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

Brian Freitas

Pan-Asia Index Rebalances/ Events/ Delta One

Event-Driven

Hang Seng Indexes will announce the results of the December 2021 review of the Hang Seng Family of Indexes on 19 November. The constituent changes will be effective after the close of trading on 3 December.The review period for the December rebalance ended on 30 September and stocks that have at least 3 month of trading history by the review meeting date are eligible for inclusion in the <a href="https://www.smartkarma.com/entities/hong-kong-hang-seng-index" target="_blank" data-smartkarma-citation="entities:22899:1" rel="noopener">Hong Kong Hang Seng Index (HSI INDEX)</a>.With Hang Seng Indexes looking to get up to 80 <a href="https://www.smartkarma.com/entities/hong-kong-hang-seng-index" target="_blank" data-smartkarma-citation="entities:22899:1" rel="noopener">Hong Kong Hang Seng Index (HSI INDEX)</a> members by mid-2022, there could be 20 inclusions over the next 3 index rebalances.As of the close on 3 November, index turnover is 1.3% from capping and other changes to the current index constituents. That gives the index committee a lot of room to add some big stocks to the index without increasing the turnover to levels seen at the last two rebalances in June and September.We identify 12 stocks that could be added to the index based on market coverage and the impact of recent regulatory changes. Of the 12 stocks, 8 are higher probability changes and 4 are lower probability.All 12 inclusions will result in a one-way turnover of 6.37% while the inclusion of the 8 high probability changes will result in a one-way turnover of 4.98%.There is large short interest on most of the stocks and index inclusion could set off a round of short covering and could drive the stocks higher.

Hang Seng Indexes will announce the results of the December 2021 review of the Hang Seng Family of Indexes on 19 November. The constituent changes will be effective after the close of trading on 3 December.The review period for the December rebalance ended on 30 September and stocks that have at least 3 month of trading history by the review meeting date are eligible for inclusion in the Hong Kong Hang Seng Index (HSI INDEX).With Hang Seng Indexes looking to get up to 80 Hong Kong Hang Seng Index (HSI INDEX) members by mid-2022, there could be 20 inclusions over the next 3 index rebalances.As of the close on 3 November, index turnover is 1.3% from capping and other changes to the current index constituents. That gives the index committee a lot of room to add some big stocks to the index without increasing the turnover to levels seen at the last two rebalances in June and September.We identify 12 stocks that could be added to the index based on market coverage and the impact of recent regulatory changes. Of the 12 stocks, 8 are higher probability changes and 4 are lower probability.All 12 inclusions will result in a one-way turnover of 6.37% while the inclusion of the 8 high probability changes will result in a one-way turnover of 4.98%.There is large short interest on most of the stocks and index inclusion could set off a round of short covering and could drive the stocks higher.

Hang Seng Index Rebalance Preview: The Road to 80 Constituents

HK/China Healthcare Analyst (ex-Fosun Pharma)

Xinyao (Criss) Wang

Thematic (Sector/Industry)

Industry viewpoints:<ul>
<li>Drug development and commercialization are two different logics, such as CAR-T therapy.</li>
<li>The domestic vaccine industry has entered a new stage of development, and innovation is one way out.</li>
<li>Currently, there is a big gap between China autoimmune drug market and overseas market.</li>
</ul>Company news:News about the updated progress on new drugs of <a href="https://www.smartkarma.com/entities/innovent-biologics-inc" target="_blank" data-smartkarma-citation="entities:27452:1" rel="noopener">Innovent Biologics Inc (1801 HK)</a>, <a href="https://www.smartkarma.com/entities/i-mab" target="_blank" data-smartkarma-citation="entities:28384:1" rel="noopener">I-Mab (IMAB US) </a>and <a href="https://www.smartkarma.com/entities/lepu-biopharma-co-ltd" target="_blank" data-smartkarma-citation="entities:33231:1" rel="noopener">Lepu Biopharma (LBP HK)</a>.Market review: Last week, stock price for healthcare sector in A share decreased 1.52%, while CSI 300 decreased 1.03% over the same period of time.Risk disclosure:Policy risk, R&amp;D risk, Company risk and COVID-19 risk.

