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 are no constituent changes for the <a href="https://www.smartkarma.com/entities/hang-seng-tech-index" target="_blank" data-smartkarma-citation="entities:31367:1" rel="noopener">Hang Seng Tech Index (HSTECH INDEX)</a> in June but there are some free float changes and a bunch of capping changes.</li>
<li>Estimated one-way turnover is 3.2% leading to a one-way trade of HK$3bn (US$384m). There are 3 stocks with over 1 day of ADV to trade.</li>
<li>
<a href="https://www.smartkarma.com/entities/trip-com-group-ltd-23a341d0-4f63-4175-a8c5-ee990906cacd" target="_blank" data-smartkarma-citation="entities:36424:1" rel="noopener">Trip.com (9961 HK)</a> has over 1x ADV to buy from <a href="https://www.smartkarma.com/entities/hang-seng-tech-index" target="_blank" data-smartkarma-citation="entities:31367:1" rel="noopener">Hang Seng Tech Index (HSTECH)</a> trackers. The stock is also an add to the <a href="https://www.smartkarma.com/entities/hong-kong-hang-seng-index" target="_blank" data-smartkarma-citation="entities:22899:1" rel="noopener">Hong Kong Hang Seng Index (HSI)</a>.</li>
</ul>


There are no constituent changes for the Hang Seng Tech Index (HSTECH INDEX) in June but there are some free float changes and a bunch of capping changes.
Estimated one-way turnover is 3.2% leading to a one-way trade of HK$3bn (US$384m). There are 3 stocks with over 1 day of ADV to trade.

Trip.com (9961 HK) has over 1x ADV to buy from Hang Seng Tech Index (HSTECH) trackers. The stock is also an add to the Hong Kong Hang Seng Index (HSI).


HSTECH Index Rebalance: Float & Capping Changes Lead to US$768m Two-Way Trade

China/Asia TMT

Shawn Yang

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

JD Health International  / Equity Bottom-Up

<ul>
<li>JDHealth (JDH) reported C1Q23 top line and non-IFRS operating profit 56% and 78% of our C1H23 estimates. </li>
<li>We now take a more positive view on JDH’s ability to at manage the issue at certain periods and certain areas;</li>
<li>We raise TP from HK$44 to HK$57 and rating to BUY. Possible risks include renewed margin pressure from prescription drugs</li>
</ul>


JDHealth (JDH) reported C1Q23 top line and non-IFRS operating profit 56% and 78% of our C1H23 estimates. 
We now take a more positive view on JDH’s ability to at manage the issue at certain periods and certain areas;
We raise TP from HK$44 to HK$57 and rating to BUY. Possible risks include renewed margin pressure from prescription drugs


[JD Health (6618 HK) Rating Change]: Strong Profitability Likely Achieved Margin Reversal

HK/China Healthcare Analyst (ex-Fosun Pharma)

Xinyao (Criss) Wang

Equity Capital Markets

Neusoft Xikang Healthcare Technology Co Ltd / Equity Capital Markets

Neusoft Xikang Healthcare Technology Co Ltd

<ul>
<li>The cloud hospital platform services serve as “the entry point” of <a href="https://www.smartkarma.com/entities/neusoft-xikang-healthcare-technology-co-ltd" target="_blank" data-smartkarma-citation="entities:33447:1" rel="noopener">Neusoft Xikang</a>’s overall solutions, but the restrictions imposed by cities would affect the scalability of business.</li>
<li>The variety of 2B objects and the diversity of medical scenarios covered would be conducive to the transformation to 2C business, resulting in stronger user stickiness and more monetization opportunities.</li>
<li>Xikang’s 2B business is weaker than ClouDr. Financial performance would finally reflect the effectiveness and rationality of business model. Xikang’s valuation should be lower than ClouDr and Ping An Good Doctor.</li>
</ul>


The cloud hospital platform services serve as “the entry point” of Neusoft Xikang’s overall solutions, but the restrictions imposed by cities would affect the scalability of business.
The variety of 2B objects and the diversity of medical scenarios covered would be conducive to the transformation to 2C business, resulting in stronger user stickiness and more monetization opportunities.
Xikang’s 2B business is weaker than ClouDr. Financial performance would finally reflect the effectiveness and rationality of business model. Xikang’s valuation should be lower than ClouDr and Ping An Good Doctor.


