In today’s briefing:
- Hang Seng Index (HSI) Rebalance: Idling at 82 Members; 100 Members in 2025 at the Earliest
- HSCEI Index Rebalance: Third Time Unlucky for Zhongsheng (881 HK) As China Unicom (762 HK) In
- China Healthcare Weekly (Feb16)-Innovative Drug Is “Innocent” In Geopolitics, BeiGene’s BTK, Jacobio
- Alibaba Group: Revitalization of Taobao and Tmall Group
Hang Seng Index (HSI) Rebalance: Idling at 82 Members; 100 Members in 2025 at the Earliest
- In a surprise, the Hang Seng index committee has decided not to make any constituent changes to the Hang Seng Index (HSI INDEX) at the March rebalance.
- We now see the index reaching its 100-member target in 2025 at the earliest, though we would not be surprised to see it spill into 2026 as well.
- Free float and capping changes will result in one-way turnover of 1.2% resulting in a round trip trade of HK$4.54bn. HSBC Holdings (5 HK) is the biggest sell.
HSCEI Index Rebalance: Third Time Unlucky for Zhongsheng (881 HK) As China Unicom (762 HK) In
- After narrowly avoiding deletion at the last two index reviews, Zhongsheng Group will be deleted from the HSCEI INDEX in March and replaced with China Unicom (762 HK).
- Zhongsheng Group (881 HK) is down 25% for the year while China Unicom Hong Kong (762 HK) is up 10%.
- There appears to be positioning on both stocks though the increase in shorts and jump in cumulative excess volume on Zhongsheng Group (881 HK) point to higher positioning.
China Healthcare Weekly (Feb16)-Innovative Drug Is “Innocent” In Geopolitics, BeiGene’s BTK, Jacobio
- Due to the US Draft Bill against CXOs, stock prices of the entire pharmaceutical industry plummeted. But in reality, there’s no impact on innovative drugs, which is just “emotional suppression”.
- The future BTK inhibitors market pattern predicted by GlobalData is very close to our estimate. This actually indirectly verifies the peak sales level that BeiGene may reach in the future.
- Setbacks on KRAS/SHP2 projects discourage investors’ confidence on Jacobio. We wouldn’t recommend projecting too high expectations on BET inhibitor just yet. Share price performance could continue to be under pressure.
Alibaba Group: Revitalization of Taobao and Tmall Group
- Alibaba Group’s latest report for the December Quarter 2023 reflected steady growth despite necessary organizational adjustments.
- The call highlighted an overall focus on a more aggressive approach towards competition to win growth, reigniting the growth in their two core businesses: e-commerce and cloud computing.
- The healthy year-over-year Gross Merchandise Volume (GMV) growth in the e-commerce segment is attributed to the effective execution of user-first and competitive pricing strategies in Taobao and Tmall Group (TTG).
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