In today’s briefing:
- HSCI Index Rebalance: 22 Adds, 27 Deletes & Changes to Southbound Stock Connect
- China Healthcare Weekly (Aug.18) – TCM Formula Granules VBP, Global Financing Rebound, CR Sanjiu
- ECM Weekly (20th August 2023) – Indigo, Vinfast, SBFC, Concord, Wuxi, NSDL, LianLian, Fedbank
- HSCEI Index Rebalance: Trip.com (9961 HK) Replaces CG Services (6098 HK)
- [Bilibili(BILI US, SELL, TP US$12.3) Review]: E-Commerce Ads Aren’t Sufficient to Hide Other Issues
- Index Rebalance & ETF Flow Recap: ASX, NEXT50, MVMVA, MVMVW, Celltrion, Brilliance, KQ150, HSCI
HSCI Index Rebalance: 22 Adds, 27 Deletes & Changes to Southbound Stock Connect
- There are 22 adds and 27 deletes for the Hang Seng Composite Index (HSCI) at the September rebalance to take the number of index constituents down to 518.
- We expect all 22 inclusions to the HSCI will be added to Stock Connect, while 24 of the 27 HSCI deletions will be removed from Southbound Stock Connect.
- Since the end of June, shares held though Southbound Connect have increased on 20 of the 27 HSCI deletions and there could be some unwinding in the next two weeks.
China Healthcare Weekly (Aug.18) – TCM Formula Granules VBP, Global Financing Rebound, CR Sanjiu
- For a considerable period of time, the industry has been speculating about when the large-scale VBP of TCM formula granules will officially begin. Now, here it comes.
- Primary market and other financing except IPO in European and US biopharma industry shows a significant signal of recovery. However, IPOs remain stagnant.
- We analyzed key points about China Resources Sanjiu. Sanjiu is expected to have better performance in 2023 than 2022, but we advise investors to allow a sufficient margin of safety.
ECM Weekly (20th August 2023) – Indigo, Vinfast, SBFC, Concord, Wuxi, NSDL, LianLian, Fedbank
- Aequitas Research puts out a weekly update on the deals that were covered by the team recently along with updates for upcoming IPOs.
- The IPO space saw a few pops this week, some were somewhat justifiable in SBFC Finance Limited and Concord Biotech while one was reminisent of the 2020-21 frenzy, Vinfast.
- In the placement space, the selldown for InterGlobe Aviation Ltd (INDIGO IN) materialised as expected but despite that the deal didn’t do much.
HSCEI Index Rebalance: Trip.com (9961 HK) Replaces CG Services (6098 HK)
- As expected, Trip.com Group (9961 HK) replaces Country Garden Services (6098 HK) in the Hang Seng China Enterprises Index (HSCEI INDEX) at the close on 1 September.
- BeiGene (6160 HK) fails the Velocity Test and misses inclusion, while an increase in Zhongsheng Group (881 HK)‘s float keeps it in the index.
- Using prices from the close on 18 August, estimated one-way turnover is 2.78% leading to a one-way trade of HK$1.73bn (US$221m).
[Bilibili(BILI US, SELL, TP US$12.3) Review]: E-Commerce Ads Aren’t Sufficient to Hide Other Issues
- BILI reported 2Q23 top-line in-line and non-GAAP net profit 7% better than consensus. However, gaming revenue was weak, causing BILI to revise down its full-year revenue guidance.
- We believe e-commerce ads could become a new near-term driving force, but the rapid growth of game-related ads might fade post-Q3.
- Also, the significant consolidation of ACG games could affect BILI’s future game performance. We maintain our US$ 12.3 TP and SELL rating.
Index Rebalance & ETF Flow Recap: ASX, NEXT50, MVMVA, MVMVW, Celltrion, Brilliance, KQ150, HSCI
- Friday was the review cutoff for the September rebalance of the ASX family of indices. The September changes for the Hang Seng family of indices were also announced.
- The September changes for the SSE STAR50 (STAR50 INDEX) will be announced after the close of trading on 25 August.
- For a second week running, there were big inflows to mainland China ETFs and were spread across multiple index trackers. There were outflows from iShares Emerging Markets (EEM US).
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