Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

<ul>
<li>
<a href="https://www.smartkarma.com/entities/china-mobile-ltd" target="_blank" data-smartkarma-citation="entities:27:1" rel="noopener">China Mobile (941 HK)</a> has priced its A-share IPO at RMB 57.58/share which is slightly disappointing in terms of premium to the H-share. </li>
<li>Subscriptions start on 22 December, and the IPO should launch a week later, for the largest mainland offering this year and possibly the largest in a decade.</li>
<li>Given the more explicit SHAREHOLDER RETURN PLAN framework published in May this year with the A-Share Circular, expect more management clarity on dividend payout.</li>
</ul>



China Mobile (941 HK) has priced its A-share IPO at RMB 57.58/share which is slightly disappointing in terms of premium to the H-share. 
Subscriptions start on 22 December, and the IPO should launch a week later, for the largest mainland offering this year and possibly the largest in a decade.
Given the more explicit SHAREHOLDER RETURN PLAN framework published in May this year with the A-Share Circular, expect more management clarity on dividend payout.


China Mobile Prices RMB A-Share IPO - Disappointing IPO Price So A-Share Could Yield ~CGBs+230

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.

Equity Bottom-Up

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<a href="https://www.smartkarma.com/entities/pt-dayamitra-telekomunikasi" target="_blank" data-smartkarma-citation="entities:34741:1" rel="noopener">Mitratel (1319Z IJ)</a> is the largest telco tower owner and operator in Indonesia based on the number of telecommunication towers owned as of 30 June 2021, according to Analysys Mason. Mitratel is a subsidiary of <a href="https://www.smartkarma.com/entities/telekomunikasi-indonesia" target="_blank" data-smartkarma-citation="entities:1051:1" rel="noopener">Telekomunikasi Indonesia (TLKM IJ)</a>.</div>
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<div>Mitratel has launched an IPO to raise IDR20.0-24.9 trillion ($1.4-1.8 billion) at the IPO price range of IDR775-975 per share. Bookbuilding will close on 4 November and the shares are set to list on 22 November. </div>
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<p>In <a href="https://www.smartkarma.com/insights/mitratel-dayamitra-telekomunikasi-ipo-initiation-control-tower" target="_blank" data-smartkarma-citation="insights:59620" rel="noopener">Mitratel (Dayamitra Telekomunikasi) IPO Initiation: Control Tower</a>, we noted that in comparison to other major regions (US, Western Europe, China and India), the tower industry in Indonesia offers an attractive mix of high EBITDA margin, low capex, no colocation discount and no obligation to provide power in the contract. The tower industry also benefits from predictable revenue due to long-term contracts and high renewal rates. Mitratel's contracted revenue based on agreements with customers for all types of leases is IDR30.7 trillion, and the average remaining life of lease agreements is 6.3 years, as of 30 June 2021. We concluded that Mitratel's fundamentals tick all the right boxes. </p>
<div class="content-highlight"><p>Our valuation analysis suggests that the IPO price range is attractive. Overall, we would participate in the IPO.</p></div>
</div>



Mitratel (1319Z IJ) is the largest telco tower owner and operator in Indonesia based on the number of telecommunication towers owned as of 30 June 2021, according to Analysys Mason. Mitratel is a subsidiary of Telekomunikasi Indonesia (TLKM IJ).

Mitratel has launched an IPO to raise IDR20.0-24.9 trillion ($1.4-1.8 billion) at the IPO price range of IDR775-975 per share. Bookbuilding will close on 4 November and the shares are set to list on 22 November. 


In Mitratel (Dayamitra Telekomunikasi) IPO Initiation: Control Tower, we noted that in comparison to other major regions (US, Western Europe, China and India), the tower industry in Indonesia offers an attractive mix of high EBITDA margin, low capex, no colocation discount and no obligation to provide power in the contract. The tower industry also benefits from predictable revenue due to long-term contracts and high renewal rates. Mitratel's contracted revenue based on agreements with customers for all types of leases is IDR30.7 trillion, and the average remaining life of lease agreements is 6.3 years, as of 30 June 2021. We concluded that Mitratel's fundamentals tick all the right boxes. 
Our valuation analysis suggests that the IPO price range is attractive. Overall, we would participate in the IPO.


