Pan-Asia Index Flows & Special Situations, Quiddity Advisors

Janaghan Jeyakumar, CFA

Pan-Asia Index Flows & Special Situations

Quiddity Advisors

Pan-Asia Catalysts/Events

Event-Driven

<ul>
<li>STAR 50 index is a tech-focused, blue-chip index in Mainland China which tracks the top 50 largest and most liquid names in the STAR market of the Shanghai Stock Exchange.</li>
<li>STAR 100 index tracks the next 100 names (51st-150th ranks) and it represents the mid-cap segment of the STAR market.</li>
<li>In this insight, we take a look at the potential ADDs/DELs for the STAR 50 and STAR 100 indices for the December 2024 index rebal event.</li>
</ul>


STAR 50 index is a tech-focused, blue-chip index in Mainland China which tracks the top 50 largest and most liquid names in the STAR market of the Shanghai Stock Exchange.
STAR 100 index tracks the next 100 names (51st-150th ranks) and it represents the mid-cap segment of the STAR market.
In this insight, we take a look at the potential ADDs/DELs for the STAR 50 and STAR 100 indices for the December 2024 index rebal event.


Quiddity Leaderboard STAR 50/100 Dec 24: Shocking Changes to Expectations After Wild Market Swings

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

Xiamen Amoytop Biotech Co Ltd / Event-Driven

<ul>
<li>90% of the way through the review period, there could be 1 change for 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> and 5 changes for the STAR100 Index.</li>
<li>We estimate turnover of 1% for 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">STAR50 INDEX</a> and 5.5% for the STAR100 Index. The net round-trip trade is CNY 3.2bn (US$453m).</li>
<li>The forecast add 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> has massively outperformed the forecast deletion from the index over the last two months.</li>
</ul>


90% of the way through the review period, there could be 1 change for the SSE STAR50 (STAR50 INDEX) and 5 changes for the STAR100 Index.
We estimate turnover of 1% for the STAR50 INDEX and 5.5% for the STAR100 Index. The net round-trip trade is CNY 3.2bn (US$453m).
The forecast add to the SSE STAR50 (STAR50 INDEX) has massively outperformed the forecast deletion from the index over the last two months.


STAR50/STAR100 Index Rebalance Preview: Massive Outperformance in Last Two Months; Time to Unwind?

Quiddity Leaderboard STAR 50/100 Dec 24: STAR 50 Exp ADD Could Outperform STAR 50 Exp DEL

HK/China Healthcare Analyst (ex-Fosun Pharma)

Xinyao (Criss) Wang

Equity Capital Markets

<ul>
<li>Medtide relies heavily on limited number of customers to contribute performance. If there is any significant reduction in demand by its major customers, Medtide’s performance growth would be materially/adversely affected.</li>
<li>Due to geopolitical conflicts, pharmaceutical companies are becoming more cautious about their reliance on China CXO. So, the development of Medtide’s overseas business would become more uncertain in this context.</li>
<li>Medtide's business scale is still small and its position in the global peptide CXO industry is not as strong as described. Valuation of Medtide should be lower than peers.</li>
</ul>


Medtide relies heavily on limited number of customers to contribute performance. If there is any significant reduction in demand by its major customers, Medtide’s performance growth would be materially/adversely affected.
Due to geopolitical conflicts, pharmaceutical companies are becoming more cautious about their reliance on China CXO. So, the development of Medtide’s overseas business would become more uncertain in this context.
Medtide's business scale is still small and its position in the global peptide CXO industry is not as strong as described. Valuation of Medtide should be lower than peers.


Pre-IPO Medtide - The Industry, the Business and the Concerns

<ul>
<li>Zadaxin is the biggest performance driver of SciClone. However, due to the challenge of generic drugs/VBP, sales of Zadaxin wouldn’t maintain strong growth momentum.  SciClone’s revenue/profit would face a significant decline.</li>
<li>The capital participating the IPO had reduced their holdings or exit entirely. Considering the low valuation/poor liquidity in HKEX, we think this privatization provides investors with a great exit opportunity.</li>
<li>For arbitrage investors, the annualized return depends on the time it takes to complete the privatization (e.g. about 5%-10%). If the privatization fails, share price could fall back to HK$14.</li>
</ul>


Zadaxin is the biggest performance driver of SciClone. However, due to the challenge of generic drugs/VBP, sales of Zadaxin wouldn’t maintain strong growth momentum.  SciClone’s revenue/profit would face a significant decline.
The capital participating the IPO had reduced their holdings or exit entirely. Considering the low valuation/poor liquidity in HKEX, we think this privatization provides investors with a great exit opportunity.
For arbitrage investors, the annualized return depends on the time it takes to complete the privatization (e.g. about 5%-10%). If the privatization fails, share price could fall back to HK$14.


