Articles from Caixin Global, Caixin Global

Caixin Global

Articles from Caixin Global

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News from Caixin

Thematic (Sector/Industry)

<ul>
<li>Multiple Chinese electric-vehicle (EV) makers posted shrinking monthly deliveries in April as the country’s severe Covid outbreaks disrupted sales channels, supply chains and road transport.</li>
<li>The Covid-19 resurgence in the Yangtze Delta region continues to cause severe industry-wide disruptions in supply chain, logistics and production since late March</li>
<li>China has been battling the worst wave of Covid-19 outbreaks since late March, in which Shanghai logged record daily infections during five weeks of an ongoing citywide lockdown.</li>
</ul>


Multiple Chinese electric-vehicle (EV) makers posted shrinking monthly deliveries in April as the country’s severe Covid outbreaks disrupted sales channels, supply chains and road transport.
The Covid-19 resurgence in the Yangtze Delta region continues to cause severe industry-wide disruptions in supply chain, logistics and production since late March
China has been battling the worst wave of Covid-19 outbreaks since late March, in which Shanghai logged record daily infections during five weeks of an ongoing citywide lockdown.


Chinese EV-Makers’ Deliveries Plunge as Lockdowns Hit Dealers, Plants

Pan-Asia Index Rebalances/ Events/ Delta One, Periscope Analytics

Brian Freitas

Pan-Asia Index Rebalances/ Events/ Delta One

Event-Driven

Post market close on 28 May, the China Securities Index Company announced the changes to the <a href="https://www.smartkarma.com/entities/shanghai-shenzhen-csi-300-index" target="_blank" data-smartkarma-citation="entities:22906:1" rel="noopener">Shanghai Shenzhen CSI 300 Index (SHSZ300 INDEX)</a> that will be effective after the close of trading on 11 June.There are 25 inclusions and exclusions in the review with an estimated one-way turnover of 3.67%.There are 10 trading days to implementation of the changes. There are 4 inclusions that will have over 1 day of ADV to buy from passive funds while there are 15 deletions that will have over 1 day of ADV to sell. The actual impact could be higher as cash and carry baskets are rebalanced and active managers reposition their portfolios to no deviate too far from their benchmark.The inclusions have outperformed the deletions by 15% over the last month and while there could be a pop in the returns over the next few sessions, we recommend gradually exiting existing positions and re-entering prior to implementation on a selloff in the trade.

Post market close on 28 May, the China Securities Index Company announced the changes to the Shanghai Shenzhen CSI 300 Index (SHSZ300 INDEX) that will be effective after the close of trading on 11 June.There are 25 inclusions and exclusions in the review with an estimated one-way turnover of 3.67%.There are 10 trading days to implementation of the changes. There are 4 inclusions that will have over 1 day of ADV to buy from passive funds while there are 15 deletions that will have over 1 day of ADV to sell. The actual impact could be higher as cash and carry baskets are rebalanced and active managers reposition their portfolios to no deviate too far from their benchmark.The inclusions have outperformed the deletions by 15% over the last month and while there could be a pop in the returns over the next few sessions, we recommend gradually exiting existing positions and re-entering prior to implementation on a selloff in the trade.

CSI300 Index Rebalance: 25 Changes as Long/Short Trade Does Well

Beijing Kingsoft Office Softwa / Event-Driven

We are nearly 95% through the review period for the June review of the <a href="https://www.smartkarma.com/entities/shanghai-shenzhen-csi-300-index" target="_blank" data-smartkarma-citation="entities:22906:1" rel="noopener">Shanghai Shenzhen CSI 300 Index (SHSZ300 INDEX)</a>. With a large AUM in ETFs tracking the index, large open interest on the CFFEX listed futures, and volatile stocks, it could pay to look at the potential changes to the index.China Securities Index Co (CSI) will announce the changes end May/beginning June and the changes will be effective after the close of trading on 11 June.We expect 30 changes at the upcoming June 2021 index review - this is the maximum number of changes that are permitted at a single review. Estimated one-way turnover is 4.08% and will result in a one-way trade of CNY 10.8bn.The expected inclusions have outperformed the <a href="https://www.smartkarma.com/entities/shanghai-shenzhen-csi-300-index" target="_blank" data-smartkarma-citation="entities:22906:1" rel="noopener">Shanghai Shenzhen CSI 300 Index (SHSZ300 INDEX)</a> on a year to date basis even post the momentum selloff that started in February. Buying the inclusion basket vs selling the CSI300 futures as a hedge could provide good market neutral returns over the next few weeks.

