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

Brian Freitas

Pan-Asia Index Rebalances/ Events/ Delta One

Event-Driven

Beijing Kingsoft Office Softwa / Event-Driven

<p>The <a href="https://www.smartkarma.com/entities/shanghai-shenzhen-csi-300-index" target="_blank" data-smartkarma-citation="entities:22906:1" rel="noopener">Shanghai Shenzhen CSI 300 Index (SHSZ300 INDEX)</a> consists of stocks from the Shanghai Stock Exchange and the Shenzhen Stock Exchange and is one of the most widely tracked A-share indices with passive tracking products listed in multiple markets globally. There are CFFEX listed futures that trade actively as well.</p><p>China Securities Index Co (CSI) will announce the changes end May/beginning June and the changes will be effective after the close of trading on 11 June.</p><p>There were 21 changes to the index at the June 2020 review and 26 changes at the December 2020 review. We expect 30 changes at the upcoming June 2021 index review - this is the maximum number of changes that are permitted at a single review. Estimated one-way turnover is 4.56%.</p><p>With passive tracking products holding around US$32bn of AUM, plus another US$53bn in open interest on the listed futures, plus active managers benchmarked to the <a href="https://www.smartkarma.com/entities/shanghai-shenzhen-csi-300-index" target="_blank" data-smartkarma-citation="entities:22906:1" rel="noopener">Shanghai Shenzhen CSI 300 Index (SHSZ300 INDEX)</a>, there could be significant moves in the inclusion/exclusion names from now to the end of the review period. There will only be 9-10 trading days between the announcement of the changes and the implementation, so having a pre-position should pay off. There should not be too many changes in the possible list of inclusions and exclusions due to the averaging process over the last year of trading.</p>

The Shanghai Shenzhen CSI 300 Index (SHSZ300 INDEX) consists of stocks from the Shanghai Stock Exchange and the Shenzhen Stock Exchange and is one of the most widely tracked A-share indices with passive tracking products listed in multiple markets globally. There are CFFEX listed futures that trade actively as well.China Securities Index Co (CSI) will announce the changes end May/beginning June and the changes will be effective after the close of trading on 11 June.There were 21 changes to the index at the June 2020 review and 26 changes at the December 2020 review. We expect 30 changes at the upcoming June 2021 index review - this is the maximum number of changes that are permitted at a single review. Estimated one-way turnover is 4.56%.With passive tracking products holding around US$32bn of AUM, plus another US$53bn in open interest on the listed futures, plus active managers benchmarked to the Shanghai Shenzhen CSI 300 Index (SHSZ300 INDEX), there could be significant moves in the inclusion/exclusion names from now to the end of the review period. There will only be 9-10 trading days between the announcement of the changes and the implementation, so having a pre-position should pay off. There should not be too many changes in the possible list of inclusions and exclusions due to the averaging process over the last year of trading.

CSI300 Index Rebalance Preview: Maxing Out the Number of Changes

HK/China Healthcare Analyst (ex-Fosun Pharma)

Xinyao (Criss) Wang

Equity Bottom-Up

Bloomage Biotechnology  Lt / Equity Bottom-Up

<p>In January, 2021, National Health Commission has approved hyaluronic acid as a new food ingredient, which could be used in common foods. This marks the further opening of China's hyaluronic acid food market and the new development milestone of China's hyaluronic acid industry. <a href="https://www.smartkarma.com/entities/bloomage-biotechnology-corporation-a" target="_blank" data-smartkarma-citation="entities:30390:1" rel="noopener">Bloomage Biotechnology Corporation-A (688363 CH)</a> is the global leader in the raw materials of hyaluronic acid, and it has broken through the whole industrial chain from the upstream hyaluronic acid raw materials to the downstream of the medical beauty, functional skin care and functional food. Besides, because of the new regulation, the Company's food grade raw materials business and functional food products are expected to shift from export to domestic sales, further opening the Company's growth space. It is expected that Bloomage’s future growth would be promising.</p>

In January, 2021, National Health Commission has approved hyaluronic acid as a new food ingredient, which could be used in common foods. This marks the further opening of China's hyaluronic acid food market and the new development milestone of China's hyaluronic acid industry. Bloomage Biotechnology Corporation-A (688363 CH) is the global leader in the raw materials of hyaluronic acid, and it has broken through the whole industrial chain from the upstream hyaluronic acid raw materials to the downstream of the medical beauty, functional skin care and functional food. Besides, because of the new regulation, the Company's food grade raw materials business and functional food products are expected to shift from export to domestic sales, further opening the Company's growth space. It is expected that Bloomage’s future growth would be promising.

