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>There are currently 76 index constituents and we can (maybe? finally! hopefully 🤞) get to 80 members in March before commencing the next leg up to 100 index constituents.</li>
<li>We list 10 potential inclusions to the index in March. Adding all 10 stocks will lead to over 6% one-way turnover, so there will be fewer inclusions.</li>
<li>All stocks will have over 1 day of ADV to buy from passive trackers. Some stocks have short interest of over 7% of float.</li>
</ul>


There are currently 76 index constituents and we can (maybe? finally! hopefully 🤞) get to 80 members in March before commencing the next leg up to 100 index constituents.
We list 10 potential inclusions to the index in March. Adding all 10 stocks will lead to over 6% one-way turnover, so there will be fewer inclusions.
All stocks will have over 1 day of ADV to buy from passive trackers. Some stocks have short interest of over 7% of float.


HSI Index Rebalance Preview: Better Late Than Never?

HK/China Healthcare Analyst (ex-Fosun Pharma)

Xinyao (Criss) Wang

Thematic (Sector/Industry)

<ul>
<li>The rebounds in healthcare sector is more due to oversold. Unfriendly macro environment could make stock price fluctuate largely.Investors would find better places to long than the current valuation level.</li>
<li>The new document about payment management measures for new technology out of CHS-DRG payment scope is an important “policy correction” signal, but there are still problems remain to be solved.</li>
<li>We analyzed our top picks and investment logic in CXO, pharmaceuticals and medical device industry. Overall, as a “defensive sector”, China healthcare has investment value in such complicated external environment.</li>
</ul>


The rebounds in healthcare sector is more due to oversold. Unfriendly macro environment could make stock price fluctuate largely.Investors would find better places to long than the current valuation level.
The new document about payment management measures for new technology out of CHS-DRG payment scope is an important “policy correction” signal, but there are still problems remain to be solved.
We analyzed our top picks and investment logic in CXO, pharmaceuticals and medical device industry. Overall, as a “defensive sector”, China healthcare has investment value in such complicated external environment.


2022H2 China Healthcare Investment Strategy and Top Picks

Equity Bottom-Up

Innovent Biologics Inc / Equity Bottom-Up

<ul>
<li>The biggest characteristic 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> is its strong ability of resources integration. Besides, when it comes to execution, clinical efficiency and R&amp;D productivity, Innovent deserves credit.</li>
<li>If having 10 big commercialized drugs are the threshold for becoming a biopharma, Innovent's upgrade from biotech to biopharma is almost complete. </li>
<li>Innovent has enough cash flow over the next few years to support development, and may even turn losses into profits. So, we think that Innovent could get through “this winter”. </li>
</ul>


The biggest characteristic of Innovent Biologics Inc (1801 HK) is its strong ability of resources integration. Besides, when it comes to execution, clinical efficiency and R&amp;D productivity, Innovent deserves credit.
If having 10 big commercialized drugs are the threshold for becoming a biopharma, Innovent's upgrade from biotech to biopharma is almost complete. 
Innovent has enough cash flow over the next few years to support development, and may even turn losses into profits. So, we think that Innovent could get through “this winter”. 


Innovent Biologics Inc (1801.HK) - Capable of Surviving “this Winter”

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.

<ul>
<li>On 2nd Dec 2021, Securities Exchange Commission (SEC) issued Final amendments to implement the Holding Foreign Companies Accountable Act (HFCAA).</li>
<li>On 24th Mar 2021, SEC had issued Amendments, Seeks Public Comment on HFCAA. This was a follow up on the HFCAA.</li>
<li>In this note, we'll talk about the final amendments and its possible timelines and implications, and a possible trade setup.</li>
</ul>


On 2nd Dec 2021, Securities Exchange Commission (SEC) issued Final amendments to implement the Holding Foreign Companies Accountable Act (HFCAA).
On 24th Mar 2021, SEC had issued Amendments, Seeks Public Comment on HFCAA. This was a follow up on the HFCAA.
In this note, we'll talk about the final amendments and its possible timelines and implications, and a possible trade setup.