Mitratel (Dayamitra Telekomunikasi) IPO: Valuation Insights

Equity Capital Markets

<p><a href="https://www.smartkarma.com/entities/pt-dayamitra-telekomunikasi" target="_blank" data-smartkarma-citation="entities:34741:1" rel="noopener">Mitratel (1319Z IJ)</a> is the largest telco tower owner and operator in Indonesia based on the number of telecommunication towers owned as of 30 June 2021, according to Analysys Mason. Mitratel is a subsidiary of <a href="https://www.smartkarma.com/entities/telekomunikasi-indonesia" target="_blank" data-smartkarma-citation="entities:1051:1" rel="noopener">Telekomunikasi Indonesia (TLKM IJ)</a>.</p><p>Mitratel has launched an IPO to raise IDR20.0-24.9 trillion ($1.4-1.8 billion) at the IPO price range of IDR775-975 per share. Bookbuilding will close on 4 November and the shares are set to list on 22 November. </p><p>Indonesia's tower industry is fast consolidating into an oligopoly with three large tower companies which are Mitratel, <a href="https://www.smartkarma.com/entities/sarana-menara-nusantara-pt" target="_blank" data-smartkarma-citation="entities:6848:1" rel="noopener">Sarana Menara Nusantara (TOWR IJ)</a> (Protelindo) and <a href="https://www.smartkarma.com/entities/tower-bersama-infrastructure" target="_blank" data-smartkarma-citation="entities:3537:1" rel="noopener">Tower Bersama Infrastructure (TBIG IJ)</a>. In comparison to other major regions (US, Western Europe, China and India), the tower industry in Indonesia offers an attractive mix of high EBITDA margin, low capex, no colocation discount and no obligation to provide power in the contract.</p><div class="content-highlight"><p>The tower industry also benefits from predictable revenue due to long-term contracts and high renewal rates. Mitratel's contracted revenue based on agreements with customers for all types of leases is IDR30.7 trillion, and the average remaining life of lease agreements is 6.3 years, as of 30 June 2021. Overall, Mitratel's fundamentals tick all the right boxes, in our view. </p></div>

Mitratel (1319Z IJ) is the largest telco tower owner and operator in Indonesia based on the number of telecommunication towers owned as of 30 June 2021, according to Analysys Mason. Mitratel is a subsidiary of Telekomunikasi Indonesia (TLKM IJ).Mitratel has launched an IPO to raise IDR20.0-24.9 trillion ($1.4-1.8 billion) at the IPO price range of IDR775-975 per share. Bookbuilding will close on 4 November and the shares are set to list on 22 November. Indonesia's tower industry is fast consolidating into an oligopoly with three large tower companies which are Mitratel, Sarana Menara Nusantara (TOWR IJ) (Protelindo) and Tower Bersama Infrastructure (TBIG IJ). In comparison to other major regions (US, Western Europe, China and India), the tower industry in Indonesia offers an attractive mix of high EBITDA margin, low capex, no colocation discount and no obligation to provide power in the contract.The tower industry also benefits from predictable revenue due to long-term contracts and high renewal rates. Mitratel's contracted revenue based on agreements with customers for all types of leases is IDR30.7 trillion, and the average remaining life of lease agreements is 6.3 years, as of 30 June 2021. Overall, Mitratel's fundamentals tick all the right boxes, in our view. 

Mitratel (Dayamitra Telekomunikasi) IPO Initiation: Control Tower

<p><a href="https://www.smartkarma.com/entities/china-telecom-corp-ltd-h" target="_blank" data-smartkarma-citation="entities:1015:1" rel="noopener">China Telecom Corp Ltd (H) (728 HK)</a> has <a href="https://www1.hkexnews.hk/listedco/listconews/sehk/2021/0806/2021080600069.pdf" target="_blank" rel="noopener">priced</a> its US$7.3bn offering of A-shares at RMB 4.53/share. That is not far from what I suggested might be an appropriate pricing in <a href="https://www.smartkarma.com/insights/china-mobile-941-hk-it-could-have-been-done-better-but-it-ain-t-bad-for-hs" target="_blank" data-smartkarma-citation="insights:52018" rel="noopener">China Mobile (941 HK) - It Could Have Been Done Better, But It Ain't Bad for Hs</a> and <a href="https://www.smartkarma.com/insights/china-telecom-728-hk-ups-div-payout-policy-there-s-a-plan-here-expect-china-mobile-to-follow" target="_blank" data-smartkarma-citation="insights:53355" rel="noopener">China Telecom (728 HK) Ups Div Payout Policy - There's a Plan Here. Expect China Mobile to Follow</a>.</p><p>It was also an 87% premium to the current H-share price. </p><p>As discussed in those previous insights, there are obligations on the China Telecom parent, and a promise of a <em>higher payout ratio</em> NOW and <em>even higher payout ratio</em> LATER. </p><p>Normally, I would suggest taking profits on an H-share which had rallied in the run-up to an A-share offering. But...</p><p>.... There is more below the fold.</p>

China Telecom Corp Ltd (H) (728 HK) has priced its US$7.3bn offering of A-shares at RMB 4.53/share. That is not far from what I suggested might be an appropriate pricing in China Mobile (941 HK) - It Could Have Been Done Better, But It Ain't Bad for Hs and China Telecom (728 HK) Ups Div Payout Policy - There's a Plan Here. Expect China Mobile to Follow.It was also an 87% premium to the current H-share price. As discussed in those previous insights, there are obligations on the China Telecom parent, and a promise of a higher payout ratio NOW and even higher payout ratio LATER. Normally, I would suggest taking profits on an H-share which had rallied in the run-up to an A-share offering. But....... There is more below the fold.

