Head of Research, Krungthai XSpring

Waraporn Wiboonkanarak

Head of Research

A full service Thai brokerage

Krungthai XSpring

Krungthai XSpring is a full service broker. The company provides a wide range of investment services such as Securities Brokerage, Derivative Agent Business, Securities Borrowing and Lending, Securities Trading, Underwriting, Financial Advisory, Wealth Advisory, Private Fund Management and International Markets Securities Trading. 

In terms of credibility, Fitch Ratings has assigned Krunghtai XSpring a long-term rating of AA- and a national short-term rating of F1+ with stable outlook.

Thematic (Sector/Industry)

<ul><li>The bank runs in the global banking system will continue to pose downside risk to global banking stocks, including Thai banks, until the Fed and the ECB can come up with systematic solutions, and a worsening of the situation would lead to huge unrealized losses from investment in government bonds.</li><li>A temporary full-deposit guarantee is another potential way to address the banking crisis; note that the US guarantees around USD10trn out of total deposits of USD18trn, and the FDIC incurs costs of just USD100bn.</li><li>The longer the banking crisis is drawn-out, the greater the risks related to a credit crunch and the higher the chance of a global economic recession.</li></ul>

The bank runs in the global banking system will continue to pose downside risk to global banking stocks, including Thai banks, until the Fed and the ECB can come up with systematic solutions, and a worsening of the situation would lead to huge unrealized losses from investment in government bonds.A temporary full-deposit guarantee is another potential way to address the banking crisis; note that the US guarantees around USD10trn out of total deposits of USD18trn, and the FDIC incurs costs of just USD100bn.The longer the banking crisis is drawn-out, the greater the risks related to a credit crunch and the higher the chance of a global economic recession.

SGX Market Strategist, Equity & Fixed Income, Singapore Exchange Ltd (SGX)

Geoff Howie

SGX Market Strategist, Equity & Fixed Income

Asia’s leading multi-asset exchange

Singapore Exchange Ltd (SGX)

Singapore Exchange is Asia’s leading and trusted market infrastructure, facilitating the exchange of capital and ideas to create value for people, businesses and economies. As a multi-asset exchange operating equity, fixed income and derivatives markets to the highest regulatory standards, SGX is a vertically integrated business that provides listing, trading, clearing, settlement, depository and data services.

With about 40% of listed companies and over 80% of listed bonds originating outside of Singapore as well as established linkages across the region and in Europe, SGX is Asia’s most international and connected exchange. Offering a full suite of derivatives products across Asian equity indices, commodities and currencies, SGX is the world’s most liquid international market for the benchmark equity indices of China, India, Japan and ASEAN.

As Asia’s pioneering central counterparty, SGX is globally recognised for its risk management and clearing capabilities, and was one of the first globally to adopt the Principles for Financial Market Infrastructure.

Headquartered in AAA-rated Singapore, SGX has over 800 employees including offices in Beijing, Chicago, Hong Kong, London, New York, Mumbai, San Francisco, Shanghai and Tokyo.

Equity Bottom-Up

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 <img src='https://api2.sgx.com/sites/default/files/2022-05/Fu%20yu%20MD.PNG' alt='Fu Yu - MD' />
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 <div class='content-caption'>Fu Yu - MD</div>
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For banking and finance veteran David Seow, the African proverb “If you want to run fast, run alone. If you want to run far, run together” carries a particular resonance - it encapsulates his core management values of teamwork, communication, innovation and action. 
“Each person’s contribution matters, but only if we work together,” said the Group Managing Director of SGX-listed precision plastic components manufacturer Fu Yu Corporation Ltd. 
“Teamwork is key for an organisation to flourish. We need people who are able to complement each other’s diverse skillsets, and people who do their part properly to derive the right outcomes for everyone in the organisation.” 
In turn, good communication forms the bedrock of strong teamwork. “We should be unafraid to give constructive feedback, to seek advice to learn and improve, and work together to achieve common goals,” he added. 
This is where innovation plays a critical role. “In this fast-evolving world, you either adapt to stay ahead of the curve, or risk being left behind. Innovation does not have to be in technology - it can also be in changing the ways we do business and transforming mindsets.” 
Last but not least, it’s all about action, Seow pointed out. “Anyone who has worked with me will know that I get things done, and I do things the right way. I also prefer working with people who deliver results rather than excuses. It’s about taking action yourself, and not resting on your laurels, or waiting for someone else to do it for you.” 
A Bachelor of Science in Economics graduate from Singapore Management University, Seow spent nearly a decade of his career as a Senior Banker and Vice President of Structured Trade &amp; Commodity Finance in Societe Generale, Singapore.  He was appointed Fu Yu’s Group Managing Director in August 2021. 
“I learnt that regardless of my education and earlier work experience, I should avoid pigeonholing myself in a single industry to achieve success,” Seow recalled. 
“I went to a business school where most of the students aspired to be “investment bankers”. While I happily took that route for 10 years, I wanted to do more than what my colleagues and clients expected of me, and never shied away from working with others on projects outside my regular job. In hindsight, these experiences made me realise I had a penchant for business management, troubleshooting issues and creating solutions.” 
Although Seow may be seen as a “textbook finance expert”, he attributes much of his finance basics and business acumen to his experiences with start-ups, including co-founding and managing a restaurant in 2013, which has achieved and retained a Michelin star since 2017. 
“Nothing beats the “real-life” exposure of preparing and executing business plans, setting up accounts, managing capital expenditure and working cash cycles, retaining and motivating employees, as well as fire-fighting to ensure business continuity,” he added. In Growth Gear 
These cumulative experiences have equipped Seow well for his current role. “Fu Yu is a stable and classic manufacturing company that has been in operation for more than four decades,” he noted. 
“As Managing Director, I bring my go-getter, entrepreneurial, and proactive mindset to transform Fu Yu from a company that has been sailing steadily to one that is forward-thinking, innovative and in growth mode.” 
