Asian Hedge Fund Manager, Long Short Equity, Macro

David Mudd

Equity Bottom-Up

<ul>
<li>Low Volatility and High Dividend yield stocks in Hong Kong outperformed the region during recent global market sell off.</li>
<li>
<a href="https://www.smartkarma.com/entities/mgm-china-holdings-ltd" target="_blank" data-smartkarma-citation="entities:472:1" rel="noopener">MGM China Holdings (2282 HK)</a> is outperforming its peers with revenue now exceeding pre-COVID levels.
</li>
<li>
<a href="https://www.smartkarma.com/entities/weibo-corp" target="_blank" data-smartkarma-citation="entities:35280:1" rel="noopener">Weibo (9898 HK)</a> maintains a high cash flow and dividend yield in China's tech sector.  <a href="https://www.smartkarma.com/entities/zhuzhou-crrc-times-electric-co-ltd" target="_blank" data-smartkarma-citation="entities:18:1" rel="noopener">Zhuzhou CRRC Times Electric Co., Ltd. (3898 HK)</a> benefits from China's new large-scale maintenance cycle.
</li>
</ul>


Low Volatility and High Dividend yield stocks in Hong Kong outperformed the region during recent global market sell off.

MGM China Holdings (2282 HK) is outperforming its peers with revenue now exceeding pre-COVID levels.


Weibo (9898 HK) maintains a high cash flow and dividend yield in China's tech sector.  Zhuzhou CRRC Times Electric Co., Ltd. (3898 HK) benefits from China's new large-scale maintenance cycle.



BUY/SELL/HOLD: Hong Kong Stock Updates (August 6)

IPOs and Catalysts/Events, Global Equity Research Ltd

Arun George

IPOs and Catalysts/Events

Uncompromised, Independent, Conflict-Free Research

Global Equity Research Ltd

Global Equity Research was started in 2017 by a group of experienced research professionals. It was founded on a passionate belief in the importance and the need for uncompromised, independent, conflict-free research. We aim to provide differentiated and actionable primary and bottom up fundamental research.

Event-Driven

Hollysys Automation Technologies / Event-Driven

<ul>
<li>Six months after announcing a binding proposal, Ascendent has <a href="https://app.quotemedia.com/data/downloadFiling?webmasterId=101533&amp;ref=318426662&amp;type=PDF&amp;symbol=HOLI&amp;cdn=3467fa76f096a159d60e77540b09d977&amp;companyName=Hollysys+Automation+Technologies+Ltd.&amp;formType=SC+13D%2FA&amp;dateFiled=2024-07-01" target="_blank" rel="noopener">obtained</a> all the Chinese regulatory approvals for its US$26.50 <a href="https://www.smartkarma.com/entities/hollysys-automation-technologies" target="_blank" data-smartkarma-citation="entities:26078:1" rel="noopener">Hollysys Automation Technologies (HOLI US)</a> offer. </li>
<li>The gross spread was wide due to the information vacuum, which has resulted in various conspiracy theories and rumours circulating.</li>
<li>The two remaining conditions required for close are the maximum dissenting cap (should be waived) and minimum net cash condition (satisfied). At the last close, the gross spread was 22.5%.</li>
</ul>


Six months after announcing a binding proposal, Ascendent has obtained all the Chinese regulatory approvals for its US$26.50 Hollysys Automation Technologies (HOLI US) offer. 
The gross spread was wide due to the information vacuum, which has resulted in various conspiracy theories and rumours circulating.
The two remaining conditions required for close are the maximum dissenting cap (should be waived) and minimum net cash condition (satisfied). At the last close, the gross spread was 22.5%.


Hollysys (HOLI US): Ascendent Finally Obtains Regulatory Approvals

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

<ul>
<li>There are 12 changes for the <a href="https://www.smartkarma.com/entities/shanghai-shenzhen-csi-300-inde" target="_blank" data-smartkarma-citation="entities:22906:1" rel="noopener">CSI 300 Index (SHSZ300 INDEX)</a> and 50 changes 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 (SH000905 INDEX)</a> in June. Most changes were expected.</li>
<li>There are a lot of stocks with over 1 day of ADV to trade. The round-trip trade in June is estimated to be US$5bn.</li>
<li>The adds have outperformed the deletes for both indices but the return profile of a long adds/ short deletes trade for the CSI500 Index is a lot smoother.</li>
</ul>


There are 12 changes for the CSI 300 Index (SHSZ300 INDEX) and 50 changes for the CSI Smallcap 500 Index (SH000905 INDEX) in June. Most changes were expected.
There are a lot of stocks with over 1 day of ADV to trade. The round-trip trade in June is estimated to be US$5bn.
The adds have outperformed the deletes for both indices but the return profile of a long adds/ short deletes trade for the CSI500 Index is a lot smoother.


