This is not a trade recommendation.
There is roughly 5% negative premium in ASHR price over CSI 300. CSI 300 is up 21.19% as of Friday's close in China, while ASHR was up only 16.29% as of this point. The premium like any other premium will be abitraged away one way or the other.
If you believe that CSI 300 will be down 5% rougly next monday, then you can argue that the 5% negative price primium is warranted;
if you believe CSI will be down more than 5% next monday in Chinese market, then ASHR or chau will go down more during the trading day next monday here.
If you believe that CSI will be down less than 5% next monday in Chinese market, then a profitable buying opportunity may present to US investors.
To me, most of the time, the premium (either way) is primarily driven by sentiment. like any other sentivement, it is just noice, any extreme level may be a buying/selling opportunity.
I am not recommending any trades here.
