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 Capital Markets

Lygend Resources & Technology / Equity Capital Markets

<ul>
<li>
<a href="https://www.smartkarma.com/entities/lygend-resources-technology" target="_blank" data-smartkarma-citation="entities:36493:1" rel="noopener">Lygend Resources &amp; Technology (2245 HK)</a>, a nickel play, has launched its IPO to raise up to US$595 million. </li>
<li>We previously discussed the IPO in <a href="https://www.smartkarma.com/insights/lygend-resources-technology-ipo-riding-the-wave" target="_blank" data-smartkarma-citation="insights:84558" rel="noopener">Lygend Resources &amp; Technology IPO: Riding the Wave</a>. </li>
<li>In this note, we present our forecasts and look at valuation. Lygend is attractively valued at the IPO price range. We would participate.</li>
</ul>



Lygend Resources &amp; Technology (2245 HK), a nickel play, has launched its IPO to raise up to US$595 million. 
We previously discussed the IPO in Lygend Resources &amp; Technology IPO: Riding the Wave. 
In this note, we present our forecasts and look at valuation. Lygend is attractively valued at the IPO price range. We would participate.


Lygend Resources & Technology IPO: Valuation Insights

<ul>
<li>
<a href="https://www.smartkarma.com/entities/lygend-resources-technology" target="_blank" data-smartkarma-citation="entities:36493:1" rel="noopener">Lygend Resources &amp; Technology (LR HK)</a>, a nickel play, is set to open its books for an HKEx IPO to raise US$700-800 million, according to press reports.</li>
<li>Lygend had the largest nickel ore trading volume in China in 2019, 2020 and 2021, with a market share of 26.8% in 2021.</li>
<li>The fundamentals are solid as the consolidation of HPL has delivered strong growth and an improved margin profile, at manageable leverage.</li>
</ul>



Lygend Resources &amp; Technology (LR HK), a nickel play, is set to open its books for an HKEx IPO to raise US$700-800 million, according to press reports.
Lygend had the largest nickel ore trading volume in China in 2019, 2020 and 2021, with a market share of 26.8% in 2021.
The fundamentals are solid as the consolidation of HPL has delivered strong growth and an improved margin profile, at manageable leverage.


Lygend Resources & Technology IPO: Riding the Wave

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

Brian Freitas

Pan-Asia Index Rebalances/ Events/ Delta One

Periscope Analytics

Periscope Analytics focuses on event-driven trades across Asia Pacific and provides comprehensive, timely and systematic coverage of index changes to major Asia Pacific indices in a structured manner.

The analysis includes forecasted inclusions and exclusions to all major Asian indices that have significant amount of tracking assets, including estimates of passive buy/sell flow on the stocks. The service also provides commentary and impact of market consultations, ground rule changes, and other events (IPOs, spin-offs, M&A) that could lead to index changes and passive flow.

Periscope Analytics works with multi-strategy hedge funds, proprietary trading firms, stat arb trading groups and long-only investors that invest and trade in the Asia Pacific region with the data being used to trade index rebalances, avoid pre-positioning and passive flow, and to time entry into and exit from stocks.

Event-Driven Trades Across Asia Pacific

Index Rebalance

<ul>
<li>From December 2022, the minimum free float requirement to be a part of the <a href="https://www.smartkarma.com/entities/philippines-stock-exchange-psei-index" target="_blank" data-smartkarma-citation="entities:22912:1" rel="noopener">Philippines Stock Exchange PSEi Index (PCOMP INDEX)</a> increases from 15% to 20%.</li>
<li>This could result in three deletions from the index which will result in three stocks being added to the index. Passive trackers selling the deletes will push the stocks lower.</li>
<li>The three current constituents could remain in the index if they sell stock to increase the free float. That would in turn put downward pressure on the stocks.</li>
</ul>


From December 2022, the minimum free float requirement to be a part of the Philippines Stock Exchange PSEi Index (PCOMP INDEX) increases from 15% to 20%.
This could result in three deletions from the index which will result in three stocks being added to the index. Passive trackers selling the deletes will push the stocks lower.
The three current constituents could remain in the index if they sell stock to increase the free float. That would in turn put downward pressure on the stocks.


PCOMP Index Rebalance Preview Feb 23: Updated Methodology to Drive Changes

Japan/Asia Long-Short, LightStream Research

Mio Kato

Japan/Asia Long-Short

Long-Short Analysis on Japan, Asia and the World

LightStream Research

LightStream conducts quantitatively rigorous and data-driven analysis with a focus on Japan and Asia.

We consistently cover the Tech, Consumer and Industrial sectors, and provide ECM and Events coverage more broadly.

