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

Converge ICT Solutions Inc / Equity Capital Markets

<p>Converge ICT aims to raise around US$500+m in its Philippines listing.</p><p>Converge ICT (CICT) is the largest high-speed fixed broadband operator in the Philippines, by high-speed residential fixed broadband subscriptions. It has a 54% market share as of Mar 2020, according to MPA. It also claims to be the fastest growing fixed broadband operator in both the residential and enterprise market.</p><p>CICT owns and operates an end-to-end fiber network in the Philippines, with over 30,000 km of fiber as of Mar 2020. Its network covers 200 cities and municipalities across Luzon. As of Mar 2020, it reached approximately 4.1m homes.</p><p>CICT’s revenue has grown at 69% CAGR over FY16-19, with growth being led by its residential business whose revenue has increased at 95% CAGR over the same time frame. Gross profit grew at 56% CAGR, EBITDA at 91% CAGR and Net profit at 60% CAGR. In other words, most of the revenue growth has flowed down to the bottom line. </p><p>I have covered the company background and undertaken a peer comparison in my earlier reports, links to which are below. In this note, I’ll talk about earnings forecast and valuations.</p><p>Links to my previous notes:</p><ul>
<li dir="ltr"><p><a href="https://www.smartkarma.com/insights/converge-ict-pre-ipo-fast-growth-low-penetration-covid-resistant" target="_blank" rel="noopener">Converge ICT Pre-IPO - Fast growth, low penetration, COVID resistant</a></p></li>
<li dir="ltr"><p><a href="https://www.smartkarma.com/compose/insight/43808/Converge%20ICT%20Pre-IPO%20-%20Peer%20Comparison%20-%20Not%20a%20Clear%20Cut%20Winner" target="_blank" rel="noopener">Converge ICT Pre-IPO - Peer comparison - Not a clear cut winner</a></p></li>
</ul>

Converge ICT aims to raise around US$500+m in its Philippines listing.Converge ICT (CICT) is the largest high-speed fixed broadband operator in the Philippines, by high-speed residential fixed broadband subscriptions. It has a 54% market share as of Mar 2020, according to MPA. It also claims to be the fastest growing fixed broadband operator in both the residential and enterprise market.CICT owns and operates an end-to-end fiber network in the Philippines, with over 30,000 km of fiber as of Mar 2020. Its network covers 200 cities and municipalities across Luzon. As of Mar 2020, it reached approximately 4.1m homes.CICT’s revenue has grown at 69% CAGR over FY16-19, with growth being led by its residential business whose revenue has increased at 95% CAGR over the same time frame. Gross profit grew at 56% CAGR, EBITDA at 91% CAGR and Net profit at 60% CAGR. In other words, most of the revenue growth has flowed down to the bottom line. I have covered the company background and undertaken a peer comparison in my earlier reports, links to which are below. In this note, I’ll talk about earnings forecast and valuations.Links to my previous notes:
Converge ICT Pre-IPO - Fast growth, low penetration, COVID resistant
Converge ICT Pre-IPO - Peer comparison - Not a clear cut winner


Converge ICT Pre-IPO - Thoughts on Valuation

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<p><a href="https://www.smartkarma.com/entities/ayalaland-reit-areit" target="_blank" data-smartkarma-citation="entities:28856:1" rel="noopener">AyalaLand Reit (AREIT) (AREIT PM)</a>, a subsidiary of <a href="https://www.smartkarma.com/entities/ayala-land-inc" target="_blank" data-smartkarma-citation="entities:131:1" rel="noopener">Ayala Land Inc (ALI PM)</a>, raised around US$250m in its Philippines listing.</p>
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<p>AREIT will be the first REIT listing for the Philippines. It will have an initial portfolio of three commercial buildings located in Metro Manila, Philippines. In addition, it will use the proceeds from the IPO to buy another asset from the sponsor, taking its total asset count to four. Its assets are relatively new, with long term leases and step-up rental escalation, which should provide stability to rentals. </p>
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<p>I’ve covered the details of the company in my previous notes, <a href="https://www.smartkarma.com/insights/areit-pre-ipo-first-philippines-reit-listing-comes-with-its-peculiarities" target="_blank" rel="noopener">AREIT Pre-IPO - First Philippines REIT Listing Comes with Its Peculiarities </a>and <a href="https://www.smartkarma.com/insights/areit-ipo-looks-sustainable-at-the-low-end" target="_blank" rel="noopener">AREIT IPO - Looks Sustainable at the Low-End</a>.</p>
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<p>In this note, I’ll talk about the deal dynamics for trading.</p>
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AyalaLand Reit (AREIT) (AREIT PM), a subsidiary of Ayala Land Inc (ALI PM), raised around US$250m in its Philippines listing.