CSI300/CSI500 Index Rebalance: Big Flows and US$5bn Round-Trip Trade

Pan-Asia Index Flows & Special Situations, Quiddity Advisors

Janaghan Jeyakumar, CFA

Pan-Asia Index Flows & Special Situations

Quiddity Advisors

Pan-Asia Catalysts/Events

Shenzhen New Industries Biomedical Engineering-A / Event-Driven

Shenzhen New Industries Biomedical Engineering-A

<ul>
<li>The June 2024 index review results for China's CSI 300 and CSI 500 indices were announced after market close on Friday 31st May 2024.</li>
<li>There will be 12 changes in CSI 300 and 50 changes in CSI 500 which could collectively cause one-way index flows of ~US$3.7bn during the June 2024 index rebal event.</li>
<li>Compared to Quiddity's final expectations, 114 out of the 124 index changes (both ways) were correct translating to a hit rate of 92%. </li>
</ul>


The June 2024 index review results for China's CSI 300 and CSI 500 indices were announced after market close on Friday 31st May 2024.
There will be 12 changes in CSI 300 and 50 changes in CSI 500 which could collectively cause one-way index flows of ~US$3.7bn during the June 2024 index rebal event.
Compared to Quiddity's final expectations, 114 out of the 124 index changes (both ways) were correct translating to a hit rate of 92%. 


Quiddity CSI 300/​​500 Jun 24 Rebalance: 92% Hit Rate; US$3.7bn One-Way Flows

Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

China International Capital Corporation / Event-Driven

<ul>
<li>The New/Better A-H Premium Tracker has tables, charts, measures galore to track A/H premium positioning, southbound and northbound positioning/volatility in pairs over time, etc.</li>
<li>SOUTHBOUND's buy streak was interrupted again this past week, but they still net bought, as did NORTHBOUND. HK stocks continued bouncing VERY hard. Hs outperformed As very strongly.</li>
<li>As had a chance to catch up. Did not. Liquid Hs outperformed their As by 4.8% from 30-April through 10-May. Wide premia narrowed more than narrow premia.</li>
</ul>


The New/Better A-H Premium Tracker has tables, charts, measures galore to track A/H premium positioning, southbound and northbound positioning/volatility in pairs over time, etc.
SOUTHBOUND's buy streak was interrupted again this past week, but they still net bought, as did NORTHBOUND. HK stocks continued bouncing VERY hard. Hs outperformed As very strongly.
As had a chance to catch up. Did not. Liquid Hs outperformed their As by 4.8% from 30-April through 10-May. Wide premia narrowed more than narrow premia.


A/H Premium Tracker (To 10 May 2024):  Excellent Quiddity Portfolio Gains as Hs Rally Huge Vs As

China

China Railway Signal & Communication Corporation Limited manufactures rail transit related systems. The Company researches, develops, designs, manufactures, sells and installs rail transit communication and signal systems. China Railway Signal & Communication also provides consulting, design and supervision work for urban transit projects and mainline railway projects.

China Railway Signal & Communi (688009 CH)

Price Gauge
52-week Range	0.00 - 0.00
Market Cap (USDm)	0.00
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China Railway Signal & Communi (688009 CH)

BUY/SELL/HOLD: Hong Kong Stock Updates (August 6)

Low Vol and High Dividend factors outperformed the region during recent sell off. MGM i EBITDA exceeds pre-COVID levels. Weibo will benefit from...

David Mudd

Hollysys (HOLI US): Ascendent Finally Obtains Regulatory Approvals

A SEC 13D/A filing notes that Ascendent has entered a facility agreement with Industrial Bank for US$1.055 billion and is working to complete the...

Arun George

CSI300/CSI500 Index Rebalance: Big Flows and US$5bn Round-Trip Trade

The CSI300/CSI500 indices rebalance at the close tomorrow. Since announcement, the inclusions to the CSI300 index have outperformed the deletes by...

Brian Freitas

Quiddity CSI 300/500 Jun 24 Rebalance: 92% Hit Rate; US$3.7bn One-Way Flows

The Inclusion/Exclusion events can be expected to take place at the close of trading on Friday 14th June 2024. We expect certain inflow names to...

Janaghan Jeyakumar, CFA

A/H Premium Tracker (To 10 May 2024): Excellent Quiddity Portfolio Gains as Hs Rally Huge Vs As

AH Premia narrowed significantly. As an average, they are down near 52wk lows, with most of the move having taken place in the last 3 weeks. Some...

Travis Lundy

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

BUY/SELL/HOLD: Hong Kong Stock Updates (August 6)

Low Vol and High Dividend factors outperformed the region during recent sell off. MGM i EBITDA exceeds pre-COVID levels. Weibo will benefit from...

David Mudd

Hollysys (HOLI US): Ascendent Finally Obtains Regulatory Approvals

A SEC 13D/A filing notes that Ascendent has entered a facility agreement with Industrial Bank for US$1.055 billion and is working to complete the...

Arun George

CSI300/CSI500 Index Rebalance: Big Flows and US$5bn Round-Trip Trade

The CSI300/CSI500 indices rebalance at the close tomorrow. Since announcement, the inclusions to the CSI300 index have outperformed the deletes by...

Brian Freitas

Quiddity CSI 300/​​500 Jun 24 Rebalance: 92% Hit Rate; US$3.7bn One-Way Flows

The Inclusion/Exclusion events can be expected to take place at the close of trading on Friday 14th June 2024. We expect certain inflow names to...

Janaghan Jeyakumar, CFA

A/H Premium Tracker (To 10 May 2024): Excellent Quiddity Portfolio Gains as Hs Rally Huge Vs As

AH Premia narrowed significantly. As an average, they are down near 52wk lows, with most of the move having taken place in the last 3 weeks. Some...

Travis Lundy

Quiddity CSI 300/500 Jun 24 Rebalance: 92% Hit Rate; US$3.7bn One-Way Flows