Starting out in 1978 as a small tooling design, fabrication and fitting shop, Fu Yu Corporation has since grown into a market leader, providing vertically integrated services for the manufacture of precision plastic components and the fabrication of precision moulds and dies. The Group was listed on SGX Mainboard in June 1995. 
Today, the Group has an established presence in the region with manufacturing facilities located in Singapore, Malaysia and China. It has built a broad and diversified customer base of blue-chip companies in the printing and imaging, networking and communications, consumer, medical, automotive as well as power tool sectors. 
Its comprehensive capabilities range from precision tool design and fabrication and precision injection moulding to secondary processes, such as silk screen printing, ultrasonic welding, heat staking and spray painting, as well as sub-assembly.  
Looking ahead, Fu Yu targets to boost growth in two ways - strengthening the Group’s capabilities and beefing up its talent pool. 
“We’ve launched several initiatives to expand our capabilities, such as technology and machine upgrades, a new innovation arm to work on modern products and designs, as well as improving efficiencies,” Seow said. 
“These “hardware” upgrades will work hand in hand with our corresponding “software” upgrades, as we upskill our employees and hire fresh talent to drive innovation within the Group.” 
With these initiatives, Seow expects a long growth runway for Fu Yu, where the organisation will not only be a manufacturer, but also a front-runner in advanced manufacturing and technology.  
“While we’ve always been known as a reliable pair of hands in manufacturing, these upgraded capabilities will enable us to work with our customers even more closely in areas of complex manufacturing and material science.” 
In parallel with its strategy to build a diversified product portfolio for business resilience and stability, Fu Yu intends to optimise its business mix to keep pace with current market trends, Seow noted. 
This will see the Group channelling greater resources towards boosting its business in market segments that display longer term stability and growth potential, such as medical, automotive, as well as eco-friendly and smart home consumer products. 
The Group’s manufacturing operations will also shift into higher gear as the redevelopment of its new factory in Singapore enters the final stages of completion. The plant is scheduled to begin operations in the third quarter of 2022, barring unforeseen circumstances. 
“With its adoption of Industry 4.0, this new “smart factory” will serve as a showcase of the Group’s advanced manufacturing capabilities,” he pointed out.  
“In addition to higher precision manufacturing capabilities and increased automation, our new factory will also feature seamless workflow across its tooling, moulding and assembly operations to achieve higher operational efficiencies and a reduced carbon footprint.” 
The Group is also in the process of broadening value-added services to customers. Its new division - Corporate Development - will work with research institutes in Singapore and other partners in the region to explore research and development (R&amp;D) programs, as well as identify commercially viable technologies to augment its manufacturing services. A Proactive Approach 
In this respect, COVID-19 has been a game-changer of sorts, Seow admitted. “COVID-19 was a timely reminder that we can never predict or pre-empt external conditions. However, we can control our own actions by proactively and continuously upgrading,” he added. 
“I want Fu Yu to be proactive and stay ahead of the curve, rather than be reactive, as that will then be too late. This is a mindset change which I am incorporating throughout the Group.” 
The pandemic also emphasised the need to have a greater control of one’s supply chain, or at least, have the ability to mitigate disruptions.  
“We’re taking things into our own hands to better manage our supply chain by centralising our procurement, which was previously done on a per site basis. To do this, we have already acquired and integrated a procurement company into the Group,” Seow noted. 
“We believe this is a differentiating factor from our competitors as it allows us to better manage our raw material prices and shorten lead times for delivery, which ultimately will benefit our customers and potentially attract new ones.” 
As for the Group’s Environmental, Social and Governance (ESG) goals, Seow is focused on optimising the Group’s energy consumption, which will help shrink its carbon footprint.  
“Some of the initiatives we’re working on include exploring the installation of solar panels in our factories, and integrating IoT technologies to improve real-time monitoring of utilities usage and machinery performance,” he said. 
“The challenge is to collect accurate data points that can be translated into useful information for our engineers to work on. With this, we can better measure and improve energy consumption by building an energy data model as a baseline which can be used to detect irregular utilities usage.” 
Apart from work, this 37-year-old father of a four-month-old son is passionate about golf. 
“I like how each game is different, even if you play at the same course. It doesn’t matter where your ball lands, because what matters most is the next shot, and how you proceed from the position you’re at, to the next position you want to get to. This applies in life as well.” 
Seow is also inspired by “a better me tomorrow”. “I try to be present in everything I do, which means being deliberate about learning from everything I experience, and making sure I am maturing and wiser every day.” 
And his advice to staff? “Be a do-er, don’t procrastinate and don’t make excuses,” he said. “Work hard, work smart, and always do the right thing.” Fu Yu Corporation Ltd 
Fu Yu provides vertically integrated services for the manufacture of precision plastic components and the fabrication of precision moulds and dies. Since its inception in 1978, the Group has grown to become one of the largest manufacturers of high precision plastic parts and moulds in Asia. Today, the Group has established a strong presence in the region with manufacturing facilities located in Singapore, Malaysia and China. Leveraging on over 40 years of operating history, the Group has built a broad and diversified customer base of blue-chip companies in the printing and imaging, networking and communications, consumer, medical, automotive and power tool sectors. 
The company website is: <a href="https://www.fuyucorp.com/">www.fuyucorp.com</a> 
Click <a href="https://www.sgx.com/securities/equities/F13">here</a> for the company's StockFacts page. 
For the year ended 31 December 2021 financial results, click <a href="https://links.sgx.com/1.0.0/corporate-announcements/NQ9V9NZN2W9OT5F1/703919_Fu%20Yu%20-%20FY2021%20News%20Release.pdf">here</a>. 
 

