Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

<ul>
<li>AH Premia are lower again (new 5yr low) in the first full week after the CNY holiday. HK stocks up BIG vs A-shares. H/A discounts <em>slightly</em> narrower on average.</li>
<li>That tells you that the big winners in HK the past two weeks are those stocks without A-shares. This past week Healthcare sector pairs saw the best relative H-share performance.</li>
<li>Foreigners returning to HK markets but less to the H in H/A pairs. They are buying HK/China "foreign-investor beta" not China breadth. Feels spivvy, and short-term.</li>
</ul>


AH Premia are lower again (new 5yr low) in the first full week after the CNY holiday. HK stocks up BIG vs A-shares. H/A discounts slightly narrower on average.
That tells you that the big winners in HK the past two weeks are those stocks without A-shares. This past week Healthcare sector pairs saw the best relative H-share performance.
Foreigners returning to HK markets but less to the H in H/A pairs. They are buying HK/China "foreign-investor beta" not China breadth. Feels spivvy, and short-term.


A/H Premium Tracker (To 14 Feb 2025):  AH Premia Fall but Foreigners Buying Non-H/A Pair HK Stocks

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.

Equity Capital Markets

Jiangsu Hengrui Medicine / Equity Capital Markets

<ul>
<li>
<a href="https://www.smartkarma.com/entities/jiangsu-hengrui-medicine-co-ltd" target="_blank" data-smartkarma-citation="entities:14128:1" rel="noopener">Jiangsu Hengrui Medicine (600276 CH)</a> a China-based pharmaceutical company, aims to raise around US$2bn in its H-share listing.</li>
<li>
<a href="https://www.smartkarma.com/entities/jiangsu-hengrui-pharmaceuticals" target="_blank" data-smartkarma-citation="entities:44224:1" rel="noopener">JHP</a>  has been ranked as one of the global Top 50 pharmaceutical companies by Pharm Exec for six consecutive years since 2019.</li>
<li>In this note, we look at its past performance and other deal dynamics that might impact the listing.</li>
</ul>



Jiangsu Hengrui Medicine (600276 CH) a China-based pharmaceutical company, aims to raise around US$2bn in its H-share listing.

JHP  has been ranked as one of the global Top 50 pharmaceutical companies by Pharm Exec for six consecutive years since 2019.
In this note, we look at its past performance and other deal dynamics that might impact the listing.


Jiangsu Hengrui Pharma A/H Listing - Innovation and Overseas Expansion Driving Earnings Rebound

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

Index Rebalance

iShares China Large-Cap (FXI) / Index Rebalance

<ul>
<li>There could be 1/2 changes to the <a href="https://www.smartkarma.com/entities/ishares-china-large-cap-etf" target="_blank" data-smartkarma-citation="entities:766:1" rel="noopener">iShares China Large-Cap (FXI) (FXI US)</a> in March. Then there will be more changes as large Chinese companies list H-shares on the <a href="https://www.smartkarma.com/entities/hong-kong-exchanges-clearing" target="_blank" data-smartkarma-citation="entities:490:1" rel="noopener">HKEX</a>.</li>
<li>Fast Entries and regular inclusion of newly listed H-shares will change the characteristics of the <a href="https://www.smartkarma.com/entities/ishares-china-large-cap-etf" target="_blank" data-smartkarma-citation="entities:766:1" rel="noopener">FXI</a> and there could be further deviations from the <a href="https://www.smartkarma.com/entities/hang-seng-china-enterprises-index" target="_blank" data-smartkarma-citation="entities:22900:1" rel="noopener">Hang Seng China Enterprises Index (HSCEI INDEX)</a>. </li>
<li>That will provide opportunities for index rebalance traders as well as volatility traders that are active on the <a href="https://www.smartkarma.com/entities/ishares-china-large-cap-etf" target="_blank" data-smartkarma-citation="entities:766:1" rel="noopener">iShares China Large-Cap (FXI) (FXI US)</a> options.</li>
</ul>


There could be 1/2 changes to the iShares China Large-Cap (FXI) (FXI US) in March. Then there will be more changes as large Chinese companies list H-shares on the HKEX.
Fast Entries and regular inclusion of newly listed H-shares will change the characteristics of the FXI and there could be further deviations from the Hang Seng China Enterprises Index (HSCEI INDEX). 
That will provide opportunities for index rebalance traders as well as volatility traders that are active on the iShares China Large-Cap (FXI) (FXI US) options.


