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 review period for the September rebalance ends 31 July. We expect the changes to be announced 30 August with the implementation taking place after the close on 13 September.</li>
<li>We expect the index committee to continue using a 6-month minimum listing history resulting in two changes to the index.</li>
<li>One-Way turnover is estimated at 3.5% resulting in a one-way trade of CNY 4.5bn (US$618m). Passive trackers will need to trade 4-8x ADV on the index changes.</li>
</ul>


The review period for the September rebalance ends 31 July. We expect the changes to be announced 30 August with the implementation taking place after the close on 13 September.
We expect the index committee to continue using a 6-month minimum listing history resulting in two changes to the index.
One-Way turnover is estimated at 3.5% resulting in a one-way trade of CNY 4.5bn (US$618m). Passive trackers will need to trade 4-8x ADV on the index changes.


STAR50 Index Rebalance Preview: Two Changes & Over US$1.2bn to Trade

<ul>
<li>With the review period now complete, we forecast 50 changes (the maximum permitted) for the <a href="https://www.smartkarma.com/entities/csi-smallcap-500-index-shang" target="_blank" data-smartkarma-citation="entities:35347:1" rel="noopener">CSI Smallcap 500 Index - Shang (SH000905 INDEX)</a> at the close on 14 June.</li>
<li>We estimate a one-way turnover of 9.3% at the rebalance resulting in a one-way trade of CNY10.88bn (US$1.5bn). The Industrials and Information Technology sectors gain at the expense of Materials.</li>
<li>The potential adds have outperformed the potential deletes by 8% over the last 3 months. There could be further outperformance over the next few weeks.</li>
</ul>


With the review period now complete, we forecast 50 changes (the maximum permitted) for the CSI Smallcap 500 Index - Shang (SH000905 INDEX) at the close on 14 June.
We estimate a one-way turnover of 9.3% at the rebalance resulting in a one-way trade of CNY10.88bn (US$1.5bn). The Industrials and Information Technology sectors gain at the expense of Materials.
The potential adds have outperformed the potential deletes by 8% over the last 3 months. There could be further outperformance over the next few weeks.


CSI500 Index Rebalance Preview: Potential Adds Rally and Outperform the Potential Deletes

<ul>
<li>The review period for the June rebalance ends 30 April. We expect the changes to be announced 31 May with the implementation taking place after the close on 14 June.</li>
<li>We expect the index committee to continue using a 6-month minimum listing history resulting in three changes to the index.</li>
<li>With a big jump in tracking AUM over the last few months, passives will need to trade a lot of stock on implementation date.</li>
</ul>


The review period for the June rebalance ends 30 April. We expect the changes to be announced 31 May with the implementation taking place after the close on 14 June.
We expect the index committee to continue using a 6-month minimum listing history resulting in three changes to the index.
With a big jump in tracking AUM over the last few months, passives will need to trade a lot of stock on implementation date.


STAR50 Index Rebalance Preview: APT Medical Moving Higher

HK/China Healthcare Analyst (ex-Fosun Pharma)

Xinyao (Criss) Wang

Equity Bottom-Up

Shenzhen Mindray Bio-Medical Electronics / Equity Bottom-Up

<ul>
<li>Mindray’s 2023 growth just hit the low end of our forecast.The good story that “recovery of routine diagnosis/treatment after COVID-19 would drive the growth of MI/IVD businesses” doesn’t hold water.</li>
<li>Mindray may fail to get back to 20%+ revenue growth in 2024 based on current situation.The Company has to continue to “buy revenue” so as to reverse the declining trend.</li>
<li>The valuation of about 25-30 PE is reasonable for Mindray, not undervalued. If PE falls to the range of 20-25, we think it is a good place to go long.</li>
</ul>


Mindray’s 2023 growth just hit the low end of our forecast.The good story that “recovery of routine diagnosis/treatment after COVID-19 would drive the growth of MI/IVD businesses” doesn’t hold water.
Mindray may fail to get back to 20%+ revenue growth in 2024 based on current situation.The Company has to continue to “buy revenue” so as to reverse the declining trend.
The valuation of about 25-30 PE is reasonable for Mindray, not undervalued. If PE falls to the range of 20-25, we think it is a good place to go long.


