20180827-中国银河国际证券-Strategy_6页_1mb

Short Selling Analysis for August 17

Core Content

This document presents an analysis of short selling activity in Hong Kong stocks based on data released by the Hong Kong Securities Clearing Company (HKSC) for August 10. The analysis is conducted using three criteria: (i) the net change in short positions between August 10 and August 17; (ii) short positions as a percentage of free float; and (iii) the absolute amount of short positions. The report highlights two stocks that experienced a significant drop in short positions, Sihuan Pharm (0460.HK) and Truly (0732.HK), and provides a broader overview of short selling trends across the top 50 stocks.

Key Findings

1. Sihuan Pharm (0460.HK)

• Net change in short positions: A 28.1% decrease during the week ended August 17.
• Short positions as a percentage of free float: 4.57%.
• 5-day moving average short-selling amount: HK$1.49m on August 24, down from HK$6.7m on August 17.
• Price change: Increased from HK$1.45 to HK$1.71, a 18.0% rise.
• Market cap: HK$16,480m.
• 2018E PER: 10.12x.
• 2019E PER: 9.49x.
• PBR: 1.30x.
• 2018E Dividend yield: 2.44%.

2. Truly (0732.HK)

• Net change in short positions: A 16.7% decrease during the week ended August 17.
• Short positions as a percentage of free float: 3.48%.
• 5-day moving average short-selling amount: HK$0.27m on August 24, down from HK$1.49m on August 17.
• Price change: Increased from HK$1.17 to HK$1.23, a 5.1% rise.
• Market cap: HK$3,838m.
• 2018E PER: 6.54x.
• 2019E PER: 4.18x.
• PBR: 0.49x.
• 2018E Dividend yield: 4.31%.

Data Sources and Limitations

• Data Source: The HKSC releases aggregate short positions data every Friday, with a one-week delay. The Hong Kong Exchange (HKEx) provides daily short-selling activity data, but it does not specify whether the short positions are covered.
• Usefulness: The HKSC data is useful for tracking the net change in short positions on a weekly basis, as it provides the outstanding short positions in each stock.
• Limitations: The data does not cover short-selling activity using over-the-counter (OTC) derivative products.

Three Angles of Analysis

1. Net Change in Short Positions:

   • This metric shows the weekly change in short positions. Sihuan Pharm and Truly both saw a notable decline.
   • Other stocks like MGM China (2282.HK) and Sinotruk (3808.HK) also experienced significant changes.

2. Short Positions as a Percentage of Free Float:

   • This reflects the proportion of short selling relative to the total number of shares available for trading. Stocks like Sinotruk (3808.HK) had a high percentage of short positions relative to free float (42.56%).

3. Absolute Amount of Short Positions:

   • This is the total value of short positions. Stocks like Ping An (2318.HK) and Sinotruk (3808.HK) had high absolute short positions.

Summary of Top 50 Short Selling Stocks

• The report includes a table of the top 50 short selling stocks, ranked by the net change in short positions (descending order), the percentage of short positions relative to free float (ascending order), and the absolute amount of short positions (descending order).
• These tables provide detailed information on each stock, including the number of shares, the short-selling amount, the percentage of free float, price changes, market cap, and earnings ratios.

Authors

• Wong Chi Man – Head of Research
• Mark Lau – Research Analyst

Contact Information

• Wong Chi Man: (852) 3698-6317 | cmwong@chinastock.com.hk
• Mark Lau: (852) 3698-6393 | marklau@chinastock.com.hk

Conclusion

The analysis suggests that certain stocks are experiencing a reduction in short-selling activity, which may indicate improved investor sentiment or reduced bearish pressure. However, the data should not be interpreted as an evaluation of corporate governance or fundamentals. Investors should be aware of the limitations of the data, particularly the exclusion of OTC derivative products, and use it as a supplementary tool for decision-making.