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Will Xiaomi be included in the "Hang Seng Index"? wrong

via:博客园     time:2018/7/16 11:33:23     readed:428


Text / Eastland

On July 9, 2018, Xiaomi fell below the issue price on the first day of listing. After breaking the first day of the most need to “give face”, Xiaomi out of a considerable upswing, closing at 21.45 Hong Kong dollars on July 13, the cumulative increase of 26.18%.

Although there are only more than 100 million shares available for trading, Xiaomi's total trading volume for the first three days reached 1.37 billion shares, and all chips were reversed ten times, averaging 4.6 times per day (because T+0). The average shareholding is only over one hour. This is where the investment value of Xiaomi is optimistic and purely speculative.

Why is Xiaomi's performance in the first week of listing?

Despite the unrealistically high valuation, Xiaomi has risen more than 20% in the first week of listing, for three reasons:

The first is that the current circulation of Xiaomi is very small.

Usually IPO companies will publicly sell 10% of new shares in Hong Kong, and the remaining 90% will be handed over to underwriters for “International Placing”. If the Hong Kong market is oversubscribed and oversubscribed by more than 100 times, it will be called back to “International Sale of Stocks”. The final public offerings in the Hong Kong market can account for more than 50% of new shares.

Xiaomi only took 5% of the new shares (109 million shares) for public sale in Hong Kong. The callback mechanism was not initiated due to the bleak subscription. Therefore, before the international placement of stocks entered the market (the 252 million shares subscribed by the cornerstone investors had a six-month lock-up period), there were only over 100 million shares in the market with a market capitalization of about 2 billion Hong Kong dollars. #两三“Coal boss” is enough to influence stock price#

The second is that there is a “trayer” that plays a role.

In 2014, when Ali went public, Goldman Sachs was appointed as “Stabilizing Market Agent”. Goldman's job is to maintain a stable stock price for a certain period of time. In layman's terms, it is “tray”. Xiaomi did not disclose whether to appoint & ldquo; pallet hand & rdquo;, but the first underwriter is Goldman Sachs. However, the circulation disk is so small, it is a knife to kill chickens with Goldman Sachs, a few "Little buddies", it is enough to stretch out your hand when Ray does not know.

The third is to be included in the Hang Seng Composite Index.

On July 9th, the Hang Seng Index announced that Xiaomi Group's compliance with the “Quick Inclusion Index Requirements” will be included in the Hang Seng Composite Index, Hang Seng Composite Industry Index & mdash after the market close on July 20; the information technology industry and the Hang Seng Composite Large-Cap Index; The Hang Seng Composite Large and Medium-Cap Index, Hang Seng Global Composite Index and Hang Seng Internet Technology Industry Index came into effect on July 23.

Some investors believe that after the inclusion of the Hang Seng Index, Xiaomi will become the target of investment for a considerable number of investment institutions (especially related index funds), and it will also become a standard for Hong Kong stocks, opening the door for A-share investors.

Hanergy was the first beneficiary of Hong Kong Stock Connect. It has never seen Hanergy's products. “Northern Amaranth” has pulled the market value of this stock to more than 300 billion Hong Kong dollars, so that Li Hejun has passed a “first rich addiction”. ; The trend of funds in the south is also an important factor in determining the stock price of Xiaomi.

Unfortunately, according to media newsThe shares of different voting rights companies are not included in the Hong Kong Stock Connect.

More unfortunately, due to investors' lack of understanding of the Hang Seng Index, it is misunderstood that Xiaomi will be included in the “Hang Seng Index HSI” for only 50 constituent stocks. It is also said that Lenovo is replaced. In fact, Xiaomi will be included in the “Hang Seng Composite Index HSCI” with 484 constituent stocks, which together account for 95% of the total market value of the HKEx Main Board.


Let's take a look at the Hang Seng Index.