Shenzhen Mindray Bio-Medical Electronics (300760.CH) - Time to Bring "New Growth Story" To Investors

Pan-Asia Index Flows & Special Situations, Quiddity Advisors

Janaghan Jeyakumar, CFA

Pan-Asia Index Flows & Special Situations

Quiddity Advisors

Pan-Asia Catalysts/Events

<ul>
<li>STAR 50 Index is a tech-focused, blue-chip index in Mainland China which tracks the top 50 largest and most liquid names in the STAR market of the Shanghai Stock Exchange.</li>
<li>Unlike the other popular Chinese indices (CSI, SSE, ChiNext, etc.) that rebalance semiannually, the STAR 50 index has a quarterly rebalance cycle and the next rebalance will be in September.</li>
<li>With the reference period for the September 2024 STAR 50 index rebal event coming to an end, we have presented our final expectations for ADDs and DELs in this insight.</li>
</ul>


STAR 50 Index is a tech-focused, blue-chip index in Mainland China which tracks the top 50 largest and most liquid names in the STAR market of the Shanghai Stock Exchange.
Unlike the other popular Chinese indices (CSI, SSE, ChiNext, etc.) that rebalance semiannually, the STAR 50 index has a quarterly rebalance cycle and the next rebalance will be in September.
With the reference period for the September 2024 STAR 50 index rebal event coming to an end, we have presented our final expectations for ADDs and DELs in this insight.


Quiddity Leaderboard STAR 50 Sep 24: Final Ranks; Some Question Marks over Ninebot Re-Inclusion

China

Jiangsu Yuyue Medical Equipment & Supply Co Ltd develops, manufactures and distributes  medical equipments.

Jiangsu Yuyue Medical Equipment & Supply A (002223 CH)

Jiangsu Yuyue Medical Equipment & Supply A

Lepu Medical Technology (Beijing) Co., Ltd. develops, produces and sells medical devices and parts.  The Company also offers medical devices consulting services.  The company's products include stent system and blockage system.

Andon Health Co., Ltd. develops, manufactures and sells medical electronic devices for home use.  The Company's products include blood pressure monitors, blood glucose monitors, and digital thermometers.

Shandong Weigao Group Medical Polymer Company Limited, through its subsidiaries, researches and develops, produces, and sells single-use aseptic polymer medical products.

Shandong Weigao Group Medical Polymer Co (1066 HK)

Shandong Pharmaceutical Glass Co., Ltd. manufactures and markets a variety of pharmaceutical glass products including molded vials, tube vials, ampoule, amber vials, infusion vials, and glass tubes.  The Company also manufactures paper packaging boxes and invests in petrochemical industry.

Shandong Pharmaceutical Glass Co., Ltd. A (600529 CH)

Shandong Pharmaceutical Glass Co., Ltd. A

Sinocare Inc. develops, manufactures, sells biosensor technology real-time detection products. The Company's main products include rapid trace blood glucose testers, and supporting blood glucose testing strips.

Shinva Medical Instrument Co., Ltd. manufactures and markets medical instruments and equipment.  The Company's products include sterilization equipment, radiation diagnosis and radiotherapy equipment, chemical indication products, and medical environmental protection equipment.

Guangzhou Wondfo Biotech Co.,Ltd. was founded in 1992. The company's line of business includes manufacturing of medical diagnostic tests.  Guangzhou Wondfo Biotech serves customers around the world.

Double Medical Technology Inc. operates as an orthopedic devices manufacturing company. The Company produces and sells physical therapy equipment, orthopedic surgical instruments, injection puncture, and other products. Double Medical Technology markets its products throughout China.

