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>There could be up to 10 adds/ 29 deletes for the China global index in February. The actual number of changes will be smaller depending on the review date chosen.</li>
<li>The flow on the forecast adds varies from US$17.5m-US$175m (0.05x-15x ADV) while the flow on the forecast deletes varies from US$14.4m-US$100.4m (0.25x-22.75x ADV).</li>
<li>
<a href="https://www.smartkarma.com/entities/bestechnic-shanghai-co-ltd" target="_blank" data-smartkarma-citation="entities:33459:1" rel="noopener">Bestechnic Shanghai (688608 CH)</a> is a potential inclusion to multiple indices in June and there will be much larger passive flows to the stock then.</li>
</ul>


There could be up to 10 adds/ 29 deletes for the China global index in February. The actual number of changes will be smaller depending on the review date chosen.
The flow on the forecast adds varies from US$17.5m-US$175m (0.05x-15x ADV) while the flow on the forecast deletes varies from US$14.4m-US$100.4m (0.25x-22.75x ADV).

Bestechnic Shanghai (688608 CH) is a potential inclusion to multiple indices in June and there will be much larger passive flows to the stock then.


China/HK: Passive Activity Expected Later This Month

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.

<ul>
<li>On 27 December 2024, <a href="https://www.smartkarma.com/entities/vesync" target="_blank" data-smartkarma-citation="entities:31067:1" rel="noopener">Vesync (2148 HK)</a> disclosed a Cayman scheme privatisation offer from the Yang family at HK$5.60. On 28 January, the antitrust condition was satisfied.   </li>
<li>Despite a light offer, the scheme vote is low-risk. No disinterested shareholder holds a blocking stake, there is a scrip option with no cap, and there is no retail opposition. </li>
<li>The scheme document will be despatched by 11 April. At the last close and for an end-of-May payment, the gross and annualised spread is 6.9% and 22.7%, respectively.  </li>
</ul>


On 27 December 2024, Vesync (2148 HK) disclosed a Cayman scheme privatisation offer from the Yang family at HK$5.60. On 28 January, the antitrust condition was satisfied.   
Despite a light offer, the scheme vote is low-risk. No disinterested shareholder holds a blocking stake, there is a scrip option with no cap, and there is no retail opposition. 
The scheme document will be despatched by 11 April. At the last close and for an end-of-May payment, the gross and annualised spread is 6.9% and 22.7%, respectively.  


Vesync (2148 HK): Antitrust Condition Satisfied, and the Scheme Vote Remains Low-Risk

<ul>
<li>
<a href="https://www.smartkarma.com/entities/vesync" target="_blank" data-smartkarma-citation="entities:31067:1" rel="noopener">Vesync (2148 HK)</a> disclosed a Cayman scheme privatisation offer from the Yang family at HK$5.60, a 33.3% premium to the last close price of HK$4.20. The offer is final.   </li>
<li>While the offer is marginally above the IPO price, it is light compared to sell-side price targets, peer multiples and historical trading ranges.</li>
<li>Nevertheless, the scrip option, irrevocables and no disinterested shareholder holding a blocking stake facilitate the scheme vote. The offer could be completed by May. </li>
</ul>



Vesync (2148 HK) disclosed a Cayman scheme privatisation offer from the Yang family at HK$5.60, a 33.3% premium to the last close price of HK$4.20. The offer is final.   
While the offer is marginally above the IPO price, it is light compared to sell-side price targets, peer multiples and historical trading ranges.
Nevertheless, the scrip option, irrevocables and no disinterested shareholder holding a blocking stake facilitate the scheme vote. The offer could be completed by May. 