China Telecom A-Share IPO Prices; H-Share Discount Wide; Buy China Mobile

Pan-Asia Index Rebalances/ Events/ Delta One, Periscope Analytics

Brian Freitas

Pan-Asia Index Rebalances/ Events/ Delta One

<p>On 3 June, President Biden amended Executive Order 13959 with respect to the threat posed by the military-industrial complex of the People’s Republic of China, and expanded the list of companies to include entities that operate in the defense and related materiel sector or the surveillance technology sector in China, or own, or are owned, or are controlled by persons that operate in the above sectors.</p><p>There were a few entities that appeared in Trump's list that were dropped while there were new entities that were added to the current list.</p><p>Some major changes were that the name of the list was changed from Communist Chinese Military Companies (CCMC) to Chinese Military-Industrial Complex Companies (CMIC), the list would be maintained by the Treasury Department as opposed to the Defense Department, and restrictions on subsidiaries would apply only if the subsidiary was explicitly named in the list.</p><p>It has been reported in the media, quoting senior officials, that the list will be updated on a rolling basis. As we were typing out the Insight, Reuters published an article that says <a href="https://www.reuters.com/article/usa-biden-china-investment/analysis-more-chinese-companies-could-fall-under-bidens-broader-investment-ban-idUSL2N2NM13H" target="_blank" rel="noopener">more Chinese companies could be added to the investment ban</a>.</p><p>In this Insight, we try to identify some of the subsidiaries of companies that could be added to the CMIC list where the parent entity is already included on the list.</p>

On 3 June, President Biden amended Executive Order 13959 with respect to the threat posed by the military-industrial complex of the People’s Republic of China, and expanded the list of companies to include entities that operate in the defense and related materiel sector or the surveillance technology sector in China, or own, or are owned, or are controlled by persons that operate in the above sectors.There were a few entities that appeared in Trump's list that were dropped while there were new entities that were added to the current list.Some major changes were that the name of the list was changed from Communist Chinese Military Companies (CCMC) to Chinese Military-Industrial Complex Companies (CMIC), the list would be maintained by the Treasury Department as opposed to the Defense Department, and restrictions on subsidiaries would apply only if the subsidiary was explicitly named in the list.It has been reported in the media, quoting senior officials, that the list will be updated on a rolling basis. As we were typing out the Insight, Reuters published an article that says more Chinese companies could be added to the investment ban.In this Insight, we try to identify some of the subsidiaries of companies that could be added to the CMIC list where the parent entity is already included on the list.

POTUS Executive Order: Potential Additions to the CMIC List

China

China Tower Corporation Limited is a state-owned telecommunication company that provides telecommunication tower infrastructure services, including construction, maintenance, and operation of base station ancillary facilities. The company also offers distributed antenna systems, smart tower services, and energy solutions like power backup and battery exchange. It was founded in July 2014 and is headquartered in Beijing, China.

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China Tower (788 HK)

Mitratel (Dayamitra Telekomunikasi) IPO: Valuation Insights

Mitratel has launched an IPO to raise $1.4-1.8 billion. Our valuation analysis suggests that the IPO price range is attractive. Overall, we would...

Arun George

Mitratel (Dayamitra Telekomunikasi) IPO Initiation: Control Tower

Mitratel has launched an IPO to raise $1.4-1.8 billion. Mitratel is well-placed to benefit from industry consolidation. Overall, Mitratel's...

Arun George

POTUS Executive Order: Potential Additions to the CMIC List

There could be more entities added to Biden's Executive Order if US-China relations continue to worsen. Defense & surveillance stocks, plus subs of...

Brian Freitas

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China Mobile Prices RMB A-Share IPO - Disappointing IPO Price So A-Share Could Yield ~CGBs+230

China Mobile (941) has priced its A-Share IPO at a disappointingly low price, possibly to spur follow-on interest which the China Telecom A-Share...

Travis Lundy

Mitratel (Dayamitra Telekomunikasi) IPO: Valuation Insights

Mitratel has launched an IPO to raise $1.4-1.8 billion. Our valuation analysis suggests that the IPO price range is attractive. Overall, we would...

Arun George

Mitratel (Dayamitra Telekomunikasi) IPO Initiation: Control Tower

Mitratel has launched an IPO to raise $1.4-1.8 billion. Mitratel is well-placed to benefit from industry consolidation. Overall, Mitratel's...

Arun George

China Telecom A-Share IPO Prices; H-Share Discount Wide; Buy China Mobile

China Telecom has priced its A-share IPO at an 87% premium to the H. To get to the same 2021e DivYield, China Mobile will have to be 20+ higher,...

Travis Lundy

POTUS Executive Order: Potential Additions to the CMIC List

There could be more entities added to Biden's Executive Order if US-China relations continue to worsen. Defense & surveillance stocks, plus subs of...

Brian Freitas