China: Nongfu Spring, Xinyi Solar Holdings, Asia High Yield Bond Index, Agile Property Holdings, Huize Holding Limited, HKEX, SenseTime Group and more

• The Hang Seng Index was meant to have 80 constituents by mid-2022 before moving to 100 members. At 66 constituents post the March review, we are not gonna make it.
• Nongfu Spring (9633 HK) and Lenovo (992 HK) will be added to the index. Nongfu’s inclusion was expected while Lenovo is a relative surprise.
• Nongfu Spring (9633 HK) will also be added to the FTSE AW Index at the March SAIR at the close on 18 March. The stock should move higher.

• As expected, Xinyi Solar Holdings (968 HK) replaces Evergrande Property Services (6666 HK) in the Hang Seng China Enterprises Index (HSCEI INDEX) at the close of trading on 4 March.
• Using prices from the close on 18 February to cap the stocks, estimated one-way turnover at the rebalance is 4.37% and will result in a one-way trade of HK$3,350m.
• Short interest on Xinyi Solar Holdings (968 HK) is 13 days of ADV to cover. While the inclusion was expected, short covering could take the stock higher.

The Chinese Property Weekly focuses on providing updates in the Chinese real-estate sector, including recent regulatory and company developments, top and bottom performers, rating actions, as well as a list of bond maturities in the next 30 days.

• Huize’s further acceleration of the “online to offline integration strategy” likely pushes it to compete more directly against China’s insurance giants (e.g., Ping An).
• One key challenge smaller Chinese insurtech players face (when it comes to attracting investors) is that some of the country’s insurance giants are relatively well digitized.
• Ping An still represents a good way to gain exposure to China’s broader insurance/insurtech space, especially given its current low valuation. 

• The sluggish share performance of HKEX (388 HK) underscored the weak trading activities at Hong Kong, its January average daily turnover (ADT) is down 47% year-over-year.
• Hong Kong’s surging COVID cases have already accounted for more confirmed infections than all previous outbreak combined, we believe this will also dampen market sentiment short-term.
• However, we remain bullish on HKEX (388 HK) with the view that China economy will likely rebound in 2022, which will drive the rebound of IPO activities and trading volume. 

• SenseTime Group (20 HK), Li Auto (2015 HK) and XPeng (9868 HK) replace Autohome (2518 HK), Weimob Inc. (2013 HK) and Tongcheng-Elong Holdings Ltd (780 HK) in the HSTECH INDEX. 
• A few changes have been made from the way stocks are treated to ensure the inclusion of Li Auto (2015 HK) and XPeng (9868 HK) in the index.
• SenseTime Group (20 HK) has been included at a much higher float than what it should be and this could take the stock higher in the next couple of weeks.