China ADRs Delisting - US Tightens and HK Loosens Requirements - Long/Short Basket Trade

<ul>
<li>Legend Biotech received takeover interest and hired Centerview Partners to review the offer. Due to the satisfactory clinical results/promising commercialization outlook of Carvykti, Legend Bio is an attractive M&amp;A candidate.</li>
<li>Peak sales of Carvykti could exceed US$5 billion. After Carvykti is approved by the FDA/EC for 2L treatment of MM, future valuation leap of legend Bio is becoming more certain.</li>
<li>Legend Bio is clearly undervalued. We think reasonable market value range for Legend Bio is about US$12.5 – 15 billion, which means there is decent upward potential for share price.</li>
</ul>


Legend Biotech received takeover interest and hired Centerview Partners to review the offer. Due to the satisfactory clinical results/promising commercialization outlook of Carvykti, Legend Bio is an attractive M&amp;A candidate.
Peak sales of Carvykti could exceed US$5 billion. After Carvykti is approved by the FDA/EC for 2L treatment of MM, future valuation leap of legend Bio is becoming more certain.
Legend Bio is clearly undervalued. We think reasonable market value range for Legend Bio is about US$12.5 – 15 billion, which means there is decent upward potential for share price.


Legend Biotech (LEGN US) - A Takeover Offer?

China

Chongqing Zhifei Biological Products Company Ltd. researches, manufactures, and sells vaccines and biological products including prevention products, blood products, diagnostic reagents, and therapeutic agents.

Chongqing Zhifei Biological Products (300122 CH)

Beijing Tiantan Biological Products Corporation Limited researches, develops, and commercializes biological products.  The Company provides treatment for hepatitis and offers a line of vaccine products including hepatitis vaccines and rubella vaccines.

Beijing Tiantan Biological Products (600161 CH)

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.

Hualan Biological Engineering Inc. produces and markets human serum albumin (HSA), gamma globulin, frozen prothrombin (PCC), and other related biological products.

Hualan Biological Engineering (002007 CH)

Walvax Biotechnology Company Limited develops, manufactures and sells bio-pharmaceutical vaccination products.  The Company's products include haemophilus influenzae type b conjugate vaccine and meningococcal group A,C bivalent polysaccharide conjugate vaccine.

Jiangxi Boya Bio-Pharmaceutical company Limited develops, produces and sells blood product. The Company's main products include human serum albumin, intravenous immunoglobulin (static C) and fibrinogen.

Jiangxi Boya Bio Pharmaceutical (300294 CH)

Shenzhen Kangtai Biological Products Co., Ltd. operates biological product manufacturing businesses. The Company produces biological vaccines and other vaccine products. Shenzhen Kangtai Biological Products conducts businesses in China.

Shenzhen Kangtai Biological Pr (300601 CH)

3SBio, Inc. is a biotechnology company located in China. The Company focuses on mammalian cell-based biopharmaceuticals in the biotechnology industry. 3SBio also develops, manufactures and markets biopharmaceutical products globally.

Zai Lab Limited operates as a bio-pharmaceutical company. The Company researches and develops therapeutic technology for antibody-based oncology, autoimmune, and infectious diseases treatments. Zai Lab also manufactures drugs in the form of capsules, injections, and liquids. Zai Lab serves patients worldwide.

BGI Genomics Co., Ltd offers researching and testing services. The Company provides deoxyribonucleic acid sequencing, food science, health care researching, cancer prevention, drug discovery, and DNA sequencing. BGI Genomics offers services to medical and scientific research institutions worldwide.

BioMarin Pharmaceutical Inc. develops and commercializes therapeutic enzyme products.  The Company has applied its proprietary enzyme technology to develop products for lysosomal storage diseases and for the treatment of serious burns. BioMarin's subsidiary provides analytical and diagnostic products and services in the area of carbohydrate biology.

Insmed, Inc. is a biopharmaceutical company focused on developing and commercializing novel, targeted inhaled therapies for patients with high unmet need battling serious orphan lung diseases.

United Therapeutics Corporation develops pharmaceuticals to treat vascular diseases such as pulmonary hypertension and peripheral vascular disease.  The Company's lead products are stable synthetic forms of prostacyclin and are delivered orally or subcutaneously.