AREIT will be the first REIT listing for the Philippines. It will have an initial portfolio of three commercial buildings located in Metro Manila, Philippines. In addition, it will use the proceeds from the IPO to buy another asset from the sponsor, taking its total asset count to four. Its assets are relatively new, with long term leases and step-up rental escalation, which should provide stability to rentals. 


I’ve covered the details of the company in my previous notes, AREIT Pre-IPO - First Philippines REIT Listing Comes with Its Peculiarities and AREIT IPO - Looks Sustainable at the Low-End.


In this note, I’ll talk about the deal dynamics for trading.


AREIT IPO Trading Update - Long Bookbuild Shouldn't Hamper the Listing

Silver Point

Thomas J. Monaco

Silver Point is a boutique research firm that focuses on the broader financial services sector, with a particular focus on troubled institutions globally. 

Asia Ex Japan

Equity Bottom-Up

Bank of the Philippine Islands / Equity Bottom-Up

<p><strong><em>*Falling Very Short:</em></strong> Bank of the Philippine Islands (BPI.PM) [BPI] reported 2Q20 results of PHP 5.3 bn – missing consensus by 15% and falling short of 1Q20 by PHP 1.1 bn (17.1%). On an operating basis, assuming a normalized tax rate of 25% (versus the reported negative 6%), results would have come in far worse at PHP 3.8 bn – declining 40.5% linked quarter. Driving the poor result was the hefty loan loss provision of PHP 10.8 bn which increased PHP 6.5 bn or 155% over the period; and</p><p> <em><strong>*Credit Is Weak, Reserves Light:</strong></em>Stated NPLs remained flattish at PHP 26.7 bn or 1.83% of total loans, but deterioration is showing up in the form of massive NCOs at PHP 10.9 bn. The impact of COVID-19 on the global economy has only begun to take its toll, and we think that BPI needs a re-think of just maintaining current ratios. Our numbers suggest that BPI will need to add another PHP 53 bn to its coffers over the next four quarters. This suggest a near tripling of its loss reserve and represent nearly three years of pre-tax results for BPI – challenging its 15.6% CET1 ratio.</p>

*Falling Very Short: Bank of the Philippine Islands (BPI.PM) [BPI] reported 2Q20 results of PHP 5.3 bn – missing consensus by 15% and falling short of 1Q20 by PHP 1.1 bn (17.1%). On an operating basis, assuming a normalized tax rate of 25% (versus the reported negative 6%), results would have come in far worse at PHP 3.8 bn – declining 40.5% linked quarter. Driving the poor result was the hefty loan loss provision of PHP 10.8 bn which increased PHP 6.5 bn or 155% over the period; and *Credit Is Weak, Reserves Light:Stated NPLs remained flattish at PHP 26.7 bn or 1.83% of total loans, but deterioration is showing up in the form of massive NCOs at PHP 10.9 bn. The impact of COVID-19 on the global economy has only begun to take its toll, and we think that BPI needs a re-think of just maintaining current ratios. Our numbers suggest that BPI will need to add another PHP 53 bn to its coffers over the next four quarters. This suggest a near tripling of its loss reserve and represent nearly three years of pre-tax results for BPI – challenging its 15.6% CET1 ratio.

Bank of the Philippine Islands – No Free Pass

<div><p><a href="https://www.smartkarma.com/entities/ayalaland-reit-areit" target="_blank" data-smartkarma-citation="entities:28856:1" rel="noopener">AyalaLand Reit (AREIT) (AREIT PM)</a>, a subsidiary of <a href="https://www.smartkarma.com/entities/ayala-land-inc" target="_blank" data-smartkarma-citation="entities:131:1" rel="noopener">Ayala Land Inc (ALI PM)</a>, aims to raise up to US$270 in its Philippines listing.</p></div><div><p>AREIT will be the first REIT listing for the Philippines. It will have an initial portfolio of three commercial buildings located in Metro Manila, Philippines. In addition, it will use the proceeds from the IPO to buy another asset from the sponsor, taking its total asset count to four. Its assets are relatively new, with long term leases and step-up rental escalation, which should provide stability to rentals. </p></div><div>
<p>I’ve covered the details of the company in my previous note, <a href="https://www.smartkarma.com/insights/areit-pre-ipo-first-philippines-reit-listing-comes-with-its-peculiarities" target="_blank" rel="noopener">AREIT Pre-IPO - First Philippines REIT Listing Comes with Its Peculiarities</a>.</p>
<p>In this note, I’ll run the deal through our ECM framework and talk about valuations.</p>
</div>