Industry viewpoints:
Drug development and commercialization are two different logics, such as CAR-T therapy.
The domestic vaccine industry has entered a new stage of development, and innovation is one way out.
Currently, there is a big gap between China autoimmune drug market and overseas market.
Company news:News about the updated progress on new drugs of Innovent Biologics Inc (1801 HK), I-Mab (IMAB US) and Lepu Biopharma (LBP HK).Market review: Last week, stock price for healthcare sector in A share decreased 1.52%, while CSI 300 decreased 1.03% over the same period of time.Risk disclosure:Policy risk, R&amp;D risk, Company risk and COVID-19 risk.

China Healthcare Weekly(Oct.29)-Logic of CAR-T,New Stage For Vaccine Industry,Autoimmune Drug Market

Industry viewpoints:<ul>
<li>Last week, seven provinces jointly decided to carry out centralized procurement of pacemakers.</li>
<li>The General Office of the State Council issued a document about the reform of the salary system in public hospitals.</li>
<li>In fact, for many companies in China, there is still a lack of “M&amp;A culture”.</li>
</ul>Company news: News about the updated progress on new drugs of <a href="https://www.smartkarma.com/entities/beigene-ltd" target="_blank" data-smartkarma-citation="entities:27352:1" rel="noopener">BeiGene Ltd (6160 HK)</a>, <a href="https://www.smartkarma.com/entities/innovent-biologics-inc" target="_blank" data-smartkarma-citation="entities:27452:1" rel="noopener">Innovent Biologics Inc (1801 HK)</a> and <a href="https://www.smartkarma.com/entities/innocare-pharma-ltd" target="_blank" data-smartkarma-citation="entities:28355:1" rel="noopener">InnoCare Pharma Ltd (9969 HK)</a>.Market review:Last week, stock price for healthcare sector in A share decreased 1.33%, while CSI 300 increased 0.56% over the same period of time.Risk disclosure:Policy risk, R&amp;D risk, Company risk and COVID-19 risk.

Industry viewpoints:
Last week, seven provinces jointly decided to carry out centralized procurement of pacemakers.
The General Office of the State Council issued a document about the reform of the salary system in public hospitals.
In fact, for many companies in China, there is still a lack of “M&amp;A culture”.
Company news: News about the updated progress on new drugs of BeiGene Ltd (6160 HK), Innovent Biologics Inc (1801 HK) and InnoCare Pharma Ltd (9969 HK).Market review:Last week, stock price for healthcare sector in A share decreased 1.33%, while CSI 300 increased 0.56% over the same period of time.Risk disclosure:Policy risk, R&amp;D risk, Company risk and COVID-19 risk.

China Healthcare Weekly (Oct.22) - VBP On Pacemakers, Salary System Reform, Lack of M&A Culture

Equity Capital Markets

Beijing Mabworks Biotech / Equity Capital Markets

On July 18, 2021, <a href="https://www.smartkarma.com/entities/beijing-mabworks-biotech-company-limited" target="_blank" data-smartkarma-citation="entities:33816:1" rel="noopener">Beijing Mabworks Biotech (MWB HK) </a>formally submitted its application to the HKEX for listing on the main board. It should be noted that Mabworks's application for listing on the SSE STAR Market was accepted in September last year, but the Company voluntarily withdrew its application in March this year. Mabworks is a clinical-stage biopharmaceutical company in China focusing on the discovery and development of differentiated antibody drugs. This insight mainly analyzed the clinical-stage drug candidates and related concerns of the Company.

