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

Quantitative Analysis

<ul>
<li>Short notional in Hong Kong is HK$439bn and has been falling over the last 18 months due to a drop in the market.</li>
<li>In terms of short notional to issue market cap, the Information Technology, Materials, Health Care and Consumer Discretionary sectors are up there, with Communication Services, Real Estate the least shorted.</li>
<li>Over the year, the largest shorts in terms of notional have been built on Xiaomi Corp, Meituan, JD.com, AIA Group Ltd, Postal Savings Bank of China, Orient Overseas, Techtronic Industries.</li>
</ul>


Short notional in Hong Kong is HK$439bn and has been falling over the last 18 months due to a drop in the market.
In terms of short notional to issue market cap, the Information Technology, Materials, Health Care and Consumer Discretionary sectors are up there, with Communication Services, Real Estate the least shorted.
Over the year, the largest shorts in terms of notional have been built on Xiaomi Corp, Meituan, JD.com, AIA Group Ltd, Postal Savings Bank of China, Orient Overseas, Techtronic Industries.


Hong Kong: Where Have Shorts Been Building Up?

Head of Research, IPOs & Placements, Aequitas Research

Sumeet Singh

Head of Research, IPOs & Placements

IPOs and Placements coverage across Asia Pacific

Aequitas Research

We cover all listing across the Asia Pacific along with follow-up placements. As of Dec 2020, our team had covered 539 IPOs with a hit rate of 73.5% and 685 placements with a hit rate of 66.8%.

We combine fundamental bottom-up views with our proprietary quantitative framework to provide a holistic coverage across new listings and placements. Our coverage includes pre-IPO notes before the deal is launched, follow-up analysis once the deal is live and post-listing trading analysis as well.

Equity Capital Markets

China Tourism Group Duty Free / Equity Capital Markets

<ul>
<li>China Tourism Group Duty Free Corporation Limited (CDF) raised around US$2.4bn in its H-share listing in Hong Kong, after pricing its IPO at HKD158/share.</li>
<li>As per Frost &amp; Sullivan, CDF had 92.3% market share by retail revenue in China duty-free merchandise sales in 2020.</li>
<li>In this note, we talk about the deal pricing and the trading dynamics.</li>
</ul>


China Tourism Group Duty Free Corporation Limited (CDF) raised around US$2.4bn in its H-share listing in Hong Kong, after pricing its IPO at HKD158/share.
As per Frost &amp; Sullivan, CDF had 92.3% market share by retail revenue in China duty-free merchandise sales in 2020.
In this note, we talk about the deal pricing and the trading dynamics.


China Tourism Group A/H Trading - Decent Support from Long-Only but Minimal Retail Participation

External broker reports(aggregated public sources), CMB International

CMB International

External broker reports(aggregated public sources)

Incorporated in Hong Kong, supported by the mainland and targeting in global market, CMB International Capital Corporation Limited (“CMBI”) is an integrated financial institution providing comprehensive and professional services. As a wholly-owned subsidiary of China Merchants Bank ("CMB"), by leveraging on the Group’s synergy and coordination in domestic and overseas markets, as well as CMB’s strong resources and outstanding social reputation, CMBI and its subsidiaries have been actively implementing diversified business strategies and set up an overall layout of main business segments including Corporate Finance, Asset Management, Wealth Management, Global Markets and Structured Finance, etc. Adhering to the philosophy of “being clients oriented and increasing our own values by the way of creating value for clients”, CMBI endeavors to provide quality and integrated financial services to institutional, corporate and individual customers both domestic and overseas including Hong Kong IPO sponsorship and underwriting, share placement and rights issue for listed companies, financial advisors, bonds issuance services, asset management, direct investment, wealth management, equity sales and trading, etc.

