The IPO market picked up in June

Compared with the six IPOs in May, the overall number of listings in June continued to increase, with a total of nine new stocks listed on HKEX. As of June 28th, the IPO market for the month was mixed, and the performance of these stocks was divergent. Among them, the share prices of EASOU TECH (2550.HK) and LAOPU GOLD (6181.HK) increased by 221% and 73%, respectively, since their listing, while UBOT HOLDING (8529.HK) and TIANJUDIHE (2479.HK) experienced a 31% and 28% drop in share price, respectively.

Phillip Hong Kong Newly Listed Equities Index ETF (2835.HK)

The ETF aims to fully replicate the Solactive Hong Kong Newly Listed Equities Index, a rules-based equity benchmark designed to track the performance of securities that had a recent initial public offering or new listing on the main board of HKEX. The index is rebalanced quarterly, incorporating securities with IPOs or new listings within the last 756 business days, aiming for a total of 50 securities based on free-float market capitalization. The index also undergoes monthly IPO reviews to include recent IPOs, subject to liquidity and market capitalization criteria.

June Monthly Review

A total of 21 stocks were included in the Solactive HK Newly listed Equities Index in June through the quarterly rebalancing mechanism, including: KE HOLDINGS INC (2423.HK), CLOUD MUSIC INC (9899.HK), SICHUAN KELUN-BIOTECH BIOPHA (6990.HK), BEIJING FOURTH PARADIGM TECH (6682.HK), ANE CAYMAN INC (9956.HK), SHANGHAI CHICMAX COSMETIC CO (2145.HK), SUPER HI INTERNATIONAL HOLDING LTD (9658.HK), IMOTION AUTOMOTIVE TECHNOLOG (1274.HK), GLOBAL NEW MATERIAL INTERNAT (6616.HK), LEPU BIOPHARMA CO LTD-H (2157.HK), STAR PLUS LEGEND HOLDINGS-H (6683.HK), CARSGEN THERAPEUTICS HOLDING (2171.HK), PALASINO HOLDINGS LTD (2536.HK), CLOUDR GROUP LTD (9955.HK), AINNOVATION TECHNOLOGY GROUP CO LTD (2121.HK), DINGDANG HEALTH TECHNOLOGY G (9886.HK), EDA GROUP HOLDINGS LTD (2505.HK), MOBVOI INC (2438.HK), JENSCARE SCIENTIFIC CO LTD-H (9877.HK), and EDIANYUN LTD-H (2416.HK). In addition, 11 existing constituents were removed, including: TRIP.COM GROUP LTD (9961.HK), KUAISHOU TECHNOLOGY (1024.HK), BAIDU INC (9888.HK), BILIBILI INC (9626.HK), SCICLONE PHARMACEUTICALS HOL (6600.HK), SHANGHAI MICROPORT MEDBOT GR (2252.HK), BAIRONG INC (6608.HK), FLOWING CLOUD TECHNOLOGY LTD (6610.HK), LESI GROUP LTD (2540.HK), CHONGQING HONGJIU FRUIT CO-H (6689.HK), and NEW HORIZON HEALTH LTD (6606.HK). The current number of constituent stocks has increased from 37 to 47.

DPC DASH LTD. (1405.HK) is a new constituent that performs well and accounts for a large proportion of this month’s index. The company is the exclusive franchisee of Domino’s Pizza in Mainland China, Hong Kong SAR, and Macau SAR. The company has localised its main features based on the needs of Chinese consumers and adjusted and developed its business model accordingly. Also, the number of its stores increased by 119.4%, from a total of 268 stores as of January 1st, 2020, to a total of 588 stores as of December 31st, 2022.

As of December 31st, 2023, the revenue of the company in 2023 was RMB 3050.7 million, a 51.0% YoY increase. The gross profit was RMB 2.3 million, turning the original loss position into a profit. The loss for the year attributable to the company’s equity holders was RMB 26.6 million, an 88.1% YoY decrease. The net loss of the company is because it keeps promoting rapid growth and plans to achieve long-term profitability by expanding geographical coverage and deepening market penetration.