Understanding the Hang Seng Index

Hang Seng Index ——Hang Seng Index, abbreviated as HSI. It was compiled by Hang Seng Index Company, a wholly-owned subsidiary of Hong Kong Hang Seng Bank, with a base date of July 19, 1964 billion and a base point of 100 points. There were 30 constituent stocks at the earliest, and there were 50 stocks since 2013. Basically, one out of one can be included.

For example, on June 17, 2013, Lenovo Group (00992) was included and Chinalco (2600) was eliminated. Some media said that Xiaomi replaced the position of Lenovo Group. In fact, it was not related to Xiaomi, but it was done by Shijiazhuang Group (1093).

On January 17, 2018, the Hang Seng Index closed at 3,1983.41, the highest in history. #沪指不半半分的最位的半#

In the last decade, the Hang Seng Index has never exceeded 20 times. In 2018, the index hit a record high of 17.6 times and fell to 12.2 times in June.


In January 1985, the Hang Seng Index added four sub-indices, which divided the constituent stocks into four categories: financial sub-index, utility sub-index, real estate sub-index and industrial and commercial sub-index. In June 2018, the price-earnings ratios of the four sub-indices were 11.06 times, 17.19 times, 6.77 times and 18.46 times, respectively.

The threshold of Hang Seng Index constituent stocks is very high. In addition to high market value and large turnover, it also requires “all 24 months of listing”, “there is a huge business in Hong Kong” and “Financial Health”. Lenovo was listed on the Main Board of Hong Kong in 1994 and was included in the Hang Seng Index in 2013 and was removed in 2018. The Country Garden and Geely Automobiles, which were included in 2017, were listed in 2007 and 2004 respectively (Geely is a backdoor listing).

Anyone who knows a little about the capital market knows that “new stocks” and “new stocks” are erratic, and A-shares have dozens of daily limit storms. The break-up of new stocks on the Hong Kong Stock Exchange is normal. less. The ten trading days were included in the Hang Seng Index, which represents the stock price trend of thousands of listed companies in Hong Kong. It is very imprecise and the Hang Seng Index Company will not make fun of its reputation.

Xiaomi is about to be included in the Hang Seng Composite Index, and the threshold is much lower. There are 484 constituent stocks divided into 11 industries. Xiaomi will also be included in the “Information Technology Industry” sub-index, which has 36 constituent stocks, including Tencent, Lenovo, NetDragon, Yuewen, ZTE, Meitu, Fuzhikang, and Jinshan Software.

Xiaomi will also be included in the “Hengsheng Integrated Large and Medium-Cap Index”, which is one of the many indexes compiled by the company. The index currently has 298 constituent stocks, with an average P/E of 12.44 times in June 2018.

The Hang Seng Index faces "Take the cage for a bird"

In 2017, the Hang Seng Index removed 4 stocks including Kunlun Energy, Cathay Pacific, Belle International, and Li & Fung, and replaced them with Sunny Optical, Wharf Real Estate, Wanzhou International and Geely Automobile. However, individual stocks from traditional industries such as finance and real estate still have an absolute advantage.

As of June 2018, the total market capitalization of Hang Seng Index constituent stocks was HK$18.9 trillion, accounting for 57.28% of the total market value of the main board.

Among the 50 constituent stocks, 12 were financial, with a total weight of 47.78%; 11 real estate shares totaled 10.95%; 12 were from three traditional industries (energy, manufacturing, services) with a total weight of 13.47%. The above 35 stocks from traditional industries have a total weight of 72.2%.


Among the 50 constituent stocks, only Tencent and AAC Technologies are in the information technology category, with weights of 10.32% and 0.88%, respectively, totaling 11.2%.

The industry distribution of Hang Seng Index constituent stocks is obviously out of touch with the times. The stocks representing the new economy are seriously inadequate and must be caged for birds.

It is expected that the weights will be ranked lower by the traditional industry and will be replaced by Xiaomi, Meituan and Ant Financial. In particular, Sino Land, Henglong Real Estate, and China Want Want, whose weights are less than 0.5%, have a high probability of giving way to the new economy. but,That is after two or three years..

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