Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

This week I briefly look at bifurcations in <a href="https://www.smartkarma.com/entities/50" target="_blank" data-smartkarma-citation="entities:50:1">Hang Lung Group Ltd (10 HK)</a>, whose clean NAV just got a little cleaner; <a href="https://www.smartkarma.com/entities/10433" target="_blank" data-smartkarma-citation="entities:10433:1">Swire Pacific Ltd Cl A (19 HK)</a> and its outperformance vs. <a href="https://www.smartkarma.com/entities/23726" target="_blank" data-smartkarma-citation="entities:23726:1">Swire Pacific Ltd-Cl B (87 HK)</a>; and the <a href="https://www.smartkarma.com/entities/3287" target="_blank" data-smartkarma-citation="entities:3287:1">Avic International Holdings Ltd (161 HK)</a> rollercoaster.These relationships trade with a minimum liquidity threshold of US$1mn on a 90-day moving average, and a % market capitalisation threshold - the $ value of the holding/opco held, over the parent’s market capitalisation, expressed as a % - of at least 20%.A detailed NAV for a number of these parent/holding relationships highlighted can be found in our holdco monitor.My comments on Hang Lung, Swire and AVIC follow the weekly setup/unwind tables.

This week I briefly look at bifurcations in Hang Lung Group Ltd (10 HK), whose clean NAV just got a little cleaner; Swire Pacific Ltd Cl A (19 HK) and its outperformance vs. Swire Pacific Ltd-Cl B (87 HK); and the Avic International Holdings Ltd (161 HK) rollercoaster.These relationships trade with a minimum liquidity threshold of US$1mn on a 90-day moving average, and a % market capitalisation threshold - the $ value of the holding/opco held, over the parent’s market capitalisation, expressed as a % - of at least 20%.A detailed NAV for a number of these parent/holding relationships highlighted can be found in our holdco monitor.My comments on Hang Lung, Swire and AVIC follow the weekly setup/unwind tables.

StubWorld - Set-Up & Unwind Extremes: Hang Lung, Swire, AVIC

APAC IPOs & Placements

Zhen Zhou, Toh

Smartkarma

Smartkarma unites the fragmented investment industry, connecting institutional investors, independent research providers, and corporates within a single network.

Research Reinvented

Equity Capital Markets

Garuda Maintenance Facility / Equity Capital Markets

<a href="https://www.smartkarma.com/entities/25901" target="_blank" data-smartkarma-citation="entities:25901:1">Garuda Maintenance Facility (1536227D IJ)</a> is raising approximately US$419m in its upcoming IPO. Proceeds will be used to expand current capacity, repay debt, and general working capital.In this insight, we will look at the company's past performance, the Manufacturing, Repair, and Overhaul (MRO) industry, and compare it with peers in the same industry. As usual, we will also run the deal through our ECM framework.

Garuda Maintenance Facility (1536227D IJ) is raising approximately US$419m in its upcoming IPO. Proceeds will be used to expand current capacity, repay debt, and general working capital.In this insight, we will look at the company's past performance, the Manufacturing, Repair, and Overhaul (MRO) industry, and compare it with peers in the same industry. As usual, we will also run the deal through our ECM framework.

Garuda Maintenance Facility IPO - Bright Spot in a Challenging Industry

The despatch of <a href="https://www.smartkarma.com/entities/19341" target="_blank" data-smartkarma-citation="entities:19341:1">Television Broadcasts Ltd (511 HK)</a>'s Offer Document has been delayed thrice since TLG’s <a href="http://www.hkexnews.hk/listedco/listconews/SEHK/2017/0307/LTN20170307602.pdf" target="_blank">"bid"</a> failed to materialise.The last two despatch delays hinged on when the Takeovers and Mergers Panel (the “Panel”) would rule on the whitewash waiver. That Panel hearing, originally tabled for the 5 April, has been rescheduled for the 27 April.In this note, I detail why the whitewash waiver is required, recent decisions handed down by the Panel and whether or not this could jeopardise the outcome of the buyback/partial offer.

The despatch of Television Broadcasts Ltd (511 HK)'s Offer Document has been delayed thrice since TLG’s "bid" failed to materialise.The last two despatch delays hinged on when the Takeovers and Mergers Panel (the “Panel”) would rule on the whitewash waiver. That Panel hearing, originally tabled for the 5 April, has been rescheduled for the 27 April.In this note, I detail why the whitewash waiver is required, recent decisions handed down by the Panel and whether or not this could jeopardise the outcome of the buyback/partial offer.