Bloomage Biotechnology (688363.CH) - Accelerated Growth with the Approval of New Regulation

Thematic (Sector/Industry)

<p>With the development of the times, people have a higher standard for their own image. More and more young people seek to improve their appearance, so as to gain certain advantages in social contact, life, job hunting and work. Such trend is stimulating consumer demand for beauty. Under this background, it directly promotes the rapid growth of the medical beauty industry in China.</p>

With the development of the times, people have a higher standard for their own image. More and more young people seek to improve their appearance, so as to gain certain advantages in social contact, life, job hunting and work. Such trend is stimulating consumer demand for beauty. Under this background, it directly promotes the rapid growth of the medical beauty industry in China.

Industry Report - Insights on China Medical Beauty Industry

Equity Capital Markets

Raily Aesthetic Medicine International Holdings Limited / Equity Capital Markets

Raily Aesthetic Medicine International Holdings Limited

<p>On December 15<sup>th</sup>, <a href="https://www.smartkarma.com/entities/raily-aesthetic-medicine-international-holdings-limited" target="_blank" data-smartkarma-citation="entities:31100:1" rel="noopener">Raily Aesthetic Medicine (2135 HK)</a> began to raise capital by floating shares. The Company planned to issue 342.5 million shares at an issue price of HK$0.3-0.4 per share, with a corresponding market value of HK$617 million - HK$822 million. Raily is expected to go public on December 28<sup>th</sup>. Whether the Company could develop smoothly after going public is worth the attention of the capital market. </p>

On December 15th, Raily Aesthetic Medicine (2135 HK) began to raise capital by floating shares. The Company planned to issue 342.5 million shares at an issue price of HK$0.3-0.4 per share, with a corresponding market value of HK$617 million - HK$822 million. Raily is expected to go public on December 28th. Whether the Company could develop smoothly after going public is worth the attention of the capital market. 

Pre-IPO Raily Aesthetic Medicine (2135.HK) - Here Are the Concerns

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.

Yatsen Holding Ltd / Equity Capital Markets

<div><p>Yatsen Holding raised around US$617m in its US IPO. The company is backed by Hillhouse, Tencent and Tiger Global. </p></div><div><p>I have covered various aspects of the deal in my earlier notes, links to which are below:</p></div><div><ul><li><a href="https://www.smartkarma.com/insights/yatsen-pre-ipo-growing-fast-but-slowing-down" target="_blank" rel="noopener">Yatsen Pre-IPO - Growing Fast but Slowing Down</a></li></ul></div><ul><li><a href="https://www.smartkarma.com/insights/yatsen-ipo-pricey-but-it-comes-with-strong-investor-backing" target="_blank" rel="noopener">Yatsen IPO - Pricey but It Comes with Strong Investor Backing</a></li></ul><p>In this insight, talk about deal dynamics and provide a table with implied valuation at different ADS levels.</p>

Yatsen Holding raised around US$617m in its US IPO. The company is backed by Hillhouse, Tencent and Tiger Global. I have covered various aspects of the deal in my earlier notes, links to which are below:Yatsen Pre-IPO - Growing Fast but Slowing DownYatsen IPO - Pricey but It Comes with Strong Investor BackingIn this insight, talk about deal dynamics and provide a table with implied valuation at different ADS levels.

Yatsen IPO Trading - A Little More Pricey Now

China

Bloomage Biotechnology Corporation Limited develops and manufactures medical products. The Company produces fillers, mesotherapy products, bio reactive hyaluronic acids, repair soothing skin care products, and other products. Bloomage Biotechnology supplies its products in medicine, cosmetics, food manufacturing companies, medical institutions, and other fields.

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Bloomage Biotechnology Lt (688363 CH)

CSI300 Index Rebalance Preview: Maxing Out the Number of Changes

We see 30 potential inclusions/exclusions to the CSI300 index at the June review that will become effective COB 11 June. With a lot of benchmarked...

Brian Freitas

Bloomage Biotechnology (688363.CH) - Accelerated Growth with the Approval of New Regulation

The article analyzed Bloomage in terms of major business (raw material, medical products, functional skin care and functional food after the new...

Xinyao (Criss) Wang

Industry Report - Insights on China Medical Beauty Industry

The article analyzed China medical beauty industry in terms of market potential,non-surgical medical beauty items, the industry chain/pain...

Xinyao (Criss) Wang

Pre-IPO Raily Aesthetic Medicine (2135.HK) - Here Are the Concerns

The article analyzed the major concerns of Raily Aesthetic Medicine in terms of financial position, high-quality talents, domestic regulations and...

Xinyao (Criss) Wang

Yatsen IPO Trading - A Little More Pricey Now

Yatsen Holding raised around US$617m in its US IPO, by pricing its IPO at the top-end of its range. The company is backed by Hillhouse, Tencent and...

Sumeet Singh

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