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.

Event-Driven

<p>On 22nd Mar 2021, <a href="https://www.smartkarma.com/entities/capitaland-ltd" target="_blank" data-smartkarma-citation="entities:55:1" rel="noopener">Capitaland (CAPL SP)</a> announced a strategic restructuring of CAPL and listing of CapitaLand Investment Management.</p><p>Having looked at the company in a prior life as a Singapore Real Estate Analyst, I'll share my thoughts on the likely impact of the deal.</p>

On 22nd Mar 2021, Capitaland (CAPL SP) announced a strategic restructuring of CAPL and listing of CapitaLand Investment Management.Having looked at the company in a prior life as a Singapore Real Estate Analyst, I'll share my thoughts on the likely impact of the deal.

CapitaLand Restructuring - CLIM Should Have Been a Pure Fee Business

Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

Pan-Asia Catalysts/Events

Quiddity Advisors

<p>In January 2019, <a href="https://www.smartkarma.com/entities/capitaland-ltd" target="_blank" data-smartkarma-citation="entities:55:1" rel="noopener">Capitaland (CAPL SP)</a> and Ascendas-Singbridge <a href="https://investor.capitaland.com/newsroom/20190114_080328_C31_NG341OU6TBGTR31P.1.pdf" target="_blank" rel="noopener">announced</a> a deal for Capitaland to purchase Ascendas-Singbridge in a 50/50 cash/scrip deal, and recently-promoted CEO Mr. Lee Choo Koon and his executive team put forth the idea of Capitaland 3.0, which among other things meant "Creating Asia's Largest Diversified Real Estate Group."</p><p>The plan was...</p><section class="figure"><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/196/145/original/Screenshot+2021-03-22+at+11.44.22+AM.png?1616384726" class="editor-image img-responsive" data-smartkarma-image-id="196145"></figure></section><section class="figure"><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/196/146/original/Screenshot+2021-03-22+at+11.44.36+AM.png?1616384736" class="editor-image img-responsive" data-smartkarma-image-id="196146"></figure></section><section class="figure"><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/196/147/original/Screenshot+2021-03-22+at+11.45.06+AM.png?1616384749" class="editor-image img-responsive" data-smartkarma-image-id="196147"></figure></section><p></p><p>It got to that position, but two years later (one of those years admittedly with covid-19), in an announcement of a NEW deal, the proposed real estate investment manager has dropped down to 12th largest real estate investment manager. </p><section class="figure"><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/196/148/original/Screenshot+2021-03-22+at+12.03.41+PM.png?1616385866" class="editor-image img-responsive" data-smartkarma-image-id="196148"></figure></section><hr><h2>The NEW News</h2><p>Today, after seeing all the Capitaland names halted early, Capitaland has <a href="https://links.sgx.com/FileOpen/20210322_CL_Announcement%20Presentation_Restructuring.ashx?App=Announcement&amp;FileID=652735" target="_blank" rel="noopener">announced</a> a restructuring whereby Capitaland will split itself into three pillars - Fund Management, Lodging, and Development. </p><section class="figure"><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/196/149/original/Screenshot+2021-03-22+at+12.07.03+PM.png?1616386071" class="editor-image img-responsive" data-smartkarma-image-id="196149"></figure></section><p>If this deal gets approved, Capitaland shareholders will receive cash, shares in <a href="https://www.smartkarma.com/entities/capitaland-integrated-commercial-trust" target="_blank" data-smartkarma-citation="entities:105:1" rel="noopener">Capitaland Integrated Commercial Trust (CICT SP)</a>, and shares in a newly-listed Capitaland Investment Management spun out of Capitaland. </p><div class="content-highlight"><p>The question investors will need to ask themselves is whether this is a good thing for them.  </p></div>

In January 2019, Capitaland (CAPL SP) and Ascendas-Singbridge announced a deal for Capitaland to purchase Ascendas-Singbridge in a 50/50 cash/scrip deal, and recently-promoted CEO Mr. Lee Choo Koon and his executive team put forth the idea of Capitaland 3.0, which among other things meant "Creating Asia's Largest Diversified Real Estate Group."The plan was...It got to that position, but two years later (one of those years admittedly with covid-19), in an announcement of a NEW deal, the proposed real estate investment manager has dropped down to 12th largest real estate investment manager. The NEW NewsToday, after seeing all the Capitaland names halted early, Capitaland has announced a restructuring whereby Capitaland will split itself into three pillars - Fund Management, Lodging, and Development. If this deal gets approved, Capitaland shareholders will receive cash, shares in Capitaland Integrated Commercial Trust (CICT SP), and shares in a newly-listed Capitaland Investment Management spun out of Capitaland. The question investors will need to ask themselves is whether this is a good thing for them.  

Capitaland (CAPL SP) Restructuring Is Big But Still Vague. Lots of Fine Print to Read.

