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 March rebalance of the HSI, HSCEI and HSTECH indices will use today's closing prices to cap the index constituent weights at 8%. This will lead to large flows.</li>
<li>The largest inflows will be on <a href="https://www.smartkarma.com/entities/li-auto-inc-3dbe6187-544f-40dd-b9f9-72fba9c0110e" target="_blank" data-smartkarma-citation="entities:33811:1" rel="noopener">Li Auto (2015 HK)</a>, <a href="https://www.smartkarma.com/entities/meituan-dianping" target="_blank" data-smartkarma-citation="entities:26970:1" rel="noopener">Meituan (3690 HK)</a>, <a href="https://www.smartkarma.com/entities/xpeng-inc-4cc65854-d10c-4d20-bf7e-ca0e016715ff" target="_blank" data-smartkarma-citation="entities:33772:1" rel="noopener">XPeng (9868 HK)</a>, <a href="https://www.smartkarma.com/entities/jd-com-inc" target="_blank" data-smartkarma-citation="entities:29043:1" rel="noopener">JD.com (9618 HK)</a>, <a href="https://www.smartkarma.com/entities/alibaba-group" target="_blank" data-smartkarma-citation="entities:28434:1" rel="noopener">Alibaba (9988 HK)</a>, <a href="https://www.smartkarma.com/entities/byd-co-ltd-h" target="_blank" data-smartkarma-citation="entities:20962:1" rel="noopener">BYD (1211 HK)</a> and <a href="https://www.smartkarma.com/entities/beijing-kuaishou-technology-co-ltd" target="_blank" data-smartkarma-citation="entities:29725:1" rel="noopener">Kuaishou Technology (1024 HK)</a>. </li>
<li>The largest outflows will be on <a href="https://www.smartkarma.com/entities/tencent-holdings-ltd" target="_blank" data-smartkarma-citation="entities:26:1" rel="noopener">Tencent (700 HK)</a>, <a href="https://www.smartkarma.com/entities/hsbc-holdings-plc" target="_blank" data-smartkarma-citation="entities:516:1" rel="noopener">HSBC Holdings (5 HK)</a>, <a href="https://www.smartkarma.com/entities/baidu-inc-a55ca720-5968-48f0-8194-ac94390d065c" target="_blank" data-smartkarma-citation="entities:32212:1" rel="noopener">Baidu (9888 HK)</a>, <a href="https://www.smartkarma.com/entities/xiaomi-corp" target="_blank" data-smartkarma-citation="entities:24409:1" rel="noopener">Xiaomi Corp (1810 HK)</a>, <a href="https://www.smartkarma.com/entities/netease" target="_blank" data-smartkarma-citation="entities:29030:1" rel="noopener">NetEase (9999 HK)</a>, <a href="https://www.smartkarma.com/entities/cnooc-ltd" target="_blank" data-smartkarma-citation="entities:175:1" rel="noopener">CNOOC (883 HK)</a> and <a href="https://www.smartkarma.com/entities/semiconductor-manufacturing-international-corp-smic" target="_blank" data-smartkarma-citation="entities:14231:1" rel="noopener">SMIC (981 HK)</a>.</li>
</ul>


The March rebalance of the HSI, HSCEI and HSTECH indices will use today's closing prices to cap the index constituent weights at 8%. This will lead to large flows.
The largest inflows will be on Li Auto (2015 HK), Meituan (3690 HK), XPeng (9868 HK), JD.com (9618 HK), Alibaba (9988 HK), BYD (1211 HK) and Kuaishou Technology (1024 HK). 
The largest outflows will be on Tencent (700 HK), HSBC Holdings (5 HK), Baidu (9888 HK), Xiaomi Corp (1810 HK), NetEase (9999 HK), CNOOC (883 HK) and SMIC (981 HK).


HSI, HSCEI, HSTECH: Rebalance Flows Post Capping (March 2023)

Independent research on the U.S. markets, Baptista Research

Baptista Research

Independent research on the U.S. markets

Baptista Research is an independent financial research house focused on the U.S. markets. We provide equity research as well as credit research reports on the top-listed U.S. companies with most of our focus on technology, consumer goods and services, automobiles, industrials, oil and gas, pharma, and healthcare. Our research has served more than 3000 institutional investors including mutual funds, hedge funds, banks, family offices, and various buy-side firms. We operate a research subscription service where institutions, as well as retail investors, can have priority access to all our research. We also have a wide distribution of our research reports across some of the top global financial platforms. Apart from equity research and credit research, we also provide advisory services with respect to mergers & acquisitions (M&A), private equity/ venture capital fundraising, valuation reports, and investment management services for corporates.
Baptista Research is owned and managed by Ishan Majumdar, an ex-Venture Capitalist/ Investment Banker, a Chartered Accountant, and a Masters’ degree holder in Management from HEC Paris. Ishan has nearly a decade of experience in Mergers and Acquisitions, Leveraged Buyouts (LBOs), Venture Capital Investing, Corporate Strategy, and Valuation in front-office roles at the likes of BNP Paribas CIB, Credit Agricole CIB, Groupe Danone, and TIW Private Equity. He has worked on and closed multiple acquisition deals, leveraged buyouts, and start-up investment transactions.

Equity Bottom-Up

<ul><li>NetEase delivered a mediocre set of results for the last quarter as it failed to meet market expectations with respect to net revenues.</li><li>The company's legacy titles, including the Westward Journey Online series and Fantasy Westward Journey Online did perform well and helped deliver an earnings beat.</li><li>The company's new game, the Egg Party, hit the Chinese market by storm this quarter.</li></ul>

NetEase delivered a mediocre set of results for the last quarter as it failed to meet market expectations with respect to net revenues.The company's legacy titles, including the Westward Journey Online series and Fantasy Westward Journey Online did perform well and helped deliver an earnings beat.The company's new game, the Egg Party, hit the Chinese market by storm this quarter.

