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

Qingdao Haier Biomedical  Lt / Event-Driven

<ul>
<li>Nearly 85% of the way through the review period, we see 2 changes using a 12-month minimum listing history, and 5 changes using a 6-month minimum listing history.</li>
<li>Given the significantly higher market cap of the inclusions using a 6-month minimum listing history, we expect the index committee will continue to use the shorter listing history requirement.</li>
<li>With 5 changes a side, one-way turnover is estimated at 5.15% and will result in a one-way trade of CNY 3,994m. Impact on some deletions is quite high.</li>
</ul>


Nearly 85% of the way through the review period, we see 2 changes using a 12-month minimum listing history, and 5 changes using a 6-month minimum listing history.
Given the significantly higher market cap of the inclusions using a 6-month minimum listing history, we expect the index committee will continue to use the shorter listing history requirement.
With 5 changes a side, one-way turnover is estimated at 5.15% and will result in a one-way trade of CNY 3,994m. Impact on some deletions is quite high.


STAR50 Index Rebalance Preview: Another Five Potential Changes in March

Zhejiang Longsheng Group Co., / Event-Driven

<ul>
<li>There are 50 changes a side for the CSI 500 Index at the upcoming rebalance that will be implemented at the close of trading on 9 December.</li>
<li>One-Way turnover at the rebalance is estimated at 12.64% leading to a one-way trade of CNY 9.3bn. The Materials, Information Technology and Consumer Discretionary sectors are net gainers.</li>
<li>9 adds to the CSI 500 Index are deletes from the CSI 300 Index while 7 deletes from the CSI 500 Index are adds to the CSI 300 Index.</li>
</ul>


There are 50 changes a side for the CSI 500 Index at the upcoming rebalance that will be implemented at the close of trading on 9 December.
One-Way turnover at the rebalance is estimated at 12.64% leading to a one-way trade of CNY 9.3bn. The Materials, Information Technology and Consumer Discretionary sectors are net gainers.
9 adds to the CSI 500 Index are deletes from the CSI 300 Index while 7 deletes from the CSI 500 Index are adds to the CSI 300 Index.


CSI 500 Index Rebalance: 50 Changes a Side Leads to 12%+ One-Way Turnover

Shanghai United Imaging Health / Event-Driven

<ul>
<li>The index committee has continued to use a 6-month minimum listing history leading to five changes to the <a href="https://www.smartkarma.com/entities/sse-science-and-technology-innovation-board-50-index" target="_blank" data-smartkarma-citation="entities:29279:1" rel="noopener">SSE STAR50 (STAR50 INDEX)</a> in December.</li>
<li>All changes are in line with our forecasts and there appears to be some pre-positioning over the last week as the deletes have sold off hard.</li>
<li>One-Way turnover is estimated at 5.34% and will result in a one-way trade of CNY 3,766m. The estimated impact on the deletes is higher than that on the adds.</li>
</ul>


The index committee has continued to use a 6-month minimum listing history leading to five changes to the SSE STAR50 (STAR50 INDEX) in December.
All changes are in line with our forecasts and there appears to be some pre-positioning over the last week as the deletes have sold off hard.
One-Way turnover is estimated at 5.34% and will result in a one-way trade of CNY 3,766m. The estimated impact on the deletes is higher than that on the adds.


STAR50 Index Rebalance: Adds Outperform Deletes in the Last Week

<ul>
<li>With the review period nearly complete, there could be 4 changes using a 12-month minimum listing history, and 5 changes using a 6-month minimum listing history.</li>
<li>The market cap of potential adds using a 6-month minimum listing history is higher and there is a higher probability of a 6-month minimum listing history being used.</li>
<li>The potential adds have outperformed the potential deletes and the index. Similar to the last few rebalances, we could see the adds outperform post the end of the review period.</li>
</ul>


With the review period nearly complete, there could be 4 changes using a 12-month minimum listing history, and 5 changes using a 6-month minimum listing history.
The market cap of potential adds using a 6-month minimum listing history is higher and there is a higher probability of a 6-month minimum listing history being used.
The potential adds have outperformed the potential deletes and the index. Similar to the last few rebalances, we could see the adds outperform post the end of the review period.


STAR50 Index Rebalance Preview: Stable Long/Short Performance in a Volatile Market

HK/China Healthcare Analyst (ex-Fosun Pharma)

Xinyao (Criss) Wang

Equity Bottom-Up

<ul>
<li>IRay Masters all the major core technologies. It has a complete technical system of TFT SENSOR design and invention patents in the field of scintillators,setting it apart from domestic peers. </li>
<li>The market where iRay is located has slow growth rate and obvious growth ceiling. The higher the short-term performance growth of iRay, the faster it would encounter a growth bottleneck.</li>
<li>IRay is overvalued. The valuation has already overdrawn the performance of the next few years. Any deceleration in revenue/profit in any given year would lead to a significant valuation correction.</li>
</ul>


IRay Masters all the major core technologies. It has a complete technical system of TFT SENSOR design and invention patents in the field of scintillators,setting it apart from domestic peers. 
The market where iRay is located has slow growth rate and obvious growth ceiling. The higher the short-term performance growth of iRay, the faster it would encounter a growth bottleneck.
IRay is overvalued. The valuation has already overdrawn the performance of the next few years. Any deceleration in revenue/profit in any given year would lead to a significant valuation correction.


IRay Technology (688301.CH) - Overvalued; Performance Deceleration Will Lead to Valuation Correction

China

Andon Health Co., Ltd. develops, manufactures and sells medical electronic devices for home use.  The Company's products include blood pressure monitors, blood glucose monitors, and digital thermometers.

Shandong Weigao Group Medical Polymer Company Limited, through its subsidiaries, researches and develops, produces, and sells single-use aseptic polymer medical products.

