In today’s briefing:
- How Has the Index Rebalance Strategy Performed in 2024?
- EQD | CSI 300 Stuck in Neutral: Equal Chances to Rally or Drop
- China New Higher Education (2001 HK): 2.2x PE, 22% Yield, Worth Taking the Risk?
- Bloks Group IPO: PHIP Updates, Revenue Continues To Post Hyper Growth As IPO Nears
- Pre-IPO HealthyWay (PHIP Updates) – Some Points Worth the Attention
How Has the Index Rebalance Strategy Performed in 2024?
- It has been a decent year for the index rebalance strategy, though there have been some big hiccups along the way.
- Forecasting the index changes and impacts has been important, but timing (especially momentum/value regime changes) and hedge selection have also been major factors affecting the returns of the strategy.
- As passive AUM continues to increase, we expect focus on the strategy to continue in 2025 with market players taking different approaches to trading the potential and announced index changes.
EQD | CSI 300 Stuck in Neutral: Equal Chances to Rally or Drop
- The Shanghai Shenzhen CSI 300 Index (SHSZ300 Index) exploded higher in mid-September 2024, then went flat in a range (still there as we write).
- Our models currently see uptrend and downtrend targets positioned at an equal distance from the last WEEKLY CLose on December 13th.
- In short this means that the index is “perfectly neutral” at the moment, a rare scenario that requires straddle and strangle-like strategies to be able to profit.
China New Higher Education (2001 HK): 2.2x PE, 22% Yield, Worth Taking the Risk?
- China New Higher Education (2001 HK) has rebounded by 40% from its post-result trough but was still down by 34% from the pre-FY24 result level, despite healthy FY24 results.
- Net profit is healthy, but it is the all-scrip final dividends that dragged on the share price. Concerns are on higher gearing, but at 69.9%, this is still acceptable.
- The consensus earnings forecast of a 6% growth in FY25 and FY26 seems not excessive. At 2.2x PER and 22% yield for FY25, it seems worthy of the risks.
Bloks Group IPO: PHIP Updates, Revenue Continues To Post Hyper Growth As IPO Nears
- Bloks Group, a founder-led leader in China’s assembly character toy segment, updated its PHIP and continued to post hyper growth.
- In the nine months ended Sep-24, the company’s revenue totaled ~RMB1629m, representing a y/y growth of ~177%, due to significant increase in product sales volume.
- According to the most recent PHIP, Ultraman IP license in China was extended to 2027 and TRANSFORMERS IP license with Hasbro will expire only in 2028.
Pre-IPO HealthyWay (PHIP Updates) – Some Points Worth the Attention
- The two core businesses is corporate and digital marketing services (2B business) and health and medical services (2C business),the synergy of which can form a virtuous cycle within the platform.
- The key performance driver for HealthWay is 2B business, but the pain point is 2C business, which is hard to scale up. Actually, HealthyWay’s growth momentum has slowed down significantly.
- After completing the final round of financing, HealthyWay’s valuation reached RMB4.1 billion. We think its valuation could be higher than ClouDr but lower than JD Health and Alibaba Health.
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