20210224-招银国际-Strategy_Report__HSI_enhancement_preview_7页_804kb

报告摘要

Summary of HSI Enhancement Preview

Core Content

This document outlines the upcoming Hang Seng Index (HSI) enhancement review and its potential impact on the index composition, sector weightings, and eligible Southbound stocks under the Stock Connect program. The review is expected to be announced on 26 Feb 2021 and may be implemented in the next quarterly index review, starting from May 2021.

Main Points and Key Information

1. Focus of the Index Review

HSI and HSCEI constituent changes: Potential adjustments to the list of stocks in the HSI and HSCEI.
HSCI constituent changes: Changes to the HSCI will determine the eligible Southbound stocks.
Consultation conclusions: Likely to include an increase in the number of HSI constituents to 65-80, with possible changes to sector representation and weighting rules.

2. Potential New HSI Constituents

Most Likely Inclusion: Haidilao (6862 HK)
Dark Horses: Ali Health (241 HK), Hanson Pharma (3692 HK)
Excluded Stocks: JD Health (6618 HK), Netease (9999 HK), Smoore (6969 HK), Nongfu Spring (9633 HK), JD (9618 HK) due to not meeting listing history requirements.
Unlikely Inclusions: Longfor Group (960 HK) and China Evergrande (3333 HK) as property sector is already well-represented.

3. Potential Removal from HSI

Most Likely: Hang Lung Properties (101 HK), due to its low market cap and turnover.

4. Southbound Eligible Stocks

Additions: 20 stocks that may be added to the HSCI and thus become eligible for Southbound trading, including several from the Property Management, Healthcare, and Consumer sectors.
Removals: Stocks such as Minsheng Edu (1569 HK), China Aircraft Leasing (1848 HK), and Shineway Pharm (2877 HK) may be removed from Southbound eligibility.

5. Proposed Enhancements to the HSI

Enhancement	Description	Impact
1. Expand industrial representation	Group industries into 6 categories and ensure balanced representation.	Financials' weight will decrease, while IT, Consumer, and Healthcare sectors will gain weight.
2. Increase number of constituents to 65-80	Expand index coverage to improve diversification.	Majority of new stocks will come from non-Financial sectors.
3. Remove minimum listing history requirement	Allow newly-listed mega-cap stocks to be included faster.	Likely to benefit up-and-coming tech companies.
4. Maintain representation of Hong Kong companies	Keep a certain number of HK constituents in the index.	HK companies' total weighting will still be diluted.
5. Unify constituent weighting cap at 8%	Equalize the weighting cap for all constituents.	Tencent (700 HK) and AIA (1299 HK) will see their weight reduced, while Alibaba (9988 HK) and Meituan (3690 HK) will see an increase.

6. Expected Winners and Losers

Winners:

IT, Consumer, Healthcare sectors: Expected to gain more stocks and higher sector weightings.
Alibaba (9988 HK) and Meituan (3690 HK): Weighting cap raised to 8%.
Xiaomi (1810 HK): May benefit if market cap increases further.

Losers:

Tencent (700 HK) and AIA (1299 HK): Weighting cap lowered to 8%.
Financial and Property stocks: May face dilution due to increased inclusion of new constituents.

Conclusion

The HSI enhancement aims to improve sector balance, increase market coverage, and enhance the inclusion of new, high-cap stocks. The changes are expected to benefit IT, Consumer, and Healthcare sectors, while Financial and Property stocks may be diluted. The review results are likely to be announced on 26 Feb 2021, with implementation expected from the May 2021 quarterly index review. The document also highlights the importance of the HSCI review for Southbound eligibility and provides a list of potential additions and removals.

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