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

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

<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

Equity Long-Short

Mo Aziz

Equity Bottom-Up

Shanghai International Airport / Equity Bottom-Up

Shanghai International Airport (600009 CH)

<ul>
<li>Chinese airports are enjoying a steady passenger traffic growth of 5% YTD; Shenzhen and Shanghai airports are growing much faster.  </li>
<li>Shanghai International Airport (600009 CH)is our top pick given its size, liquidity, strong balance sheet, and its strong earnings growth potential.  </li>
<li>Our target price for <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 CNY44, pegged to global airport peer average FY25 EV/EBITDA of 12x.   </li>
</ul>


Chinese airports are enjoying a steady passenger traffic growth of 5% YTD; Shenzhen and Shanghai airports are growing much faster.  
Shanghai International Airport (600009 CH)is our top pick given its size, liquidity, strong balance sheet, and its strong earnings growth potential.  
Our target price for Shanghai International Airport (600009 CH) is CNY44, pegged to global airport peer average FY25 EV/EBITDA of 12x.   


Shanghai International Airport (600009 CH | BUY | TP:CNY44): Slow but Steady Earnings Recovery

Asian Insight Provider - Actionable ideas, CrossASEAN Research

Henry Soediarko

Asian Insight Provider - Actionable ideas

CrossASEAN Research

At CrossASEAN Research we strive to produce unbiased and differentiated on the ground insights on companies across South East Asia. Our Research is produced for the most part after face to face meetings and conversations with company management to dig deep into the long term vision and strategy of the companies we cover. We seek to deliver investable and actionable themes on sectors and markets across SE Asia, often in collaboration with other Insight Providers across the region, pooling the vast experience of the analysts within the Smartkarma Ecosystem. We also offer bespoke work and tailor made trips for our clients. 

Insights across South East Asia

H1 2021 number of flights processed in China has shown signs of healthy recovery but due to the recent Delta Variant spread in China, <a href="https://www.smartkarma.com/entities/travelsky-technology-ltd-h" target="_blank" data-smartkarma-citation="entities:19829:1" rel="noopener">Travelsky Technology Ltd H (696 HK)</a> share price alongside the other travel-related names have been sold off. Furthermore, excerpts from an Instagram update provides some colour of the current state of air travel situation in the Chinese airport. 
The short-term recommendation is to stay away from <a href="https://www.smartkarma.com/entities/travelsky-technology-ltd-h" target="_blank" data-smartkarma-citation="entities:19829:1" rel="noopener">Travelsky Technology Ltd H (696 HK)</a> as the Delta variant has caused the negative sentiment on airline-related stocks to soar again as shown in the chart below.
Taking into account a more optimistic view that the higher vaccination rates in China and that it is working effectively against the current and future variant, therefore, air travel volume should recover, sooner rather than later, the company should benefit from the recovery thus for long-term investors, this is a stock that you can and should average down.
For investors who are to have exposure to <a href="https://www.smartkarma.com/entities/travelsky-technology-ltd-h" target="_blank" data-smartkarma-citation="entities:19829:1" rel="noopener">Travelsky Technology Ltd H (696 HK)</a> , this is probably the right time to start building exposure.

H1 2021 number of flights processed in China has shown signs of healthy recovery but due to the recent Delta Variant spread in China, Travelsky Technology Ltd H (696 HK) share price alongside the other travel-related names have been sold off. Furthermore, excerpts from an Instagram update provides some colour of the current state of air travel situation in the Chinese airport. 
The short-term recommendation is to stay away from Travelsky Technology Ltd H (696 HK) as the Delta variant has caused the negative sentiment on airline-related stocks to soar again as shown in the chart below.
Taking into account a more optimistic view that the higher vaccination rates in China and that it is working effectively against the current and future variant, therefore, air travel volume should recover, sooner rather than later, the company should benefit from the recovery thus for long-term investors, this is a stock that you can and should average down.
For investors who are to have exposure to Travelsky Technology Ltd H (696 HK) , this is probably the right time to start building exposure. 

