ChinaDaily Briefs

Daily Brief China: HKBN Ltd, Jiangsu Hoperun Software, Hwatsing Technology , Baimtec Material , Ping An Healthcare and Technology, Hang Seng Index, Pacific Textiles and more

In today’s briefing:

  • HKBN (1310 HK): China Mobile’s Half-Baked Preconditional VGO
  • ChiNext/​​ChiNext 50 Index Rebalance: US$1.7bn Round-Trip Trade
  • CNI Semiconductor Chips Index Rebalance: One Change with Big Flow
  • Quiddity CSI National Defense Dec 24 Results: Seven Changes; US$124mn One-Way
  • Quiddity ChiNext/ChiNext 50 Dec 24 Results: ~80% Hit Rate; US$1bn+ One-Way Flows
  • HKBN (1310 HK): China Mobile’s “Fair” Tendering Offer
  • Ping An Healthcare and Technology (1833 HK) – About The Special Dividend and the Outlook
  • EQD | Hong Kong Single Stock Options Weekly Nov 25-29
  • EQD | Hong Kong Index Options Weekly – HSI and HSCEI Nov 25-29
  • HK-Listed Apparel & Footwear Screener:  Attractive Yield & Rapid Expansion Outside China – Dec 2024


HKBN (1310 HK): China Mobile’s Half-Baked Preconditional VGO

By Arun George

  • HKBN Ltd (1310 HK)‘s preconditional voluntary conditional offer from China Mobile (941 HK) is HK$5.23. Including the HK$0.165 dividend, the total offer is HK$5.395, an 11.0% premium to last close.
  • The offer seems rushed and a reaction to a potential competing offer from I Squared. The lack of privatisation through a scheme and MBK’s irrevocable suggest the offer is light.   
  • An unattractive offer, a lengthy precondition long-stop date and the irrevocable competing offer clause invite I Squared to enter the fray. 

ChiNext/​​ChiNext 50 Index Rebalance: US$1.7bn Round-Trip Trade

By Brian Freitas

  • There are 7 changes for the ChiNext Index (SZ399006 INDEX) and 5 changes for the ChiNext 50 Index at the December rebalance.
  • We correctly forecast 4/7 and 7/7 for the Chinext Index adds/deletes and were 3/5 and 5/5 for the Chinext50 Index adds/deletes.
  • Based on the estimated passive tracking AUM, the round-trip trade across both indices is estimated to be CNY 12.24bn (US$1.69bn).

CNI Semiconductor Chips Index Rebalance: One Change with Big Flow

By Brian Freitas

  • There is 1 change for the CNI Semiconductor Chips Index that will be implemented at the close on 13 December.
  • Passive trackers are estimated to buy 0.9x ADV in Hwatsing Technology (688120 CH) and sell 0.5x ADV in StarPower Semiconductor (603290 CH)
  • The add has outperformed the delete, but not by a lot. There could be more outperformance over the next couple of weeks.

Quiddity CSI National Defense Dec 24 Results: Seven Changes; US$124mn One-Way

By Janaghan Jeyakumar, CFA

  • The December 2024 index review results for the CSI National Defense Industry Index were announced after market close on Friday 29th November 2024.
  • There will be seven changes  for the CSI National Defense Industry Index. 
  • In this insight, we take a look at our flow expectations for the ADDs/DELs involved in the rebalance.

Quiddity ChiNext/ChiNext 50 Dec 24 Results: ~80% Hit Rate; US$1bn+ One-Way Flows

By Janaghan Jeyakumar, CFA

  • The December 2024 index review results for the ChiNext and ChiNext 50 indices were announced yesterday.
  • There will be seven changes for the ChiNext index and five changes for the ChiNext 50 index. Some of these names surprised us.
  • In this insight, we take a look at our final flow expectations for the confirmed index changes.

HKBN (1310 HK): China Mobile’s “Fair” Tendering Offer

By David Blennerhassett

  • China Mobile (941 HK) was a logical suitor for HKBN Ltd (1310 HK). A non-PRC (or government-affiliated) corporation taking over a media/broadband/telco in Hong Kong is probably a non-starter.
  • China Mobile has a made a pre-conditional voluntary Offer at HK$5.23/share, a 40.97% premium to undisturbed. The price is final. 
  • Pre-Cons are the usual suspects (NDRC, Mofcom & SASAC). The Offer itself conditional on a 50% acceptance hurdle, with 24.96% in the bag. The intention is to maintain HKBN’s listing. 

Ping An Healthcare and Technology (1833 HK) – About The Special Dividend and the Outlook

By Xinyao (Criss) Wang

  • PAGD’s Special Dividend announcement made investors “unhappy”. PAGD’s operation after IPO is a big failure, which is why there were large amounts of funds left that were not used.
  • Being a “vassal” of Ping An Group won’t bring high valuation due to limited growth potential. There’s still room for stock price/valuation to decline. Investors need not rush to buy.
  • The Special Dividend will be approved. Ping An’s idea is to increase shareholding ratio by distributing dividends, which can also lower PAGD’s stock price, providing opportunity for a low-price privatization.

EQD | Hong Kong Single Stock Options Weekly Nov 25-29

By John Ley

  • Put trading was heavy in the Financial sector this week. ICBC and Bank of China were the main contributors to that with 73% and 63% of their volume in Puts.
  • ANTA Sports Products had a notable pick up in Call activity this past week as the stock bounces around 3 year lows vs the Hang Seng index (graph at bottom)
  • Energy and Real Estate sectors might be the best area to look for low vol opportunities.

EQD | Hong Kong Index Options Weekly – HSI and HSCEI Nov 25-29

By John Ley

  • Price jump on Wednesday led implied vol higher but vols were otherwise soft with passing of key events in November.
  • Large jump in option activity on Wednesday was likely due to positions being closed out as open interest declined for both Puts and Calls on the week.
  • HSCEI has more support for implied vols at these levels with short term historic vols trading above 1M implied vol. 

HK-Listed Apparel & Footwear Screener:  Attractive Yield & Rapid Expansion Outside China – Dec 2024

By Sameer Taneja


💡 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