On July 18, 2021, Beijing Mabworks Biotech (MWB HK) formally submitted its application to the HKEX for listing on the main board. It should be noted that Mabworks's application for listing on the SSE STAR Market was accepted in September last year, but the Company voluntarily withdrew its application in March this year. Mabworks is a clinical-stage biopharmaceutical company in China focusing on the discovery and development of differentiated antibody drugs. This insight mainly analyzed the clinical-stage drug candidates and related concerns of the Company.

Pre-IPO Beijing Mabworks Biotech - MIL62 Alone Cannot Save the Situation

Industry viewpoints:
<ul>
<li>VBP on recombinant human growth hormone</li>
<li>The differentiation of business models between big pharma/biopharma and biotech companies</li>
<li>A view on the development prospects of innovative drugs in China </li>
</ul>
Company news:
News about the updated progress on new drugs of <a href="https://www.smartkarma.com/entities/hansoh-pharmaceutical-group" target="_blank" data-smartkarma-citation="entities:23675:1" rel="noopener">Hansoh Pharmaceutical (3692 HK)</a>, <a href="https://www.smartkarma.com/entities/akeso-biopharma-inc" target="_blank" data-smartkarma-citation="entities:28830:1" rel="noopener">Akeso Biopharma Inc (9926 HK)</a> and <a href="https://www.smartkarma.com/entities/luye-pharma-group-ltd" target="_blank" data-smartkarma-citation="entities:488:1" rel="noopener">Luye Pharma (2186 HK)</a>.
Market review:
Last week, stock price for healthcare sector in A share decreased 1.98%, while CSI 300 increased 0.04% over the same period of time.
Risk disclosure:
Policy risk, R&amp;D risk, Company risk and COVID-19 risk.

Industry viewpoints:

VBP on recombinant human growth hormone
The differentiation of business models between big pharma/biopharma and biotech companies
A view on the development prospects of innovative drugs in China 

Company news:
News about the updated progress on new drugs of Hansoh Pharmaceutical (3692 HK), Akeso Biopharma Inc (9926 HK) and Luye Pharma (2186 HK).
Market review:
Last week, stock price for healthcare sector in A share decreased 1.98%, while CSI 300 increased 0.04% over the same period of time.
Risk disclosure:
Policy risk, R&amp;D risk, Company risk and COVID-19 risk.

China Healthcare Weekly (Oct15)-Growth Hormone VBP, Biotech's Business Model,Innovative Drug Outlook

China

Innovent Biologics, Inc. operates as a biopharmaceutical company. The Company develops, manufactures, and distributes monoclonal antibody drug candidates for the treatment of oncology, ophthalmology, autoimmune, cardiovascular, and other diseases. Innovent Biologics serves customers in China.

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Innovent Biologics Inc (1801 HK)

Hang Seng Index Rebalance Preview: The Road to 80 Constituents

The HSI has 60 members and the target is to reach 80 constituents over the next 3 rebalances. There could be a lot of stocks added at the Dec rebal...

Brian Freitas

China Healthcare Weekly(Oct.29)-Logic of CAR-T,New Stage For Vaccine Industry,Autoimmune Drug Market

The insight analyzed the different logics of drug development and commercialization for CAR-T, a new stage of development for domestic vaccine...

Xinyao (Criss) Wang

China Healthcare Weekly (Oct.22) - VBP On Pacemakers, Salary System Reform, Lack of M&A Culture

The article mainly analyzed the centralized procurement of pacemakers,a document of the salary system reform in public hospitals, and the lack of...

Xinyao (Criss) Wang

Pre-IPO Beijing Mabworks Biotech - MIL62 Alone Cannot Save the Situation

This article mainly analyzed Mabworks Biotech in terms of the important clinical-stage drug candidates (MIL62, MIL93, MBS301, MIL97, MIL95, MIL86,...

Xinyao (Criss) Wang

China Healthcare Weekly (Oct15)-Growth Hormone VBP, Biotech's Business Model,Innovative Drug Outlook

The article analyzed the VBP on recombinant human growth hormone, the difference in business model of big pharma/biopharma and biotech, and the...

Xinyao (Criss) Wang

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)