaceuticals Holding Co., Ltd. manufactures, retails, and wholesales a variety of pharmaceuticals including biopharmaceuticals, chemical and Chinese traditional medicines, and healthcare products. The Company also invests in new medicine development and provides related services.

Shanghai Pharmaceuticals Holding (2607 HK)

Sinopharm Group Co Ltd is a pharmacy distribution company. The Company also owns several pharmacy enterprise groups in different industries such as logistics, retail stores, pharmaceutical manufacturing, and chemical testing.

Huadong Medicine Co., Ltd. wholesales and retails medicines, pharmaceutical preparations, biological products, and medical instruments.  Through its subsidiaries, the Company also manufactures antibiotic medicines and biochemical products.

WuXi Biologics (Cayman) Inc. is a leading open-access R&D capability and technology platform company serving the pharmaceutical, biotechnology, and medical device industries, with operations in China, U.S., and Iceland.  We provide a broad and integrated portfolio of laboratory and manufacturing services throughout the drug and medical device R&D process.  Our services are designed to help our global partners in shortening the cycle and lowering the cost of drug and medical device R&D through cost-effective and efficient solutions. 

Guangzhou Baiyunshan Pharmaceutical Holdings Co., Ltd. manufactures and sells Chinese patent medicine. The Company also wholesales, retails, imports, and exports Western and Chinese pharmaceutical products and various medical apparatus.

Guangzhou Baiyunshan Pharmaceu (600332 CH)

China National Medicines Corp. Ltd. wholesales and retails chemical material medicines, western medicine preparations, biochemical medicines, biological products, and Chinese traditional medicines.  Through its subsidiaries, the Company also manufactures pharmaceuticals including injections, capsules, tablets, and other related products under the CNCM brand name.

Topchoice Medical Investment Corporation provides dental and oral health care services.

Tibet Rhodiola Pharmaceutical Holding Co. develops, manufactures, and markets Tibet medicines.  The Company's products include Rhodiola capsules, Rhodiola pellets, and other related medicines.

Zhejiang Dian Diagnostics Co., Ltd. provides medical diagnostic solutions, as an outsourcer, to various general hospitals, specialized hospitals, community health service centers (stations), township (county) hospitals, medical centers,  disease prevention and control centers.

Shenzhen Neptunus Bioengineering Co., Ltd. develops, manufactures, and markets biochemical pharmaceuticals, biological products, traditional Chinese medicines, and healthcare products.  Through its subsidiaries, the Company also manufactures food.

Bangkok Dusit Medical Services Public Company Limited operates Bangkok General Hospital. The Hospital specializes in cardiovascular, lung, neurological, eye and genitourinary cancer, as well as physical therapy and medical imaging.

Apollo Hospitals Enterprise Limited owns and operates hospitals in India.  The Company also runs a 24-hour pharmacy network via over 120 outlets across India. Apollo Hospitals also runs clinics and offer managed care and family health plans. The Company has a variety of locations in Chennai, Hyderabad, Delhi, Dubai, Vizag, Bilaspur and Chengannur.

Molina Healthcare Inc. is a managed care organization.  The Company arranges for the delivery of health care services to persons eligible for Medicaid and other programs for low-income families and individuals.  Molina Healthcare has health plans in California, Washington, Utah, and Michigan, as well as primary care clinics located in Northern and Southern California.

Universal Health Services, Inc. is a healthcare management company. The Company operates acute care hospitals, behavioral health centers, and surgery centers. Universal provides services such as general surgery, internal medicine, radiology, and pediatric services throughout the United States and Puerto Rico.

Quest Diagnostics Incorporated provides diagnostic testing, information, and services.  The Company operates a national network of full-service laboratories, rapid response laboratories, and patient service centers.  Quest Diagnostics provides esoteric testing, routine medical testing, drugs of abuse testing, and non-hospital-based anatomicpathology testing.

Laboratory Corporation of America Holdings is a clinical laboratory company that offers clinical laboratory tests used by the medical profession in routine testing, patient diagnosis, and in the monitoring and treatment of disease. The Company develops specialty testing operations, such as oncology testing, HIV genotyping and phenotyping, diagnostic genetics and clinical trials.

Laboratory Corporation of America Holdings (LH US)

Laboratory Corporation of America Holdings

Encompass Health Corporation provides inpatient rehabilitative healthcare services.  The Company operates inpatient rehabilitation hospitals, outpatient and rehabilitation satellites, and home health agencies. Encompass Health provides treatment on both an inpatient and outpatient basis.

Sonic Healthcare Limited is a medical diagnostics company with operations in Australia, New Zealand, and Europe.  The Company provides a comprehensive range of pathology and diagnostic imaging services to medical practitioners, hospitals and their patients along with providing administrative services and facilities to medical practitioners.

Tenet Healthcare Corporation, through its subsidiaries, owns or operates general hospitals and related health care facilities serving communities in the United States.  The Company operates rehabilitation hospitals, specialty hospitals, long-term care facilities, psychiatric facilities, and medical office buildings near its general hospitals, as well as ancillary health care businesses.

Fresenius Medical Care AG & Co. KGaA offers kidney dialysis services and manufactures and distributes equipment and products used in the treatment of dialysis patients. The Company also offers clinical laboratory testing and diagnostic testing services and provides home infusion, respiratory therapy, ultrasound, and echo-cardiography. Fresenius operates worldwide.

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

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Aier Eye Hospital Group (300015 CH)

Index Rebalance & ETF Flow Recap: S&P/ASX, China A50, SET50, Bilibili, Leapmotor, Onewo, CALB

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

Brian Freitas

China Healthcare Weekly (Sep.25) - CXO Trading Strategy, Plunge in Medical Beauty, Belief in Biotech

If investor still want to trade CXO,here are two suggestions; The plunge in medical beauty sector last week was due to industry-wide...

Xinyao (Criss) Wang

Aier Eye Hospital (300015.CH) 22H1 - More Downside Ahead; The Long Logic Doesn't Exist

Aier has hit a growth ceiling.As endogenous demand steps downward,performance will further decline.The bottom of healthcare sector will appear...

Xinyao (Criss) Wang

China Healthcare Weekly (Sep.16) - Industry Clearing, Bottom of Healthcare Sector, Endogenous Growth

We still haven’t seen the “industry clearing” of healthcare. The decline of total retail sales of consumer goods will lead to endogenous growth...

Xinyao (Criss) Wang

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

Index Rebalance & ETF Flow Recap: S&P/ASX, China A50, SET50, Bilibili, Leapmotor, Onewo, CALB

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

Brian Freitas

China Healthcare Weekly (Sep.25) - CXO Trading Strategy, Plunge in Medical Beauty, Belief in Biotech

If investor still want to trade CXO,here are two suggestions; The plunge in medical beauty sector last week was due to industry-wide...

Xinyao (Criss) Wang

Aier Eye Hospital (300015.CH) 22H1 - More Downside Ahead; The Long Logic Doesn't Exist

Aier has hit a growth ceiling.As endogenous demand steps downward,performance will further decline.The bottom of healthcare sector will appear...

Xinyao (Criss) Wang

China A-Share Deep Dive: Growth Slows, but EM Funds Remain Well Invested

China A-Share exposure has seen tremendous growth over the last decade, yet the rate of ownership growth has slowed this year. In this piece we...

Steven Holden

China Healthcare Weekly (Sep.16) - Industry Clearing, Bottom of Healthcare Sector, Endogenous Growth

We still haven’t seen the “industry clearing” of healthcare. The decline of total retail sales of consumer goods will lead to endogenous growth...

Xinyao (Criss) Wang