Top 10 Holdings

The top 10 holdings of the Solactive Hong Kong IPO changed this month. TRIP.COM GROUP LTD (9961.HK), KUAISHOU TECHNOLOGY (1024.HK), BAIDU INC (9888.HK), and BILIBILI INC (9626.HK), the original top ten holdings in May, were removed from the index since they listed over 756 trading days; While KE HOLDINGS INC (2423.HK), ZHEJIANG LEAPMOTOR TECHNOLOG (9863.HK), JD LOGISTICS INC (2618.HK), and GIANT BIOGENE HOLDING CO LTD (2367.HK), became the new top ten holdings of the month. Currently, the index focuses on industries as follows: consumer discretionary (including EV companies like Li Auto, Nio, X Peng, etc.), real estate (including KE HOLDINGS INC and ONEWO INC), and industrials (including J&T Global Express, JD Logistics, and TUHU Car). The following figures show the top 10 holdings and sector breakdown of the Phillip HK Newly Listed Equities Index:

Key Components Update

• KE HOLDINGS (2423.HK): Beijing introduced new policies for its real estate market, including reducing the down payment ratio to 20% for first-time home buyers and to 35% for second home buyers, decreasing the lower limit of mortgage rates, relaxing the definition of first-time home ownership for families with multiple children, and encouraging developers and brokers to participate in the trade-in program. Since this policy will help to increase the activity of the first-hand and second-hand housing markets in Beijing, KE HOLDINGS will have core competitiveness as a real estate agency platform as 25% of the company’s total second-hand transaction volume comes from Beijing.
• LI AUTO (2015.HK): According to the June delivery data released by Li Auto, the company delivered 47,774 new vehicles in June, a 46.7% year-on-year increase. Sale potential for the L series kept rising in June, and Li Auto L6 successfully delivered over 20,000 vehicles this month. In the second quarter, Li Auto delivered a total of 108,581 vehicles, a 25.5% year-on-year increase. As of June 2024, Li Auto had delivered a total of 822,345 vehicles, ranking first among all Chinese new energy vehicle brands.
• Nio (9866.HK): According to June delivery data released by Nio, the company delivered a total of 21,209 new cars in June, a year-on-year increase of 98.1%, hitting a record high. The sales figure includes 11,581 luxury smart electric SUVs and 9,628 luxury smart electric cars. In the second quarter, Nio delivered a total of 57,373 new cars, a year-on-year increase of 143.9%. Nio has delivered a total of 537,020 vehicles to date.
• XPENG (9868.HK): According to the June delivery data released by XPENG, the company delivered 10,668 new vehicles in June, a 23.76% year-on-year increase and a 5.14% month-on-month increase. Among them, the delivery volume of the XPENG X9 in June reached 1,687 vehicles, and the cumulative delivery volume since its launch has reached 13,143 vehicles, maintaining an astonishing sales record in China’s all-electric MPV and three-row model area.
• J&T GLOBAL EXPRESS (1519.HK): According to the operating data for Q2 2024 that was released by J&T Global Express, the total parcel volume of the company in the second quarter reached 5.983 billion pieces, a 30.7% year-on-year increase; its average daily parcel volume was 65.8 million pieces, a 30.7% year-on-year increase. The cumulative parcel volume of J&T Global Express in the first half of the year was 11.015 billion pieces, a 38.3% year-on-year increase; the average daily parcel volume was 60.5 million pieces, a 37.5% year-on-year increase.

Top Constituent movers in June:

Bottom constituent movers in June:

The Phillip HK Newly Listed Index ETF (2835.HK) Monthly performance for June

The Phillip HK Newly Listed Index ETF (2835.HK) recorded a monthly decline of 8.80% in June, underperforming the Hang Seng Index’s (HSI) 2% monthly decline and underperforming the Hang Seng Tech Index’s (HSTI) 3.69% monthly decline. As of June 28th, this ETF had fallen 21.11% since its listing, underperforming the HSI’s fall of 1.52% and the HSTI’s fall of 5.03%.

The IPO market picked up in May

Compared with the three IPOs in April, the overall number of listings in May increased, with a total of six new stocks listed on HKEX. As of May 31st, the stock prices of these six companies were generally performing well. Among them, the share prices of MARKETING FORCE (2556.HK) and QUNABOX GROUP (917.HK) increased by 83% and 60%, respectively, after listing, while only SUNHO BIO-B (2898.HK) and HOLLWIN URBAN (2529.HK) experienced a 47% and 16% drop in share price, respectively.

Phillip Hong Kong Newly Listed Equities Index ETF (2835.HK)

The ETF aims to fully replicate the Solactive Hong Kong Newly Listed Equities Index, a rules-based equity benchmark designed to track the performance of securities that had a recent initial public offering or new listing on the main board of HKEX. The index is rebalanced quarterly, incorporating securities with IPOs or new listings within the last 756 business days, aiming for a total of 50 securities based on free-float market capitalization. The index also undergoes monthly IPO reviews to include recent IPOs, subject to liquidity and market capitalization criteria.

May Monthly Review

One stock, Productive Technologies Company Limited (650.HK), was removed from the Solactive HK Newly Listed Equities Index in May. The current number of constituent stocks has decreased from 38 to 37.

