Equity Long-Short

Mo Aziz

Thematic (Sector/Industry)

<ul>
<li>An excellent article by Keith Mwanalushi in Aviation Week Network is a must read, here is the link <a href="https://aviationweek.com/mro/supply-chain/engine-supply-chain-experiences-shifting-pain-points" target="_blank" rel="noopener">Engine Supply Chain Experiences Shifting Pain Points | Aviation Week Network  </a>
</li>
<li>Underpins our thesis that engine issues disrupt aircraft supply, pushing lease rates higher - especially on aircraft coming off leases, and for spare engines </li>
<li>
<a href="https://www.smartkarma.com/entities/ftai-aviation-ltd" target="_blank" data-smartkarma-citation="entities:28793:1" rel="noopener">FTAI Aviation (FTAI US)</a> is the prime beneficiary with a portfolio of engines followed by <a href="https://www.smartkarma.com/entities/aercap-holdings-nv" target="_blank" data-smartkarma-citation="entities:28083:1" rel="noopener">AerCap Holdings NV (AER US)</a> with engines and mid-life aircraft coming off leases</li>
</ul>


An excellent article by Keith Mwanalushi in Aviation Week Network is a must read, here is the link Engine Supply Chain Experiences Shifting Pain Points | Aviation Week Network  

Underpins our thesis that engine issues disrupt aircraft supply, pushing lease rates higher - especially on aircraft coming off leases, and for spare engines 

FTAI Aviation (FTAI US) is the prime beneficiary with a portfolio of engines followed by AerCap Holdings NV (AER US) with engines and mid-life aircraft coming off leases


Engine Supply Chain Experiences Shifting Pain Points

<ul>
<li>This report explains the nuts and bolts of the aircraft leasing industry in a simple manner, along with its opportunities, risks, and business outlook.  </li>
<li>We are in a golden era, underpinned by strong global traffic recovery, and supply shortage due to technical and manufacturer snafus. Airlines are also increasingly struggling to access credit. </li>
<li>
<a href="https://www.smartkarma.com/entities/aercap-holdings-nv" target="_blank" data-smartkarma-citation="entities:28083:1" rel="noopener">AerCap Holdings NV (AER US)</a> is our top pick on its superior business profile and attractive valuation, the second choice is <a href="https://www.smartkarma.com/entities/boc-aviation" target="_blank" data-smartkarma-citation="entities:22689:1" rel="noopener">BOC Aviation (2588 HK). </a>
</li>
</ul>


This report explains the nuts and bolts of the aircraft leasing industry in a simple manner, along with its opportunities, risks, and business outlook.  
We are in a golden era, underpinned by strong global traffic recovery, and supply shortage due to technical and manufacturer snafus. Airlines are also increasingly struggling to access credit. 

AerCap Holdings NV (AER US) is our top pick on its superior business profile and attractive valuation, the second choice is BOC Aviation (2588 HK). 



Aircraft Leasing 101 - Heralding the Golden Era

Asia-ex Japan PM

John Liu

Equity Bottom-Up

<ul>
<li>Global aviation supply continues to suffer from various supply chain disruptions, driving up lease rates and aircraft values and benefiting aircraft lessors, such as BOC Aviation (BOCA) </li>
<li>Although BOCA's interim results were disappointing due to delayed aircraft deliveries, I expect its momentum to recover in 2025, driven by incoming aircraft and lower interest costs. </li>
<li>Stock is trading at 0.9x PB, nearing its historical trough of 0.8x, and offering a decent 5% dividend yield.</li>
</ul>


Global aviation supply continues to suffer from various supply chain disruptions, driving up lease rates and aircraft values and benefiting aircraft lessors, such as BOC Aviation (BOCA) 
Although BOCA's interim results were disappointing due to delayed aircraft deliveries, I expect its momentum to recover in 2025, driven by incoming aircraft and lower interest costs. 
Stock is trading at 0.9x PB, nearing its historical trough of 0.8x, and offering a decent 5% dividend yield.


BOC Aviation (2588 HK): Lease Rate Surge to Boost Earnings; Undervalued Stock with 4.5% Div Yield

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

Haitong Unitrust International Financial Leasing / Event-Driven

Haitong Unitrust International Financial Leasing (1905 HK)

Haitong Unitrust International Financial Leasing

<ul>
<li>
<a href="https://www.smartkarma.com/entities/haitong-unitrust-international-financial-leasing-co-ltd-class-h" target="_blank" data-smartkarma-citation="entities:28044:1" rel="noopener">Haitong Unitrust International Financial Leasing (1905 HK)</a> halted trading on 5 October pending a takeover announcement. Its parent, Guotai Haitong Securities, owns 85% and will likely take it private.</li>
<li>A merger by absorption looks low-risk because no holder has a blocking stake and opposition at the AGM was negligible. A voluntary/delisting offer would face a tougher 90% acceptance hurdle.</li>
<li>My valuation methods point to an offer of HK$1.29–1.65 per share, a 7.5%–37.5% premium to the HK$1.20 close. </li>
</ul>



Haitong Unitrust International Financial Leasing (1905 HK) halted trading on 5 October pending a takeover announcement. Its parent, Guotai Haitong Securities, owns 85% and will likely take it private.
A merger by absorption looks low-risk because no holder has a blocking stake and opposition at the AGM was negligible. A voluntary/delisting offer would face a tougher 90% acceptance hurdle.
My valuation methods point to an offer of HK$1.29–1.65 per share, a 7.5%–37.5% premium to the HK$1.20 close. 


Haitong Unitrust (1905 HK): Trading Halt Points to a Likely Privatisation by the Parent

<ul>
<li>We compiled the share price movements of 183 global travel/mobility stocks to uncover general trends and identify rotation and laggard plays   </li>
<li>Tourist countries like Greece, Spain and Turkey did very well. The U.S. also performed well, almost all names closed the year higher except for those with unique problems  </li>
<li>China and anything that is China-focused performed the worst, even companies that delivered great results are not spared and currently trading at cheap valuations </li>
</ul>


We compiled the share price movements of 183 global travel/mobility stocks to uncover general trends and identify rotation and laggard plays   
Tourist countries like Greece, Spain and Turkey did very well. The U.S. also performed well, almost all names closed the year higher except for those with unique problems  
China and anything that is China-focused performed the worst, even companies that delivered great results are not spared and currently trading at cheap valuations 


2023 Winners & Losers: Laggards and Rotation Plays for Global Travel/Mobility Stocks

Singapore

BOC Aviation is a leading global aircraft operating leasing company. It offers direct operating and finance leases, sale and leaseback facilities, engine finance leases, and third-party asset management, along with aircraft remarketing and technical management services. The company is headquartered in Singapore and was founded in 1993.

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BOC Aviation (2588 HK)

Engine Supply Chain Experiences Shifting Pain Points

Engine supply chain issues are causing disruptions in the aircraft supply and driving up lease rates, benefiting FTAI Aviation and AerCap Holdings.

Mo Aziz

Aircraft Leasing 101 - Heralding the Golden Era

Aircraft Leasing 101 is a quick and easy guide to the aircraft leasing industry. We are Bullish on Aercap and BOC Aviation, and you will be too...

Mo Aziz