Asia Pac IPO & Placement Research, China biotech, Aequitas Research

Ke Yan, CFA, FRM

Asia Pac IPO & Placement Research, China biotech

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.

Quantitative Analysis

<ul>
<li>We analyze the weekly Hong Kong Connect flows with our data engine for holding position as of November 17th.</li>
<li>The top stocks by inflows and outflows were tabulated for all market, HSCEI, mid cap and s/mid cap groups.</li>
<li>We highlight Hongkong connect flows for Meituan, Tencent and Xiaomi.</li>
</ul>


We analyze the weekly Hong Kong Connect flows with our data engine for holding position as of November 17th.
The top stocks by inflows and outflows were tabulated for all market, HSCEI, mid cap and s/mid cap groups.
We highlight Hongkong connect flows for Meituan, Tencent and Xiaomi.


Hong Kong Connect Flows (Nov 17th): Meituan, Tencent, Xiaomi

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>Wednesday will be a busy day as positions are put on and unwound following announcement of the changes to the MSC indices.</li>
<li>Friday will end the review cutoff for the ASX indices and Hang Seng Indexes will announce the December changes for the <a href="https://www.smartkarma.com/entities/hong-kong-hang-seng-index" target="_blank" data-smartkarma-citation="entities:22899:1" rel="noopener">HSI</a>, <a href="https://www.smartkarma.com/entities/hang-seng-china-enterprises-index" target="_blank" data-smartkarma-citation="entities:22900:1" rel="noopener">HSCEI</a>, <a href="https://www.smartkarma.com/entities/hang-seng-tech-index" target="_blank" data-smartkarma-citation="entities:31367:1" rel="noopener">HSTECH</a> and HSCI post market close.</li>
<li>Another week of large outflows for China focused ETFs with redemptions across all the major indices.</li>
</ul>


Wednesday will be a busy day as positions are put on and unwound following announcement of the changes to the MSC indices.
Friday will end the review cutoff for the ASX indices and Hang Seng Indexes will announce the December changes for the HSI, HSCEI, HSTECH and HSCI post market close.
Another week of large outflows for China focused ETFs with redemptions across all the major indices.


Index Rebalance & ETF Flow Recap: SSE50, Chinext/50, Renesas, Tencent, Amman Mineral

Hygon Information Technology C / Event-Driven

<ul>
<li>With the review period complete, we see 9 stocks in inclusion zone and 10 in deletion zone. However, there can be a maximum of 5 changes at a review.</li>
<li>We estimate a one-way turnover of 4.7% at the December rebalance leading to a one-way trade of CNY 3.86bn. Index arb balances could increase the impact on the stocks.</li>
<li>Apart from being added to the <a href="https://www.smartkarma.com/entities/shanghai-stock-exchange-sse-50-a-share-index" target="_blank" data-smartkarma-citation="entities:31073:1" rel="noopener">SSE50 Index</a>, <a href="https://www.smartkarma.com/entities/hygon-information-technology-c" target="_blank" data-smartkarma-citation="entities:36366:1" rel="noopener">Hygon Information Technology (688041 CH)</a> could also be added to other local/global indices over the next few weeks and months.</li>
</ul>


With the review period complete, we see 9 stocks in inclusion zone and 10 in deletion zone. However, there can be a maximum of 5 changes at a review.
We estimate a one-way turnover of 4.7% at the December rebalance leading to a one-way trade of CNY 3.86bn. Index arb balances could increase the impact on the stocks.
Apart from being added to the SSE50 Index, Hygon Information Technology (688041 CH) could also be added to other local/global indices over the next few weeks and months.


SSE50 Index Rebalance Preview: Five Potential Changes; Hygon Stands Out

<ul>
<li>We analyze the monthly Hong Kong Connect flows with our data engine.</li>
<li>We tabulate the top stocks by inflows, outflows, and holding by mainland investors.</li>
<li>We highlight inflows into Meituan, Wuxi Biologics, SMIC, GWM, HKEX.</li>
</ul>


We analyze the monthly Hong Kong Connect flows with our data engine.
We tabulate the top stocks by inflows, outflows, and holding by mainland investors.
We highlight inflows into Meituan, Wuxi Biologics, SMIC, GWM, HKEX.


