20171113-中国银河国际证券-Short_Selling_Analysis_for_November_3_6页_573kb

Short Selling Analysis Summary - November 3, 2017

Core Content

This report provides an analysis of short selling activity in Hong Kong stocks based on the aggregate short positions data released by the Hong Kong Securities and Futures Commission (HKSC) for November 3, 2017. The analysis is based on three key criteria: the net change in short positions between October 27 and November 3, short positions as a percentage of free float, and the absolute amount of short positions.

Main Findings

Companies with Significant Increase in Short Positions

• Cowell (1415.HK)

  • Short positions increased from zero to 2.6% of free float.
  • Price dropped slightly by 0.8%.
  • The increase may be linked to a lack of near-term catalysts following the iPhone X release.

• CPMC (0906.HK)

  • Short positions increased by 51%, equivalent to 2.6% of free float.
  • The stock price had a sharp 22% rise after announcing a proposed investment in JDB, followed by a correction.

• Shanghai Pharm (2607.HK)

  • Short positions increased by 87.6%, equivalent to 2.9% of free float.
  • The stock has lost momentum since late October and has been gradually declining.

Companies with Significant Decline in Short Positions

• ASM Pacific (0522.HK)

  • Short positions decreased by 15%.
  • The stock remained stable after a major shareholder sold a 9% stake in early November.
  • The share price jumped 5.76% last Friday.

• United Lab (3933.HK)

  • Short positions decreased by 19.6%.
  • The decline may be related to the CBs issued in November 2016.

• China Hongqiao (1378.HK)

  • Short positions decreased by 28.2%.
  • The decline is likely due to the resumption of trading in late October.
  • The share price experienced a 80% jump when trading resumed, followed by recent pressure.

Key Information

• The HKSCF releases aggregate short positions data weekly, while the HKEx provides daily data, but it is not clear if the short positions are covered or not.
• The data has limitations as it does not cover short-selling activity using OTC derivative products.
• The analysis is objective and quantitative, not implying any judgment on corporate governance or fundamentals.
• Figure 1 shows companies with significant increases in short positions during the week ended October 27.
• Figure 2 ranks the top 50 short selling stocks by the net change in short positions (descending order).
• Figure 3 ranks the top 50 short selling stocks by the net change in short positions (ascending order).
• Figure 4 ranks the top 50 short selling stocks by the percentage of free float.

Summary of Key Stocks

Increased Short Positions

• Cowell (1415.HK): 2.6% of free float, 308.2% increase in short positions.
• CPMC (0906.HK): 2.6% of free float, 51% increase in short positions.
• Shanghai Pharm (2607.HK): 2.9% of free float, 87.6% increase in short positions.

Decreased Short Positions

• ASM Pacific (0522.HK): 8.0% of free float, 15% decrease in short positions.
• United Lab (3933.HK): 26.9% of free float, 19.6% decrease in short positions.
• China Hongqiao (1378.HK): 4.3% of free float, 28.2% decrease in short positions.

Conclusion

The report highlights that while some companies experienced a significant rise in short positions, others saw a notable decline. The analysis focuses on the quantitative data and does not make any qualitative judgments on the companies' fundamentals or governance. Investors are advised to monitor the stocks with increased short positions, particularly CPMC, Cowell, and Shanghai Pharm, while also noting the decline in short positions for ASM Pacific, United Lab, and China Hongqiao.