About kopi-C: the Company brew

Text: Jennifer Tan-Stanisic Photo: Company file kopi-C is a regular column on the SGX Research website that features C-level executives of leading companies listed on Singapore Exchange. These interviews are profiles of senior management aimed at helping investors better understand the individuals who run these corporations. 
For previous editions of kopi-C: the Company brew, please click <a href="https://www.sgx.com/research-education/market-dialogues">here</a>.   
For more information, or if you would like your senior executives to be featured on SGX Market Dialogues, please send suggestions to <a href="https://c/Users/tanje/Desktop/Working%20Files/kopi-C/jennifer.t@sgx.com">jennifer.t@sgx.com</a>.
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    Fu Yu - MD


For banking and finance veteran David Seow, the African proverb “If you want to run fast, run alone. If you want to run far, run together” carries a particular resonance - it encapsulates his core management values of teamwork, communication, innovation and action.  
“Each person’s contribution matters, but only if we work together,” said the Group Managing Director of SGX-listed precision plastic components manufacturer Fu Yu Corporation Ltd.  
“Teamwork is key for an organisation to flourish. We need people who are able to complement each other’s diverse skillsets, and people who do their part properly to derive the right outcomes for everyone in the organisation.”  
In turn, good communication forms the bedrock of strong teamwork. “We should be unafraid to give constructive feedback, to seek advice to learn and improve, and work together to achieve common goals,” he added.  
This is where innovation plays a critical role. “In this fast-evolving world, you either adapt to stay ahead of the curve, or risk being left behind. Innovation does not have to be in technology - it can also be in changing the ways we do business and transforming mindsets.”  
Last but not least, it’s all about action, Seow pointed out. “Anyone who has worked with me will know that I get things done, and I do things the right way. I also prefer working with people who deliver results rather than excuses. It’s about taking action yourself, and not resting on your laurels, or waiting for someone else to do it for you.”  
A Bachelor of Science in Economics graduate from Singapore Management University, Seow spent nearly a decade of his career as a Senior Banker and Vice President of Structured Trade &amp; Commodity Finance in Societe Generale, Singapore.  He was appointed Fu Yu’s Group Managing Director in August 2021.  
“I learnt that regardless of my education and earlier work experience, I should avoid pigeonholing myself in a single industry to achieve success,” Seow recalled.  
“I went to a business school where most of the students aspired to be “investment bankers”. While I happily took that route for 10 years, I wanted to do more than what my colleagues and clients expected of me, and never shied away from working with others on projects outside my regular job. In hindsight, these experiences made me realise I had a penchant for business management, troubleshooting issues and creating solutions.”  
Although Seow may be seen as a “textbook finance expert”, he attributes much of his finance basics and business acumen to his experiences with start-ups, including co-founding and managing a restaurant in 2013, which has achieved and retained a Michelin star since 2017.  
“Nothing beats the “real-life” exposure of preparing and executing business plans, setting up accounts, managing capital expenditure and working cash cycles, retaining and motivating employees, as well as fire-fighting to ensure business continuity,” he added.  In Growth Gear   
These cumulative experiences have equipped Seow well for his current role. “Fu Yu is a stable and classic manufacturing company that has been in operation for more than four decades,” he noted.  
“As Managing Director, I bring my go-getter, entrepreneurial, and proactive mindset to transform Fu Yu from a company that has been sailing steadily to one that is forward-thinking, innovative and in growth mode.”  
Starting out in 1978 as a small tooling design, fabrication and fitting shop, Fu Yu Corporation has since grown into a market leader, providing vertically integrated services for the manufacture of precision plastic components and the fabrication of precision moulds and dies. The Group was listed on SGX Mainboard in June 1995.  
Today, the Group has an established presence in the region with manufacturing facilities located in Singapore, Malaysia and China. It has built a broad and diversified customer base of blue-chip companies in the printing and imaging, networking and communications, consumer, medical, automotive as well as power tool sectors.  
Its comprehensive capabilities range from precision tool design and fabrication and precision injection moulding to secondary processes, such as silk screen printing, ultrasonic welding, heat staking and spray painting, as well as sub-assembly.   
Looking ahead, Fu Yu targets to boost growth in two ways - strengthening the Group’s capabilities and beefing up its talent pool.  
“We’ve launched several initiatives to expand our capabilities, such as technology and machine upgrades, a new innovation arm to work on modern products and designs, as well as improving efficiencies,” Seow said.  
“These “hardware” upgrades will work hand in hand with our corresponding “software” upgrades, as we upskill our employees and hire fresh talent to drive innovation within the Group.”  
With these initiatives, Seow expects a long growth runway for Fu Yu, where the organisation will not only be a manufacturer, but also a front-runner in advanced manufacturing and technology.   
“While we’ve always been known as a reliable pair of hands in manufacturing, these upgraded capabilities will enable us to work with our customers even more closely in areas of complex manufacturing and material science.”  
In parallel with its strategy to build a diversified product portfolio for business resilience and stability, Fu Yu intends to optimise its business mix to keep pace with current market trends, Seow noted.  
This will see the Group channelling greater resources towards boosting its business in market segments that display longer term stability and growth potential, such as medical, automotive, as well as eco-friendly and smart home consumer products.  
The Group’s manufacturing operations will also shift into higher gear as the redevelopment of its new factory in Singapore enters the final stages of completion. The plant is scheduled to begin operations in the third quarter of 2022, barring unforeseen circumstances.  
“With its adoption of Industry 4.0, this new “smart factory” will serve as a showcase of the Group’s advanced manufacturing capabilities,” he pointed out.   
“In addition to higher precision manufacturing capabilities and increased automation, our new factory will also feature seamless workflow across its tooling, moulding and assembly operations to achieve higher operational efficiencies and a reduced carbon footprint.”  
The Group is also in the process of broadening value-added services to customers. Its new division - Corporate Development - will work with research institutes in Singapore and other partners in the region to explore research and development (R&amp;D) programs, as well as identify commercially viable technologies to augment its manufacturing services.  A Proactive Approach  
In this respect, COVID-19 has been a game-changer of sorts, Seow admitted. “COVID-19 was a timely reminder that we can never predict or pre-empt external conditions. However, we can control our own actions by proactively and continuously upgrading,” he added.  
“I want Fu Yu to be proactive and stay ahead of the curve, rather than be reactive, as that will then be too late. This is a mindset change which I am incorporating throughout the Group.”  
The pandemic also emphasised the need to have a greater control of one’s supply chain, or at least, have the ability to mitigate disruptions.   
“We’re taking things into our own hands to better manage our supply chain by centralising our procurement, which was previously done on a per site basis. To do this, we have already acquired and integrated a procurement company into the Group,” Seow noted.  
“We believe this is a differentiating factor from our competitors as it allows us to better manage our raw material prices and shorten lead times for delivery, which ultimately will benefit our customers and potentially attract new ones.”  
As for the Group’s Environmental, Social and Governance (ESG) goals, Seow is focused on optimising the Group’s energy consumption, which will help shrink its carbon footprint.   
“Some of the initiatives we’re working on include exploring the installation of solar panels in our factories, and integrating IoT technologies to improve real-time monitoring of utilities usage and machinery performance,” he said.  
“The challenge is to collect accurate data points that can be translated into useful information for our engineers to work on. With this, we can better measure and improve energy consumption by building an energy data model as a baseline which can be used to detect irregular utilities usage.”  
Apart from work, this 37-year-old father of a four-month-old son is passionate about golf.  
“I like how each game is different, even if you play at the same course. It doesn’t matter where your ball lands, because what matters most is the next shot, and how you proceed from the position you’re at, to the next position you want to get to. This applies in life as well.”  
Seow is also inspired by “a better me tomorrow”. “I try to be present in everything I do, which means being deliberate about learning from everything I experience, and making sure I am maturing and wiser every day.”  
And his advice to staff? “Be a do-er, don’t procrastinate and don’t make excuses,” he said. “Work hard, work smart, and always do the right thing.”  Fu Yu Corporation Ltd  
Fu Yu provides vertically integrated services for the manufacture of precision plastic components and the fabrication of precision moulds and dies. Since its inception in 1978, the Group has grown to become one of the largest manufacturers of high precision plastic parts and moulds in Asia. Today, the Group has established a strong presence in the region with manufacturing facilities located in Singapore, Malaysia and China. Leveraging on over 40 years of operating history, the Group has built a broad and diversified customer base of blue-chip companies in the printing and imaging, networking and communications, consumer, medical, automotive and power tool sectors.  
The company website is: www.fuyucorp.com  
Click here for the company's StockFacts page.  
For the year ended 31 December 2021 financial results, click here. 
 

About kopi-C: the Company brew

Text: Jennifer Tan-Stanisic Photo: Company file  kopi-C is a regular column on the SGX Research website that features C-level executives of leading companies listed on Singapore Exchange. These interviews are profiles of senior management aimed at helping investors better understand the individuals who run these corporations.  
For previous editions of kopi-C: the Company brew, please click here.    
For more information, or if you would like your senior executives to be featured on SGX Market Dialogues, please send suggestions to jennifer.t@sgx.com.



Fu Yu: Staying Ahead of the Manufacturing Curve

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Investors can now gain exposure to a wider range of Hong Kong stocks via SGX-listed DLCs with the listing of new DLCs tracking CK Asset, China Merchants Bank, ANTA Sports, Li Ning &amp; WuXi Biologics. DLCs offer 5 times leverage and allow investors to participate in the price performance of an underlying stock at a fraction of the underlying stock price. 
	 </li>
	<li>
Issued by Societe Generale, the 5x Long and Short DLCs on CK Asset, China Merchants Bank, ANTA Sports, Li Ning &amp; WuXi Biologics started trading today on 25 October. The DLCs offer a fixed leverage of 5 times of the daily performance of the underlying stock i.e. a 1% move in the underlying stock generally translates into a 5% move in the DLC on a close-to-close basis.  
	 </li>
	<li>In the YTD till 22 Oct, CK Asset, China Merchants Bank and WuXi Biologics have outperformed the broader Hang Seng Index, which remained in the negative territory. While key Chinese sportswear brands, ANTA Sports and Li Ning, achieved double digits growth in revenues this year. </li>
</ul>
 