Founder of Antler Capital

Stanley Tsai, CFA

BOC Aviation | BOCAVI <a href="https://www.smartkarma.com/entities/boc-aviation" target="_blank" data-smartkarma-citation="entities:22689:1" rel="noopener">(2588 HK)</a> 
As a follow-up on <a href="https://www.smartkarma.com/profiles/david-blennerhassett" target="_blank" data-smartkarma-citation="accounts:840" rel="noopener">David Blennerhassett</a>'s Smartkarma Original <a href="https://www.smartkarma.com/insights/asia-pac-airports-ups-but-mostly-downs" target="_blank" data-smartkarma-citation="insights:51855" rel="noopener">Asia-Pac Airports: Ups, But Mostly Downs</a>, we take a look at BOCAVI, which, in our view, is a compelling alternative to APAC airport operators and airlines as a post-Covid trade.
BOCAVI is a highly geared play on the resumption of air travel. The stock has gone through periods of significant out/underperformance against the APAC airports and airlines and may continue to give investors high beta in either direction. The geographical exposure is broad, but there is a heavy skew towards short-haul flights, which will see the earliest acceleration in passenger traffic.
Management's countercyclical capex expansion increasingly looks like a shrewd bet. At its core, BOCAVI is in the capital management business. Strong liquidity and BOC's explicit backing have allowed the lessor to grow its purchase-and-leaseback portfolio through the depths of the pandemic. While airlines are still hemorrhaging cash, over 99% of BOCAVI's aircraft remain cash-generating.  
We expect the firm's undiscounted committed revenues to top USD20bn in 2021. By year-end, the value of the portfolio will have doubled since 2014. We estimate the present value of this cashflow stream to be HKD72.80/share. We are essentially getting free growth optionality. 
We are buyers at book value. The stock is trading at 8x P/E and 1.1x P/B on a 12M forward basis. BOCAVI is reasonably liquid, with a market cap of USD6bn and average daily turnover of USD3.5mn. Besides the obvious risk of protracted lockdowns globally, a well-functioning USD bond market and BOC's funding support are critical to our investment case.
Attachment: BOCAVI Financial Summary

BOC Aviation | BOCAVI (2588 HK) 
As a follow-up on David Blennerhassett's Smartkarma Original Asia-Pac Airports: Ups, But Mostly Downs, we take a look at BOCAVI, which, in our view, is a compelling alternative to APAC airport operators and airlines as a post-Covid trade.
BOCAVI is a highly geared play on the resumption of air travel. The stock has gone through periods of significant out/underperformance against the APAC airports and airlines and may continue to give investors high beta in either direction. The geographical exposure is broad, but there is a heavy skew towards short-haul flights, which will see the earliest acceleration in passenger traffic.
Management's countercyclical capex expansion increasingly looks like a shrewd bet. At its core, BOCAVI is in the capital management business. Strong liquidity and BOC's explicit backing have allowed the lessor to grow its purchase-and-leaseback portfolio through the depths of the pandemic. While airlines are still hemorrhaging cash, over 99% of BOCAVI's aircraft remain cash-generating.  
We expect the firm's undiscounted committed revenues to top USD20bn in 2021. By year-end, the value of the portfolio will have doubled since 2014. We estimate the present value of this cashflow stream to be HKD72.80/share. We are essentially getting free growth optionality. 
We are buyers at book value. The stock is trading at 8x P/E and 1.1x P/B on a 12M forward basis. BOCAVI is reasonably liquid, with a market cap of USD6bn and average daily turnover of USD3.5mn. Besides the obvious risk of protracted lockdowns globally, a well-functioning USD bond market and BOC's funding support are critical to our investment case.
Attachment: BOCAVI Financial Summary

BOC Aviation (2588 HK): The Stars Don't Look Bigger, but They Do Look Brighter

China

Shenzhen Airport Co., Ltd. provides airport terminal ground passenger transportation and cargo delivery services.  The Company also leases airport lounge, designs and publishes advertisements, and offers air ticket agency services.

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Shenzhen Airport Co Ltd A (000089 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

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

Shanghai International Airport (600009 CH | BUY | TP:CNY44): Slow but Steady Earnings Recovery

Chinese airports are enjoying steady passenger traffic growth and a good proxy for travel recovery. Our top pick among the six listed Chinese...

Mo Aziz

Travelsky (696): Maintain Positive Stand

An optimistic view that with the higher vaccination rates in China and is working effectively against the current and future variant, air travel...

Henry Soediarko

BOC Aviation (2588 HK): The Stars Don't Look Bigger, but They Do Look Brighter

As downstream players continue to hemorrhage cash, over 99% of BOCAVI’s aircraft are still cash-generating. Valuation is undemanding for a high...

Stanley Tsai, CFA

Price Gauge

52-week Range

Market Cap (USDm)

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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

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

Shanghai International Airport (600009 CH | BUY | TP:CNY44): Slow but Steady Earnings Recovery

​Chinese airports are enjoying steady passenger traffic growth and a good proxy for travel recovery. Our top pick among the six listed Chinese...

Mo Aziz

Travelsky (696): Maintain Positive Stand

An optimistic view that with the higher vaccination rates in China and is working effectively against the current and future variant, air travel...

Henry Soediarko

BOC Aviation (2588 HK): The Stars Don't Look Bigger, but They Do Look Brighter

As downstream players continue to hemorrhage cash, over 99% of BOCAVI’s aircraft are still cash-generating. Valuation is undemanding for a high...

Stanley Tsai, CFA

Chinese airports are enjoying steady passenger traffic growth and a good proxy for travel recovery. Our top pick among the six listed Chinese...