We supplement traditional qualitative insights from company relationships with a robust quantitative foundation that examines as much historical data as is available.
We further refine the accuracy of our insights and calls through the use of alternative data to flesh out current trends, and through a valuation framework that emphasises non-superficial peer group selection and a proper attempt to understand the metrics and changes that have driven security valuations in the past.

Equity Bottom-Up

<a href="https://www.smartkarma.com/entities/3439" target="_blank" data-smartkarma-citation="entities:3439:1">Pacific Metals Co Ltd (5541 JP)</a> is Japan's largest nickel producer and in the top five globally. The company produces ferronickel and thus does not directly sell materials for Li-ion batteries, but should benefit indirectly from this theme through higher LME prices for nickel which the companies' products are benchmarked to.<h2>Nickel Ore Prices Have Been Driven by Indonesian Ban on Raw Material Exports</h2>The 85% decline in nickel prices from 2007 to 2015 were not kind to the company and Indonesia's…

Pacific Metals Co Ltd (5541 JP) is Japan's largest nickel producer and in the top five globally. The company produces ferronickel and thus does not directly sell materials for Li-ion batteries, but should benefit indirectly from this theme through higher LME prices for nickel which the companies' products are benchmarked to.Nickel Ore Prices Have Been Driven by Indonesian Ban on Raw Material ExportsThe 85% decline in nickel prices from 2007 to 2015 were not kind to the company and Indonesia's…

Pacific Metals: Boost from Indonesian Nickel Ore Export Resumption Could Put This on 7x PE

CEO, A. Stotz Investment Research

Dr. Andrew Stotz, CFA

Quantamental Investing to beat Benchmarks

A. Stotz Investment Research

We pick stocks. We construct portfolios. All our effort is focused on how to better pick stocks and construct portfolios. We serve fund management companies, family offices, and high net worth individuals.

<ul><li>Low correlation with Western stock markets, and low correlation to the Filipino market relative to its sector</li><li>Nickel prices should grow further due to global supply cut as a result of the Philippine government audit resulting in possible mine closures cutting around 50% production. NIKL is ready to benefit and gain market share</li><li>NIKL is one of the largest global suppliers of lateritic nickel ore used for stainless steel production in China, which imports 90% of nickel ore from Philippines. Its 32% domestic market share in 2015 should expand in 2017</li><li>Trades at an attractive 17CE* PEG ratio of 0.4 versus Asian Materials at a PEG of 1.2 and NIKL is net cash</li><li>Risks: Mines mentioned in the audit finally not being closed</li></ul>* Consensus Estimates

Low correlation with Western stock markets, and low correlation to the Filipino market relative to its sectorNickel prices should grow further due to global supply cut as a result of the Philippine government audit resulting in possible mine closures cutting around 50% production. NIKL is ready to benefit and gain market shareNIKL is one of the largest global suppliers of lateritic nickel ore used for stainless steel production in China, which imports 90% of nickel ore from Philippines. Its 32% domestic market share in 2015 should expand in 2017Trades at an attractive 17CE* PEG ratio of 0.4 versus Asian Materials at a PEG of 1.2 and NIKL is net cashRisks: Mines mentioned in the audit finally not being closed* Consensus Estimates

NIKL: Ore Miner Well Placed to Cash in on Mine Audits

Philippines

Nickel Asia Corporation is a diversified natural resources development company primarily engaged in the mining and exploration of lateritic nickel ore, including saprolite and limonite ore. The company also has significant interests in renewable energy development, such as solar and geothermal power generation. It is headquartered in Taguig City, Philippines, and was founded in 1969.

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Nickel Asia (NIKL PM)

Lygend Resources & Technology IPO: Valuation Insights

In this note, we present our forecasts and look at valuation. Lygend is attractively valued at the IPO price range. We would participate.

Arun George

Lygend Resources & Technology IPO: Riding the Wave

The fundamentals are solid as the consolidation of HPL has delivered strong growth and an improved margin profile, at manageable leverage.

Arun George

PCOMP Index Rebalance Preview Feb 23: Updated Methodology to Drive Changes

A methodology change that increases the minimum free float from 15% to 20% could result in 3 changes to the index. The three constituents will need...

Brian Freitas

Pacific Metals: Boost from Indonesian Nickel Ore Export Resumption Could Put This on 7x PE

Pacific Metals Co Ltd (5541 JP) is Japan's largest nickel producer and in the top five globally. The company produces ferronickel and thus does not...

Mio Kato

NIKL: Ore Miner Well Placed to Cash in on Mine Audits

Low correlation with Western stock markets, and low correlation to the Filipino market relative to its sector Nickel prices should grow further...

A. Stotz Investment Research

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