Daily Leverage Certificates (“DLCs”) and Structured warrants (“Warrants”) are financial instruments issued by a third-party financial institution, usually investment banks, and are traded in the SGX securities market. DLCs and Warrants offer investors an alternative instrument to participate in the price performance of an underlying asset at a fraction of the underlying asset price. Any failure of the issuer or guarantor to perform obligations when due (e.g. issuer becomes insolvent), may result in the loss of an entire investment. CK Asset, China Merchant Bank and WuXi Biologics outperform broader market 
CK Asset Holdings (CKA), China Merchants Bank (CMB) and WuXi Biologics (WuXi) listed on the Stock Exchange of Hong Kong have outperformed the broader Hang Seng Index (HSI) in the YTD ending 15 October. The respective YTD price returns of the three stocks are: 20% (CKA), 36% (CMB) and 10% (WuXi), outperforming the HSI by a significant margin as the benchmark index continued to remain in negative territory with a YTD price return of -4%.
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In terms of volatility, the average 10D, 30D, 90D trailing volatility of the three stocks stand at 31%, 46% and 44% respectively. On the shorter term, WuXi Biologics trades at the highest 10D volatility of 47%,  15 percentage points above China Merchant Bank and 33 percentage points above CK Asset. ANTA Sports and Li Ning propel China’s sportswear industry 
The sportswear market in China is one of the largest and fastest growing in the world, underpinned by China's large textile industry, strong consumer support for domestic brands and a growing awareness of fitness and health. In the first half of this year, key Chinese sportswear brands – ANTA Sports and Li Ning – achieved double digits revenue growth, outperforming overseas brands with presence in China. ANTA Sports 
ANTA Sports designs, develops, manufactures and markets branded sportswear including footwear, apparel and accessories to consumers. It’s brand portfolio includes ANTA, FILA, DESCENTE and KOLON SPORT among others. 
The Group announced that it has become the official sportswear partner of the 2022 Beijing Winter Olympics Games and Paralympics Winter Games. In addition, the Group will provide Chinese athletes with first-class sports equipment and become the first Chinese sportswear brand to sponsor national Olympic events. 
For the latest 2021 interim report, the Group’s revenue rebounded by 55.5% to historical high of RMB22.81 billion while profit attributable to equity shareholders (with JV) surged 131.6% to RMB3.84 billion. Click <a href="https://files.services/files/394/2021/0824/20210826163906_36069575_en.pdf?force_isolation=true">here</a> to read more. Li Ning 
With more than 30 years of history, Li Ning is a leading athletic apparel, footwear and equipment company in China, founded by former Olympic gymnast Li Ning. The Group has various sales channels including franchise distributors, direct operations and e-commerce channels. In addition to its core LI-NING brand, other brands under the Group includes Double Happiness (table tennis), AIGLE (outdoor sports), Danskin (fashionable fitness products for dance and yoga) and Kason (badminton). 
According to their 2021 interim report, Li Ning reported 1H 2021 turnover of RMB10,197 million, up 65% year-on-year. This brought its half-year net profit attributable to equity holders to RMB1,962 million, more than the full year 2020’s RMB1,698 million. 
Over the course of the year, the Group noted that it benefited from the Chinese government’s effective control of the pandemic and consumers’ support for domestic brands, which significantly boosted growth in sales and gross profit margin. The Group expects that public awareness of fitness and health would further increase across China in the post-pandemic era, resulting in higher consumption demands for sports and health products. Click <a href="https://www1.hkexnews.hk/listedco/listconews/sehk/2021/0830/2021083000625.pdf">here</a> to read more. Specifications of New DLCs on CK Asset, China Merchants Bank, ANTA Sports, Li Ning &amp; WuXi Biologics 
There are two types of DLCs –  a Long DLC and a Short DLC.  Long DLCs are for investors who have a bullish view of the underlying asset (i.e. the investor takes the view that the price of the underlying asset will go up). Short DLCs are for investors who have a bearish view of the underlying asset (i.e. the investor takes the view that the price of the underlying asset will go down). A summary of the terms of the new DLCs is tabled below.

<table class="table table-striped"><tbody>
<tr>
<td>
			Counter name
			</td>
			<td>
			Code
			</td>
			<td>
			Underlying stock 
			</td>
			<td>
			Type
			</td>
			<td>
			Leverage 
			</td>
			<td>
			Issue Price (S$)
			</td>
			<td>
			Expiry Date
			</td>
		</tr>
<tr>
<td>
			CKAsset 5xLongSG231019
			</td>
			<td>
			DJHW
			</td>
			<td>
			1113.HK
			</td>
			<td>
			LONG
			</td>
			<td>
			5x
			</td>
			<td>
			1.00
			</td>
			<td>
			19 Oct 2023
			</td>
		</tr>
<tr>
<td>
			CKAsset 5xShortSG231019
			</td>
			<td>
			DIBW
			</td>
			<td>
			1113.HK
			</td>
			<td>
			SHORT
			</td>
			<td>
			-5x
			</td>
			<td>
			1.00
			</td>
			<td>
			19 Oct 2023
			</td>
		</tr>
<tr>
<td>
			CMB 5xLongSG231019
			</td>
			<td>
			DTDW
			</td>
			<td>
			3968.HK
			</td>
			<td>
			LONG
			</td>
			<td>
			5x
			</td>
			<td>
			1.20
			</td>
			<td>
			19 Oct 2023
			</td>
		</tr>
<tr>
<td>
			CMB 5xShortSG231019
			</td>
			<td>
			DSGW
			</td>
			<td>
			3968.HK
			</td>
			<td>
			SHORT
			</td>
			<td>
			-5x
			</td>
			<td>
			1.20
			</td>
			<td>
			19 Oct 2023
			</td>
		</tr>
<tr>
<td>
			ANTA 5xLongSG231019
			</td>
			<td>
			DZDW
			</td>
			<td>
			2020.HK
			</td>
			<td>
			LONG
			</td>
			<td>
			5x
			</td>
			<td>
			1.50
			</td>
			<td>
			19 Oct 2023
			</td>
		</tr>
<tr>
<td>
			ANTA 5xShortSG231019
			</td>
			<td>
			DXGW
			</td>
			<td>
			2020.HK
			</td>
			<td>
			SHORT
			</td>
			<td>
			-5x
			</td>
			<td>
			1.50
			</td>
			<td>
			19 Oct 2023
			</td>
		</tr>
<tr>
<td>
			LiNing 5xLongSG231019
			</td>
			<td>
			DCJW
			</td>
			<td>
			2331.HK
			</td>
			<td>
			LONG
			</td>
			<td>
			5x
			</td>
			<td>
			1.50
			</td>
			<td>
			19 Oct 2023
			</td>
		</tr>
<tr>
<td>
			LiNing 5xShortSG231019
			</td>
			<td>
			DVBW
			</td>
			<td>
			2331.HK
			</td>
			<td>
			SHORT
			</td>
			<td>
			-5x
			</td>
			<td>
			1.50
			</td>
			<td>
			19 Oct 2023
			</td>
		</tr>
<tr>
<td>
			WuxiBio 5xLongSG221020
			</td>
			<td>
			DUAW
			</td>
			<td>
			2269.HK
			</td>
			<td>
			LONG
			</td>
			<td>
			5x
			</td>
			<td>
			1.20
			</td>
			<td>
			20 Oct 2022
			</td>
		</tr>
<tr>
<td>
			WuxiBio 5xShortSG221020
			</td>
			<td>
			DWDW
			</td>
			<td>
			2269.HK
			</td>
			<td>
			SHORT
			</td>
			<td>
			-5x
			</td>
			<td>
			1.20
			</td>
			<td>
			20 Oct 2022
			</td>
		</tr>
</tbody></table>
 Source: SGX

 

