IPOs and Catalysts/Events, Global Equity Research Ltd

Arun George

IPOs and Catalysts/Events

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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

Hainan Meilan International Airport / Event-Driven

Hainan Meilan International Airport (357 HK)

<ul>
<li>On 30 April, Haikou Meilan International Airport entered a SPA with <a href="https://www.smartkarma.com/entities/hainan-airport-infrastructure-co-ltd" target="_blank" data-smartkarma-citation="entities:1233:1" rel="noopener">Hainan Airport Infrastructure (600515 CH)</a> to sell its <a href="https://www.smartkarma.com/entities/hainan-meilan-international-airport-company-limited" target="_blank" data-smartkarma-citation="entities:12545:1" rel="noopener">Hainan Meilan International Airport (357 HK)</a> 50.19% stake at RMB9.85 (HK$10.62).</li>
<li>The SPA precondition is satisfied, and the SPA will be completed within 20 business days. Completion will trigger an unconditional MGO at HK$10.62.</li>
<li>Tendering is likely to be low as the offer is unattractive. At the last close and for a mid-February 2026 payment, the gross/annualised spread is 0.2%/1.1%.</li>
</ul>


On 30 April, Haikou Meilan International Airport entered a SPA with Hainan Airport Infrastructure (600515 CH) to sell its Hainan Meilan International Airport (357 HK) 50.19% stake at RMB9.85 (HK$10.62).
The SPA precondition is satisfied, and the SPA will be completed within 20 business days. Completion will trigger an unconditional MGO at HK$10.62.
Tendering is likely to be low as the offer is unattractive. At the last close and for a mid-February 2026 payment, the gross/annualised spread is 0.2%/1.1%.


Meilan Airport (357 HK): SPA Precondition Satisfied, Setting up an Unconditional MGO at HK$10.62

HK/China Equity Long-Short

Osbert Tang, CFA

Equity Bottom-Up

Hainan Meilan International Airport / Equity Bottom-Up

<ul>
<li>The change in controlling shareholder at <a href="https://www.smartkarma.com/entities/hainan-meilan-international-airport-company-limited" target="_blank" data-smartkarma-citation="entities:12545:1" rel="noopener">Hainan Meilan International Airport (357 HK)</a> will trigger a general offer. At HK$10.62, we do not see the proposed offer price attractive.</li>
<li>The proposed price is only at 10.6% premium to the latest closing price, and equals to 1.15x 12-month forward P/B, way lower than the 5-year peak of 5.1x.</li>
<li>The new parent <a href="https://www.smartkarma.com/entities/hainan-island-construction-co-ltd" target="_blank" data-smartkarma-citation="entities:1233:1" rel="noopener">Hainan Airport Infrastructure (600515 CH)</a> can generate synergy, and the turn of Hainan into a Free Trade Port will attract visitors, boosting the long-term outlook. </li>
</ul>


The change in controlling shareholder at Hainan Meilan International Airport (357 HK) will trigger a general offer. At HK$10.62, we do not see the proposed offer price attractive.
The proposed price is only at 10.6% premium to the latest closing price, and equals to 1.15x 12-month forward P/B, way lower than the 5-year peak of 5.1x.
The new parent Hainan Airport Infrastructure (600515 CH) can generate synergy, and the turn of Hainan into a Free Trade Port will attract visitors, boosting the long-term outlook. 


Hainan Meilan Intl Airport (357 HK): Possible Mandatory General Offer

<ul>
<li>Haikou Meilan International Airport Company entered an SPA with <a href="https://www.smartkarma.com/entities/hainan-island-construction-co-ltd" target="_blank" data-smartkarma-citation="entities:1233:1" rel="noopener">Hainan Island Construction (600515 CH)</a> to sell its <a href="https://www.smartkarma.com/entities/hainan-meilan-international-airport-company-limited" target="_blank" data-smartkarma-citation="entities:12545:1" rel="noopener">Hainan Meilan International Airport (357 HK)</a> 50.19% stake at RMB9.85 per share (HK$10.62).</li>
<li>The SPA completion requires several regulatory approvals, which are low-risk, particularly as Hainan SASAC is the largest shareholder of the offeror and the seller.</li>
<li>Under Rule 26.1 of the Takeovers Code, upon completion, the offeror will be required to make an unconditional mandatory cash offer at HK$10.62 per share. The MGO price is final.  </li>
</ul>


Haikou Meilan International Airport Company entered an SPA with Hainan Island Construction (600515 CH) to sell its Hainan Meilan International Airport (357 HK) 50.19% stake at RMB9.85 per share (HK$10.62).
The SPA completion requires several regulatory approvals, which are low-risk, particularly as Hainan SASAC is the largest shareholder of the offeror and the seller.
Under Rule 26.1 of the Takeovers Code, upon completion, the offeror will be required to make an unconditional mandatory cash offer at HK$10.62 per share. The MGO price is final.  


