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>BYD’s deliveries grew by 68% YoY in November 2024, which provides a positive signal for the whole NEV (New Energy Vehicle) industry.</li>
<li>In November, Seres' sales volume increased by 27% YoY with NEV up by 55% YoY.</li>
<li>Arawana, the top cooking oil producer, finished acquiring 11% of Lihua's stock.</li>
</ul>


BYD’s deliveries grew by 68% YoY in November 2024, which provides a positive signal for the whole NEV (New Energy Vehicle) industry.
In November, Seres' sales volume increased by 27% YoY with NEV up by 55% YoY.
Arawana, the top cooking oil producer, finished acquiring 11% of Lihua's stock.


China Consumption Weekly (9 Dec 2024): BYD, Geely, Li Auto, Seres, Xiaomi, Arawana

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

Brian Freitas

Pan-Asia Index Rebalances/ Events/ Delta One

Periscope Analytics

Periscope Analytics focuses on event-driven trades across Asia Pacific and provides comprehensive, timely and systematic coverage of index changes to major Asia Pacific indices in a structured manner.

The analysis includes forecasted inclusions and exclusions to all major Asian indices that have significant amount of tracking assets, including estimates of passive buy/sell flow on the stocks. The service also provides commentary and impact of market consultations, ground rule changes, and other events (IPOs, spin-offs, M&A) that could lead to index changes and passive flow.

Periscope Analytics works with multi-strategy hedge funds, proprietary trading firms, stat arb trading groups and long-only investors that invest and trade in the Asia Pacific region with the data being used to trade index rebalances, avoid pre-positioning and passive flow, and to time entry into and exit from stocks.

Event-Driven Trades Across Asia Pacific

Event-Driven

China Tourism Group Duty Free Corp Ltd / Event-Driven

<ul>
<li>The <a href="https://www.smartkarma.com/entities/ishares-ftse-a50-china-index-etf" target="_blank" data-smartkarma-citation="entities:249:1" rel="noopener">iShares A50 China (2823 HK)</a> and <a href="https://www.smartkarma.com/entities/csop-ftse-china-a50-etf-26e3b671-fa47-4165-a12e-bf841640c5a3" target="_blank" data-smartkarma-citation="entities:23664:1" rel="noopener">CSOP China A50 (2822 HK)</a> ETFs will rebalance their holdings at the close on 20 September.</li>
<li>
<a href="https://www.smartkarma.com/entities/china-national-nuclear-power-c" target="_blank" data-smartkarma-citation="entities:25348:1" rel="noopener">China National Nuclear Power (601985 CH)</a> and <a href="https://www.smartkarma.com/entities/huaneng-lancang-river-hydropow" target="_blank" data-smartkarma-citation="entities:26585:1" rel="noopener">Huaneng Lancang River Hydropow (600025)</a> will replace <a href="https://www.smartkarma.com/entities/china-tourism-group-duty-free-corp-ltd" target="_blank" data-smartkarma-citation="entities:12278:1" rel="noopener">China Tourism Group Duty Free (601888 CH)</a> and <a href="https://www.smartkarma.com/entities/yihai-kerry-arawana-holdings-c" target="_blank" data-smartkarma-citation="entities:33230:1" rel="noopener">Yihai Kerry Arawana (300999 CH)</a> in the ETFs.</li>
<li>Passive trackers are estimated to buy between 0.3-0.5 days of ADV in the adds and sell between 0.4-1.1 days of ADV in the deletes.</li>
</ul>


The iShares A50 China (2823 HK) and CSOP China A50 (2822 HK) ETFs will rebalance their holdings at the close on 20 September.

China National Nuclear Power (601985 CH) and Huaneng Lancang River Hydropow (600025) will replace China Tourism Group Duty Free (601888 CH) and Yihai Kerry Arawana (300999 CH) in the ETFs.
Passive trackers are estimated to buy between 0.3-0.5 days of ADV in the adds and sell between 0.4-1.1 days of ADV in the deletes.


China A50 ETF Rebalance: Two Adds, Two Deletes, as Expected

China National Nuclear Power C / Event-Driven

<ul>
<li>Based on the close of 22 July, there could be two changes for the <a href="https://www.smartkarma.com/entities/ishares-ftse-a50-china-index-etf" target="_blank" data-smartkarma-citation="entities:249:1" rel="noopener">iShares A50 China (2823 HK)</a> / <a href="https://www.smartkarma.com/entities/csop-ftse-china-a50-etf-26e3b671-fa47-4165-a12e-bf841640c5a3" target="_blank" data-smartkarma-citation="entities:23664:1" rel="noopener">CSOP China A50 (2822 HK)</a> ETFs in June.</li>
<li>
<a href="https://www.smartkarma.com/entities/china-national-nuclear-power-c" target="_blank" data-smartkarma-citation="entities:25348:1" rel="noopener">China National Nuclear Power</a> and <a href="https://www.smartkarma.com/entities/huaneng-lancang-river-hydropow" target="_blank" data-smartkarma-citation="entities:26585:1" rel="noopener">Huaneng Lancang River Hydropowe</a>r could replace <a href="https://www.smartkarma.com/entities/china-tourism-group-duty-free-corp-ltd" target="_blank" data-smartkarma-citation="entities:12278:1" rel="noopener">China Tourism Group Duty Free Corp Ltd</a> and <a href="https://www.smartkarma.com/entities/yihai-kerry-arawana-holdings-c" target="_blank" data-smartkarma-citation="entities:33230:1" rel="noopener">Yihai Kerry Arawana Holdings</a> in the ETFs. </li>
<li>
<a href="https://www.smartkarma.com/entities/china-tourism-group-duty-free" target="_blank" data-smartkarma-citation="entities:36229:1" rel="noopener">China Tourism Group Duty Free (1880 HK)</a> could be deleted from a global index in August, so there could be selling in the A-shares and H-shares.</li>
</ul>


Based on the close of 22 July, there could be two changes for the iShares A50 China (2823 HK) / CSOP China A50 (2822 HK) ETFs in June.

