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<Research>CICC Concerned About Positive Impact of Passive Funds on NTES-S/ BYD COMPANY/ ZTO EXPRESS-W After HSI Quarterly Review
Hang Seng Indexes Company has announced the results of its quarterly review, with MIDEA GROUP (00300.HK) and ZTO EXPRESS-W (02057.HK) being added to the blue-chip list. CICC has ca...
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<Research>CICC Concerned About Positive Impact of Passive Funds on NTES-S/ BYD COMPANY/ ZTO EXPRESS-W After HSI Quarterly Review
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Hang Seng Indexes Company has announced the results of its quarterly review, with MIDEA GROUP (00300.HK)  +2.300 (+2.953%)    Short selling $122.60M; Ratio 17.880%   and ZTO EXPRESS-W (02057.HK)  +5.800 (+4.036%)    Short selling $215.07M; Ratio 44.852%   being added to the blue-chip list. CICC has calculated passive fund flows and is focusing on the positive impact on NTES-S (09999.HK)  -3.800 (-2.000%)    Short selling $77.21M; Ratio 5.704%   , BYD COMPANY (01211.HK)  -0.400 (-0.092%)    Short selling $1.48B; Ratio 34.568%   , and ZTO EXPRESS-W, as well as the negative impact on CHINA LIT (00772.HK)  -2.000 (-7.576%)    Short selling $165.52M; Ratio 42.582%   and WH GROUP (00288.HK)  -0.030 (-0.449%)    Short selling $23.10M; Ratio 15.919%   .

According to the report, ZTO EXPRESS-W and NTES-S will require the most time for the HSI passive funds to flow in, with estimated inflows of USD128 million and USD218 million, taking around 2.8 and 1.4 days, respectively.

Related NewsUBS Lifts NTES-S (09999.HK) TP to $237.1 on Strong 1Q Results
On the outflow side, due to reduced weightings, WH GROUP and Hengan International are expected to see potential passive outflows of about USD11.62 million and USD2.91 million, with outflow times of around 0.3 days.

Although there are no changes to the constituents of the HSCEI this time, changes in stock weightings mean NTES-S will require the most time for passive fund inflows, with an estimated USD63.94 million flowing in over about 0.4 days. For outflows, CHINA SHENHUA (01088.HK)  +0.150 (+0.468%)    Short selling $174.28M; Ratio 27.071%   and CCB (00939.HK)  -0.070 (-1.012%)    Short selling $325.01M; Ratio 14.848%   are expected to experience potential passive outflows of about USD6.03 million and USD18.7 million, with outflow times of around 0.06 days.

For the HSTECH, NTES-S, which saw the largest increase in weighting due to a higher free float ratio, will require the most time for passive funds to flow in, with an estimated USD590 million flowing in over about 3.8 days. Newly included BYD COMPANY is anticipated to attract about USD2 billion in passive fund inflows, taking around 2.7 days.

Related NewsJPM: NTES-S 1Q25 Results Beat; Stock Price Expected to React Positively
On the outflow side, CHINA LIT's current 0.49% weighting will result in about USD120 million in passive fund outflows, with an outflow time of around 4.7 days.

Based on the adjustments to the Hang Seng Composite Index this time and the requirements for inclusion in Southbound Stock Connect, CICC predicted that BLOKS (00325.HK)  +9.400 (+6.483%)    Short selling $15.23M; Ratio 6.663%   , GUMING (01364.HK)  +1.250 (+5.144%)    Short selling $5.42M; Ratio 4.319%   , and MIXUE GROUP (02097.HK)  +40.500 (+8.526%)   may qualify for inclusion in Southbound Stock Connect.
(HK stocks quote is delayed for at least 15 mins.Short Selling Data as at 2025-05-19 16:25.)

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