Greater China Equity Long/Short Analyst

Eric Chen

Equity Bottom-Up

Beijing Capital International Airport (BCIA) / Equity Bottom-Up

Beijing Capital International Airport (BCIA)

<ul>
<li>Recent newsflow and company results suggest China outbound travel is on track to recover to pre-pandemic level by the end of this year.</li>
<li>China airports have different exposures to outbound travel, which largely determines the scale of their duty-free shopping business and earnings upside amidst this recovery cycle.</li>
<li>Beijing Capital Airport offers best risk/return profile among listed China airports in our view as current valuation does not fully capture even a conservative scenario of recovery in outbound travel.</li>
</ul>


Recent newsflow and company results suggest China outbound travel is on track to recover to pre-pandemic level by the end of this year.
China airports have different exposures to outbound travel, which largely determines the scale of their duty-free shopping business and earnings upside amidst this recovery cycle.
Beijing Capital Airport offers best risk/return profile among listed China airports in our view as current valuation does not fully capture even a conservative scenario of recovery in outbound travel.


China Airports: Beijing Capital Airport Offers Best Risk/Return Payoff

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.

Event-Driven

Malaysia Airports Holdings / Event-Driven

<ul>
<li>
<a href="https://www.smartkarma.com/entities/malaysia-airports-holdings-bhd" target="_blank" data-smartkarma-citation="entities:117:1" rel="noopener">Malaysia Airports Holdings (MAHB MK)</a>’s pre-conditional voluntary conditional offer from a four-member consortium is RM11.00, a 5.8% premium to the last close. </li>
<li>Despite the offer representing an all-time high, the 90% minimum acceptance condition could be challenging due to the low takeover premium and discount to historical and peer multiples. </li>
<li>The consortium can overcome issues satisfying the minimum acceptance condition by bumping the offer or lowering the acceptance condition. </li>
</ul>



Malaysia Airports Holdings (MAHB MK)’s pre-conditional voluntary conditional offer from a four-member consortium is RM11.00, a 5.8% premium to the last close. 
Despite the offer representing an all-time high, the 90% minimum acceptance condition could be challenging due to the low takeover premium and discount to historical and peer multiples. 
The consortium can overcome issues satisfying the minimum acceptance condition by bumping the offer or lowering the acceptance condition. 


Malaysia Airports (MAHB MK): Pre-Conditional Voluntary Offer at RM11.00

HK/China Equity Long-Short

Osbert Tang, CFA

Thematic (Sector/Industry)

<ul>
<li>Various statistics suggested that China's tourism and hospitality industry has staged a significant recovery during the 2024 CNY holidays, with traffic surging high double-digit.</li>
<li>While consumers are more cautious about retail product spending, they are willing to spend more on traveling. Such a trend will continue to bode well for the sector.</li>
<li>We like OTAs including <a href="https://www.smartkarma.com/entities/tongcheng-travel-holdings-ltd" target="_blank" data-smartkarma-citation="entities:27363:1" rel="noopener">Tongcheng Travel (780 HK)</a> and <a href="https://www.smartkarma.com/entities/trip-com-group-ltd-23a341d0-4f63-4175-a8c5-ee990906cacd" target="_blank" data-smartkarma-citation="entities:36424:1" rel="noopener">Trip.com (9961 HK)</a> despite their YTD surge in share prices. Meanwhile, <a href="https://www.smartkarma.com/entities/air-china-ltd-h" target="_blank" data-smartkarma-citation="entities:8239:1" rel="noopener">Air China Ltd (H) (753 HK)</a> stays as the top pick.</li>
</ul>


Various statistics suggested that China's tourism and hospitality industry has staged a significant recovery during the 2024 CNY holidays, with traffic surging high double-digit.
While consumers are more cautious about retail product spending, they are willing to spend more on traveling. Such a trend will continue to bode well for the sector.
We like OTAs including Tongcheng Travel (780 HK) and Trip.com (9961 HK) despite their YTD surge in share prices. Meanwhile, Air China Ltd (H) (753 HK) stays as the top pick.


China Tourism and Hospitality Industry: Roundup of a Solid CNY

Asian Equities Analyst, Logistics & Transport, Tracking Traffic

Daniel Hellberg

Asian Equities Analyst, Logistics & Transport

Tracking Traffic

Focusing on Asian logistics, transportation, and travel companies

<ul>
<li>China's outbound tourism recovery started much later than others in the region</li>
<li>In particular, Taiwan &amp; Korea began ramping outbound travel earlier (in Q222)</li>
<li>As destinations, Thailand &amp; Vietnam recovered early, but now lag HK's growth</li>
</ul>


China's outbound tourism recovery started much later than others in the region
In particular, Taiwan &amp; Korea began ramping outbound travel earlier (in Q222)
As destinations, Thailand &amp; Vietnam recovered early, but now lag HK's growth


