Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

Equity Bottom-Up

<ul>
<li>Momentum has favored Japan Airlines' share price vs ANA Holdings this year and we expect this outperformance to continue in the short term (next 3-6 months).</li>
<li>So our pair trade involves going long Japan Airlines (9201 JP) and going short on Ana Holdings (9202 JP). </li>
<li>Four major reasons why we like Japan Airlines vs ANA Holdings include: a) better valuations, b) higher EBITDA margins, c) stronger leverage ratios, and d) higher proportion of overseas business.</li>
</ul>


Momentum has favored Japan Airlines' share price vs ANA Holdings this year and we expect this outperformance to continue in the short term (next 3-6 months).
So our pair trade involves going long Japan Airlines (9201 JP) and going short on Ana Holdings (9202 JP). 
Four major reasons why we like Japan Airlines vs ANA Holdings include: a) better valuations, b) higher EBITDA margins, c) stronger leverage ratios, and d) higher proportion of overseas business.


Japan Transport: Japan Airlines (Long) Vs ANA Holdings (Short)

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>Air New Zealand (AIR) aims to raise around US$827m (NZ$1.2bn) via a renounceable rights issue.</li>
<li>The deal has been in the works for months and has been put off multiple times before owing to COVID-19 induced New Zealand (NZ) lockdowns.</li>
<li>In this note, we will run the deal through our ECM framework and talk about the recent updates.</li>
</ul>


Air New Zealand (AIR) aims to raise around US$827m (NZ$1.2bn) via a renounceable rights issue.
The deal has been in the works for months and has been put off multiple times before owing to COVID-19 induced New Zealand (NZ) lockdowns.
In this note, we will run the deal through our ECM framework and talk about the recent updates.


Air New Zealand Rights and Possible Shortfall - Delayed Boarding but Its Priced to Fly

Japan/Asia Long-Short, LightStream Research

Mio Kato

Japan/Asia Long-Short

Long-Short Analysis on Japan, Asia and the World

LightStream Research

LightStream conducts quantitatively rigorous and data-driven analysis with a focus on Japan and Asia.

We consistently cover the Tech, Consumer and Industrial sectors, and provide ECM and Events coverage more broadly.

We supplement traditional qualitative insights from company relationships with a robust quantitative foundation that examines as much historical data as is available.
We further refine the accuracy of our insights and calls through the use of alternative data to flesh out current trends, and through a valuation framework that emphasises non-superficial peer group selection and a proper attempt to understand the metrics and changes that have driven security valuations in the past.

<ul>
<li>ANA announced and priced a ¥150bn CB issuance last night. </li>
<li>This was of course after all the usual denials about needing more capital. </li>
<li>We suspect dilution will not be an issue here and that is a problem.</li>
</ul>


ANA announced and priced a ¥150bn CB issuance last night. 
This was of course after all the usual denials about needing more capital. 
We suspect dilution will not be an issue here and that is a problem.


ANA – CB Issuance Is Positive… Sort Of

<ul>
<li>ANA recently commented that it was more likely to sell assets than raise capital if it were unable to return to the black next year. </li>
<li>We believe that is highly likely and that recovery expectations are highly overoptimistic. </li>
<li>Furthermore we believe ANA will continue to be challenged by a more aggressive JAL in possession of a stronger balance sheet.</li>
</ul>


ANA recently commented that it was more likely to sell assets than raise capital if it were unable to return to the black next year. 
We believe that is highly likely and that recovery expectations are highly overoptimistic. 
Furthermore we believe ANA will continue to be challenged by a more aggressive JAL in possession of a stronger balance sheet.


ANA – Will Be Under Pressure for Some Time

Event-Driven

<p>We believe that there is a material possibility of ANA requiring more capital to maintain its competitiveness. In addition, valuations appear to be pricing in a blue-sky scenario and there are some signs that ANA’s spending could be unsustainably low. With markets looking for reopening plays and bidding up its price this looks like a perfect storm coming together.</p>

We believe that there is a material possibility of ANA requiring more capital to maintain its competitiveness. In addition, valuations appear to be pricing in a blue-sky scenario and there are some signs that ANA’s spending could be unsustainably low. With markets looking for reopening plays and bidding up its price this looks like a perfect storm coming together.

Japan

ANA Holdings Inc provides a variety of air transportation-related services. The Company offers scheduled & unscheduled air passenger services and air courier services. ANA sells aircraft parts and provides travel arrangement & reservation services as well.

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Ana Holdings (9202 JP)

Japan Transport: Japan Airlines (Long) Vs ANA Holdings (Short)

Four major reasons why we like Japan Airlines vs ANA Holdings include: a) better valuations, b) higher EBITDA margins, c) stronger leverage ratios,...

Douglas Kim

Air New Zealand Rights and Possible Shortfall - Delayed Boarding but Its Priced to Fly

Air New Zealand (AIR) aims to raise around US$827m (NZ$1.2bn) via a renounceable rights issue. In this note, we will run the deal through our...

Sumeet Singh

ANA – CB Issuance Is Positive… Sort Of

As we predicted ANA did indeed need more capital and issued ¥150bn in CBs. While this removes a negative catalyst it also flags a beak operating...

Mio Kato

ANA – Will Be Under Pressure for Some Time

Recovery expectations remain highly overoptimistic and we believe ANA will continue to be challenged by a more aggressive JAL in possession of a...

Mio Kato

ANA – Needs More Capital

There is a material possibility of ANA requiring more capital while valuations are rich and costs could be unsustainably low. This could seriously...

Mio Kato

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