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

Brian Freitas

Pan-Asia Index Rebalances/ Events/ Delta One

Event-Driven

<ul>
<li>The March rebalance should see the slow crawl toward 80 index members continue. We should get up to 68-70 members in March. Reaching 80 by June is unlikely.</li>
<li>High probability inclusions are <a href="https://www.smartkarma.com/entities/beijing-kuaishou-technology-co-ltd" target="_blank" data-smartkarma-citation="entities:29725:1" rel="noopener">Kuaishou Technology (1024 HK)</a>, <a href="https://www.smartkarma.com/entities/smoore-international" target="_blank" data-smartkarma-citation="entities:28241:1" rel="noopener">Smoore International (6969 HK)</a>, <a href="https://www.smartkarma.com/entities/nongfu-spring" target="_blank" data-smartkarma-citation="entities:28955:1" rel="noopener">Nongfu Spring (9633 HK)</a>, <a href="https://www.smartkarma.com/entities/jd-health-international-inc" target="_blank" data-smartkarma-citation="entities:29677:1" rel="noopener">JD Health (6618 HK)</a> and <a href="https://www.smartkarma.com/entities/jd-logistics" target="_blank" data-smartkarma-citation="entities:31500:1" rel="noopener">JD Logistics (2618 HK)</a>.</li>
<li>Currently, index turnover due to capping/float changes is low which will allow more stocks to be added to the index. Increase in the turnover will result in fewer changes.</li>
</ul>


The March rebalance should see the slow crawl toward 80 index members continue. We should get up to 68-70 members in March. Reaching 80 by June is unlikely.
High probability inclusions are Kuaishou Technology (1024 HK), Smoore International (6969 HK), Nongfu Spring (9633 HK), JD Health (6618 HK) and JD Logistics (2618 HK).
Currently, index turnover due to capping/float changes is low which will allow more stocks to be added to the index. Increase in the turnover will result in fewer changes.


HSI Index Rebalance Preview (March 2022): The Slow Crawl Continues

Overseas Chinese Equities, Aequitas Research

Ming Lu

Overseas Chinese Equities

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.

Equity Bottom-Up

<ul>
<li>NS expanded its distribution channel with the funds raised from IPO.</li>
<li>NS water revenue did not decrease even in the worst time of COVID-19, but increased significantly after the pandemic was eased.</li>
<li>We believe the stock is obviously overvalued compared to soft drink brands distributed in China.</li>
</ul>


NS expanded its distribution channel with the funds raised from IPO.
NS water revenue did not decrease even in the worst time of COVID-19, but increased significantly after the pandemic was eased.
We believe the stock is obviously overvalued compared to soft drink brands distributed in China.


Nongfu Spring (9633 HK): Typical Good Company but Bad Stock

Asia Pac IPO & Placement Research, China biotech, Aequitas Research

Ke Yan, CFA, FRM

Asia Pac IPO & Placement Research, China biotech

Quantitative Analysis

<ul>
<li>We analyzed the latest HK SFC report for aggregate short position as of Dec 3rd. </li>
<li>Top short increases and decreases were tabulated for one week and four week period. </li>
<li>We highlight short interest increase for Nongfu Spring and short covers for Bilibili, Wynn Macau, and SJM. </li>
</ul>


We analyzed the latest HK SFC report for aggregate short position as of Dec 3rd. 
Top short increases and decreases were tabulated for one week and four week period. 
We highlight short interest increase for Nongfu Spring and short covers for Bilibili, Wynn Macau, and SJM. 


HK Short Interest: Short Covers for Macau Gaming

Research from EqualOcean, EqualOcean

EqualOcean

Research from EqualOcean

EqualOcean is an investment research firm and information service provider focusing on China's Technology, Automotive and Consumer Internet sectors. With unique research and due diligence methodology, we provide tailored insights into a wide range of industries and companies, empowering our clients' value-added decisions.

Founded in 2014, EqualOcean is headquartered in Beijing and has offices in Shanghai, Shenzhen and New York.

Thematic (Sector/Industry)

<ul><li>The silver market will be the next blue ocean for the consumer goods market in China.</li><li>Redefining the seniors - Seniors in China are actually not yet 'old.'</li><li>Silver netizens - According to the China Internet Network Information Center (CINIC) that by end of June 2021, netizens over 50 years old accounted for 28% of the total number, reported 283 million.</li></ul>

The silver market will be the next blue ocean for the consumer goods market in China.Redefining the seniors - Seniors in China are actually not yet 'old.'Silver netizens - According to the China Internet Network Information Center (CINIC) that by end of June 2021, netizens over 50 years old accounted for 28% of the total number, reported 283 million.

Revealing the Hidden 'Silver Consumption' in China

<ul>
<li>
<a href="https://www.smartkarma.com/entities/china-resources-beer-holdings" target="_blank" data-smartkarma-citation="entities:399:1" rel="noopener">China Resources Beer Holdings (291 HK)</a>, <a href="https://www.smartkarma.com/entities/enn-energy-holdings-ltd" target="_blank" data-smartkarma-citation="entities:316:1" rel="noopener">ENN Energy (2688 HK)</a>, <a href="https://www.smartkarma.com/entities/jd-com-inc" target="_blank" data-smartkarma-citation="entities:29043:1" rel="noopener">JD.com Inc. (9618 HK)</a> and <a href="https://www.smartkarma.com/entities/netease" target="_blank" data-smartkarma-citation="entities:29030:1" rel="noopener">NetEase (9999 HK)</a> will be added to the HSI at the close on 3 December.</li>
<li>One-Way turnover is estimated at 5.05% and will result in a one-way trade of HK$10.1bn due to the inclusions, float changes and capping changes.</li>
<li>Currently at 64 members, Hang Seng Indexes is unlikely to reach its 80 index constituent target for the HSI by mid 2022 and the timeline is likely to be extended.</li>
</ul>



China Resources Beer Holdings (291 HK), ENN Energy (2688 HK), JD.com Inc. (9618 HK) and NetEase (9999 HK) will be added to the HSI at the close on 3 December.
One-Way turnover is estimated at 5.05% and will result in a one-way trade of HK$10.1bn due to the inclusions, float changes and capping changes.
Currently at 64 members, Hang Seng Indexes is unlikely to reach its 80 index constituent target for the HSI by mid 2022 and the timeline is likely to be extended.


HSI Index Rebalance: Tiptoeing to the 80 Index Member Target

China

Nongfu Spring Co. Ltd. supplies soft drinks. The Company develops, produces, and sells bottled mineral water, fruit juice, sports drinks, and tea drinks. Nongfu Spring also offers barreled mineral water door-to-door services.

Price Gauge
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Nongfu Spring (9633 HK)

HSI Index Rebalance Preview (March 2022): The Slow Crawl Continues

We are at 64 index members currently & are unlikely to reach the target of 80 members by the June rebal. We highlight 10 stocks that could be added...

Brian Freitas