The IPO market showed a trend of differentiation in November
The total number of listings in November remained stable in comparison to the eight initial public offerings (IPOs) in October. This month, seven new stocks were listed on HKEX, but the overall performance of the IPO market was divided. As of November 30th, GUOFUHEE (2582.HK) and MOKINGRAN (2585.HK) saw a 43% and 8% incline in share price, respectively, whereas JIUYUAN GENE (2566.HK) and AUGROUP (2519.HK) saw a 36% and 26% decrease in share price since listing.
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 capitalisation criteria.
November Monthly Review
This month, 2 new stocks, Midea Group (300.HK) and Carote (2549.HK), were added to the Solactive HK Newly Listed Equities Index through the monthly fast-track mechanism. The current number of constituent stocks has increased from 35 to 37.
Midea Group (300.HK) is a leading technology-driven global provider of Smart Home Solutions and Commercial & Industrial Solutions. The company’s product and service offerings cover a wide range of home appliances for consumers and solutions for enterprise customers spanning across Energy Solutions & Industrial Technology, Intelligent Building Technology, Robotics & Automation, and Other Businesses. The company is the world’s largest home appliance company in terms of both sales volume and revenue in 2023, capturing a market share of 7.9%.
As of December 31st, 2023, the company’s revenue in 2023 was 373.71 billion yuan (RMB, the same below), a year-on-year increase of 8.1%. Gross profit was 98.39 billion yuan, a year-on-year increase of 18.0%; the gross profit margin in 2023 increased from 24.1% in 2022 to 26.3%. The profit for the year attributable to the company’s equity holders was 33.72 billion yuan, a year-on-year increase of 14.1%. The increase in the company’s gross profit comes from the growth in revenue from smart home business, commercial, and industrial solutions. However, the company’s effective control of operating costs and production costs has led to an increase in the gross profit margin, highlighting the economies of scale effect.
Top 10 Holdings
This month, the Solactive Hong Kong Newly Listed Equities Index’s top ten holdings do not change. The following industries are currently the focus of the index: consumer discretionary (including Li Auto, Trip, and HAIRE SMARTHOME), communication services (including KUAISHOU, BAIDU, and BILIBILI-W), and real estate (including BEKE-W, CHINA RES MIXC, and ONEWO). The following figures show the top 10 holdings and sector breakdown of the Phillip HK Newly Listed Equities Index:
Key Components Update
Top constituent movers in November:
Bottom constituent movers in November:
The Phillip HK Newly Listed Index ETF (2835.HK) monthly performance for November
The Phillip HK Newly Listed Index ETF (2835.HK) recorded a 5.48% monthly decrease in November, underperforming the Hang Seng Index’s (HSI) 4.40% monthly decrease and underperforming the Hang Seng Tech Index’s (HSTI) 3.24% monthly decrease. As of November 30th, this ETF had fallen 8.72% since its listing, underperforming the HSI’s rose of 7.95% and the HSTI’s rose of 16.32%.
The IPO market performed not well in October
The total number of listings in October rose dramatically in comparison to the two initial public offerings (IPOs) in September. This month, eight new stocks were listed on HKEX; however, the IPO market has largely underperformed. As of October 31st, QINIU (2567.HK) and TAIMEI TECH (2576.HK) saw a 57% and 53% decline in share price, respectively, whereas BIOSTAR PHARM-B (2563.HK) and HORIZONROBOT-W (9660.HK) saw a 30% and 20% increase in share price since listing.
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 capitalisation criteria.
October Monthly Review
This month, there has been no change in the Solactive HK Newly listed Equities Index’s holdings; there are currently 35 member stocks.
Top 10 Holdings
This month, the Solactive Hong Kong IPO’s top ten holdings experienced a change. The share price decline in October caused SENSETIME (20.HK) to drop out of the top ten holdings during this time, while POP MART (9992.HK) rose to the top ten. The following industries are currently the focus of the index: consumer discretionary (including Li Auto, Trip, and HAIRE SMARTHOME), communication services (including KUAISHOU, BAIDU, and BILIBILI-W), and real estate (including BEKE-W, CHINA RES MIXC, and ONEWO). The following figures show the top 10 holdings and sector breakdown of the Phillip HK Newly Listed Equities Index:
Key Components Update
Top constituent movers in October:
Bottom constituent movers in October:
The Phillip HK Newly Listed Index ETF (2835.HK) monthly performance for October
The Phillip HK Newly Listed Index ETF (2835.HK) recorded an 8.67% monthly decrease in October, underperforming the Hang Seng Index’s (HSI) 3.86% monthly decrease and underperforming the Hang Seng Tech Index’s (HSTI) 5.32% monthly decrease. As of October 31st, this ETF had fallen 3.43% since its listing, underperforming the HSI’s rose of 12.92% and the HSTI’s rose of 20.21%.