Investors are advised to read the issuer documents found on SGX website <a href="https://www.sgx.com/securities/company-announcements?value=SG%20ISSUER&amp;type=company&amp;PLST=PLST08">here</a> or the issuer’s DLC website <a href="DLC.socgen.com">here</a> for the full details of the DLCs including the product features (e.g. compounding effect and airbag mechanism) and the risks before investing in the DLCs. 
Investors should note these DLCs will track the moves in the underlying shares trading in Hong Kong, hence the market-making hours for these instruments will follow the stock’s trading hours on Hong Kong Stock Exchange from 9.30am to 4pm, with a break from 12-1pm. Specified Investment Products 
Daily Leverage Certificates are for investors who are willing to accept the risk of substantial losses up to the principal investment amount, possibly within a very short timeframe. Investors should also have sufficient understanding of the product and should possess either a high level of knowledge or sufficient trading experience to properly evaluate and assess the product structure, associated risks, valuation, costs and expected returns. All investors need to be Specified Investment Products (SIP) qualified to invest in DLCs. DLCs seek to achieve short-term investment results that correspond to the daily magnified performance of the underlying asset.
</body></html>





Investors can now gain exposure to a wider range of Hong Kong stocks via SGX-listed DLCs with the listing of new DLCs tracking CK Asset, China Merchants Bank, ANTA Sports, Li Ning &amp; WuXi Biologics. DLCs offer 5 times leverage and allow investors to participate in the price performance of an underlying stock at a fraction of the underlying stock price. 
	 
	
Issued by Societe Generale, the 5x Long and Short DLCs on CK Asset, China Merchants Bank, ANTA Sports, Li Ning &amp; WuXi Biologics started trading today on 25 October. The DLCs offer a fixed leverage of 5 times of the daily performance of the underlying stock i.e. a 1% move in the underlying stock generally translates into a 5% move in the DLC on a close-to-close basis.   
	 
	In the YTD till 22 Oct, CK Asset, China Merchants Bank and WuXi Biologics have outperformed the broader Hang Seng Index, which remained in the negative territory. While key Chinese sportswear brands, ANTA Sports and Li Ning, achieved double digits growth in revenues this year. 

 

Daily Leverage Certificates (“DLCs”) and Structured warrants (“Warrants”) are financial instruments issued by a third-party financial institution, usually investment banks, and are traded in the SGX securities market. DLCs and Warrants offer investors an alternative instrument to participate in the price performance of an underlying asset at a fraction of the underlying asset price. Any failure of the issuer or guarantor to perform obligations when due (e.g. issuer becomes insolvent), may result in the loss of an entire investment.  CK Asset, China Merchant Bank and WuXi Biologics outperform broader market  
CK Asset Holdings (CKA), China Merchants Bank (CMB) and WuXi Biologics (WuXi) listed on the Stock Exchange of Hong Kong have outperformed the broader Hang Seng Index (HSI) in the YTD ending 15 October. The respective YTD price returns of the three stocks are: 20% (CKA), 36% (CMB) and 10% (WuXi), outperforming the HSI by a significant margin as the benchmark index continued to remain in negative territory with a YTD price return of -4%.



      
    
    Stock price performance


In terms of volatility, the average 10D, 30D, 90D trailing volatility of the three stocks stand at 31%, 46% and 44% respectively. On the shorter term, WuXi Biologics trades at the highest 10D volatility of 47%,  15 percentage points above China Merchant Bank and 33 percentage points above CK Asset.  ANTA Sports and Li Ning propel China’s sportswear industry  
The sportswear market in China is one of the largest and fastest growing in the world, underpinned by China's large textile industry, strong consumer support for domestic brands and a growing awareness of fitness and health. In the first half of this year, key Chinese sportswear brands – ANTA Sports and Li Ning – achieved double digits revenue growth, outperforming overseas brands with presence in China.  ANTA Sports  
ANTA Sports designs, develops, manufactures and markets branded sportswear including footwear, apparel and accessories to consumers. It’s brand portfolio includes ANTA, FILA, DESCENTE and KOLON SPORT among others.  
The Group announced that it has become the official sportswear partner of the 2022 Beijing Winter Olympics Games and Paralympics Winter Games. In addition, the Group will provide Chinese athletes with first-class sports equipment and become the first Chinese sportswear brand to sponsor national Olympic events.  
For the latest 2021 interim report, the Group’s revenue rebounded by 55.5% to historical high of RMB22.81 billion while profit attributable to equity shareholders (with JV) surged 131.6% to RMB3.84 billion. Click here to read more.  Li Ning  
With more than 30 years of history, Li Ning is a leading athletic apparel, footwear and equipment company in China, founded by former Olympic gymnast Li Ning. The Group has various sales channels including franchise distributors, direct operations and e-commerce channels. In addition to its core LI-NING brand, other brands under the Group includes Double Happiness (table tennis), AIGLE (outdoor sports), Danskin (fashionable fitness products for dance and yoga) and Kason (badminton).  
According to their 2021 interim report, Li Ning reported 1H 2021 turnover of RMB10,197 million, up 65% year-on-year. This brought its half-year net profit attributable to equity holders to RMB1,962 million, more than the full year 2020’s RMB1,698 million.  
Over the course of the year, the Group noted that it benefited from the Chinese government’s effective control of the pandemic and consumers’ support for domestic brands, which significantly boosted growth in sales and gross profit margin. The Group expects that public awareness of fitness and health would further increase across China in the post-pandemic era, resulting in higher consumption demands for sports and health products. Click here to read more.  Specifications of New DLCs on CK Asset, China Merchants Bank, ANTA Sports, Li Ning &amp; WuXi Biologics  
There are two types of DLCs –  a Long DLC and a Short DLC.  Long DLCs are for investors who have a bullish view of the underlying asset (i.e. the investor takes the view that the price of the underlying asset will go up). Short DLCs are for investors who have a bearish view of the underlying asset (i.e. the investor takes the view that the price of the underlying asset will go down). A summary of the terms of the new DLCs is tabled below.




			Counter name
			
			
			Code
			
			
			Underlying stock 
			
			
			Type
			
			
			Leverage 
			
			
			Issue Price (S$)
			
			
			Expiry Date
			
		


			CKAsset 5xLongSG231019
			
			
			DJHW
			
			
			1113.HK
			
			
			LONG
			
			
			5x
			
			
			1.00
			
			
			19 Oct 2023
			
		


			CKAsset 5xShortSG231019
			
			
			DIBW
			
			
			1113.HK
			
			
			SHORT
			
			
			-5x
			
			
			1.00
			
			
			19 Oct 2023
			
		


			CMB 5xLongSG231019
			
			
			DTDW
			
			
			3968.HK
			
			
			LONG
			
			
			5x
			
			
			1.20
			
			
			19 Oct 2023
			
		


			CMB 5xShortSG231019
			
			
			DSGW
			
			
			3968.HK
			
			
			SHORT
			
			
			-5x
			
			
			1.20
			
			
			19 Oct 2023
			
		


			ANTA 5xLongSG231019
			
			
			DZDW
			
			
			2020.HK
			
			
			LONG
			
			
			5x
			
			
			1.50
			
			
			19 Oct 2023
			
		


			ANTA 5xShortSG231019
			
			
			DXGW
			
			
			2020.HK
			
			
			SHORT
			
			
			-5x
			
			
			1.50
			
			
			19 Oct 2023
			
		


