Financial News, Analysis and Data, FNArena

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Financial News, Analysis and Data

Online financial media company focused on Australian equities, with a global perspective

Equity Bottom-Up

<ul><li>Despite strong underlying growth in the core accounting business, lower cost guidance and the general approval of analysts, shares in Xero fell after first-half results.</li><li> -Xero&rsquo;s interim reveals strong growth for the core accounting business -Operating expense guidance down, Melio aspirations confirmed -Loss-making Melio to keep Xero's growth below Rule-of-40 level until FY28 -Re-rating likely requires tangible evidence of successful Melio integration and execution</li></ul>

Despite strong underlying growth in the core accounting business, lower cost guidance and the general approval of analysts, shares in Xero fell after first-half results. -Xero&rsquo;s interim reveals strong growth for the core accounting business -Operating expense guidance down, Melio aspirations confirmed -Loss-making Melio to keep Xero's growth below Rule-of-40 level until FY28 -Re-rating likely requires tangible evidence of successful Melio integration and execution

Sceptics Want Xero To Prove Melio's Added Value

Head of Research, IPOs & Placements, Aequitas Research

Sumeet Singh

Head of Research, IPOs & Placements

IPOs and Placements coverage across Asia Pacific

Aequitas Research

We cover all listing across the Asia Pacific along with follow-up placements. As of Dec 2020, our team had covered 539 IPOs with a hit rate of 73.5% and 685 placements with a hit rate of 66.8%.

We combine fundamental bottom-up views with our proprietary quantitative framework to provide a holistic coverage across new listings and placements. Our coverage includes pre-IPO notes before the deal is launched, follow-up analysis once the deal is live and post-listing trading analysis as well.

Equity Capital Markets

<ul>
<li>Aequitas Research's weekly update on the IPOs, placements, lockup expiry and other ECM linked events that were covered by the team over the past week.</li>
<li>On the IPO front, in a busy listing week, the results from listing were mixed.</li>
<li>On the placements front, there were a number of large deals across the region.</li>
</ul>


Aequitas Research's weekly update on the IPOs, placements, lockup expiry and other ECM linked events that were covered by the team over the past week.
On the IPO front, in a busy listing week, the results from listing were mixed.
On the placements front, there were a number of large deals across the region.


ECM Weekly (30 June 2025) - FWD, Anjoy, IFBH, HDB Financials, Virgin, Xero, Shinhan, Innovent

<ul><li>A brief look at important company events and economic data releases next week </li></ul>

A brief look at important company events and economic data releases next week 

Xero Ltd - Next Week At A Glance - 30 June-July 4 2025

Pan-Asia Index Rebalances/ Events/ Delta One, Periscope Analytics

Brian Freitas

Pan-Asia Index Rebalances/ Events/ Delta One

Periscope Analytics

Periscope Analytics focuses on event-driven trades across Asia Pacific and provides comprehensive, timely and systematic coverage of index changes to major Asia Pacific indices in a structured manner.

The analysis includes forecasted inclusions and exclusions to all major Asian indices that have significant amount of tracking assets, including estimates of passive buy/sell flow on the stocks. The service also provides commentary and impact of market consultations, ground rule changes, and other events (IPOs, spin-offs, M&A) that could lead to index changes and passive flow.

Periscope Analytics works with multi-strategy hedge funds, proprietary trading firms, stat arb trading groups and long-only investors that invest and trade in the Asia Pacific region with the data being used to trade index rebalances, avoid pre-positioning and passive flow, and to time entry into and exit from stocks.

Event-Driven Trades Across Asia Pacific

Event-Driven

<ul>
<li>
<a href="https://www.smartkarma.com/entities/xero-ltd" target="_blank" data-smartkarma-citation="entities:390:1" rel="noopener">Xero Ltd (XRO AU)</a> has entered into a binding agreement to acquire Melio Limited for an upfront cash consideration of US$2.5bn in cash and <a href="https://www.smartkarma.com/entities/xero-ltd" target="_blank" data-smartkarma-citation="entities:390:1" rel="noopener">Xero Ltd (XRO AU)</a> stock.</li>
<li>The cash consideration is being funded mainly through a fully underwritten A$1.85bn (US$1.2bn) institutional placement. There is also a non-underwritten Share Purchase Plan to raise around A$200m.</li>
<li>Given the large size of the institutional placement, there will be an increase in index shares and the passive buying that follows should mop up over 20% of the placement.</li>
</ul>



Xero Ltd (XRO AU) has entered into a binding agreement to acquire Melio Limited for an upfront cash consideration of US$2.5bn in cash and Xero Ltd (XRO AU) stock.
The cash consideration is being funded mainly through a fully underwritten A$1.85bn (US$1.2bn) institutional placement. There is also a non-underwritten Share Purchase Plan to raise around A$200m.
Given the large size of the institutional placement, there will be an increase in index shares and the passive buying that follows should mop up over 20% of the placement.


Xero (XRO AU): Index Flows Following the Capital Raise

<ul>
<li>
<a href="https://www.smartkarma.com/entities/xero-ltd" target="_blank" data-smartkarma-citation="entities:390:1" rel="noopener">Xero Ltd (XRO AU)</a>  plans to raise around US$1.2bn via an institutional placement to partly fund the US$2.5bn acquisition for Melio.</li>
<li>The US market has been a growth dampener for Xero for a while. The acquisition is large but might not be a game changer.</li>
<li>In this note, we will talk about the deal dynamics and run the deal through our ECM framework.</li>
</ul>



Xero Ltd (XRO AU)  plans to raise around US$1.2bn via an institutional placement to partly fund the US$2.5bn acquisition for Melio.
The US market has been a growth dampener for Xero for a while. The acquisition is large but might not be a game changer.
In this note, we will talk about the deal dynamics and run the deal through our ECM framework.


Xero US1.2bn Placement - Trying to Jump Start US, Again. Might Not Be a Game Changer.

New Zealand

Xero Limited offers an online accounting system.  The software features bank transaction importing, a cashbook, a general ledger, invoicing, accounts receivable, accounts payable, financial reporting, and management of expense claims.

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Xero Ltd (XRO AU)

Sceptics Want Xero To Prove Melio's Added Value

Despite strong underlying growth in the core accounting business, lower cost guidance and the general approval of analysts, shares in Xero fell...

FNArena

ECM Weekly (30 June 2025) - FWD, Anjoy, IFBH, HDB Financials, Virgin, Xero, Shinhan, Innovent

Aequitas Research's weekly update on the IPOs, placements, lockup expiry and other ECM linked events that were covered by the team over the past week.

Sumeet Singh

Xero Ltd - Next Week At A Glance - 30 June-July 4 2025

A brief look at important company events and economic data releases next week

FNArena

Xero (XRO AU): Index Flows Following the Capital Raise

Xero is raising A$1.85bn to partially fund its Melio acquisition. The issue price is a 9.4% discount to last and is fully underwritten. Passives...

Brian Freitas

Xero US1.2bn Placement - Trying to Jump Start US, Again. Might Not Be a Game Changer.

Xero Ltd (XRO AU) plans to raise around US$1.2bn via an institutional placement to partly fund the US$2.5bn acquisition for Melio.

Sumeet Singh

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