China’s equity capital markets are undergoing a significant re-alignment. The key trend is a “return home” with increased listings occurring on the STAR board and a dramatic increase of large IPOs and secondary listings in Hong Kong. We expect this trend to continue. At the same time, recent announcements such as QFII/RQFII reform should further expand the depth of China’s onshore markets. US/China tensions are likely to accelerate the re-alignment. Since US sanctions were introduced, China Mobile (941 HK) and CNOOC (883 HK) have seen US$6.7bn of Southbound inflow illustrating the strong support from Chinese investors, promoting a more self-sustaining capital market infrastructure. The increasingly tense Sino-US backdrop is likely to drive further “secondary” listings in Hong Kong and more CDR/STAR board listings. Connect expansion? HK pre-profit biotech stocks have been included and STAR board names are likely to be added this quarter in their respective Stock Connect programs. We still believe that the inclusion of Hong Kong “–S secondary” listings are a matter of when, not if. That said, secondary inclusion is likely to take longer on the back of regulatory concerns around large internet names. Further Connect inclusions will have a variety of implications: 1) increased opportunity set for Northbound, 2) liquidity shifts in US-listed ADR’s, 3) re-allocation of domestic QDII quota into non-Chinese stocks, amongst others. Long- and short-term beneficiaries from the realignment. Longer-term, we expect these trends to continue to drive Southbound and Northbound Stock Connect usage and promote a more robust China capital market. From a tactical perspective, large new IPOs should benefit from “fast-track” Connect inclusion and STAR board/CDR dual-listing announcements could continue to drive stocks considering that route. Potential Southbound inclusion of Secondary-listed stocks could resurface as a catalyst in 2H21.