The IPO market picked up in September
Compared with the 3 IPOs in August, the overall number of listings kept declining in September. There were only 2 new stocks listed on HKEX this month, but the IPO market is generally well performed. As of September 30st, the share price of MIDEA GROUP (0300.HK) and SYNTRUST GK (8629.HK) increased by 35.49% and 8.08% since listing, 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.
September Monthly Review
A total of 10 stocks were included in the Solactive HK Newly listed Equities Index in September through the quarterly rebalancing mechanism, including: KUAISHOU (1024.HK), BAIDU (9888.HK), TRIP.COM (9961.HK), HAIER SMARTHOME (6690.HK), BILIBILI-W (9626.HK), JD HEALTH (6618.HK), POP MART (9992.HK), CHINA RES MIXC (1209.HK), ROBOSENSE (2498.HK), and REMEGEN (9995.HK). In addition, 13 existing constituents were removed, including: MINISO (9896.HK), CLOUD MUSIC (9899.HK), ANE (9956.HK), CHICMAX (2145.HK), KINGSOFT CLOUD (3896.HK), CHERVON (2285.HK), SUPER HI (9658.HK), LEPU BIO-B (2157.HK), STARPLUS LEGEND (6683.HK), IMOTIONAUTOTECH (1274.HK), AINNOVATION (2121.HK), DINGDANG HEALTH (9886.HK), and EDIANYUN (2416.HK). The current number of constituent stocks has dropped from 38 to 35.
Bilibili-W (9626.HK) is the best-performing and relatively heavy-weighted new component stock in September. The company is an iconic brand and a leading video community for young generations in China. It has become the welcoming home of diverse cultures and interests, as well as a destination for discovering cultural trends and phenomena of young generations in China. The community offers a wide array of content serving young generations’ diverse interests. The content categories include many fields, from lifestyle, games, entertainment, anime, technology, and knowledge to many more. Users and content creators can discover and interact with diverse content based on different interests. The company’s revenue is mainly generated from mobile games, value-added services, advertising, e-commerce, and others.
As of June 30th, 2024, revenue for the company in the first half of the year was 11,791.7 million yuan (RMB, the same below), representing an increase of 13.7% year over year. Gross profit was 3,438.6 million yuan, achieved a 47.5% year-over-year increase; gross profit margin rose to 29.2%, compared with 22.5% of the same period last year. The loss for the year attributable to the company’s equity holders was 1,357.2 million yuan, decreased by 37.6% year over year. In the first half of this year, the company accelerated monetisation by enhancing commercial and operational efficiency, accelerating topline growth while also improving revenue quality, successfully expanding gross profit margin, and significantly narrowing losses.
Top 10 Holdings
The top 10 holdings of the Solactive Hong Kong IPO changed this month. In September, MINISO (9896.HK) was removed because of the quarterly rebalancing mechanism, while KUAISHOU (1024.HK), BAIDU (9888.HK), TRIP.COM (9961.HK), HAIER SMARTHOME (6690.HK), and BILIBILI-W (9626.HK) became the new top ten holdings. Currently, the index focuses on industries as follows: consumer discretionary (including Li Auto, Trip, and HAIRE SMARTHOME), communication services (including KUAISHOU, BAIDU, and BILIBILI-W), 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
Top constituent movers in September:
Bottom constituent movers in September:
The Phillip HK Newly Listed Index ETF (2835.HK) monthly performance for September
The Phillip HK Newly Listed Index ETF (2835.HK) recorded a 38.01% monthly increase in September, outperforming the Hang Seng Index’s (HSI) 17.48% monthly increase and outperforming the Hang Seng Tech Index’s (HSTI) 33.45% monthly increase. As of September 30th, this ETF had rose 5.74% since its listing, outperforming the HSI’s rose of 17.46% and the HSTI’s rose of 26.96%.