			LiNing 5xLongSG231019
			
			
			DCJW
			
			
			2331.HK
			
			
			LONG
			
			
			5x
			
			
			1.50
			
			
			19 Oct 2023
			
		


			LiNing 5xShortSG231019
			
			
			DVBW
			
			
			2331.HK
			
			
			SHORT
			
			
			-5x
			
			
			1.50
			
			
			19 Oct 2023
			
		


			WuxiBio 5xLongSG221020
			
			
			DUAW
			
			
			2269.HK
			
			
			LONG
			
			
			5x
			
			
			1.20
			
			
			20 Oct 2022
			
		


			WuxiBio 5xShortSG221020
			
			
			DWDW
			
			
			2269.HK
			
			
			SHORT
			
			
			-5x
			
			
			1.20
			
			
			20 Oct 2022
			
		

 Source: SGX

 

Investors are advised to read the issuer documents found on SGX website here or the issuer’s DLC website here for the full details of the DLCs including the product features (e.g. compounding effect and airbag mechanism) and the risks before investing in the DLCs.  
Investors should note these DLCs will track the moves in the underlying shares trading in Hong Kong, hence the market-making hours for these instruments will follow the stock’s trading hours on Hong Kong Stock Exchange from 9.30am to 4pm, with a break from 12-1pm.  Specified Investment Products   
Daily Leverage Certificates are for investors who are willing to accept the risk of substantial losses up to the principal investment amount, possibly within a very short timeframe. Investors should also have sufficient understanding of the product and should possess either a high level of knowledge or sufficient trading experience to properly evaluate and assess the product structure, associated risks, valuation, costs and expected returns. All investors need to be Specified Investment Products (SIP) qualified to invest in DLCs. DLCs seek to achieve short-term investment results that correspond to the daily magnified performance of the underlying asset.



New DLCs tracking CK Asset, China Merchants Bank, ANTA Sports, Li Ning & WuXi Biologics

Managing Partner, VRS (Valuation & Research Specialists)

VRS (Valuation & Research Specialists)

Managing Partner

Valuation & Research Specialists (VRS) is a boutique financial advisor with more than 17 years of experience in Corporate Valuation and Finance, and a diversified client base including some of the largest Companies in Greece.

Since 2002, VRS has completed more than 200 engagements in the areas of business valuation and financial analysis for more than 100 clients in a wide range of industries.

VRS has been honored to work with small and large private and publicly traded companies in Europe and overseas.

Boutique Financial Advisor

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<h2>SOCIETE GENERALE S.A.</h2>
<h3>Equity Research Flash Note</h3>
<div>
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Corporate &amp; Investment Highlights
<ul>
<li>Societe Generale S.A. is a France-based financial services group. The Group offers a wide range of advisory services and tailored financial solutions to secure transactions, protect and manage assets and savings, and help its clients finance their projects. It operates through three segments: French Retail Banking, International Retail Banking &amp; Financial Services and Global Banking and Investor Solutions. French Retail Banking includes the domestic networks Societe Generale, Credit du Nord and Bour- sorama. International Retail Banking &amp; Financial Services consists of International Retail Banking (con- sumer finance activities), Financial Services to Corporates (operational vehicle leasing and fleet man- agement, equipment and vendor finance) and Insurance Activities. Global Banking and Investor Solu- tions comprises Global Markets and Investors Services, Financing and Advisory, Asset and Wealth Management. The Group is active globally. [Source: Reuters]</li>
</ul>
<figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/240/691/original/image_70676100271636468150834.png?1636468154" class="editor-image img-responsive" data-smartkarma-image-id="240691"></figure>
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<div>
<div>
<div>
Important Note:
Information contained herein is based on data obtained from recognized statistical services, issue reports or communications, or other sources, believed to be reliable. However, such information has not been verified by VRS, and VRS does not make any representation as to its accuracy and completeness. Opinions, estimates, and statements nonfactual in nature expressed in its research represent VRS’s judgment as of the date of its reports, are subject to change without notice and are provided in good faith and without legal responsibility. In addition, there may be instances when fundamental, technical and quantitative opinions, estimates, and statements may not be in concert. Neither the information nor any opinion expressed shall constitute an offer to sell or a solicitation of an offer to buy any shares, warrants, convertible securities or options of “covered companies” by no means. Valuation &amp; Research Specialists (VRS) are the sole creators and distributors of this report.
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SOCIETE GENERALE S.A.
Equity Research Flash Note




Corporate &amp; Investment Highlights

Societe Generale S.A. is a France-based financial services group. The Group offers a wide range of advisory services and tailored financial solutions to secure transactions, protect and manage assets and savings, and help its clients finance their projects. It operates through three segments: French Retail Banking, International Retail Banking &amp; Financial Services and Global Banking and Investor Solutions. French Retail Banking includes the domestic networks Societe Generale, Credit du Nord and Bour- sorama. International Retail Banking &amp; Financial Services consists of International Retail Banking (con- sumer finance activities), Financial Services to Corporates (operational vehicle leasing and fleet man- agement, equipment and vendor finance) and Insurance Activities. Global Banking and Investor Solu- tions comprises Global Markets and Investors Services, Financing and Advisory, Asset and Wealth Management. The Group is active globally. [Source: Reuters]






Important Note:
Information contained herein is based on data obtained from recognized statistical services, issue reports or communications, or other sources, believed to be reliable. However, such information has not been verified by VRS, and VRS does not make any representation as to its accuracy and completeness. Opinions, estimates, and statements nonfactual in nature expressed in its research represent VRS’s judgment as of the date of its reports, are subject to change without notice and are provided in good faith and without legal responsibility. In addition, there may be instances when fundamental, technical and quantitative opinions, estimates, and statements may not be in concert. Neither the information nor any opinion expressed shall constitute an offer to sell or a solicitation of an offer to buy any shares, warrants, convertible securities or options of “covered companies” by no means. Valuation &amp; Research Specialists (VRS) are the sole creators and distributors of this report.













SOCIETE GENERALE S.A. Equity Research Flash Note

Sunny Optical Technology Group / Equity Bottom-Up

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<ul>
<li>
Investors can now gain exposure to Hang Seng TECH Index (HS TECH) via new SGX-listed DLCs and Warrants. DLCs and Warrants are leverage instruments for investors seeking to capture short-term trends on the underlying index for both long and short directions. 
	 </li>
	<li>
Issued by Societe Generale, the 5x Long and Short DLCs on HS TECH started trading on 19 February. The DLCs offer a fixed leverage of 5x the daily performance of the underlying index i.e. a 1% move in HS TECH translates into a 5% move in the DLC on a close-to-close basis.   
	 </li>
	<li>Issued by Macquarie Bank, Call and Put Warrants on HS TECH started trading on 22 February. The warrants offer an effective leverage of approximately 10 times on the underlying index performance and are generally priced below $0.20 per unit. </li>
</ul>
 