Equity Capital Markets

<p>DDMP REIT (DDMPR), a subsidiary of DoubleDragon Properties Corp (DDP), aims to raise up to US$300 in its Philippines listing.</p>
<p>DDMPR will be the second REIT listing in the Philippines. DDMPR’s investment strategy is to invest in income-generating real estate located in either Metro Manila or key provinces in the Philippines. It aims to acquire primarily Grade A commercial properties, but may acquire other related real estate as well.</p>
<p>It will have an initial portfolio of three commercial buildings, with six office towers, located in DD Meridian Park. It also owns the land for two other under construction assets, which have been leased to DDP. Together the assets will have a gross leasable area (GLA) of 172,252sqm. As of Sep 2020, the portfolio had an occupancy of 99.5% and weighted average lease expiry for the office leases of 4.2years.</p>
<p>Its assets are relatively new, with all having been completed over 2017-19. The assets have long term leases and step-up rental escalation, which should provide rental stability. </p>
<p>However, the assets aren’t located in prime CBD and the particular area appears to have a fair amount of incoming office supply over the next few years.</p>

DDMP REIT (DDMPR), a subsidiary of DoubleDragon Properties Corp (DDP), aims to raise up to US$300 in its Philippines listing.
DDMPR will be the second REIT listing in the Philippines. DDMPR’s investment strategy is to invest in income-generating real estate located in either Metro Manila or key provinces in the Philippines. It aims to acquire primarily Grade A commercial properties, but may acquire other related real estate as well.
It will have an initial portfolio of three commercial buildings, with six office towers, located in DD Meridian Park. It also owns the land for two other under construction assets, which have been leased to DDP. Together the assets will have a gross leasable area (GLA) of 172,252sqm. As of Sep 2020, the portfolio had an occupancy of 99.5% and weighted average lease expiry for the office leases of 4.2years.
Its assets are relatively new, with all having been completed over 2017-19. The assets have long term leases and step-up rental escalation, which should provide rental stability. 
However, the assets aren’t located in prime CBD and the particular area appears to have a fair amount of incoming office supply over the next few years.

DDMP REIT Pre-IPO - Brand New Assets but Not with the Best of Outlooks

APAC IPOs & Placements

Zhen Zhou, Toh

CapitaLand Ascendas REIT / Equity Capital Markets

<p><a href="https://www.smartkarma.com/entities/ascendas-real-estate-investment-trust" target="_blank" data-smartkarma-citation="entities:39:1" rel="noopener">Ascendas Real Estate Investment Trust (AREIT SP)</a> is raising up to US$916m (S$1,234m) to acquire various properties.</p><p>Overall, the deal scored well on our framework owing to the good track record and momentum but it was dragged down by its large deal size.</p><p>Our previous coverage:</p><ul>
<li><a href="https://www.smartkarma.com/insights/areit-placement-expected-to-be-dpu-accretive-but-the-acquisition-might-take-a-while" target="_blank" rel="noopener">AREIT Placement - Expected to Be DPU Accretive but the Acquisition Might Take a While</a></li>
<li><a href="https://www.smartkarma.com/insights/areit-paying-for-acquisition-with-only-equity-doesn-t-add-up-dpu-to-fall-by-3-4" target="_blank" rel="noopener">AREIT - Paying for Acquisition with Only Equity Doesn’t Add Up, DPU to Fall by 3-4%</a></li>
</ul>

Ascendas Real Estate Investment Trust (AREIT SP) is raising up to US$916m (S$1,234m) to acquire various properties.Overall, the deal scored well on our framework owing to the good track record and momentum but it was dragged down by its large deal size.Our previous coverage:
AREIT Placement - Expected to Be DPU Accretive but the Acquisition Might Take a While
AREIT - Paying for Acquisition with Only Equity Doesn’t Add Up, DPU to Fall by 3-4%


Ascendas REIT Placement - Multiple Acquisitions to Be Made, Starting From US Office Properties

Independent Asian Credit Research, Bondcritic

Warut Promboon

Independent Asian Credit Research

Asian Fixed Income/Frontier Market Research

Bondcritic

Bondcritic, established in 2009, is designed to be an independent credit research voice that helps investors gain insights and unbiased analyses on Asian fixed income market. Our mission is to discover deep-value Asian high-yield and distressed bonds with a bottom-up approach, together with the help of our proprietary ESG (Environmental, Social Development, and Governance) model. At the same time, we focus on bringing investment cases of unrated and unloved issuers to the general public.

