In today’s briefing:
- FTSE China A50 Index Rebalance Preview (March 2022): Adds, Deletes & FOL Changes
- China Mobile Parent Ups The Ante – Announces Share Increase Plan
- China Evergrande Group – Vultures Circling
- Pre-IPO Remegen Co Ltd – Some Points Worth the Attention
FTSE China A50 Index Rebalance Preview (March 2022): Adds, Deletes & FOL Changes
- We see three potential changes at the March rebalance. One is a high probability change while the other two are close to the cutoff ranks.
- Then there will be changes to the investability weight of the stocks following the Ground Rule change that will cap stocks at their Foreign Ownership Limits.
- The combined impact of all changes at the rebalance will result in a one-way turnover estimated at 17.55% and will result in a one-way trade of CNY 9,744m.
China Mobile Parent Ups The Ante – Announces Share Increase Plan
- The parent company of China Mobile (941 HK) has announced a plan to increase its holding. This is not surprising given the contents of the RMB Share Issue Circular.
- If they spend the midpoint of the RMB 3.0-5.0bn plan at a 20+% premium to current price, it is 8% of the RMB Share float.
- The H-share buyback program is eligible to start after 8 Feb deadline for RMB Share greenshoe allocation. The stock is HK$51. Anything under HK$70/share is accretive vs the IPO.
China Evergrande Group – Vultures Circling
- Mainland Chinese municipalities and authorities continue to find numerous ways to bone pick the Evergrande carcass without compensation;
- Evergrande’s offshore bondholders are now threatening legal enforcement of collateral over the company’s “opaque” debt restructuring process; and
- Guangdong province is seeking to segregate Evergrande’s offshore assets in a fire sale to cover what they can of the company’s offshore debt.
Pre-IPO Remegen Co Ltd – Some Points Worth the Attention
- RC48’s commercialization performance in China market could be lower than expected. The breakthrough point is whether the deal with Seagen can bring any surprise in the global markets.
- Due to large R&D and selling expenses, Remegen Co Ltd (9995 HK) is facing cash flow pressure, indicating that this IPO in SSE STAR market is very important for the Company.
- Let’s see if RemeGen would in-license some unique late-stage candidates or reach new blockbuster license-out deals that surprise us again, both of which would help turn things around.
Before it’s here, it’s on Smartkarma