Daily Leverage Certificates (“DLCs”) and Structured warrants (“Warrants”) are financial instruments issued by a third-party financial institution, usually investment banks, and are traded in the SGX securities market. DLCs and Warrants offer investors an alternative instrument to participate in the price performance of an underlying asset at a fraction of the underlying asset price. Any failure of the issuer or guarantor to perform obligations when due (e.g. issuer becomes insolvent), may result in the loss of an entire investment. HS TECH outperforms HSI and HSCEI with +56% return since its launch 
Since its launch on 27 July 2020, the Hang Seng TECH Index (HS TECH) has outperformed the Hang Seng Index (HSI) and Hang Seng China Enterprises Index (HSCEI) by a wide margin. As shown in the chart below, HS TECH returned +56% between 27 July 2020 and 19 February 2021 compared to HSI’s +25% and HSCEI’s +20%. Given the more concentrated portfolio in the technology sector, it is not surprising that HS TECH has outperformed the broad based market indices such as HSI and HSCEI amidst the market rally since the start of 2021.  
</body></html>

<figure>
 <img src='https://api2.sgx.com/sites/default/files/2021-02/Capture_15.PNG' alt='Index Performance' />
 </figure>
 <div class='content-caption'>Index Performance</div>
<!DOCTYPE html PUBLIC "-//W3C//DTD HTML 4.0 Transitional//EN" "http://www.w3.org/TR/REC-html40/loose.dtd">
<html><body>According to the factsheet provided by Hang Seng Indexes, HS TECH includes the 30 largest technology companies listed in Hong Kong that are classified under Industrials, Consumer Discretionary, Healthcare, Financials or Information Technology industries and are considered innovative by operating a technology-enabled business, with strong Research &amp; Development investment or exhibit high revenue growth. 
The Index is free-float market capitalization weighted with 8% cap on individual constituent weighting. The top 5 constituents are Meituan-W, Sunny Optical, Tencent, BABA-SW and JD Health as of January 2021. Click <a href="https://www.hsi.com.hk/eng/indexes/all-indexes/hstech?force_isolation=true">here</a> to read more. HS TECH exhibits higher volatility than HSI and HSCEI 
The potential for higher returns comes with higher volatility on the concentrated HS TECH index compared to more broad base market indices like the HSI and HSCEI. As shown in the chart below, HS TECH exhibited a 30-Day volatility of 39% compared to HSI's 22% and HSCEI’s 22%. Volatility is a measure of the risk of price moves for the index based on the standard deviation of day-to-day logarithmic historical price changes. The 30-Day volatility is the annualized standard deviation of the relative price change for the 30 most recent trading days, expressed as a percentage.</body></html>

<figure>
 <img src='https://api2.sgx.com/sites/default/files/2021-02/Capture_16.PNG' alt='30 Day Volatility' />
 </figure>
 <div class='content-caption'>30 Day Volatility</div>
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Since end December 2020, the 30-Day volatility has also been rising which may be ideal for day traders or generally investors who have a short-term view of the market. The newly listed DLCs and Warrants are specifically designed to be traded on a short-term basis – offering leverage exposure for potential magnified returns (or losses), capital efficiency and flexibility to take a long or short position – therefore they are ideal instruments for investors to take full advantage of the day-to-day market swings, even if volatility starts to slow down. Specifications of New DLCs on HS TECH 
There are two types of DLCs –  a Long DLC and a Short DLC.  Long DLCs are for investors who have a bullish view of the underlying index (i.e. the investor takes the view that the price of the underlying index will go up). Short DLCs are for investors who have a bearish view of the underlying index (i.e. the investor takes the view that the price of the underlying index will go down). A summary of the terms of the new DLCs is tabled below.

<table class="table table-striped"><tbody>
<tr>
<td>
			Counter name
			</td>
			<td>
			Code
			</td>
			<td>
			Underlying index 
			</td>
			<td>
			Type
			</td>
			<td>
			Leverage 
			</td>
			<td>
			Issue Price (S$)
			</td>
			<td>
			Expiry Date
			</td>
		</tr>
<tr>
<td>
			HSTECH 5xLongSG230216
			</td>
			<td>
			CXDW
			</td>
			<td>
			Hang Seng TECH Index
			</td>
			<td>
			LONG
			</td>
			<td>
			5x
			</td>
			<td>
			2.50
			</td>
			<td>
			16 Feb 2023
			</td>
		</tr>
<tr>
<td>
			HSTECH 5xShortSG230216
			</td>
			<td>
			CWEW
			</td>
			<td>
			Hang Seng TECH Index
			</td>
			<td>
			SHORT
			</td>
			<td>
			-5x
			</td>
			<td>
			2.50
			</td>
			<td>
			16 Feb 2023
			</td>
		</tr>
</tbody></table>
 Source: SGX

 

Investors are advised to read the issuer documents found on SGX website <a href="https://www.sgx.com/securities/company-announcements?value=SG%20ISSUER&amp;type=company">here</a> or the issuer’s DLC website <a href="DLC.socgen.com">here</a> for the full details of the DLCs including the product features (e.g. compounding effect and airbag mechanism) and the risks before investing in the DLCs. Specifications of New Warrants on HS TECH 
Similarly, there are two types of Warrants – a Call Warrant and a Put Warrant. Call warrants are for investors who have a bullish view of the underlying index (i.e. the investor takes the view that the price of the underlying index will go up). Put warrants are for investors who have a bearish view of the underlying index (i.e. the investor takes the view that the price of the underlying index will go down). A summary of the terms of the new Warrants is tabled below.

<table class="table table-striped"><tbody>
<tr>
<td>
			Counter name
			</td>
			<td>
			Code
			</td>
			<td>
			Underlying Index
			</td>
			<td>
			Type
			</td>
			<td>
			Exercise Level 
			</td>
			<td>
			Expiry Date
			</td>
		</tr>
<tr>
<td>
			HSTECH 12300 MB ECW210429
			</td>
			<td>
			IQTW
			</td>
			<td>
			Hang Seng TECH Index
			</td>
			<td>
			CALL
			</td>
			<td>
			12300
			</td>
			<td>
			29 Apr 21
			</td>
		</tr>
<tr>
<td>
			HSTECH 9300 MB EPW210429
			</td>
			<td>
			YF7W
			</td>
			<td>
			Hang Seng TECH Index
			</td>
			<td>
			PUT
			</td>
			<td>
			9300
			</td>
			<td>
			29 Apr 21
			</td>
		</tr>
<tr>
<td>
			HSTECH 14000 MB ECW210629
			</td>
			<td>
			ICYW
			</td>
			<td>
			Hang Seng TECH Index
			</td>
			<td>
			CALL
			</td>
			<td>
			14000
			</td>
			<td>
			29 June 21
			</td>
		</tr>
<tr>
<td>
			HSTECH 8000 MB EPW210629
			</td>
			<td>
			V6EW
			</td>
			<td>
			Hang Seng TECH Index
			</td>
			<td>
			PUT
			</td>
			<td>
			8000
			</td>
			<td>
			29 June 21
			</td>
		</tr>
</tbody></table>
 Source: SGX

 

Investors are advised to read the issuer documents found on SGX website <a href="https://www.sgx.com/securities/company-announcements?value=MACQUARIE%20BANK%20LIMITED&amp;type=company">here</a> or the issuer’s warrant website <a href="https://www.warrants.com.sg/home">here</a> for the full details of the warrants including the product features and the risks before investing in them. 
Investors should note these Warrants/DLCs will track the moves in the underlying index futures trading in Hong Kong, hence the market-making hours for these instruments will follow the index futures trading hours on Hong Kong Stock Exchange from 9.30am to 4.30pm, with a break from 12-1pm. Specified Investment Products 
Structured Warrants and Daily Leverage Certificates are for investors who are willing to accept the risk of substantial losses up to the principal investment amount, possibly within a very short timeframe. Investors should also have sufficient understanding of the product and should possess either a high level of knowledge or sufficient trading experience to properly evaluate and assess the product structure, associated risks, valuation, costs and expected returns. All investors need to be Specified Investment Products (SIP) qualified to invest in these instruments.
</body></html>





Investors can now gain exposure to Hang Seng TECH Index (HS TECH) via new SGX-listed DLCs and Warrants. DLCs and Warrants are leverage instruments for investors seeking to capture short-term trends on the underlying index for both long and short directions. 
	 
