In today’s briefing:
- HSCI Index Rebalance Preview and Stock Connect: Potential Changes in March 2025
- 2025 (“Year of the Snake”) IPOs Pipeline in Asia
- BYD Electronics (285 HK): Earnings Bottoming Out in 4Q24, EV and Data Center Driving Growth in 2025
- EQD | Hong Kong Single Stock Options Weekly December 09 – 13
- EQD | Hong Kong Index Options Weekly – HSI and HSCEI December 09-13
- Monthly Chinese Tourism Tracker | Five Easy Charts Showing China’s Tourism Recovery To Date
- Pre-IPO Herbs Generation Group Holdings (PHIP Updates) – Some Points Worth the Attention
HSCI Index Rebalance Preview and Stock Connect: Potential Changes in March 2025
- We see 32 potential and close adds and 44 potential and close deletes for the Hang Seng Composite Index in March. Some of the stocks are close on market cap/liquidity.
- We expect 29 stocks to be added to Southbound Stock Connect following the rebalance while 31 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.
2025 (“Year of the Snake”) IPOs Pipeline in Asia
- In this insight, we provide a list of 70 prominent companies in Asia that could complete their IPOs in Asia next year.
- This is a comprehensive, REFERENCE GUIDE to help clients so that they could get a broad view of the major IPOs that could get completed in Asia in 2025.
- Some of the most prominent potential IPOs in Asia next year include Reliance Jio, LG Electronics India, Shein, Sony Financial Group, Didi Global, and Okada Manila.
BYD Electronics (285 HK): Earnings Bottoming Out in 4Q24, EV and Data Center Driving Growth in 2025
- BYD Electronics benefits from two key growth drivers in 2025: a cyclical upswing in its legacy EMS business, and sustained strong growth in auto electronics and AI data cooling devices.
- Earnings momentum is expected to pick up in 4Q, with key segments entering an earning upcycle. Expect bottomline growth to accelerate to 45% in 2025 from 9% in 2024.
- The 13x 2025 PE multiple does not capture BYDE’s transformation from a low-end, cyclical EMS to a leading high-precision manufacturer with a more diverse and balanced set of growth drivers.
EQD | Hong Kong Single Stock Options Weekly December 09 – 13
- Top Ten most active contracts for the week all traded on Monday. Most of the active contracts were Calls with December expiries.
- Xiaomi Corp (1810 HK) makes the Top Ten non-Tencent most active contracts with both Puts and Call active – likely stock replacement and hedges following torrid run higher.
- Tencent implied vols trading at their lowest levels of the past year.
EQD | Hong Kong Index Options Weekly – HSI and HSCEI December 09-13
- Both HSI and HSCEI show characteristics of being short gamma at higher strikes highlighted by Mondays pop in spot and vol in both markets.
- Implied vol did a complete round-trip closing virtually unchanged from last week despite spot holding on to modest gains on the week and large high – low range.
- Up-Strike Calls look to have been added in both markets which will help maintain the positive spot vol correlation.
Monthly Chinese Tourism Tracker | Five Easy Charts Showing China’s Tourism Recovery To Date
- In this insight we chart the progress of China’s tourism recovery vs pre-pandemic levels
- In October 2024, Chinese outbound (international) demand finally reached pre-Covid levels
- The recovery in domestic activity was completed earlier and more quickly than outbound
Pre-IPO Herbs Generation Group Holdings (PHIP Updates) – Some Points Worth the Attention
- Performance declined sharply in 24H1 mainly due to the decrease in orders from Customer A. Herbs Generation’s business/financial performance would be easily affected if the contributions from Customer A decline.
- Current sales model of Herbs Generation is hard to change, and the Company still has to invest heavily in offline marketing and promotional efforts, but the efficiency is not high.
- Herbs Generation’s ability to resist risks is relatively weak, which prevents us from building optimistic expectations for sustainable growth in the future. Valuation should be lower than peers.
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