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

Brilliance China Automotive / Event-Driven

<ul>
<li>
<a href="https://www.smartkarma.com/entities/brilliance-china-automotive" target="_blank" data-smartkarma-citation="entities:469:1" rel="noopener">Brilliance China Automotive (1114 HK)</a> is up 220% on a total return basis since we first published our insight in August 2023.</li>
<li>The company paid a special dividend in April this year and will pay a large special dividend of HK$4.3/share going ex-div on 3 July.</li>
<li>The resultant drop in market cap will result in deletion of the stock from large global passive portfolios at the close on 3 July.</li>
</ul>



Brilliance China Automotive (1114 HK) is up 220% on a total return basis since we first published our insight in August 2023.
The company paid a special dividend in April this year and will pay a large special dividend of HK$4.3/share going ex-div on 3 July.
The resultant drop in market cap will result in deletion of the stock from large global passive portfolios at the close on 3 July.


Brilliance China (1114 HK): Reversing Out of Passive Portfolios

Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

Equity Bottom-Up

Brilliance China Automotive / Equity Bottom-Up

<ul>
<li>With the Hang Seng Index dipping below the 15,000 mark earlier this week, it's time to dust off some old school perspective.</li>
<li>This insight looks at Benjamin Graham's Net Nets, (current assets less current liabilities), then subtract any debt not included in current liabilities. More simply, current assets less total liabilities.</li>
<li>Graham would conclude these stocks are priced for liquidation.  Stocks discussed include <a href="https://www.smartkarma.com/entities/brilliance-china-automotive" target="_blank" data-smartkarma-citation="entities:469:1" rel="noopener">Brilliance China (1114 HK)</a>, <a href="https://www.smartkarma.com/entities/ming-yuan-cloud-group" target="_blank" data-smartkarma-citation="entities:29268:1" rel="noopener">Ming Yuan (909 HK)</a>, <a href="https://www.smartkarma.com/entities/yidu-tech-inc" target="_blank" data-smartkarma-citation="entities:29245:1" rel="noopener">Yidu Tech (2158 HK)</a>, and <a href="https://www.smartkarma.com/entities/a-living-smart-city-services-c" target="_blank" data-smartkarma-citation="entities:26728:1" rel="noopener">A-Living Smart City (3319 HK)</a>.</li>
</ul>


With the Hang Seng Index dipping below the 15,000 mark earlier this week, it's time to dust off some old school perspective.
This insight looks at Benjamin Graham's Net Nets, (current assets less current liabilities), then subtract any debt not included in current liabilities. More simply, current assets less total liabilities.
Graham would conclude these stocks are priced for liquidation.  Stocks discussed include Brilliance China (1114 HK), Ming Yuan (909 HK), Yidu Tech (2158 HK), and A-Living Smart City (3319 HK).


More Hong Kong Stocks Priced For Liquidation

Global Mobility/Transport, Equity Long-Short

Mohshin Aziz

<ul>
<li>Business is struggling due to legacy luxury brands such as BMW losing its positioning in China. Local brands are eating into market share fast. </li>
<li>Thankfully, the company is cash rich and its trading nature enables steady supply of dividends and have been known to pay special dividends.  </li>
<li>Share price has been under pressure, now trading at ~15% dividend yield based on 50% payout,  appealing to yield seekers. </li>
</ul>


Business is struggling due to legacy luxury brands such as BMW losing its positioning in China. Local brands are eating into market share fast. 
Thankfully, the company is cash rich and its trading nature enables steady supply of dividends and have been known to pay special dividends.  
Share price has been under pressure, now trading at ~15% dividend yield based on 50% payout,  appealing to yield seekers. 


Brilliance China Automotive (1114 HK, NEUTRAL, TP:HKD3.90): Go for the >15% Dividend Yields

<ul>
<li>
<a href="https://www.smartkarma.com/entities/brilliance-china-automotive" target="_blank" data-smartkarma-citation="entities:469:1" rel="noopener">Brilliance China Automotive (1114 HK)</a> was deleted from local and global indices following its prolonged trading suspension from April 2021 to September 2022.</li>
<li>Following the resumption of trading, <a href="https://www.smartkarma.com/entities/brilliance-china-automotive" target="_blank" data-smartkarma-citation="entities:469:1" rel="noopener">Brilliance China Automotive (1114 HK)</a> was added to the HSCI in March and subsequently to Southbound Stock Connect.</li>
<li>The stock should be bought by global passive trackers over the next few months and there should be substantial passive inflows.</li>
</ul>



Brilliance China Automotive (1114 HK) was deleted from local and global indices following its prolonged trading suspension from April 2021 to September 2022.
Following the resumption of trading, Brilliance China Automotive (1114 HK) was added to the HSCI in March and subsequently to Southbound Stock Connect.
The stock should be bought by global passive trackers over the next few months and there should be substantial passive inflows.


Brilliance China (1114 HK): Driving Back Into Passive Portfolios

China Specialist, Auto and Industrial Specialist

Victoria Li

<ul>
<li>HK$0.96 per share special dividend announced last Friday disappointed the market. </li>
<li>The dividend implies only 20% of the cash on the balance sheet paid out in dividends</li>
<li>We think there could be 1-2 more special dividends in 2023E given lack of obvious uses for the cash balance</li>
</ul>


HK$0.96 per share special dividend announced last Friday disappointed the market. 
The dividend implies only 20% of the cash on the balance sheet paid out in dividends
We think there could be 1-2 more special dividends in 2023E given lack of obvious uses for the cash balance


Brilliance China: Special Dividend Amount Disappoints, but More Could Be on the Way

Hong Kong

Brilliance China Automotive Holdings Limited, through its subsidiaries, manufactures and distributes minibuses and sedans in the People's Republic of China.  The Company also manufactures and trades automotive components.

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Brilliance China Automotive (1114 HK)

Brilliance China (1114 HK): Reversing Out of Passive Portfolios

Brilliance China is up 220% in total return terms over the last year. The large special div next week will result in a huge drop in market cap....

Brian Freitas

More Hong Kong Stocks Priced For Liquidation

This note looks at Net Nets, (current assets less current liabilities), then subtract debt not included in current liabilities. Benjamin Graham...

David Blennerhassett