Equity Bottom-Up

<div><div><div><div><ul><li>WuXi Chemistry delivered phenomenal growth despite COVID-19 interruptions, driven by strong growth from both COVID and non-COVID projects.</li></ul><div><div><div><ul><li>Cell and gene therapies (CGT) CDMO segment turned positive growth.</li></ul><div><div><div><div><ul><li>Expedited globalization pace. Besides the ongoing constructions of large- scale drug product manufacturing facilities in Delaware, US, WuXi AppTec announced to further invest US$1.4bn in next 10 years to build full-suite R&amp;D and manufacturing capabilities in Singapore.</li></ul></div></div></div></div></div></div></div></div></div></div></div><p><em>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.</em></p>

WuXi Chemistry delivered phenomenal growth despite COVID-19 interruptions, driven by strong growth from both COVID and non-COVID projects.Cell and gene therapies (CGT) CDMO segment turned positive growth.Expedited globalization pace. Besides the ongoing constructions of large- scale drug product manufacturing facilities in Delaware, US, WuXi AppTec announced to further invest US$1.4bn in next 10 years to build full-suite R&amp;D and manufacturing capabilities in Singapore.Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

WuXi AppTec (603259 CH) – Growth momentum to accelerate in 2H22E

Legend Biotech Corp / Equity Capital Markets

<ul>
<li>
<a href="https://www.smartkarma.com/entities/legend-biotech-corp" target="_blank" data-smartkarma-citation="entities:28963:1" rel="noopener">Legend Biotech Corp (LEGN US)</a>, a non-wholly owned subsidiary of Hong Kong-listed <a href="https://www.smartkarma.com/entities/genscript-biotech-corp" target="_blank" data-smartkarma-citation="entities:21041:1" rel="noopener">Genscript Biotech (1548 HK)</a>, is planning to raise up to US$250m in its follow-on offering.</li>
<li>The company last raised cash in Dec 2021 in a similar sized deal, which ended up doing very well after a sharp share price correction.</li>
<li>In this note, we will talk about the deal dynamics and  run the deal through our ECM framework.</li>
</ul>



Legend Biotech Corp (LEGN US), a non-wholly owned subsidiary of Hong Kong-listed Genscript Biotech (1548 HK), is planning to raise up to US$250m in its follow-on offering.
The company last raised cash in Dec 2021 in a similar sized deal, which ended up doing very well after a sharp share price correction.
In this note, we will talk about the deal dynamics and  run the deal through our ECM framework.


Legend Biotech Follow-On - A Little Opportunistic. Last Deal Did Well, After a Large Correction

HK/China Healthcare Analyst (ex-Fosun Pharma)

Xinyao (Criss) Wang

Thematic (Sector/Industry)

<ul>
<li>Jiangsu Provincial Medical Insurance Bureau organized the 7th round of centralized procurement of medical consumables, mainly including spring coil, endoscopic stapler, ultrasound knife and vacuum blood collection tube.</li>
<li>
<a href="https://www.smartkarma.com/entities/cstone-pharmaceuticals" target="_blank" data-smartkarma-citation="entities:27882:1" rel="noopener">CStone Pharmaceuticals (2616 HK)</a> is considering a potential sale of the business. We analyzed the logic behind this deal.</li>
<li>For biotech, Mr Market can never be rational enough to see the big picture. Maybe we should be "dumb". Buy low and sell high works for all investors.</li>
</ul>


Jiangsu Provincial Medical Insurance Bureau organized the 7th round of centralized procurement of medical consumables, mainly including spring coil, endoscopic stapler, ultrasound knife and vacuum blood collection tube.

CStone Pharmaceuticals (2616 HK) is considering a potential sale of the business. We analyzed the logic behind this deal.
For biotech, Mr Market can never be rational enough to see the big picture. Maybe we should be "dumb". Buy low and sell high works for all investors.


China Healthcare Weekly (July22)-Jiangsu Province VBP, CStone's Potential Sale, Irrational Mr Market

China

WuXi AppTec Co., Ltd. manufactures medical products. The Company produces biological agents, antibodies, biological diagnostic reagents, and other products. WuXi AppTec also provides biological analysis, technical study, and other services.

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WuXi AppTec (603259 CH)

Hong Kong: Where Have Shorts Been Building Up?

Short notional in HK has decreased as a result of falling prices. Shorts have been increasing on a lot of stocks over the year. A rally could see...

Brian Freitas

China Tourism Group A/H Trading - Decent Support from Long-Only but Minimal Retail Participation

China Tourism Group Duty Free Corporation Limited (CDF) raised around US$2.4bn in its H-share listing in Hong Kong, after pricing its IPO at HKD158...

Sumeet Singh