Thematic (Sector/Industry)

<p style="text-align: justify;">In this Smartkarma Original, we seek to study how diversity and incentives influence stock performance and profitability. We tallied diversity and incentive data related to the board of directors, management, and employees across major economies in Asia and picked top 10 companies of each country in terms of market capitalization. We chose to exclude major companies listed in exchanges of other economies such as Tencent and Alibaba to limit our sample size.</p>
<p style="text-align: justify;">Then we devised diversity and incentive scores to assign to those companies and compare those scores against a 5-year trend of their return on shareholders’ equity (ROE) ratios and 1-year stock performance from 1-July-19 to 30-June-20 over its corresponding exchange indices.</p>
<p style="text-align: justify;">The report covers diversity vs. incentives in Asia, diversity score vs. 1-year stock performance and ROE trend, incentives vs. 1-year stock performance and ROE trend, diversity + incentives scores vs. 1-year stock performance and ROE trend, companies with top and bottom diversity + incentive scores, countries with top and bottom average diversity + incentive scores, and incentive score vs. staffing cost trend. </p>
<p style="text-align: justify;">The results show that companies with high diversity scores do perform well. A high diversity score also has a positive impact on the ROE trend, based on our regression analysis at 95% confidence level. We found that employee incentives are not significant as staff diversity but they can still have an influence on company performances at a lower 90% confidence level.</p>
<p style="text-align: justify;">We note that this study is at the preliminary stage and stock performance is a function of many factors, not only the diversity scores that we concluded. Needless to say, our diversity and incentive scores also reflect the level of disclosures by selected companies, not necessarily the actual practice within each company. Our diversity and incentive scores are also not a credit rating or ranking with peers and, hence, do not reflect default probability of selected companies.</p>
<p style="text-align: justify;">We caution that in Asia, many diversity trends in the West may not apply. The fact that many Asian business communities may remain less sensitive to equal opportunities for females, disabled persons, or LGBTQ communities could make returns of Asian companies less correlated to diversity than in the West. Likewise, additional incentives in some countries in Asia may not be necessary as employees’ strong performance (i.e. in Japan) is a norm, according to the prevalent work culture.</p>
<p style="text-align: justify;">Bondcritic is developing a scoring model, which includes environment, social development, and corporate governance; the last of which cover diversity and incentives. This report is the first of the series to uncover shenanigans in the Asian corporate sector.</p>

In this Smartkarma Original, we seek to study how diversity and incentives influence stock performance and profitability. We tallied diversity and incentive data related to the board of directors, management, and employees across major economies in Asia and picked top 10 companies of each country in terms of market capitalization. We chose to exclude major companies listed in exchanges of other economies such as Tencent and Alibaba to limit our sample size.
Then we devised diversity and incentive scores to assign to those companies and compare those scores against a 5-year trend of their return on shareholders’ equity (ROE) ratios and 1-year stock performance from 1-July-19 to 30-June-20 over its corresponding exchange indices.
The report covers diversity vs. incentives in Asia, diversity score vs. 1-year stock performance and ROE trend, incentives vs. 1-year stock performance and ROE trend, diversity + incentives scores vs. 1-year stock performance and ROE trend, companies with top and bottom diversity + incentive scores, countries with top and bottom average diversity + incentive scores, and incentive score vs. staffing cost trend. 
The results show that companies with high diversity scores do perform well. A high diversity score also has a positive impact on the ROE trend, based on our regression analysis at 95% confidence level. We found that employee incentives are not significant as staff diversity but they can still have an influence on company performances at a lower 90% confidence level.
We note that this study is at the preliminary stage and stock performance is a function of many factors, not only the diversity scores that we concluded. Needless to say, our diversity and incentive scores also reflect the level of disclosures by selected companies, not necessarily the actual practice within each company. Our diversity and incentive scores are also not a credit rating or ranking with peers and, hence, do not reflect default probability of selected companies.
We caution that in Asia, many diversity trends in the West may not apply. The fact that many Asian business communities may remain less sensitive to equal opportunities for females, disabled persons, or LGBTQ communities could make returns of Asian companies less correlated to diversity than in the West. Likewise, additional incentives in some countries in Asia may not be necessary as employees’ strong performance (i.e. in Japan) is a norm, according to the prevalent work culture.
Bondcritic is developing a scoring model, which includes environment, social development, and corporate governance; the last of which cover diversity and incentives. This report is the first of the series to uncover shenanigans in the Asian corporate sector.

Asian Governance: Diversity & Incentives Through the Cultural Lens

Singapore

CapitaLand Limited is a real estate company focused on investment holding. The Company and its subsidiaries are principally engaged in investment holding, real estate development, investment in real estate financial products and real estate assets, investment advisory and management services, as well as the management of serviced residences.

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Capitaland (CAPL SP)

CapitaLand Restructuring - CLIM Should Have Been a Pure Fee Business

On 22nd Mar 2021, Capitaland (CAPL SP) announced a strategic restructuring of CAPL and listing of CLIM. Having looked at the company in a prior...

Sumeet Singh