NetEase Inc.: Acquisition of SkyBox Labs & Other Drivers

Global Emerging Market Equities, Propitious Research

Wium Malan, CFA

Global Emerging Market Equities

Independent, Fundamental Quantitative Research

Propitious Research

Fully independent, fundamental and quantitative equity research, focused on companies in the Telecommunication, Media, Technology, Internet and Healthcare sectors in the Global Emerging Markets. Idea generation focused on Quality stocks, trading below their intrinsic Value, with sound Corporate Governance.

Quantitative Analysis

<ul>
<li>An overview (and output) of our machine learning-driven GEM screening model, which seeks to find the best medium-term long ideas within the top 100 stocks in the MSCI GEM Index.</li>
<li>The model is based on 1) a quantitative multifactor screening model, enhanced by two AI Technology-based approaches; 2) a Deep Neural Network model, and 3) a Recurrent Neural Network model.</li>
<li>Developed over roughly 4 years and implemented in its current state for nearly 3 years, the model has a solid real-world alpha-generating performance track record, discussed in detail below.</li>
</ul>


An overview (and output) of our machine learning-driven GEM screening model, which seeks to find the best medium-term long ideas within the top 100 stocks in the MSCI GEM Index.
The model is based on 1) a quantitative multifactor screening model, enhanced by two AI Technology-based approaches; 2) a Deep Neural Network model, and 3) a Recurrent Neural Network model.
Developed over roughly 4 years and implemented in its current state for nearly 3 years, the model has a solid real-world alpha-generating performance track record, discussed in detail below.


China/Asia TMT

Shawn Yang

China growth and global non-US Internet equities

Blue Lotus Research Institute

Blue Lotus Research is a Hong Kong Type 4 Licensed investment advisory firm focusing on Chinese growth equities and global non-US Internet equities

Thematic (Sector/Industry)

<ul>
<li>XPEV: BYD cut prices for the older models of its Dynasty series (-)</li>
<li>700HK/SE/NTES: &lt;Undawn&gt; performance lower than expectation  (-/-/+)， hence we cut our estimation of annual gross billings of the game</li>
<li>9995HK: Daiichi Sangyo/Astra Zeneca's ADC blockbuster DS8201 (Enhertu) approve by NMPA... Impact to Remegen is material in the long run (-)</li>
</ul>


XPEV: BYD cut prices for the older models of its Dynasty series (-)
700HK/SE/NTES: &lt;Undawn&gt; performance lower than expectation  (-/-/+)， hence we cut our estimation of annual gross billings of the game
9995HK: Daiichi Sangyo/Astra Zeneca's ADC blockbuster DS8201 (Enhertu) approve by NMPA... Impact to Remegen is material in the long run (-)


China TMT Update(Feb.28):  700HK/SE/NTES/XPEV/9995HK - BYD Cut Prices for the Older Models

<ul>
<li>NetEase’s 4Q22 revenue was in-line with cons., while its non-GAAP net income missed cons. by (8%) because of a one-off, non-renewal contract with Blizzard.</li>
<li>We still see NetEase as a BUY because of &lt;Eggy Party&gt;’s overseas publishing and &lt;Justice Mobile&gt;, which we estimate will contribute about 1-2bn/3-4bn RMB for annual gross billing, respectively. </li>
<li>We maintain BUY and TP US$ 87, which implies 16.0X PE in 2023.</li>
</ul>


NetEase’s 4Q22 revenue was in-line with cons., while its non-GAAP net income missed cons. by (8%) because of a one-off, non-renewal contract with Blizzard.
We still see NetEase as a BUY because of &lt;Eggy Party&gt;’s overseas publishing and &lt;Justice Mobile&gt;, which we estimate will contribute about 1-2bn/3-4bn RMB for annual gross billing, respectively. 
We maintain BUY and TP US$ 87, which implies 16.0X PE in 2023.


[NetEase (NTES US) Earnings Review]: Eggy Party and Justice Mobile Are Two Catalysts

China

NetEase, Inc. is an Internet technology company that develops applications, services and other Internet technologies in China. The Company's core businesses consist of email service, web portal and online entertainment, including online gaming services. NetEase also offers online advertising, search, mobile applications and e-commerce.

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NetEase Inc (NTES US)

HSI, HSCEI, HSTECH: Rebalance Flows Post Capping (March 2023)

The Hang Seng indices rebalance Friday. Capping uses today's closing prices. The one-way trade across all stocks across the indices is estimated at...

Brian Freitas

NetEase Inc.: Acquisition of SkyBox Labs & Other Drivers

NetEase delivered a mediocre set of results for the last quarter as it failed to meet market expectations with respect to net revenues. The...

Baptista Research

Screening for GEMs: March 2023

This insight provides an overview of our, machine learning-driven, proprietary GEM screening model, based on a Multifactor model, a Deep Neural...

Wium Malan, CFA

China TMT Update(Feb.28): 700HK/SE/NTES/XPEV/9995HK - BYD Cut Prices for the Older Models

9995HK: Daiichi Sangyo/Astra Zeneca's ADC blockbuster DS8201 (Enhertu) approve by NMPA; XPEV: BYD cut prices for the older models (-); 700HK/SE...

Blue Lotus Research Institute

[NetEase (NTES US) Earnings Review]: Eggy Party and Justice Mobile Are Two Catalysts

We still see NetEase as a BUY because of <Eggy Party>’s overseas publishing and <Justice Mobile>, which we estimate will contribute about 1-2bn/3...

Blue Lotus Research Institute

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52-week Range

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