China National Nuclear Power and Huaneng Lancang River Hydropower could replace China Tourism Group Duty Free Corp Ltd and Yihai Kerry Arawana Holdings in the ETFs. 

China Tourism Group Duty Free (1880 HK) could be deleted from a global index in August, so there could be selling in the A-shares and H-shares.


China A50 ETFs Rebalance Preview: Two Changes in September

Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

<ul>
<li>
<a href="https://www.smartkarma.com/entities/furuya-metal-co-ltd" target="_blank" data-smartkarma-citation="entities:5196:1" rel="noopener">Furuya Metal (7826 JP)</a> and <a href="https://www.smartkarma.com/entities/visional-inc" target="_blank" data-smartkarma-citation="entities:32977:1" rel="noopener">Visional (4194 JP)</a> are expected to be included in the TOPIX index at the end of January 2024. </li>
<li>
<a href="https://www.smartkarma.com/entities/wilmar-international-ltd" target="_blank" data-smartkarma-citation="entities:172:1" rel="noopener">Wilmar International (WIL SP)</a>'s current implied stub and simple ratio (Wilmar/ <a href="https://www.smartkarma.com/entities/yihai-kerry-arawana-holdings-c" target="_blank" data-smartkarma-citation="entities:33230:1" rel="noopener">Yihai Kerry Arawana Holdings (300999 CH)</a>) are both at all-time highs.</li>
<li>Reportedly, the mother and two sisters of <a href="https://www.smartkarma.com/entities/samsung-electronics-co-ltd" target="_blank" data-smartkarma-citation="entities:191:1" rel="noopener">Samsung Electronics (005930 KS)</a> Chairman Jay Y. Lee plan to sell shares in a block deal worth ~₩2.8tn ($2.1bn billion.</li>
</ul>



Furuya Metal (7826 JP) and Visional (4194 JP) are expected to be included in the TOPIX index at the end of January 2024. 

Wilmar International (WIL SP)'s current implied stub and simple ratio (Wilmar/ Yihai Kerry Arawana Holdings (300999 CH)) are both at all-time highs.
Reportedly, the mother and two sisters of Samsung Electronics (005930 KS) Chairman Jay Y. Lee plan to sell shares in a block deal worth ~₩2.8tn ($2.1bn billion.


Last Week in Event SPACE: Furuya Metal, Visional, Wilmar, Samsung Electronics, ViinFast/Vingroup

<ul>
<li>
<a href="https://www.smartkarma.com/entities/wilmar-international-ltd" target="_blank" data-smartkarma-citation="entities:172:1" rel="noopener">Wilmar International (WIL SP)</a>'s current implied stub and simple ratio (Wilmar/<a href="https://www.smartkarma.com/entities/yihai-kerry-arawana-holdings-c" target="_blank" data-smartkarma-citation="entities:33230:1" rel="noopener">Yihai Kerry Arawana Holdings C (300999 CH)</a>) are both at all-time highs. </li>
<li>Preceding my comments on Wilmar are the current setup/unwind tables for Asia-Pacific Holdcos.</li>
<li>These relationships trade with a minimum liquidity of US$1mn, and a % market capitalisation &gt;20%.</li>
</ul>



Wilmar International (WIL SP)'s current implied stub and simple ratio (Wilmar/Yihai Kerry Arawana Holdings C (300999 CH)) are both at all-time highs. 
Preceding my comments on Wilmar are the current setup/unwind tables for Asia-Pacific Holdcos.
These relationships trade with a minimum liquidity of US$1mn, and a % market capitalisation &gt;20%.


StubWorld: Wilmar's All-Time High Implied Stub As Yihai Kerry Touches New Lows

China

Yihai Kerry Arawana Holdings Co., Ltd wholesales and distributes food products. The Company provides kitchen foods, feed raw materials, oil technology products, and other products. Yihai Kerry Arawana Holdings also operates investment businesses.

Yihai Kerry Arawana Holdings C (300999 CH)

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Yihai Kerry Arawana Holdings C (300999 CH)

China Consumption Weekly (9 Dec 2024): BYD, Geely, Li Auto, Seres, Xiaomi, Arawana

BYD’s deliveries grew by 68% YoY in November 2024,. In November, Seres sales volume increased by 27% YoY with NEV up by 55% YoY. Arawana finished...

Ming Lu

China A50 ETF Rebalance: Two Adds, Two Deletes, as Expected

China National Nuclear Power and Huaneng Lancang River Hydropower will replace CTG Duty Free and Yihai Kerry Arawana in the ETFs. Passives need to...

Brian Freitas

China A50 ETFs Rebalance Preview: Two Changes in September

There could be 2 changes for the China A50 ETFs in Sep. CTG could see selling in A- and H-shares within 3 weeks. The IPPs have been trading higher...

Brian Freitas

Last Week in Event SPACE: Furuya Metal, Visional, Wilmar, Samsung Electronics, ViinFast/Vingroup

The weekend is here! Pour yourself a coffee, grab a comfortable seat, and sift through a brief summary of insights on various events discussed...

David Blennerhassett

StubWorld: Wilmar's All-Time High Implied Stub As Yihai Kerry Touches New Lows

I'd be reluctant to short Wilmar, long YKA here. I might look to short Wilmar against a basket of larger peers (ADM, Bunge etc). I would not be...

David Blennerhassett

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