Pre IPO Neusoft Xikang Healthcare Technology - Some Points Worth the Attention

Thematic (Sector/Industry)

<ul>
<li>China's retail pharmacy market has entered a new era of integration as the industry growth is slowing down. After JD Health/Alibaba Health enter this industry, the game rule changes. </li>
<li>In the short term, the offline chain pharmacies, JD Health, Alibaba Health, etc. would still have the opportunity to carve up market share under the trend of prescription outflow.</li>
<li>In the long term, it depends on who're the first to establish new omni-channel retail scenarios, because the "new retail" model would comprehensively surpass traditional model from cost to experience.</li>
</ul>


China's retail pharmacy market has entered a new era of integration as the industry growth is slowing down. After JD Health/Alibaba Health enter this industry, the game rule changes. 
In the short term, the offline chain pharmacies, JD Health, Alibaba Health, etc. would still have the opportunity to carve up market share under the trend of prescription outflow.
In the long term, it depends on who're the first to establish new omni-channel retail scenarios, because the "new retail" model would comprehensively surpass traditional model from cost to experience.


China Retail Pharmacy Industry - New Game Rule, New Challenges, New Outlook

Head of Research, IPOs & Placements, Aequitas Research

Sumeet Singh

Head of Research, IPOs & Placements

IPOs and Placements coverage across Asia Pacific

Aequitas Research

We cover all listing across the Asia Pacific along with follow-up placements. As of Dec 2020, our team had covered 539 IPOs with a hit rate of 73.5% and 685 placements with a hit rate of 66.8%.

We combine fundamental bottom-up views with our proprietary quantitative framework to provide a holistic coverage across new listings and placements. Our coverage includes pre-IPO notes before the deal is launched, follow-up analysis once the deal is live and post-listing trading analysis as well.

JD Industrial Technology  / Equity Capital Markets

<ul>
<li>
<a href="https://www.smartkarma.com/entities/jd-industrials" target="_blank" data-smartkarma-citation="entities:36875:1" rel="noopener">JD Industrials</a> is looking to raise about US$1bn in its upcoming HK IPO. </li>
<li>JD Industrials (JDI) is a leading industrial supply chain technology and service provider in China in terms of GMV in each year during the Track Record Period, according to CIC.</li>
<li>In this note, we talk about the not-so-positive aspects of the deal.</li>
</ul>



JD Industrials is looking to raise about US$1bn in its upcoming HK IPO. 
JD Industrials (JDI) is a leading industrial supply chain technology and service provider in China in terms of GMV in each year during the Track Record Period, according to CIC.
In this note, we talk about the not-so-positive aspects of the deal.


JD Industrials Pre-IPO - The Negatives - Hasn't Provided a Whole Lot of Details

China

JD Health International Inc. operates drug stores. The Company retails Chinese and Western medicines, nutrition products, health care products, and other products. JD Health International markets its products throughout China.

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JD Health International (6618 HK)

HSTECH Index Rebalance: Float & Capping Changes Lead to US$768m Two-Way Trade

Estimated one-way turnover is 3.2% leading to a one-way trade of HK$3bn (US$384m). There are 3 stocks with over 1 day of ADV to trade. Trip.com is...

Brian Freitas

[JD Health (6618 HK) Rating Change]: Strong Profitability Likely Achieved Margin Reversal

We now take a more positive view on JDH’s ability to at manage the issue at certain periods and certain areas; We raise TP from HK$44 to HK$57 and...

Blue Lotus Research Institute

Pre IPO Neusoft Xikang Healthcare Technology - Some Points Worth the Attention

Xikang’s business model has its logic.But due to the restrictions imposed by cities, the scalability is uncertain.Without strong 2B business as...

Xinyao (Criss) Wang

China Retail Pharmacy Industry - New Game Rule, New Challenges, New Outlook

China's retail pharmacy market has entered a new era with new game rule.As industry growth is slowing down, which companies are the first to...

Xinyao (Criss) Wang

JD Industrials Pre-IPO - The Negatives - Hasn't Provided a Whole Lot of Details

JD Industrials is looking to raise about US$1bn in its upcoming HK IPO. In this note, we talk about the not-so-positive aspects of the deal.

Sumeet Singh

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