China's Tourism Recovery Versus Other Major Tourist Sources in Asia: Delayed, Not Slower

Global Mobility/Transport, Equity Long-Short

Mohshin Aziz

<ul>
<li>Chinese airports have turnaround with Xiamen, Guangzhou, and Shanghai airports reported 9M23 profits. The others (Beijing, Shenzhen, Hainan) are still lossmaking, but should turnaround soon   </li>
<li>The upcoming Winter/Spring schedule reveals international capacity at 70% of 2019's level, a catalyst for strong earnings growth, as international flights generate &gt;2.5x higher revenues   </li>
<li>
<a href="https://www.smartkarma.com/entities/xiamen-international-air-a" target="_blank" data-smartkarma-citation="entities:18544:1" rel="noopener">Xiamen International Air A (600897 CH)</a> exhibits the best value; <a href="https://www.smartkarma.com/entities/shanghai-international-airport-co-ltd" target="_blank" data-smartkarma-citation="entities:6511:1" rel="noopener">Shanghai International Airport (600009 CH)</a> is the most appealing due to its size and liquidity </li>
</ul>


Chinese airports have turnaround with Xiamen, Guangzhou, and Shanghai airports reported 9M23 profits. The others (Beijing, Shenzhen, Hainan) are still lossmaking, but should turnaround soon   
The upcoming Winter/Spring schedule reveals international capacity at 70% of 2019's level, a catalyst for strong earnings growth, as international flights generate &gt;2.5x higher revenues   

Xiamen International Air A (600897 CH) exhibits the best value; Shanghai International Airport (600009 CH) is the most appealing due to its size and liquidity 


Chinese Airports at Inflection Point, Low Risk and High Visibility Growth Sector

China

Beijing Capital International Airport Company Limited operates both aeronautical and non-aeronautical business in the Beijing airport.  The Company provides aircraft movement and passenger service facilities, safety and security services, fire-fighting services, and ground handling services.  In addition, Beijing Capital operates duty free and other retail shops and leases properties.

Beijing Capital International Airport (BCIA) (694 HK)

Price Gauge
52-week Range	0.00 - 0.00
Market Cap (USDm)	0.00
P/E	0.00
Dividend (Yield)	0.00

Beijing Capital International Airport (BCIA) (694 HK)

China Airports: Beijing Capital Airport Offers Best Risk/Return Payoff

China outbound travel is set to recover to pre-pandemic levels by year-end, with Beijing Capital Airport offering the best risk/return profile...

Eric Chen

Malaysia Airports (MAHB MK): Pre-Conditional Voluntary Offer at RM11.00

The offer is light based on historical/peer multiples. The consortium can overcome issues satisfying the 90% minimum acceptance condition by...

Arun George

China Tourism and Hospitality Industry: Roundup of a Solid CNY

China's tourism industry sees a strong recovery during the 2024 CNY holidays, with a high double-digit traffic surge. OTAs like Tongcheng and...

Osbert Tang, CFA

China's Tourism Recovery Versus Other Major Tourist Sources in Asia: Delayed, Not Slower

In this insight we compare China's progress toward restoring outbound tourism activity to the progress shown by other major tourist sources in the...

Tracking Traffic

Chinese Airports at Inflection Point, Low Risk and High Visibility Growth Sector

Chinese airports have underperformed the CSI 300 despite a successful turnaround. There will be a surge in lucrative international flights that...

Mohshin Aziz

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

China Airports: Beijing Capital Airport Offers Best Risk/Return Payoff

​China outbound travel is set to recover to pre-pandemic levels by year-end, with Beijing Capital Airport offering the best risk/return profile...

Eric Chen

Malaysia Airports (MAHB MK): Pre-Conditional Voluntary Offer at RM11.00

The offer is light based on historical/peer multiples. The consortium can overcome issues satisfying the 90% minimum acceptance condition by...

Arun George

China Tourism and Hospitality Industry: Roundup of a Solid CNY

​China's tourism industry sees a strong recovery during the 2024 CNY holidays, with a high double-digit traffic surge. OTAs like Tongcheng and...

Osbert Tang, CFA

China's Tourism Recovery Versus Other Major Tourist Sources in Asia: Delayed, Not Slower

In this insight we compare China's progress toward restoring outbound tourism activity to the progress shown by other major tourist sources in the...

Tracking Traffic

Chinese Airports at Inflection Point, Low Risk and High Visibility Growth Sector

​Chinese airports have underperformed the CSI 300 despite a successful turnaround. There will be a surge in lucrative international flights that...

Mohshin Aziz

China outbound travel is set to recover to pre-pandemic levels by year-end, with Beijing Capital Airport offering the best risk/return profile...

China's tourism industry sees a strong recovery during the 2024 CNY holidays, with a high double-digit traffic surge. OTAs like Tongcheng and...

Chinese airports have underperformed the CSI 300 despite a successful turnaround. There will be a surge in lucrative international flights that...