Top 10 Holdings

The top 10 holdings of the Solactive Hong Kong IPO changed this month. Zhejiang Leapmotor Technology Co. Ltd. (9863.HK), the original top ten holdings in April, has been replaced by Onewo Inc. (2602.HK) in May because of its rising stock price, which became the new top ten holdings of the month. Currently, the index focuses on industries as follows: consumer discretionary (including Trip.com and EV companies like Li Auto, Nio, X Peng, etc.), communication services (including Kuaishou, Baidu, and Bilibili), and industrials (including J&T Global Express, JD Logistics, and TUHU Car). The following figures show the top 10 holdings and sector breakdown of the Phillip HK Newly Listed Equities Index:

Key Components Update

• Trip.com (9961.HK): The trend of travel during the Dragon Boat Festival in June is towards short-distance tours through renting cars and self-driving. According to data from Trip.com, the number of bookings for domestic short-distance trips during the Dragon Boat Festival period increased by 20% year-on-year, while the number of domestic car rental and self-driving orders even increased by 260% year-on-year. In addition, outbound travel during this period was also taken into consideration by travellers, with the search popularity of outbound hotels on Trip’s platform increasing by 50% compared to the same period in 2019.
• Kuaishou (1024.HK): Kuaishou’s self-developed text-to-image model “Kolors” has been officially opened to the public at the end of May and can be used for free on the official website and WeChat apps for a limited period of time. This model supports both text-to-image and image-to-image functions, and more than 20 types of AI images are now online for use, including AI image customization and AI creation. It has been learned that, unlike similar AI products that require multiple photos and a long time to generate, the “Kolors” model can generate a set of high-quality AI images with just one picture and a few seconds.
• Nio (9866.HK): According to May delivery data released by Nio, the company delivered a total of 20,544 new cars in May, a year-on-year increase of 233.8% and a month-on-month increase of 31.5%, hitting a record high. Since 2024, Nio has delivered a total of 66,217 new cars, an increase of 51% on a year-on-year basis. With 515,811 vehicles delivered to date, Nio is becoming the first premium pure electric brand in the industry to deliver more than 500,000 vehicles.
• Baidu (9888.HK): According to the 2024 Baidu Mobile Ecosystem Wanxiang Conference held on May 30th, Baidu marked the commercial focus on scene implementation abilities of the model and explored the commercial application and realization of agents. At the conference, Baidu also announced the latest progress of its LLMs and ERNIE agents across its mobile ecosystem, including Baidu Search, Baidu Wenku, and ERNIE Bot App, which lowered the application barrier for the model on all fronts. In addition, Baidu revealed that its ERNIE agents have served more than 160,000 developers and over 50,000 enterprises, covering more than 100 application scenarios.
• Li Auto (2015.HK): According to the May delivery data released by Li Auto, the company delivered 35,020 new vehicles in May, a 23.8 percent year-on-year increase. As of the end of May 2024, Li Auto had delivered a total of 774,571 vehicles. Among them, the new Li Auto L6 launched in April had delivered 15,000 units by the end of May, hitting the record for the fastest delivery of Li Auto’s new vehicle models.

Top Constituent movers in May:

Bottom constituent movers in May:

The Phillip HK Newly Listed Index ETF (2835.HK) Monthly performance for May

The Phillip HK Newly Listed Index ETF (2835.HK) recorded a monthly decline of 1.3% in May, underperforming the Hang Seng Index’s (HSI) 1.78% monthly decline and underperforming the Hang Seng Tech Index’s (HSTI) 0.27% monthly decline. As of May 31st, this ETF had fallen 14.20% since its listing, underperforming the HSI’s rise of 0.48% and the HSTI’s fall of 1.39%.
     

The IPO market performed dismal in April

Compared with a total of 7 new stocks listed on the Hong Kong Stock Exchange (HKEX), there were a total of 3 new stocks listed in April, not only the number of new stocks listed has declined, but the performance after listing is also unsatisfactory. As of April 30, the stock prices of the three companies listed in April were weak. Among them, Tianjin Construction Development Group (2515.HK) and Chabaidao (2555.HK) have fallen by 39.2% and 34.6% respectively.

Phillip Hong Kong Newly Listed Equities Index ETF (2835.HK)

The ETF aims to fully replicate the Solactive Hong Kong Newly Listed Equities Index, a rules-based equity benchmark designed to track the performance of securities that had a recent initial public offering or new listing on the main board of the HKEX. The Index is rebalanced quarterly, incorporating securities with IPOs or new listings within the last 756 business days, aiming for a total of 50 securities based on free-float market capitalization. The Index also undergoes monthly IPO reviews to include recent IPOs, subject to liquidity and market capitalization criteria.