Hong Kong Connect Flows (October): Four Months of Inflows

External broker reports(aggregated public sources), CMB International

CMB International

External broker reports(aggregated public sources)

Incorporated in Hong Kong, supported by the mainland and targeting in global market, CMB International Capital Corporation Limited (“CMBI”) is an integrated financial institution providing comprehensive and professional services. As a wholly-owned subsidiary of China Merchants Bank ("CMB"), by leveraging on the Group’s synergy and coordination in domestic and overseas markets, as well as CMB’s strong resources and outstanding social reputation, CMBI and its subsidiaries have been actively implementing diversified business strategies and set up an overall layout of main business segments including Corporate Finance, Asset Management, Wealth Management, Global Markets and Structured Finance, etc. Adhering to the philosophy of “being clients oriented and increasing our own values by the way of creating value for clients”, CMBI endeavors to provide quality and integrated financial services to institutional, corporate and individual customers both domestic and overseas including Hong Kong IPO sponsorship and underwriting, share placement and rights issue for listed companies, financial advisors, bonds issuance services, asset management, direct investment, wealth management, equity sales and trading, etc.

Thematic (Sector/Industry)

<ul><li>The NAFR announced Life and P&amp;C premium income of all registered insurers in Sep, showing trends that: 1) the liability side of the sector continued to improve, despite recent regulatory tightening on channels, products and agent behaviour.</li><li>Personal life reversed a negative monthly YoY from -0.2% in 8M23 to +0.9% in 9M23 (Fig 1), and P&amp;C strengthened growth to +5.9% YoY in 9M23 (vs +3.2% YoY in 8M23), driven by an upward auto growth of 6.9% YoY in 9M23; 2) total investment assets expanded to RMB27.2tn in 9M23, up 8.5% from 12M22, with allocation in bonds increased to 44.0% in 9M23 (vs 43.6% in 8M23), and in stocks and equity funds down to 12.8% (-0.1pct from 8M23, Fig 15).</li><li>We believe the upward trend in long-term yields, evidenced by GCNY10 staying above 2.7% since mid Oct (Fig 18), will continue to benefit investment returns and asset performances of the sector, to serve as a shore-up for the sector’s valuation.</li></ul><p><em>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.</em></p>

The NAFR announced Life and P&amp;C premium income of all registered insurers in Sep, showing trends that: 1) the liability side of the sector continued to improve, despite recent regulatory tightening on channels, products and agent behaviour.Personal life reversed a negative monthly YoY from -0.2% in 8M23 to +0.9% in 9M23 (Fig 1), and P&amp;C strengthened growth to +5.9% YoY in 9M23 (vs +3.2% YoY in 8M23), driven by an upward auto growth of 6.9% YoY in 9M23; 2) total investment assets expanded to RMB27.2tn in 9M23, up 8.5% from 12M22, with allocation in bonds increased to 44.0% in 9M23 (vs 43.6% in 8M23), and in stocks and equity funds down to 12.8% (-0.1pct from 8M23, Fig 15).We believe the upward trend in long-term yields, evidenced by GCNY10 staying above 2.7% since mid Oct (Fig 18), will continue to benefit investment returns and asset performances of the sector, to serve as a shore-up for the sector’s valuation.Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

China

China Pacific Insurance (Group) Company, Ltd. is an integrated insurance services provider. The Company offers life and property insurance products through its subsidiaries.

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China Pacific Insurance (2601 HK)

Hong Kong Connect Flows (Nov 17th): Meituan, Tencent, Xiaomi

We analyzed southbound Hong Kong connect flows in the past week and highlight Hongkong connect flows for Meituan, Tencent and Xiaomi.

Ke Yan, CFA, FRM

Index Rebalance & ETF Flow Recap: SSE50, Chinext/50, Renesas, Tencent, Amman Mineral

This recap highlights Insights covering Asian index rebalances (announcements/ forecasts/ IPO Fast Entry/ M&A driven changes). We also highlight...

Brian Freitas

SSE50 Index Rebalance Preview: Five Potential Changes; Hygon Stands Out

There should be 5 index changes in Dec. Hygon has been outperforming with inflows from multiple passive inflows expected in the next month. Adds...

Brian Freitas

Hong Kong Connect Flows (October): Four Months of Inflows

We analyzed the Hong Kong Connect Scheme for October and highlight flows for Meituan, Wuxi Biologics, SMIC, Great Wall Motor, HKEX.

Ke Yan, CFA, FRM

China Insurance – 9M23 Monthly

We believe the upward trend in long-term yields, evidenced by GCNY10 staying above 2.7% since mid Oct, will continue to benefit investment returns

CMB International

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