Index Review Announcement: The China Securities Index Company and Hang Seng Indexes Company released the half-yearly review results for the Hang Seng CSI Shanghai-Hong Kong AH Smart Index, which includes the largest 50 AH companies under the Shanghai-Hong Kong Stock Connect programme.

Constituent Changes: The index maintains 50 constituent companies, with SANY HEAVY INDUSTRIES and SERES being newly included, while CEA and TSINGTAO BREWERY were excluded.

Future Share Class Determination: The share classes of the companies included in the index will be determined in March 2026, aligning with the monthly share class switching exercise.

Market Data: The report includes short selling data for the excluded companies, indicating significant short selling activity and ratios for both CEA and TSINGTAO BREWERY.

Daiwa's A+H Share Strategy: Daiwa's research indicates that its A+H share valuation premium strategy has performed exceptionally well, with cumulative relative returns increasing from 90% to 107.5% over two months, driven by rising global metal prices and China's construction machinery renewal cycle.

Impact on Specific Stocks: The strategy has notably benefited materials and industrial stocks, including CMOC, ZIJIN MINING, SANY HEAVY IND, and WEICHAI POWER, despite some experiencing short selling pressures.

Foreign Investment Trends: Many overseas investors are showing interest in Chinese tech companies, favoring H-shares due to geopolitical concerns, which may lead to increased foreign capital inflows and a potential rise in H-share prices.

Potential for A-Share Revaluation: As tech companies complete dual listings, their share prices may increase rapidly, creating opportunities for revaluation of A-shares compared to their H-share counterparts.

Strong Demand for Crawler Cranes: In November 2025, shipments of crawler cranes in China surged by 102% year-on-year, driven by equipment replacement needs and strong demand in renewable energy sectors like wind power.

Market Share Decline Among Top Manufacturers: The market share of the top four large excavator manufacturers decreased from 59.7% in 2024 to 58.7% in the first nine months of 2025, indicating increased competition in the Chinese construction machinery market.

Citi's Investment Ratings: Citi maintained its investment ratings for major companies in the construction machinery sector, with JSHL rated as a "Buy" with a target price of RMB 105, and SANY HEAVY IND rated as a "Buy" with a target price of HKD 31.

Short Selling Activity: ZOOMLION experienced short selling of $1.01 million with a ratio of 7.721%, while CONS MACHINERY was rated as a "Sell" with a target price of RMB 2.6.

Record IPO Activity in Hong Kong: In 11M25, 91 companies completed IPOs in the Hong Kong equity market, raising a total of $259.889 billion, marking the first time in four years that HKEX surpassed the $200 billion fundraising threshold and ranking first globally in fundraising amount.

Top Global IPOs: Notable companies among the top ten global IPOs this year include CATL, ZIJIN GOLD INTL, SANY HEAVY IND, and SERES, all contributing significantly to the overall fundraising totals.

SZSE Announcement: The Shenzhen Stock Exchange has made adjustments to the list of securities eligible for the Southbound Stock Connect.

New Additions: SANY HEAVY IND (06031.HK) and CIG (06166.HK) have been added to the list, effective immediately.

Implementation Measures: The changes are based on the "Shenzhen Stock Exchange Southbound Stock Connect Implementation Measures."

Effective Date: The adjustments took effect on the 24th of the month.