Sciclone Pharmaceuticals (6600.HK) - The Privatization Offers a Good Exit Opportunity

China

Sinopep-Allsino Bio Pharmaceutical Co.,Ltd. researches, develops, manufactures, and sells peptide drugs and small molecule drugs. The Company produces liraglutide, somalutide, alogliptin benzoate, bivalirudin, eptifibatide, and more. Sinopep-Allsino Bio Pharmaceutical applies its products in treatment of diabetes, cardiovascular diseases, tumors, and other fields.

Sinopep-Allsino Bio Pharmaceutical (688076 CH)

Price Gauge
52-week Range	0.00 - 0.00
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Sinopep-Allsino Bio Pharmaceutical (688076 CH)

Quiddity Leaderboard STAR 50/100 Dec 24: Shocking Changes to Expectations After Wild Market Swings

We previously had one expected ADD/DEL for STAR 50 but we do not expect that change to take place now. We also had 6 expected ADDs/DELs for STAR...

Janaghan Jeyakumar, CFA

STAR50/STAR100 Index Rebalance Preview: Massive Outperformance in Last Two Months; Time to Unwind?

We forecast 1 change for the STAR50 and 5 changes for the STAR100. There is over 9x ADV to trade on the STAR50 changes. The net round-trip trade is...

Brian Freitas

Quiddity Leaderboard STAR 50/100 Dec 24: STAR 50 Exp ADD Could Outperform STAR 50 Exp DEL

The expected STAR 50 ADD and DEL could see net index buying of 14x ADV and net index selling of 8x ADV respectively during the STAR 50/100 index...

Janaghan Jeyakumar, CFA

Pre-IPO Medtide - The Industry, the Business and the Concerns

Medtide's growth is at risk due to high reliance on limited customers, uncertainty in overseas business and lower-than-expected position in global...

Xinyao (Criss) Wang

Sciclone Pharmaceuticals (6600.HK) - The Privatization Offers a Good Exit Opportunity

The success rate of privatization could be 70-80%. The time could be about six months. The annualized rate of return isn't attractive.It's up to...

Xinyao (Criss) Wang

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

Quiddity Leaderboard STAR 50/100 Dec 24: Shocking Changes to Expectations After Wild Market Swings

We previously had one expected ADD/DEL for STAR 50 but we do not expect that change to take place now. We also had 6 expected ADDs/DELs for STAR...

Janaghan Jeyakumar, CFA

STAR50/STAR100 Index Rebalance Preview: Massive Outperformance in Last Two Months; Time to Unwind?

We forecast 1 change for the STAR50 and 5 changes for the STAR100. There is over 9x ADV to trade on the STAR50 changes. The net round-trip trade is...

Brian Freitas

Quiddity Leaderboard STAR 50/100 Dec 24: STAR 50 Exp ADD Could Outperform STAR 50 Exp DEL

The expected STAR 50 ADD and DEL could see net index buying of 14x ADV and net index selling of 8x ADV respectively during the STAR 50/100 index...

Janaghan Jeyakumar, CFA

Pre-IPO Medtide - The Industry, the Business and the Concerns

​Medtide's growth is at risk due to high reliance on limited customers, uncertainty in overseas business and lower-than-expected position in global...

Xinyao (Criss) Wang

Sciclone Pharmaceuticals (6600.HK) - The Privatization Offers a Good Exit Opportunity

The success rate of privatization could be 70-80%. The time could be about six months. The annualized rate of return isn't attractive.It's up to...

Xinyao (Criss) Wang

Medtide's growth is at risk due to high reliance on limited customers, uncertainty in overseas business and lower-than-expected position in global...