FXI ETF: Potential Changes in the Year of the Snake

HK/China Healthcare Analyst (ex-Fosun Pharma)

Xinyao (Criss) Wang

Equity Bottom-Up

<ul>
<li>Anhui Province will lead the first National biological drugs VBP in 2025. However, we are optimistic because we think the whole industry will start to bottom out from here.</li>
<li>EVER001 has the potential to become “a game changer” for membranous nephropathy treatment. We are waiting for Everest Medicines to reach licensing cooperation based on EVER001 in the future.</li>
<li>The real motivation for the Disposals of WuXi XDC shares could be to boost WuXi AppTec's stock price first so that the management can again reduce positions at high level.</li>
</ul>


Anhui Province will lead the first National biological drugs VBP in 2025. However, we are optimistic because we think the whole industry will start to bottom out from here.
EVER001 has the potential to become “a game changer” for membranous nephropathy treatment. We are waiting for Everest Medicines to reach licensing cooperation based on EVER001 in the future.
The real motivation for the Disposals of WuXi XDC shares could be to boost WuXi AppTec's stock price first so that the management can again reduce positions at high level.


China Healthcare Weekly (Jan.19)- WuXi AppTec Sells Shares in WuXi XDC, National Biological Drug VBP

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 analyze the 4Q2023 Shanghai/Shenzhen northbound Connect flows with our data engine as the exchange changed the rule to only disclose north bound position once a quarter.</li>
<li>We estimate that the outflows in 4Q2023 were US$20,921 million and holdings were US$302 billion.</li>
<li>We highlight flows for Moutai, Yangtze Power, Catl, Gree Electric Appliances, Sungrow Power Supply.</li>
</ul>


We analyze the 4Q2023 Shanghai/Shenzhen northbound Connect flows with our data engine as the exchange changed the rule to only disclose north bound position once a quarter.
We estimate that the outflows in 4Q2023 were US$20,921 million and holdings were US$302 billion.
We highlight flows for Moutai, Yangtze Power, Catl, Gree Electric Appliances, Sungrow Power Supply.


Northbound Flows (4Q2023): $20bn Outflows in 4Q

China

WuXi AppTec Co., Ltd. manufactures medical products. The Company produces biological agents, antibodies, biological diagnostic reagents, and other products. WuXi AppTec also provides biological analysis, technical study, and other services.

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WuXi AppTec (2359 HK)

A/H Premium Tracker (To 14 Feb 2025): AH Premia Fall but Foreigners Buying Non-H/A Pair HK Stocks

New 5yr low for AH Premia but HK indices beat A-shares by far more than Hs in H/A Pairs outperformed their As. AGAIN. This dichotomy tells you the...

Travis Lundy

Jiangsu Hengrui Pharma A/H Listing - Innovation and Overseas Expansion Driving Earnings Rebound

Jiangsu Hengrui Medicine (600276 CH) a China-based pharmaceutical company, aims to raise around US$2bn in its H-share listing.

Sumeet Singh

FXI ETF: Potential Changes in the Year of the Snake

There could be many constituent changes to the FXI this year. That will alter the returns, volatility and drawdown of the ETF and open up trading...

Brian Freitas

China Healthcare Weekly (Jan.19)- WuXi AppTec Sells Shares in WuXi XDC, National Biological Drug VBP

Anhui to lead the national biological drug VBP, industry expected to rebound.EVER001 may be game changer for MN.Disposal of WuXi XDC shares may...

Xinyao (Criss) Wang

Northbound Flows (4Q2023): $20bn Outflows in 4Q

We analyzed Northbound connect data for 4Q2023 and highlight flows for Moutai, Yangtze Power, Catl, Gree Electric Appliances, Sungrow Power Supply.

Ke Yan, CFA, FRM

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

A/H Premium Tracker (To 14 Feb 2025): AH Premia Fall but Foreigners Buying Non-H/A Pair HK Stocks

New 5yr low for AH Premia but HK indices beat A-shares by far more than Hs in H/A Pairs outperformed their As. AGAIN. This dichotomy tells you the...

Travis Lundy

Jiangsu Hengrui Pharma A/H Listing - Innovation and Overseas Expansion Driving Earnings Rebound

Jiangsu Hengrui Medicine (600276 CH) a China-based pharmaceutical company, aims to raise around US$2bn in its H-share listing.

Sumeet Singh

FXI ETF: Potential Changes in the Year of the Snake

There could be many constituent changes to the FXI this year. That will alter the returns, volatility and drawdown of the ETF and open up trading...

Brian Freitas

China Healthcare Weekly (Jan.19)- WuXi AppTec Sells Shares in WuXi XDC, National Biological Drug VBP

​Anhui to lead the national biological drug VBP, industry expected to rebound.EVER001 may be game changer for MN.Disposal of WuXi XDC shares may...

Xinyao (Criss) Wang

Northbound Flows (4Q2023): $20bn Outflows in 4Q

We analyzed Northbound connect data for 4Q2023 and highlight flows for Moutai, Yangtze Power, Catl, Gree Electric Appliances, Sungrow Power Supply.

Ke Yan, CFA, FRM

Anhui to lead the national biological drug VBP, industry expected to rebound.EVER001 may be game changer for MN.Disposal of WuXi XDC shares may...