Pan-Asia Index Flows & Special Situations, Quiddity Advisors

Janaghan Jeyakumar, CFA

Pan-Asia Index Flows & Special Situations

Quiddity Advisors

Pan-Asia Catalysts/Events

Event-Driven

<ul>
<li>In this insight, we take a look at a group of names with reasonably high likelihood of being involved in index changes for the Hang Seng Index in June 2024.</li>
<li>The index changes for the June 2024 index rebal will be announced on 17th May 2024.</li>
<li>The HSI selection process is highly subjective and does not follow clear-cut rules. This insight is simply an attempt to provide readers with an overall understanding of the possible scenarios.</li>
</ul>


In this insight, we take a look at a group of names with reasonably high likelihood of being involved in index changes for the Hang Seng Index in June 2024.
The index changes for the June 2024 index rebal will be announced on 17th May 2024.
The HSI selection process is highly subjective and does not follow clear-cut rules. This insight is simply an attempt to provide readers with an overall understanding of the possible scenarios.


Quiddity Leaderboard for Hang Seng Index Jun 24: Could Country Garden Services Get Deleted?

Articles from Caixin Global, Caixin Global

Caixin Global

Articles from Caixin Global

Caixin is a media group dedicated to providing financial and business news through periodicals, online content, mobile apps, conferences, books and TV/video programs. Caixin aims to blaze a trail that helps traditional media prosper in the new media age through integrated multimedia platforms.

News from Caixin

Equity Bottom-Up

Country Garden Services / Equity Bottom-Up

<ul><li>Chinese property developer <strong>Country Garden Holdings Co. Ltd.</strong> vowed to deliver more than 480,000 homes in 2024, a more modest target than 2023 after it failed to achieve its 700,000-unit goal last year.</li><li>The focus of 2024 is still to “guarantee delivery, guarantee operation and guarantee credit,” of which delivery is the bottom line that Country Garden “must firmly hold,” Chairwoman Yang Huiyan said at the developer’s annual meeting Monday.</li><li>Country Garden, once China’s No. 1 developer by sales, delivered more than 600,000 units last year, short of its goal set at the beginning of 2023, the developer said.</li></ul>

Chinese property developer Country Garden Holdings Co. Ltd. vowed to deliver more than 480,000 homes in 2024, a more modest target than 2023 after it failed to achieve its 700,000-unit goal last year.The focus of 2024 is still to “guarantee delivery, guarantee operation and guarantee credit,” of which delivery is the bottom line that Country Garden “must firmly hold,” Chairwoman Yang Huiyan said at the developer’s annual meeting Monday.Country Garden, once China’s No. 1 developer by sales, delivered more than 600,000 units last year, short of its goal set at the beginning of 2023, the developer said.

Country Garden Pledges to Deliver More Than 480,000 Homes in 2024 

Founder-CEO & Chief Analyst, Real Estate Foresight

Robert Ciemniak

Founder-CEO & Chief Analyst

Real Estate Foresight

Since 2012, REF has been helping investors with market research, project due diligence, and strategy development. This has ranged from detailed assessments and estimates on distressed developers' project portfolios to market due diligence on specific projects to macro-level questions linked to demand for commodities. The unique combination of the housing markets and developer data from data partner China Index Academy in Beijing, primary research, and technology-powered alternative data collection from public sources result in a valuable content set used in REF analytics and reports.

Predictive Analytics for China Property

Thematic (Sector/Industry)

<ul>
<li>China housing metrics for July and August remained weak, in line with our forecast from December data, but watch out for some major data twists</li>
<li>The new wave of policy easing responds to the re-weakening of the market since April, though the impact may not show quickly, as the Zhengzhou example illustrates</li>
<li>Cities are quick to implement the new rules, including Shenzhen, Chengdu, and Guangzhou in the past few days </li>
</ul>


China housing metrics for July and August remained weak, in line with our forecast from December data, but watch out for some major data twists
The new wave of policy easing responds to the re-weakening of the market since April, though the impact may not show quickly, as the Zhengzhou example illustrates
Cities are quick to implement the new rules, including Shenzhen, Chengdu, and Guangzhou in the past few days 


China Property - The Latest Signals In The Housing Markets: August 2023

HK/China Equity Long-Short

Osbert Tang, CFA

<ul>
<li>Although 5% GDP growth target for 2023 is at the low end of market speculation of 5.5-6%, we think this reflects the government's conservative stance amid post-COVID recovery. </li>
<li>A 0.2pp higher budget deficit and a special purpose bond quota of Rmb3.8trn suggested that government spending will stay as important economic driver.</li>
<li>Consumption is another major stimulus for economic growth, and more supportive measures will be rolled out - we have seen many cities planning to hand out consumption vouchers.</li>
</ul>


Although 5% GDP growth target for 2023 is at the low end of market speculation of 5.5-6%, we think this reflects the government's conservative stance amid post-COVID recovery. 
A 0.2pp higher budget deficit and a special purpose bond quota of Rmb3.8trn suggested that government spending will stay as important economic driver.
Consumption is another major stimulus for economic growth, and more supportive measures will be rolled out - we have seen many cities planning to hand out consumption vouchers.


