20171030-中国银河国际证券-Short_Selling_Analysis_for_October_20_6页_575kb

Short Selling Analysis Summary - October 20, 2017

Core Content

This document provides an analysis of short selling activity in Hong Kong stocks as of October 20, 2017, based on three criteria: (i) the net change in short positions between October 13 and October 20, (ii) short positions as a percentage of free float, and (iii) the absolute amount of short positions. The analysis is based on data released by the Hong Kong Securities and Futures Commission (HKSCF) and highlights stocks that may be vulnerable to short-selling activity.

Key Findings

Companies with Significant Increase in Short Positions

• Genescript (1548.HK): Short positions increased by 45.5%, representing 4.19% of the free float. The company has seen a 160% return YTD, which is likely a contributing factor.
• China Harmony (3836.HK): Short positions rose by 28.2%, with short positions equivalent to 4.33% of the free float.
• Baoxin Auto (1293.HK): Short positions increased by 27.7%, representing 3.52% of the free float.
• Sinolink (1168.HK): Short positions increased by 21.1%, and this was attributed to the IPO of ZhongAn Online P&C Insurance (6060.HK).

Companies with Significant Decrease in Short Positions

• Guangzhou R&F (2777.HK): Short positions dropped by 30.4%, with short positions equivalent to 2.59% of the free float.
• Huadian Fuxin (0816.HK): Short positions decreased by 25.7%, representing 2.60% of the free float.
• Shandong Chenming Paper (1812.HK): Although short positions increased by 196% since early September, they dropped by 20% during the week ended October 20.
• Shanghai Electric (2727.HK): Short positions declined by 14.4%, representing 6.56% of the free float.
• Wasion Group (3393.HK): Short positions decreased by 12.8%, representing 5.06% of the free float.

Analysis Criteria

1. Net Change in Short Positions: The change in short positions from October 13 to October 20 is used to identify trends in short selling activity.
2. Short Positions as a Percentage of Free Float: This indicates the relative size of short positions compared to the total number of shares available for trading.
3. Absolute Amount of Short Positions: The total number of shares sold short, providing an idea of the scale of short selling activity.

Limitations of the Data

• The HKSCF data is delayed by one week and only includes reportable short positions, not those from OTC derivative products.
• The HKEx provides daily data on short-selling activity, but it does not specify whether short positions are covered or not, making it less useful for precise tracking.

Additional Notes

• Short positions in auto dealers have continued to increase, partly due to their strong share price performance YTD.
• Some companies, such as Chenming Paper, have seen a sharp rise in short positions earlier in the month but a decline in the week ended October 20.
• The overall market trend shows a mix of increasing and decreasing short positions, indicating varied investor sentiment.

Conclusion

The analysis suggests that investors should closely monitor Genescript, China Harmony, Baoxin Auto, and Sinolink due to their significant increase in short positions. Conversely, Guangzhou R&F, Huadian Fuxin, Shandong Chenming Paper, Shanghai Electric, and Wasion Group have experienced notable declines, possibly reflecting improved market sentiment or reduced short selling activity. The data highlights the importance of tracking short positions for understanding market dynamics and potential risks.