Microport Scientific Corp. manufactures interventional and minimally invasive devices for keyhole surgery. The Company's products are used to treat vascular diseases and is developing devices to treat diabetes and orthopedic diseases.

Merit Medical Systems, Inc. manufactures and markets products used in diagnostic and interventional cardiology and radiology procedures.  The Company's primary products include inflation devices, guide wires, thrombolytic catheters and fluid dispensing systems, and angiography accessories, among others.  Merit's products are sold worldwide.

Haemonetics Corporation designs, manufactures, and markets automated blood processing systems.  The Company's products are for use in surgical blood salvage, blood component collections, and plasma collections.  Haemonetics markets its products worldwide, primarily outside the United States.

Neogen Corporation develops and markets products and services dedicated to food and animal safety.  The Company's diagnostic products are used by food and animal producers to test for foodborne bacteria, food allergen, natural toxins, drug and chemical residues, plant diseases, and quality assurance.

ASAHI INTECC CO., LTD. manufactures medical tools as well as both medical and industrial-use stainless wire rope.  The Company's main products include catheters, guidewires, and miniature coils for endoscopic devices.

Integer Holdings Corporation operates as a medical device manufacturing company. The Company designs and develops medical devices and power solutions for the medical and non-medical markets. Integer Holdings serves patients worldwide.

Getinge AB develops, manufactures, and sells equipment and systems for sterilization and disinfection.  The Company markets to the pharmaceutical industry, hospitals, dental clinics, and laboratories.  Getinge produces in the United Kingdom, France, the United States, and Australia.  The products are sold by subsidiaries, sales offices, and distributors worldwide.

GN Store Nord A/S (GN Great Nordic) is the parent company to an international group of companies that manufactures and markets communication solutions.  The Company develops wireless technology and provides hand-free solutions, and products for the hearing impaired.  The Company also works with cable systems.

Inspire Medical Systems, Inc. operates as a medical technology company. The Company develops implantable neurostimulation systems to treat obstructive sleep apnea. Inspire Medical Systems operates in the the United States.

LivaNova PLC operates as a medical technology company. The Company focuses on neuromodulation, as well as cardiac surgery and rhythm management. LivaNova develops medical solutions for the treatment of cardiovascular diseases.

Integra LifeSciences Holdings Corp develops, manufactures, and markets medical devices, implants, and biomaterials. The Company's products are primarily used in the treatment of burns and skin defects, spinal and cranial disorders, orthopedics, and other surgical applications.

APT Medical Inc. engages in development, production and sales of electrophysiology and vascular interventional medical devices. The Company provides coronary artery access and electrophysiological medical devices, peripheral blood vessels and nerve intervention medical devices, and more. APT Medical markets its products worldwide.

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APT Medical (688617 CH)

STAR50 Index Rebalance Preview: Two Changes & Over US$1.2bn to Trade

With 90% of the review period complete, there should be 2 changes for the STAR50 in Sep. One-way turnover is 3.5% and the round-trip trade is over...

Brian Freitas

CSI500 Index Rebalance Preview: Potential Adds Rally and Outperform the Potential Deletes

There could be 50 changes for the CSI500 Index in June. The potential adds have outperformed the potential deletes by 8% over the last 3 months and...

Brian Freitas

STAR50 Index Rebalance Preview: APT Medical Moving Higher

The potential adds have outperformed the potential deletes by 13%+ since this Insight was published. If you are in, might be prudent to take some...

Brian Freitas

Shenzhen Mindray Bio-Medical Electronics (300760.CH) - Time to Bring "New Growth Story" To Investors

Mindray is currently facing the dilemma of sluggish growth. YoY revenue growth would further decrease to 15% in the future. Without "new growth...

Xinyao (Criss) Wang

Quiddity Leaderboard STAR 50 Sep 24: Final Ranks; Some Question Marks over Ninebot Re-Inclusion

One of our expected ADDs Ninebot was only recently deleted from the STAR 50 index and there are some question marks over the re-inclusion of this...

Janaghan Jeyakumar, CFA

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