Shandong Weigao Group Medical Polymer Co (1066 HK)

Sinocare Inc. develops, manufactures, sells biosensor technology real-time detection products. The Company's main products include rapid trace blood glucose testers, and supporting blood glucose testing strips.

Shandong Pharmaceutical Glass Co., Ltd. manufactures and markets a variety of pharmaceutical glass products including molded vials, tube vials, ampoule, amber vials, infusion vials, and glass tubes.  The Company also manufactures paper packaging boxes and invests in petrochemical industry.

Shandong Pharmaceutical Glass Co., Ltd. A (600529 CH)

Shandong Pharmaceutical Glass Co., Ltd. A

Guangzhou Wondfo Biotech Co.,Ltd. was founded in 1992. The company's line of business includes manufacturing of medical diagnostic tests.  Guangzhou Wondfo Biotech serves customers around the world.

Double Medical Technology Inc. operates as an orthopedic devices manufacturing company. The Company produces and sells physical therapy equipment, orthopedic surgical instruments, injection puncture, and other products. Double Medical Technology markets its products throughout China.

Microport Scientific Corp. manufactures interventional and minimally invasive devices for keyhole surgery. The Company's products are used to treat vascular diseases and is developing devices to treat diabetes and orthopedic diseases.

Shinva Medical Instrument Co., Ltd. manufactures and markets medical instruments and equipment.  The Company's products include sterilization equipment, radiation diagnosis and radiotherapy equipment, chemical indication products, and medical environmental protection equipment.

Shanghai Tofflon Science and Technology Company Limited develops, designs, produces and markets pharmaceutical freeze dryer and related systems. The Company's main products include in-place sterilisation, in-place lyophilization cleaners, laboratory freeze dryers, production freeze dryers, liquid nitrogen freeze dryers and freeze drying systems and equipments.

Lepu Medical Technology (Beijing) Co., Ltd. develops, produces and sells medical devices and parts.  The Company also offers medical devices consulting services.  The company's products include stent system and blockage system.

Osstem Implant Co., Ltd. manufactures dental implant system. The Company also markets dental management software. Osstem Implant provides products for dental surgery and exports abroad.

JEOL Ltd. manufactures electron optics instruments and analytical instruments including electron microscope, X-ray diffractometer and spectrometer and thermographs.  The Company also makes semiconductor manufacturing equipment, medical equipment and industrial equipment.

Integra LifeSciences Holdings Corp develops, manufactures, and markets medical devices, implants, and biomaterials. The Company's products are primarily used in the treatment of burns and skin defects, spinal and cranial disorders, orthopedics, and other surgical applications.

Poly Medicure Limited manufactures disposable healthcare products. The Company offers a wide range of products for infusion therapy, anesthesia, urology, gastroenterology, blood management, surgery and drainage, and catheters.

CONMED Corporation provides orthopedic products, specializing in arthroscopy and powered surgical instruments.  The Company develops, manufactures, and supplies surgical instruments and systems used in a range of surgical procedures.  CONMED's products include arthroscopic surgery devices and powered surgical instruments, electrosurgery systems, and ECG electrodes for heart monitoring.

QuidelOrtho Corporation provides health care services. The Company offers technologies and platforms to benefit customers with expanded access to clinical chemistry, immunoassay, molecular diagnostics, immunohematology, donor screening, and point-of-care diagnostics offerings.

LeMaitre Vascular, Inc. manufactures medical devices for vascular surgeons and interventionists.  The Company develops, produces, and markets disposable and implantable devices for the treatment of peripheral vascular disease, such as stent grafts, anastomotic clips, valvulotomes, radiopaque marking tape, shunts, and embolectomy catheters.

NIHON KOHDEN CORPORATION develops, manufactures, and sells medical equipment, transformers, and power switches and devices.  The Company's products include testing equipment for cerebral nerve such as electroencephalographs, circulatory systems, diagnostic equipment, catheters, biogenic monitoring systems such as electrocardiographs used into patient monitoring systems.

NuVasive, Inc. designs, develops, and markets products for the surgical treatment of spine disorders. The Company's products include Maximum Access Surgery (MAS) and Fusion products.

Hartalega Holdings Bhd. manufactures a wide range of latex gloves. The Company's products include natural rubber examination gloves, nitrile examination gloves, nitrile clean room gloves and natural rubber surgical gloves.

iRay Technology Company Limited manufactures optical components. The Company produces and sells amorphous silicon flat detectors and other products. iRay Technology markets its products throughout China.

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iRay Technology (688301 CH)

STAR50 Index Rebalance Preview: Another Five Potential Changes in March

There could be 5 changes using a 6-month minimum listing history. One-way turnover will be 5%+ resulting in a one-way trade of CNY4bn. Impact on...

Brian Freitas

CSI 500 Index Rebalance: 50 Changes a Side Leads to 12%+ One-Way Turnover

There are 50 adds/deletes for the index in Dec. One-way turnover is 12.6% leading to a one-way trade of CNY 9bn. There are 16 overlaps between the...

Brian Freitas

STAR50 Index Rebalance: Adds Outperform Deletes in the Last Week

There are 5 changes for the STAR50 in Dec. The changes were forecast; the adds have outperformed the deletes in the last week. Historically, a long...

Brian Freitas

STAR50 Index Rebalance Preview: Stable Long/Short Performance in a Volatile Market

We expect the index committee to continue using a 6-month minimum listing history. That means 5 changes in December. The potential adds have...

Brian Freitas

IRay Technology (688301.CH) - Overvalued; Performance Deceleration Will Lead to Valuation Correction

iRay masters all the major core technologies, but the market where iRay is located has slow growth rate and obvious growth ceiling. Any...

Xinyao (Criss) Wang

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