Natera, Inc. operates as a diagnostics company. The Company provides preconception and prenatal genetic testing services. Natera also offers pre-implantation genetic diagnosis, aneuploidy screening, translocation, and single gene testing services.

Neurocrine Biosciences, Inc. is focused on the discovery and development of therapeutics for neuropsychiatric, neuroinflammatory, and neurodegenerative diseases and disorders.  The Company is developing therapeutic interventions for anxiety, depression, Alzheimer's disease, insomnia, stroke, malignant brain tumors, multiple sclerosis, obesity, and diabetes.

Alteogen Inc. is a pharmaceutical research company.  The Company researches and develops bio-medicines such as bio-better and bio-similar.

Sarepta Therapeutics, Inc. is a biopharmaceutical company focused on the discovery and development of unique RNA-based therapeutics for the treatment of both rare and infectious diseases. The Company offers its products to the medical industry in countries around the world.

Incyte Corp is a biopharmaceutical company. The Company discovers, develops and commercializes proprietary small molecule drugs, primarily used in oncology.

Genmab A/S operates as a biotechnology company. The Company creates and develops human antibody products for the treatment of life threatening and debilitating diseases. Genmab focuses on products to treat cancer, rheumatoid arthritis and other inflammatory conditions, and psoriasis. The Company develops new products through partnerships. Genmab operates in Europe and the United States.

Genmab A/S operates as a biotechnology company. The Company specializes in development of antibody therapeutics for the treatment of cancer. Genmab serves customers worldwide.

BeiGene, Ltd. operates as a commercial stage biopharmaceutical company. The Company focuses on discovery, development, and commercialization of molecularly targeted and immuno-oncology drugs for the treatment of cancer. BeiGene serves patients worldwide.

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BeiGene (6160 HK)

HSI Index Rebalance Preview: Better Late Than Never?

Adding 4 stocks gets us to 80 members - a target that was to be reached by mid-2022. We list 10 potential adds where passive trackers will need to...

Brian Freitas

2022H2 China Healthcare Investment Strategy and Top Picks

We analyze the investment strategy,top picks and logic in CXO,pharmaceuticals and medical device industry.As a “defensive sector”,China healthcare...

Xinyao (Criss) Wang

Innovent Biologics Inc (1801.HK) - Capable of Surviving “this Winter”

After continuous pullback, investors may lose interest in Innovent. However, it still has investment value based on pipeline, resources, R&D and...

Xinyao (Criss) Wang

China ADRs Delisting - US Tightens and HK Loosens Requirements - Long/Short Basket Trade

On 2nd Dec 2021, SEC issued Final amendments to implement the Holding Foreign Companies Accountable Act. In this note we will talk about the final...

Sumeet Singh

Legend Biotech (LEGN US) - A Takeover Offer?

Legend Bio is an attractive M&A target with promising Carvykti outlook. Peak sales could reach over $5 billion. Legend Bio is currently...

Xinyao (Criss) Wang

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

HSI Index Rebalance Preview: Better Late Than Never?

Adding 4 stocks gets us to 80 members - a target that was to be reached by mid-2022. We list 10 potential adds where passive trackers will need to...

Brian Freitas

2022H2 China Healthcare Investment Strategy and Top Picks

We analyze the investment strategy,top picks and logic in CXO,pharmaceuticals and medical device industry.As a “defensive sector”,China healthcare...

Xinyao (Criss) Wang

Innovent Biologics Inc (1801.HK) - Capable of Surviving “this Winter”

After continuous pullback, investors may lose interest in Innovent. However, it still has investment value based on pipeline, resources, R&D and...

Xinyao (Criss) Wang

China ADRs Delisting - US Tightens and HK Loosens Requirements - Long/Short Basket Trade

On 2nd Dec 2021, SEC issued Final amendments to implement the Holding Foreign Companies Accountable Act. In this note we will talk about the final...

Sumeet Singh

Legend Biotech (LEGN US) - A Takeover Offer?

​Legend Bio is an attractive M&A target with promising Carvykti outlook. Peak sales could reach over $5 billion. Legend Bio is currently...

Xinyao (Criss) Wang

Legend Bio is an attractive M&A target with promising Carvykti outlook. Peak sales could reach over $5 billion. Legend Bio is currently...