	
Issued by Societe Generale, the 5x Long and Short DLCs on HS TECH started trading on 19 February. The DLCs offer a fixed leverage of 5x the daily performance of the underlying index i.e. a 1% move in HS TECH translates into a 5% move in the DLC on a close-to-close basis.   
	 
	Issued by Macquarie Bank, Call and Put Warrants on HS TECH started trading on 22 February. The warrants offer an effective leverage of approximately 10 times on the underlying index performance and are generally priced below $0.20 per unit. 

 

Daily Leverage Certificates (“DLCs”) and Structured warrants (“Warrants”) are financial instruments issued by a third-party financial institution, usually investment banks, and are traded in the SGX securities market. DLCs and Warrants offer investors an alternative instrument to participate in the price performance of an underlying asset at a fraction of the underlying asset price. Any failure of the issuer or guarantor to perform obligations when due (e.g. issuer becomes insolvent), may result in the loss of an entire investment.  HS TECH outperforms HSI and HSCEI with +56% return since its launch  
Since its launch on 27 July 2020, the Hang Seng TECH Index (HS TECH) has outperformed the Hang Seng Index (HSI) and Hang Seng China Enterprises Index (HSCEI) by a wide margin. As shown in the chart below, HS TECH returned +56% between 27 July 2020 and 19 February 2021 compared to HSI’s +25% and HSCEI’s +20%. Given the more concentrated portfolio in the technology sector, it is not surprising that HS TECH has outperformed the broad based market indices such as HSI and HSCEI amidst the market rally since the start of 2021.  



      
    
    Index Performance

According to the factsheet provided by Hang Seng Indexes, HS TECH includes the 30 largest technology companies listed in Hong Kong that are classified under Industrials, Consumer Discretionary, Healthcare, Financials or Information Technology industries and are considered innovative by operating a technology-enabled business, with strong Research &amp; Development investment or exhibit high revenue growth.  
The Index is free-float market capitalization weighted with 8% cap on individual constituent weighting. The top 5 constituents are Meituan-W, Sunny Optical, Tencent, BABA-SW and JD Health as of January 2021. Click here to read more.  HS TECH exhibits higher volatility than HSI and HSCEI  
The potential for higher returns comes with higher volatility on the concentrated HS TECH index compared to more broad base market indices like the HSI and HSCEI. As shown in the chart below, HS TECH exhibited a 30-Day volatility of 39% compared to HSI's 22% and HSCEI’s 22%. Volatility is a measure of the risk of price moves for the index based on the standard deviation of day-to-day logarithmic historical price changes. The 30-Day volatility is the annualized standard deviation of the relative price change for the 30 most recent trading days, expressed as a percentage.


      
    
    30 Day Volatility


Since end December 2020, the 30-Day volatility has also been rising which may be ideal for day traders or generally investors who have a short-term view of the market. The newly listed DLCs and Warrants are specifically designed to be traded on a short-term basis – offering leverage exposure for potential magnified returns (or losses), capital efficiency and flexibility to take a long or short position – therefore they are ideal instruments for investors to take full advantage of the day-to-day market swings, even if volatility starts to slow down.  Specifications of New DLCs on HS TECH   
There are two types of DLCs –  a Long DLC and a Short DLC.  Long DLCs are for investors who have a bullish view of the underlying index (i.e. the investor takes the view that the price of the underlying index will go up). Short DLCs are for investors who have a bearish view of the underlying index (i.e. the investor takes the view that the price of the underlying index will go down). A summary of the terms of the new DLCs is tabled below.




			Counter name
			
			
			Code
			
			
			Underlying index 
			
			
			Type
			
			
			Leverage 
			
			
			Issue Price (S$)
			
			
			Expiry Date
			
		


			HSTECH 5xLongSG230216
			
			
			CXDW
			
			
			Hang Seng TECH Index
			
			
			LONG
			
			
			5x
			
			
			2.50
			
			
			16 Feb 2023
			
		


			HSTECH 5xShortSG230216
			
			
			CWEW
			
			
			Hang Seng TECH Index
			
			
			SHORT
			
			
			-5x
			
			
			2.50
			
			
			16 Feb 2023
			
		

 Source: SGX

 

Investors are advised to read the issuer documents found on SGX website here or the issuer’s DLC website here for the full details of the DLCs including the product features (e.g. compounding effect and airbag mechanism) and the risks before investing in the DLCs.  Specifications of New Warrants on HS TECH  
Similarly, there are two types of Warrants – a Call Warrant and a Put Warrant. Call warrants are for investors who have a bullish view of the underlying index (i.e. the investor takes the view that the price of the underlying index will go up). Put warrants are for investors who have a bearish view of the underlying index (i.e. the investor takes the view that the price of the underlying index will go down). A summary of the terms of the new Warrants is tabled below.




			Counter name
			
			
			Code
			
			
			Underlying Index
			
			
			Type
			
			
			Exercise Level 
			
			
			Expiry Date
			
		


			HSTECH 12300 MB ECW210429
			
			
			IQTW
			
			
			Hang Seng TECH Index
			
			
			CALL
			
			
			12300
			
			
			29 Apr 21
			
		


			HSTECH 9300 MB EPW210429
			
			
			YF7W
			
			
			Hang Seng TECH Index
			
			
			PUT
			
			
			9300
			
			
			29 Apr 21
			
		


			HSTECH 14000 MB ECW210629
			
			
			ICYW
			
			
			Hang Seng TECH Index
			
			
			CALL
			
			
			14000
			
			
			29 June 21
			
		


			HSTECH 8000 MB EPW210629
			
			
			V6EW
			
			
			Hang Seng TECH Index
			
			
			PUT
			
			
			8000
			
			
			29 June 21
			
		

 Source: SGX

 

Investors are advised to read the issuer documents found on SGX website here or the issuer’s warrant website here for the full details of the warrants including the product features and the risks before investing in them.  
Investors should note these Warrants/DLCs will track the moves in the underlying index futures trading in Hong Kong, hence the market-making hours for these instruments will follow the index futures trading hours on Hong Kong Stock Exchange from 9.30am to 4.30pm, with a break from 12-1pm.  Specified Investment Products   
Structured Warrants and Daily Leverage Certificates are for investors who are willing to accept the risk of substantial losses up to the principal investment amount, possibly within a very short timeframe. Investors should also have sufficient understanding of the product and should possess either a high level of knowledge or sufficient trading experience to properly evaluate and assess the product structure, associated risks, valuation, costs and expected returns. All investors need to be Specified Investment Products (SIP) qualified to invest in these instruments.



New DLCs and Warrants tracking the Hang Seng TECH Index

France

Societe Generale SA attracts deposits and offers commercial, retail, investment, and private banking services.  The Bank offers consumer credit, vehicle lease financing, information technology equipment leasing, life and non-life insurance, custodian services, trade and project financing, currency exchange, treasury services, and financial and commodities futures brokerage services.

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