April Monthly Review

 After the monthly fast-track mechanism of the Solactive HK Newly Listed Equities Index, there is 1 new constituent was added, which is Lesi Group (2540.HK). The current number of constituent stocks has increased from 37 to 38.

Lesi Group (2540.HK) is a mobile advertising service provider in the PRC and mainly provides comprehensive mobile advertising services to the customers for marketing of their brands, products and/or services on media platforms operated by their media partners. The company had a market share of approximately 0.1% in terms of gross billing in 2022 in the mobile advertising industry in the PRC. The company services include mobile marketing planning, traffic acquisition, production of ad creatives, ad placements, ad optimization, ad campaign management and ad distribution.

For the year ended 31 December 2023, the company revenue amounted to RMB 628.0 million, increasing 27.5% YoY. The gross profit amounted to RMB 104.0 million, increasing 0.9% YoY. The gross profit margin was 16.6%, decreasing 4.4 percentage points YoY. Profit for the year attributable to equity shareholders of the Company amounted to RMB 65.2 million, decreasing 3.1% YoY. The decrease in gross profit margin was mainly due to the increase in traffic acquisition costs with the decrease in rebates from media partners caused by the decrease of the customers’ demand for placement of mobile ads with them and the change of rebate policies of media partners of the Group as their business plan may vary from time to time, and the decrease in revenue from advertisement distribution services.

Top 10 Holdings

The top 10 holdings of the Solactive Hong Kong IPO changed this month. JD Logistics (2618.HK), one of the top ten holdings in March, fell out of the top ten holdings due to the decline in its stock price, while SenseTime (20.HK) became the new top ten holdings. The industries that the index currently focuses on include communication services (including Baidu, Kuaishou and Bilibili), Consumer Durables (including EV companies like Li Auto, Nio, X Peng and LeapMotor) and Health Care (HUTCHMED and Wuxi XDC). The following table shows the top 10 holdings and sector breakdown of the Phillip HK Newly Listed Equities Index:

Key Components Update

• Kuaishou (1024.HK): The company officially disbanded the Kuaishou Beijing Game Division. Only a few people were transferred to other project teams. The president reduced the number of staff by nearly 30-40 people, mainly members of the card project team of “Codename: Beisan”. The trigger for this layoff was that the test data of “Codename: Beisan” was not up to standard.
• Trip.com (9961.HK): The tourism market was invigorated on the first day of the Labor Day holiday. Trip.com data shows that on the first day of the holiday, the YoY growth rate of inbound and outbound travel orders in most first- and second-tier cities was higher than the growth rate of domestic travel orders, with inbound and outbound travel orders increasing by 70% YoY. At the same time, the sinking trend of the tourism market has further emerged, and the growth rate of travel orders in most third- and fourth-tier cities and county-level cities is higher than that of first- and second-tier cities.
• Baidu (9888.HK): Tesla CEO Elon Musk visited China on April 28. According to foreign media reports, this visit was mainly to promote Tesla’s fully autonomous driving system to be approved in China. Later, it was reported that Tesla’s Chinese version of the fully autonomous driving system would use Baidu’s lane-level navigation map.
• Li Auto (2015.HK): The company announced delivery data for April. The company delivered a total of 25,787 units in April, increasing 0.4% YoY. As of April 30, 2024, the company has delivered a total of 739,551 units. The company said that Li L6 released in April is Li Auto’s first product priced under RMB 300,000 and has been welcomed by many young family users. Mass deliveries will begin in May. Data shows that during the first sales period from April 18 to May 5, the L6’s exceeded 41,000 units.
• XPeng (9868.HK): The company announced delivery data for April. The company delivered a total of 9,393 Smart EVs, increasing 33% YoY and increasing 4% MoM. Among them, the XPeng X9 achieved monthly deliveries of 1,959 units in April, with cumulative deliveries of nearly 10,000 units since its launch, maintaining its position as the top-selling all-electric MPV in China. From January 2024 to April 2024, XPENG has cumulatively delivered 31,214 Smart EVs, increasing 23% increase YoY.

Top Constituent movers in April:

Bottom constituent movers in April:

The Phillip HK Newly Listed Index ETF (2835.HK) Monthly performance for April

The Phillip HK Newly Listed Index ETF (2835.HK) recorded a monthly gain of 4.2%, underperforming the Hang Seng Index’s (HSI) 7.4% monthly gain and underperforming the Hang Seng Tech Index’s (HSTI) 6.4% monthly gain. As of 30 April, the ETF has fallen 13.07%, underperforming the HSI’s decline of 1.28% and underperforming the HSTI’s decline of 1.12%.