Asia Ex-J Consumer/ Transport analyst

Valerie Law, CFA

Thematic (Sector/Industry)

Extending my point about more demanding transportation frameworks going forward (see <a href="https://www.smartkarma.com/insights/comfortdelgro-fy16-results-an-era-where-competition-hits-a-higher-gear" target="_blank" data-smartkarma-citation="insights:8719">ComfortDelGro FY16 Results: An Era Where Competition Hits a Higher Gear</a> ), the recent fire-bomb attack on Hong Kong’s MTR that left 19 injured signals increasing costs for transport operators. This article presents another reason why investors should sell MTR Corp, on top of points already provided by fellow insight provider Sameer Taneja in an earlier piece <a href="https://www.smartkarma.com/insights/mtr-66-hk-conviction-sell-thesis" target="_blank" data-smartkarma-citation="insights:7982">MTR (66 HK): Conviction Sell Thesis</a><h2>Security Costs to</h2>…

Extending my point about more demanding transportation frameworks going forward (see ComfortDelGro FY16 Results: An Era Where Competition Hits a Higher Gear ), the recent fire-bomb attack on Hong Kong’s MTR that left 19 injured signals increasing costs for transport operators. This article presents another reason why investors should sell MTR Corp, on top of points already provided by fellow insight provider Sameer Taneja in an earlier piece MTR (66 HK): Conviction Sell ThesisSecurity Costs to…

66 HK and SBUS SP: Attack on HK Metro Signals Increases in Transport Operators' Costs

Equity Research Analyst, Maritime sector, Drewry Maritime Financial Research

Ankush Kathuria CFA, FRM

Equity Research Analyst, Maritime sector

Maritime Sector, Equity & Credit Research

Drewry Maritime Financial Research

With no ties to other players in the shipping, finance or banking world, we provide a uniquely impartial view of the markets and companies we cover. Our parent organization, Drewry is a leading independent provider of research services to the maritime and shipping industry, employing over 100 professionals across an international network of offices in London, Delhi, Singapore and Shanghai. Combining our market-leading resources with seasoned sector expertise DFRS offers a highly differentiated and comprehensive range of investment and financial research services to lenders and prospective investors in publicly listed maritime and shipping companies. The full service of reports, supporting resources and sector orientated webinars provides our clients with the most complete picture of the organisations under coverage as is possible. We have been charting and analysing the world’s maritime markets for more than 40 years. This unrivalled intelligence and understanding provides the foundation of our research service. Our analysts have access to one of the most up-to-date, comprehensive and reliable sources of market insight and research data available today. We look at globally listed companies within the following sectors: Port Operators, Container Shipping, Container Manufacturing & Leasing, LNG Shipping, Dry Bulk Shipping and Tanker Shipping. Combine in-depth sector expertise with financial analysis focusing on over 50 stocks globally.

Reasonable port valuation supports M&amp;A activities<figure class="editor-figure"><img src="https://static-prod.smartkarma.com/images/media/000/005/443/original/ports5.JPG?1454570524" class="editor-image img-responsive" data-smartkarma-image-id="5443"></figure>Note: Market-weighted EV/EBITDA ticked higher from FY14 level of 14.8x to 15.0x Source: Bloomberg, DMER<figure class="editor-figure"><img src="https://static-prod.smartkarma.com/images/media/000/005/444/original/ports6.JPG?1454570793" class="editor-image img-responsive" data-smartkarma-image-id="5444"></figure> Source: Company, DMER• As the global trade growth moderates, we expect significant volatility to persist in the year ahead. Port companies with sturdy balance sheet will be favoured over growth companies. Debt servicing ratio is expected to trend lower on higher interest and faltering earnings. Therefore, we look for terminal operators with…

Reasonable port valuation supports M&amp;A activitiesNote: Market-weighted EV/EBITDA ticked higher from FY14 level of 14.8x to 15.0x Source: Bloomberg, DMER Source: Company, DMER• As the global trade growth moderates, we expect significant volatility to persist in the year ahead. Port companies with sturdy balance sheet will be favoured over growth companies. Debt servicing ratio is expected to trend lower on higher interest and faltering earnings. Therefore, we look for terminal operators with…

Global Port Operators - Reasonable Valuation Supports M&A Activities

Hong Kong

Hong Kong Aircraft Engineering Company Limited maintains and overhauls commercial aircrafts.  The Company performs comprehensive checks, refurbishments and reconfigurations of airframes and engines.

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HAECO (44 HK)

StubWorld - Set-Up & Unwind Extremes: Hang Lung, Swire, AVIC

This week I briefly look at bifurcations in Hang Lung Group Ltd (10 HK), whose clean NAV just got a little cleaner; Swire Pacific Ltd Cl A (19 HK)...

David Blennerhassett

Garuda Maintenance Facility IPO - Bright Spot in a Challenging Industry

Garuda Maintenance Facility (1536227D IJ) is raising approximately US$419m in its upcoming IPO. Proceeds will be used to expand current capacity,...

Zhen Zhou, Toh

TVB - Whitewash Musings

The despatch of Television Broadcasts Ltd (511 HK)'s Offer Document has been delayed thrice since TLG’s "bid" failed to materialise.The last two...

David Blennerhassett

66 HK and SBUS SP: Attack on HK Metro Signals Increases in Transport Operators' Costs

Extending my point about more demanding transportation frameworks going forward (see ComfortDelGro FY16 Results: An Era Where Competition Hits a...

Valerie Law, CFA

Global Port Operators - Reasonable Valuation Supports M&A Activities

Reasonable port valuation supports M&A activitiesNote: Market-weighted EV/EBITDA ticked higher from FY14 level of 14.8x to 15.0xSource:...

Drewry Maritime Financial Research

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