China NPC: Implications of Government Working Report 2023

<ul>
<li>2024 marks another year that our "Buy the worst" strategy underperformed the HSI. The strategy yielded -1.7% YTD, against HSI's +17.9%. <a href="https://www.smartkarma.com/entities/meituan" target="_blank" data-smartkarma-citation="entities:26970:1" rel="noopener">Meituan (3690 HK)</a> is the only winner.</li>
<li>For 2025, the strategy will switch to <a href="https://www.smartkarma.com/entities/budweiser-brewing-co-apac-ltd" target="_blank" data-smartkarma-citation="entities:28077:1" rel="noopener">Budweiser Brewing (1876 HK)</a>, <a href="https://www.smartkarma.com/entities/chow-tai-fook-jewellery-group" target="_blank" data-smartkarma-citation="entities:549:1" rel="noopener">Chow Tai Fook (1929 HK)</a>, <a href="https://www.smartkarma.com/entities/hang-lung-properties-ltd" target="_blank" data-smartkarma-citation="entities:49:1" rel="noopener">Hang Lung Props (101 HK)</a>, <a href="https://www.smartkarma.com/entities/wuxi-apptec" target="_blank" data-smartkarma-citation="entities:23679:1" rel="noopener">Wuxi Biologics (2269 HK)</a>, and <a href="https://www.smartkarma.com/entities/cspc-pharmaceutical-group-ltd" target="_blank" data-smartkarma-citation="entities:229:1" rel="noopener">CSPC Pharmaceutical (1093 HK)</a>.  </li>
<li>The top five HSI winners YTD 2024 have generated an average gain of 92.7%, outperforming the HSI massively. Given their current high valuations, this is unlikely to repeat in 2025.</li>
</ul>


2024 marks another year that our "Buy the worst" strategy underperformed the HSI. The strategy yielded -1.7% YTD, against HSI's +17.9%. Meituan (3690 HK) is the only winner.
For 2025, the strategy will switch to Budweiser Brewing (1876 HK), Chow Tai Fook (1929 HK), Hang Lung Props (101 HK), Wuxi Biologics (2269 HK), and CSPC Pharmaceutical (1093 HK).  
The top five HSI winners YTD 2024 have generated an average gain of 92.7%, outperforming the HSI massively. Given their current high valuations, this is unlikely to repeat in 2025.


"Buy the Worst" HSI Strategy: Another Disappointing Year in 2024, Let's See 2025

China

Country Garden Services Holdings Company Limited provides real estate development services. The Company develops residential apartments, multi-functional complex buildings, government and public facilities, industrial parks, highway service stations, and schools. Country Garden Services Holdings serves clients in China.

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Country Garden Services (6098 HK)

Quiddity Leaderboard for Hang Seng Index Jun 24: Could Country Garden Services Get Deleted?

Country Garden Services (6098 HK) will be deleted from the Hang Seng Index and BYD Electronics (285 HK) will be added to the index in June 2024....

Janaghan Jeyakumar, CFA

Country Garden Pledges to Deliver More Than 480,000 Homes in 2024

Chinese property developer Country Garden Holdings Co. Ltd. vowed to deliver more than 480,000 homes in 2024, a more modest target than 2023 after...

Caixin Global

China Property - The Latest Signals In The Housing Markets: August 2023

China Property: We highlight the latest indicators for July and August for the new home markets in China, as well as the latest policy developments.

Robert Ciemniak

China NPC: Implications of Government Working Report 2023

A 0.2pp higher budget deficit and a Rmb3.8trn special purpose bond quota suggested government spending will remain important economic driver. More...

Osbert Tang, CFA

"Buy the Worst" HSI Strategy: Another Disappointing Year in 2024, Let's See 2025

The 2024 "Buy the worst" strategy has underperformed HSI, and the new picks for 2025 are Budweiser APAC, Chow Tai Fook, Hang Lung Properties, Wuxi...

Osbert Tang, CFA

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

Quiddity Leaderboard for Hang Seng Index Jun 24: Could Country Garden Services Get Deleted?

Country Garden Services (6098 HK) will be deleted from the Hang Seng Index and BYD Electronics (285 HK) will be added to the index in June 2024....

Janaghan Jeyakumar, CFA

Country Garden Pledges to Deliver More Than 480,000 Homes in 2024

Chinese property developer Country Garden Holdings Co. Ltd. vowed to deliver more than 480,000 homes in 2024, a more modest target than 2023 after...

Caixin Global

China Property - The Latest Signals In The Housing Markets: August 2023

China Property: We highlight the latest indicators for July and August for the new home markets in China, as well as the latest policy developments.

Robert Ciemniak

China NPC: Implications of Government Working Report 2023

A 0.2pp higher budget deficit and a Rmb3.8trn special purpose bond quota suggested government spending will remain important economic driver. More...

Osbert Tang, CFA

"Buy the Worst" HSI Strategy: Another Disappointing Year in 2024, Let's See 2025

​The 2024 "Buy the worst" strategy has underperformed HSI, and the new picks for 2025 are Budweiser APAC, Chow Tai Fook, Hang Lung Properties, Wuxi...

Osbert Tang, CFA

The 2024 "Buy the worst" strategy has underperformed HSI, and the new picks for 2025 are Budweiser APAC, Chow Tai Fook, Hang Lung Properties, Wuxi...