Vesync (2148 HK): The Yang Family’s Scheme Offer Is Light but Likely Done

<ul>
<li>
<a href="https://www.smartkarma.com/entities/vesync" target="_blank" data-smartkarma-citation="entities:31067:1" rel="noopener">Vesync (2148 HK)</a> is in a trading halt “<em>pending the release of an announcement pursuant to the Code on Takeovers and Mergers which contains inside information of the Company.</em>” </li>
<li>The Yang family is likely seeking to privatise Vesync through a Cayman scheme. The shares are trading 24% below the HK$5.52 IPO price.</li>
<li>We use several methods to triangulate the likely offer price, which suggests a price range of HK$5.09-10.30 per share, with an average of HK$6.71, a 59.8% premium to last close.</li>
</ul>



Vesync (2148 HK) is in a trading halt “pending the release of an announcement pursuant to the Code on Takeovers and Mergers which contains inside information of the Company.” 
The Yang family is likely seeking to privatise Vesync through a Cayman scheme. The shares are trading 24% below the HK$5.52 IPO price.
We use several methods to triangulate the likely offer price, which suggests a price range of HK$5.09-10.30 per share, with an average of HK$6.71, a 59.8% premium to last close.


Vesync (2148 HK): The Yang Family to Launch a Privatisation Offer?

Blue Lotus China New Economy Research, Blue Lotus Research Institute

Eric Wen

Blue Lotus China New Economy Research

China growth and global non-US Internet equities

Blue Lotus Research Institute

Blue Lotus Research is a Hong Kong Type 4 Licensed investment advisory firm focusing on Chinese growth equities and global non-US Internet equities

Equity Bottom-Up

<ul>
<li>On November 18th, 2024, Temasek-affiliated investment fund 65Equity bought 13% of TUYA, an IOT hardware company and planned to bring the company to list on the Singapore Stock Exchange;</li>
<li>TUYA is trading at US$901mn market cap, equivalent to 3.2x 12TTM sales. This isn't cheap. Xiaomi, a high flying stock, now trades at 2.0x 12TTM sales. TUYA is not profitable;</li>
<li>TUYA is a good and real company but in a bad business. Electronics inventory cycle and advanced stocking for Trump's Tariff Hike shall support earnings in the next few quarters.</li>
</ul>


On November 18th, 2024, Temasek-affiliated investment fund 65Equity bought 13% of TUYA, an IOT hardware company and planned to bring the company to list on the Singapore Stock Exchange;
TUYA is trading at US$901mn market cap, equivalent to 3.2x 12TTM sales. This isn't cheap. Xiaomi, a high flying stock, now trades at 2.0x 12TTM sales. TUYA is not profitable;
TUYA is a good and real company but in a bad business. Electronics inventory cycle and advanced stocking for Trump's Tariff Hike shall support earnings in the next few quarters.


TUYA: Is The King of White Label IOT Ready to Charter a Different Course?

China

Ecovacs Robotics Co., Ltd. designs and sells household maintenance technology based products. The Company offers robotic floor and window cleaners for residential and commercial applications.

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Ecovacs Robotics (603486 CH)

China/HK: Passive Activity Expected Later This Month

There could be up to 10 adds/29 deletes for China in Feb. Flow varies from US$14m-175m and impact from 0.05x-22.75x ADV. Bestechnic Shanghai is a...

Brian Freitas

Vesync (2148 HK): Antitrust Condition Satisfied, and the Scheme Vote Remains Low-Risk

Despite a light offer, the scheme vote is low-risk. No disinterested shareholder holds a blocking stake, there is a scrip option with no cap, and...

Arun George

Vesync (2148 HK): The Yang Family’s Scheme Offer Is Light but Likely Done

The offer is light. Nevertheless, the scrip option, the irrevocables, and the absence of a disinterested shareholder holding a blocking stake...

Arun George

Vesync (2148 HK): The Yang Family to Launch a Privatisation Offer?

We use several methods to triangulate the likely offer price, which suggests a price range of HK$5.09-10.30 per share, with an average of HK$6.71....

Arun George

TUYA: Is The King of White Label IOT Ready to Charter a Different Course?

Temasek bought 13% of TUYA and planned to list on SGX. We believe TUYA's valuation is high and the company's business model, customer segment and...

Blue Lotus Research Institute

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