AyalaLand Reit (AREIT) (AREIT PM), a subsidiary of Ayala Land Inc (ALI PM), aims to raise up to US$270 in its Philippines listing.AREIT will be the first REIT listing for the Philippines. It will have an initial portfolio of three commercial buildings located in Metro Manila, Philippines. In addition, it will use the proceeds from the IPO to buy another asset from the sponsor, taking its total asset count to four. Its assets are relatively new, with long term leases and step-up rental escalation, which should provide stability to rentals. 
I’ve covered the details of the company in my previous note, AREIT Pre-IPO - First Philippines REIT Listing Comes with Its Peculiarities.
In this note, I’ll run the deal through our ECM framework and talk about valuations.


AREIT IPO - Looks Sustainable at the Low-End

IPOs and Catalysts/Events, Global Equity Research Ltd

Arun George

IPOs and Catalysts/Events

Uncompromised, Independent, Conflict-Free Research

Global Equity Research Ltd

Global Equity Research was started in 2017 by a group of experienced research professionals. It was founded on a passionate belief in the importance and the need for uncompromised, independent, conflict-free research. We aim to provide differentiated and actionable primary and bottom up fundamental research.

<div><p><a href="https://www.smartkarma.com/entities/ayalaland-reit-areit" target="_blank" data-smartkarma-citation="entities:28856:1" rel="noopener">AyalaLand Reit (AREIT) (AREIT PM)</a> is a real estate company established in the Philippines by <a href="https://www.smartkarma.com/entities/ayala-land-inc" target="_blank" data-smartkarma-citation="entities:131:1" rel="noopener">Ayala Land Inc (ALI PM)</a>, the leading and most diversified real estate conglomerates in the Philippines. It has won preliminary approval for an IPO in the Philippines to raise PHP13.7 billion ($284 million) through the selling of 456.9 million units at PHP30.05 per unit. The offer period is set from 27 July to 31 July. </p></div><div><div><div class="content-highlight"><p>In <a href="https://www.smartkarma.com/insights/ayalaland-reit-areit-ipo-initiation-the-reit-idea" target="_blank" rel="noopener">our initiation note</a>, we noted that AREIT offers an attractive value proposition for investors willing to invest in a niche segment of the Asian REIT sector. Our valuation analysis suggests that the IPO price is reasonable. </p></div></div></div>

AyalaLand Reit (AREIT) (AREIT PM) is a real estate company established in the Philippines by Ayala Land Inc (ALI PM), the leading and most diversified real estate conglomerates in the Philippines. It has won preliminary approval for an IPO in the Philippines to raise PHP13.7 billion ($284 million) through the selling of 456.9 million units at PHP30.05 per unit. The offer period is set from 27 July to 31 July. In our initiation note, we noted that AREIT offers an attractive value proposition for investors willing to invest in a niche segment of the Asian REIT sector. Our valuation analysis suggests that the IPO price is reasonable. 

AyalaLand REIT (AREIT) IPO: Valuation Insights

Philippines

Ayala Land Inc. is a Philippine real estate company that develops master-planned estates integrating residential, commercial, and green spaces. Its core businesses include strategic landbank management, residential development, retail shopping centers, corporate businesses, and hotels & resorts. The company is headquartered in Makati, Philippines, and was founded on June 30, 1988.

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Ayala Land (ALI PM)

Converge ICT Pre-IPO - Thoughts on Valuation

Converge ICT aims to raise around US$500m in its Philippines listing. Converge ICT (CICT) is the largest high-speed fixed broadband operator in...

Sumeet Singh

AREIT IPO Trading Update - Long Bookbuild Shouldn't Hamper the Listing

AyalaLand Reit (AREIT) (AREIT PM), a subsidiary of Ayala Land Inc (ALI PM), raised around US$250m in its Philippines listing. AREIT will be the...

Sumeet Singh

Bank of the Philippine Islands – No Free Pass

*Falling Very Short: Bank of the Philippine Islands (BPI.PM) [BPI] reported 2Q20 results of PHP 5.3 bn – missing consensus by 15% and falling short...

Thomas J. Monaco

AREIT IPO - Looks Sustainable at the Low-End

AyalaLand Reit (AREIT) (AREIT PM), a subsidiary of Ayala Land Inc (ALI PM), aims to raise up to US$270 in its Philippines listing.AREIT will be the...

Sumeet Singh

AyalaLand REIT (AREIT) IPO: Valuation Insights

AyalaLand Reit (AREIT) (AREIT PM) is a real estate company established in the Philippines by Ayala Land Inc (ALI PM), the leading and most...

Arun George

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