In today’s briefing:
- China TCM (570.HK) Update – Behind The Share Price Plunge and Prospects for Privatization Progress
- HSCI Index Rebalance Preview and Stock Connect: Potential Changes in September
- HSTECH Index Rebalance Preview: ASM Pacific (522) Could Replace Ping An Health (1833); US$1bn Trade
- Chenqi Technology IPO – Smallest in Scale, Sentiment Might Not Be the Best
China TCM (570.HK) Update – Behind The Share Price Plunge and Prospects for Privatization Progress
- The slow progress of privatization is related to recent high-level changes in CNPGC. Decisions on SOE deals with “strategic purpose” require careful considerations, not based on “one leader’s personal preferences”.
- Based on public information, we cannot find convincing reason to prove that CNPGC has changed its mind.There’re rumors that China TCM’s privatization is still considered important project on the agenda.
- China TCM’s has strong fundamentals to support valuation. If there is no announcement, the privatization process is expected to proceed as usual, and we continue to wait for the voting.
HSCI Index Rebalance Preview and Stock Connect: Potential Changes in September
- We see 37 potential adds (including plenty of new listings) and 25 potential deletes (on market cap and liquidity) for the Hang Seng Composite Index in September.
- We expect 32 stocks to be added to Southbound Stock Connect following the rebalance while 24 stocks could be deleted from the trading link and become Sell-only.
- There are stocks that have a very high percentage of holdings via Stock Connect and there could be some unwinding prior to the stocks becoming Sell-only.
HSTECH Index Rebalance Preview: ASM Pacific (522) Could Replace Ping An Health (1833); US$1bn Trade
- ASM Pacific Technology (522 HK) is expected to replace Ping An Healthcare and Technol (1833 HK) in the Hang Seng TECH Index (HSTECH INDEX) at the September rebalance.
- Constituent changes and capping changes will result in a one-way turnover of 3.7% and that will result in a round-trip trade of HK$7.8bn (US$1bn).
- Short interest is near the lows on both stocks but there has been a recent tick higher for ASM Pacific Technology (522 HK).
Chenqi Technology IPO – Smallest in Scale, Sentiment Might Not Be the Best
- Chenqi Technology Limited (CT HK) is looking to raise up to US$174m in its Hong Kong IPO, after downsizing from an earlier reported float of US$300m.
- Chenqi Technology (Chenqi) is a mobility technology and service company in China, founded by the GAC Group and Tencent.
- In our previous notes, we talked about the company’s historical performance and PHIP updates. In this note, we undertake a quick peer comparison and share our thoughts on valuation.
💡 Before it’s here, it’s on Smartkarma
Sign Up for Free
The Smartkarma Preview Pass is your entry to the Independent Investment Research Network
- ✓ Unlimited Research Summaries
- ✓ Personalised Alerts
- ✓ Custom Watchlists
- ✓ Company Data and News
- ✓ Events & Webinars
