Daily Brief China: China Galaxy Securities (H), Nws Holdings, ICBC (H), Shanghai United Imaging Health, Hygon Information Technology C, Adani Ports & Special Economic Zone, PDD Holdings and more

• The WisdomTree Emerging Markets SmallCap Dividend Index is a fundamentally weighted index that measures the performance of small cap stocks within Emerging Markets.
• The October rebalance will result in a one-way turnover of ~45% and in a one-way trade of US$1.24bn. There are ~300 stocks with over 1 day of ADV to trade.
• With only 4 trading days to implementation, there could be large moves on stocks with large flows and impact over the next few days.

• Nws Holdings (659 HK)’s IFA opines that the conditional voluntary general offer from the Cheng family is fair and reasonable. The offer + 2H dividend is HK$9.46 per share.
• The key condition is (majority vote) approval by independent NWD shareholders (EGM on 2 November). The timetable is designed such that the shareholders will also receive the NWS final dividend.
• NWD has a high but declining AGM minority participation rate. Retail forums suggest support for the transaction. On balance, we believe that this deal gets up. 

• Central Huijin, the sovereign wealth fund, increased their shareholding of the Big 4 banks in China on 11 October 2023
• Contrary to their last similar action, Huijin will increase its stakes in these banks over the next 6 months period, providing stabilizing force of the stock prices 
• Worries on property sector, LGFV and the overall health of the economy have significantly depressed banking stocks. 

• CSI 300 represents the 300 largest stocks by market capitalization and liquidity from the entire universe of Shanghai and Shenzhen Stock Exchanges. CSI 500 represents the next largest 500 names.
• In this insight, we take a look at the potential ADDs/DELs for the CSI 300 and CSI 500 rebalance in December 2023.
• A couple of baskets I suggested in my last insight have both outperformed the CSI 300 index by more than 2% in less than a month.

• The SSE 50 and SSE180, respectively, aim to represent the performance of the 50 and 180 largest and most liquid A-share stocks listed on the Shanghai Stock Exchange.
• In this insight, we take a look at our final expectations for potential index changes for SSE 50 and SSE 180 during the December 2023 Rebalance event.
• I currently expect 5 ADDs/DELETEs for the SSE 50 index 18 ADDs/DELs for the SSE 180 index. Some of these names are different from my previous expectations.

Lucror Analytics Morning Views comprise our fundamental credit analysis, opinions and trade recommendations on high yield issuers in the region, based on key company-specific developments in the past 24 hours. Our Morning Views include a section with a brief market commentary, key market indicators and a macroeconomic and corporate event calendar.

• Adani Ports & Special Economic Zone
• Shui On Land
• Yuexiu Property

• PDD Holdings Inc. delivered a solid result and managed an all-around beat in the quarter.
• The company experienced a substantial 66% year-on-year increase in revenue, signaling a growing trust in its products and services.
• This surge in consumer confidence has led to increased demand across various product categories, a testament to the company’s continued success.