In "Major Banks," China International Capital Corporation lists the predicted changes in fund flows for stocks with significant increases and decreases in weight due to the quarterly review of the MSCI China Index (Table)

CICC published a report on the adjustment of the MSCI China Index constituents, with all adjustments to be implemented after the market closes on February 27. A total of 37 new stocks will be added, including SenseTime-W (00020.HK), YOFC (06869.HK), Hesai-W (02525.HK), and Pony.ai-W (02026.HK), while 16 constituents will be removed, including QFIN, Zhejiang Hu-Hang-Yong (00576.HK), CHINACOMSERVICE (00552.HK), Fosun International (00656.HK), and Vanke Enterprise (02202.HK). After the adjustments, the total number of constituents will increase to 581, with 408 A-shares (weight 14.7%), 164 Hong Kong stocks (weight 81.3%), 7 US-listed Chinese stocks (weight 3.9%), and 2 B-shares (weight 0.1%). Additionally, the free float factors of 2 companies and the share capital of 113 companies will also be adjusted, leading to changes in the weights of the constituents within the index.

In terms of potential impacts: pay attention to the positive effects on Pony.ai, Hesai, and SenseTime; and the negative effects on CHINACOMSERVICE and Fosun International. From the perspective of absolute weight changes, the bank estimates that the newly added SenseTime, YOFC, Hesai, and Pony.ai will see significant weight increases, ranging from 0.29% to 0.09%. Conversely, Tencent (00700.HK), Alibaba-W (09988.HK), QFIN, and Zhejiang Hu-Hang-Yong will experience the largest declines in index weight due to dilution or removal, ranging from 0.2% to 0.05%.

The bank has listed the predicted changes in capital for individual stocks with significant increases and decreases in weight:

(1) Stocks expected to see significant weight increases

Stock│Weight Change│Estimated Passive Fund Flow

SenseTime-W (00020.HK)│0.29%│Inflow of $422 million

YOFC (06869.HK)│0.184%│Inflow of $266 million

Hesai-W (02525.HK)│0.1%│Inflow of $147 million

Pony.ai-W (02026.HK)│0.09%│Inflow of $134.8 million

CATL (03750.HK)│0.051%│Inflow of $74.8 million

Geely (00175.HK)│0.03%│Inflow of $43.8 million

(2) Stocks expected to see significant weight decreases

Stock│Weight Change│Estimated Passive Fund Flow

Tencent (00700.HK)│-0.203%│Outflow of $293 million

Alibaba-W (09988.HK)│-0.107%│Outflow of $156 million

QFIN (QFIN.US)│-0.056%│Outflow of $81.1 million

Zhejiang Hu-Hang-Yong (00576.HK)│-0.053%│Outflow of $77.1 million ZTO Express (00552.HK)│-0.047%│Outflow of $69 million

Fosun International (00656.HK)│-0.043%│Outflow of $62.6 million

Vanke Enterprises (02202.HK)│-0.037%│Outflow of $54.2 million

Yum China (09987.HK)│-0.037%│Outflow of $53.2 million

Pinduoduo (PDD.US)│-0.024%│Outflow of $35.4 million

Xiaomi-W (01810.HK)│-0.022%│Outflow of $32.1 million

Ping An Insurance (02318.HK)│-0.02%│Outflow of $29.6 million

Meituan-W (03690.HK)│-0.019%│Outflow of $27.2 million