Meilan Airport (357 HK): Possible Unconditional MGO at HK$10.62

Beijing Capital International Airport / Equity Bottom-Up

Beijing Capital International Airport (694 HK)

<ul>
<li>Long <a href="https://www.smartkarma.com/entities/beijing-capital-international-airport-bcia" target="_blank" data-smartkarma-citation="entities:10626:1" rel="noopener">Beijing Capital International Airport (BCIA) (694 HK)</a>, and short <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> strategy should bring in good sector-neutral returns over the next 12 months. </li>
<li>BCIA will return to profit next year, fuelling the rebound of its share price. Air China, however, may face uncertainties related to stronger USD and higher-than-expected US interest rates.</li>
<li>Higher duty-free sales for BCIA should propel earnings outlook. BCIA's P/B is well below the 5-year average, while Air China has already returned to the historical average level.</li>
</ul>


Long Beijing Capital International Airport (BCIA) (694 HK), and short Air China Ltd (H) (753 HK) strategy should bring in good sector-neutral returns over the next 12 months. 
BCIA will return to profit next year, fuelling the rebound of its share price. Air China, however, may face uncertainties related to stronger USD and higher-than-expected US interest rates.
Higher duty-free sales for BCIA should propel earnings outlook. BCIA's P/B is well below the 5-year average, while Air China has already returned to the historical average level.


China Pair Trade: Long BCIA (694 HK), Short Air China (753 HK)

<ul>
<li>Despite <a href="https://www.smartkarma.com/entities/shangri-la-asia-ltd" target="_blank" data-smartkarma-citation="entities:19690:1" rel="noopener">Shangri-La Asia (69 HK)</a>'s good share price performance YTD, it has still not yet fully reflected the strengths of and benefits from China's re-opening. More upside to come.</li>
<li>Occupancy for Hong Kong and mainland China has surged 30-45pp YoY in Mar, and with China's RevPAR for FY22 is down 56.5% from peak, we see massive rebound in profitability.</li>
<li>Share of China's EBITDA was US$258m in FY22, from US$465m in FY16-19, suggests good room for recovery. It is cheap on ~70% discount to revalued NAV, vs. 37% in FY18.</li>
</ul>


Despite Shangri-La Asia (69 HK)'s good share price performance YTD, it has still not yet fully reflected the strengths of and benefits from China's re-opening. More upside to come.
Occupancy for Hong Kong and mainland China has surged 30-45pp YoY in Mar, and with China's RevPAR for FY22 is down 56.5% from peak, we see massive rebound in profitability.
Share of China's EBITDA was US$258m in FY22, from US$465m in FY16-19, suggests good room for recovery. It is cheap on ~70% discount to revalued NAV, vs. 37% in FY18.


Shangri-La Asia (69 HK): Not yet Fully Reflected China's Comeback

China

Guangzhou Baiyun International Airport Co., Ltd. operates the Guangzhou Baiyun International Airport and provides related transportation services, including ground, passenger, storage, airplane maintenance and repair, and other services.  The Company also provides food, space rental, and advertising services.

Guangzhou Baiyun International Airport (600004 CH)

Price Gauge
52-week Range	0.00 - 0.00
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Guangzhou Baiyun International Airport (600004 CH)

Meilan Airport (357 HK): SPA Precondition Satisfied, Setting up an Unconditional MGO at HK$10.62

Tendering is likely to be low as the offer is unattractive. At the last close and for a mid-February 2026 payment, the gross/annualised spread is...

Arun George

Hainan Meilan Intl Airport (357 HK): Possible Mandatory General Offer

Meilan Airport's change in parent company triggers a general offer, but the proposed price is unattractive at 10.6% premium. Synergy with new...

Osbert Tang, CFA

Meilan Airport (357 HK): Possible Unconditional MGO at HK$10.62

The parent is selling out to Hainan Airport Infrastructure at HK$10.62. Completion will trigger an unconditional MGO. Timing is the key risk.

Arun George

China Pair Trade: Long BCIA (694 HK), Short Air China (753 HK)

BCIA's profit rebound and duty-free sales recovery should drive returns, while Air China faces stronger USD and high US interest rates. These...

Osbert Tang, CFA

Shangri-La Asia (69 HK): Not yet Fully Reflected China's Comeback

Shangri-la Asia is an excellent play on recovery of China, where 55% of rooms are located. Its overseas assets will gain from surge in outbound...

Osbert Tang, CFA

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

Meilan Airport (357 HK): SPA Precondition Satisfied, Setting up an Unconditional MGO at HK$10.62

Tendering is likely to be low as the offer is unattractive. At the last close and for a mid-February 2026 payment, the gross/annualised spread is...

Arun George

Hainan Meilan Intl Airport (357 HK): Possible Mandatory General Offer

Meilan Airport's change ​in parent company triggers a general offer, but the proposed price is unattractive at 10.6% premium. Synergy with new...

Osbert Tang, CFA

Meilan Airport (357 HK): Possible Unconditional MGO at HK$10.62

The parent is selling out to Hainan Airport Infrastructure at HK$10.62. Completion will trigger an unconditional MGO. Timing is the key risk.

Arun George

China Pair Trade: Long BCIA (694 HK), Short Air China (753 HK)

​BCIA's profit rebound and duty-free sales recovery should drive returns, while Air China faces stronger USD and high US interest rates. These...

Osbert Tang, CFA

Shangri-La Asia (69 HK): Not yet Fully Reflected China's Comeback

Shangri-la Asia is an excellent play on recovery of China, where 55% of rooms are located. Its overseas assets will gain from surge in outbound...

Osbert Tang, CFA

Meilan Airport's change in parent company triggers a general offer, but the proposed price is unattractive at 10.6% premium. Synergy with new...

BCIA's profit rebound and duty-free sales recovery should drive returns, while Air China faces stronger USD and high US interest rates. These...