We are nearly 95% through the review period for the June review of the Shanghai Shenzhen CSI 300 Index (SHSZ300 INDEX). With a large AUM in ETFs tracking the index, large open interest on the CFFEX listed futures, and volatile stocks, it could pay to look at the potential changes to the index.China Securities Index Co (CSI) will announce the changes end May/beginning June and the changes will be effective after the close of trading on 11 June.We expect 30 changes at the upcoming June 2021 index review - this is the maximum number of changes that are permitted at a single review. Estimated one-way turnover is 4.08% and will result in a one-way trade of CNY 10.8bn.The expected inclusions have outperformed the Shanghai Shenzhen CSI 300 Index (SHSZ300 INDEX) on a year to date basis even post the momentum selloff that started in February. Buying the inclusion basket vs selling the CSI300 futures as a hedge could provide good market neutral returns over the next few weeks.

CSI300 Index Rebalance Preview: Recovering from the Growth Sell-Off

Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

Brilliance China Automotive / Event-Driven

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Last September, Reuters <a href="https://www.reuters.com/article/brilliance-china-take-private-idUSKCN26F0FF" target="_blank" rel="noopener">reported</a> that state-controlled Liaoning Provincial Transportation Investment Group (LPTIG),  was planning to lead a consortium of Chinese investors to take PRC-automaker (&amp; BMW's main Chinese JV partner) <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> private. No deal transpired, allegedly due to "differences in valuations and financing difficulties".
A possible take-private transaction is <a href="https://www.reuters.com/article/us-faw-group-brilliance-china-m-a-exclus/exclusive-chinas-faw-considers-acquiring-bmw-partner-brilliance-for-about-7-2-billion-sources-idUSKBN2A30I5?il=0" target="_blank" rel="noopener">again in the press</a>, this time from state-owned <a href="https://www.smartkarma.com/entities/faw-car-company-limited-a" target="_blank" data-smartkarma-citation="entities:6497:1" rel="noopener">Faw Car Company Limited A (000800 CH)</a>, China’s No. 2 automaker.
Reportedly FAW will acquire the 30.43% stake held by Huachen Automotive Group, Liaoning’s state asset regulator, and 11.89% from LPTIG, triggering a Mandatory General Offer (MGO). The Offer price is rumoured to be HK$11/share, a 73% premium to the undisturbed price. 
The on-again, off-again, transaction comes amid HAG's <a href="https://www.scmp.com/business/companies/article/3107281/parent-bmws-chinese-partner-defaults-bond-declining-car-sales" target="_blank" rel="noopener">inability</a> to repay a corporate bond that matured in October last year, culminating in the group <a href="https://www.shine.cn/biz/auto/2011210271/" target="_blank" rel="noopener">entering</a> a bankruptcy restructuring the following month.
Brilliance has <a href="https://www1.hkexnews.hk/listedco/listconews/sehk/2021/0203/2021020300609.pdf" target="_blank" rel="noopener">announced</a> it has no knowledge of the potential acquisition of shares and the privatisation of the company.
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As always, more below the fold.
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Concerning the title, one of the automotive world’s most distinctive features, that immediately identifies a BMW as being a BMW, is its ‘kidney grille’.
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Last September, Reuters reported that state-controlled Liaoning Provincial Transportation Investment Group (LPTIG),  was planning to lead a consortium of Chinese investors to take PRC-automaker (&amp; BMW's main Chinese JV partner) Brilliance China Automotive (1114 HK) private. No deal transpired, allegedly due to "differences in valuations and financing difficulties".
A possible take-private transaction is again in the press, this time from state-owned Faw Car Company Limited A (000800 CH), China’s No. 2 automaker.
Reportedly FAW will acquire the 30.43% stake held by Huachen Automotive Group, Liaoning’s state asset regulator, and 11.89% from LPTIG, triggering a Mandatory General Offer (MGO). The Offer price is rumoured to be HK$11/share, a 73% premium to the undisturbed price. 
The on-again, off-again, transaction comes amid HAG's inability to repay a corporate bond that matured in October last year, culminating in the group entering a bankruptcy restructuring the following month.
Brilliance has announced it has no knowledge of the potential acquisition of shares and the privatisation of the company.


As always, more below the fold.

Concerning the title, one of the automotive world’s most distinctive features, that immediately identifies a BMW as being a BMW, is its ‘kidney grille’.


Brilliance China (1114 HK): Grilling Kidneys

Asian Insight Provider - Actionable ideas, CrossASEAN Research

Henry Soediarko

Asian Insight Provider - Actionable ideas

CrossASEAN Research

At CrossASEAN Research we strive to produce unbiased and differentiated on the ground insights on companies across South East Asia. Our Research is produced for the most part after face to face meetings and conversations with company management to dig deep into the long term vision and strategy of the companies we cover. We seek to deliver investable and actionable themes on sectors and markets across SE Asia, often in collaboration with other Insight Providers across the region, pooling the vast experience of the analysts within the Smartkarma Ecosystem. We also offer bespoke work and tailor made trips for our clients. 

Insights across South East Asia

Equity Bottom-Up

This is the first part of the two parts of the report detailing how DRB Hi Com is about to unlock its value in the next few months.  
With a low industry growth expectation due to a couple of reasons namely no-end-of-life policy, no scrap policy, combined with high car ownership in Malaysia, the prospect for Malaysia's automotive industry is not that exciting. However, Proton's resurgence in sales volume story thanks to its focus on the SUV segment is a silver lining.

This is the first part of the two parts of the report detailing how DRB Hi Com is about to unlock its value in the next few months.  
With a low industry growth expectation due to a couple of reasons namely no-end-of-life policy, no scrap policy, combined with high car ownership in Malaysia, the prospect for Malaysia's automotive industry is not that exciting. However, Proton's resurgence in sales volume story thanks to its focus on the SUV segment is a silver lining. 

China

FAW Jiefang Group Co., Ltd, through joint ventures, manufactures and markets cars and auto parts.  The Company produces automobiles, transmission systems, and engines.  FAW Car also provides auto repair and customizing services.

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FAW Jiefang Group Co., Ltd A (000800 CH)

Chinese EV-Makers’ Deliveries Plunge as Lockdowns Hit Dealers, Plants

Multiple Chinese electric-vehicle (EV) makers posted shrinking monthly deliveries in April as the country’s severe Covid outbreaks disrupted sales...

Caixin Global

CSI300 Index Rebalance: 25 Changes as Long/Short Trade Does Well

There are 25 changes to the CSI300 Index that will be implemented at the close on 11 June. One-way turnover is 3.67% and the adds have outperformed...

Brian Freitas

CSI300 Index Rebalance Preview: Recovering from the Growth Sell-Off

We forecast 30 changes to the CSI300 Index at the June review that will be announced at the end of May and effective 11 June. The expected...

Brian Freitas

Brilliance China (1114 HK): Grilling Kidneys

Brilliance is cheap with respect to peers, ostensibly held back by HAG's financial concerns. Brilliance is even cheaper when taking into account...

David Blennerhassett

DRB Hi Com (DRB): Value Unlocking-Part I

This is the first part of the two parts of the report detailing how DRB Hi Com is about to unlock its value in the next few months. With a low...

Henry Soediarko

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