Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

Last Week in Event SPACE: NTT Docomo, Car, Sunac Services, Evergrande, Jardine Cycle, PRC Antitrust

Asian Equities Analyst, Logistics & Transport, Tracking Traffic

Daniel Hellberg

Asian Equities Analyst, Logistics & Transport

Tracking Traffic

Focusing on Asian logistics, transportation, and travel companies

Equity Bottom-Up

<a href="https://www.smartkarma.com/entities/trip-com-group-ltd" target="_blank" data-smartkarma-citation="entities:180:1" rel="noopener">Trip.com (TCOM US)</a> rallied 14% on Monday in the US on news that <a href="https://www.smartkarma.com/entities/pfizer-inc" target="_blank" data-smartkarma-citation="entities:1131:1" rel="noopener">Pfizer Inc (PFE US)</a>'s Covid19 vaccine had been found highly effective, and that distribution of the vaccine would begin before the end of 2020. Many travel-related stocks, such as airlines (<a href="https://www.smartkarma.com/entities/american-airlines-group-inc" target="_blank" data-smartkarma-citation="entities:3663:1" rel="noopener">American Airlines Group (AAL US)</a>, +15%) and cruise operators (<a href="https://www.smartkarma.com/entities/royal-caribbean-cruises-ltd" target="_blank" data-smartkarma-citation="entities:1629:1" rel="noopener">Royal Caribbean Cruises (RCL US)</a>, +29%) also rallied by 10% or more. We have anticipated a rebound in Chinese travel-related shares when there is positive news about a 'normalization' of travel, especially cross-border travel, which has been hit harder than domestic travel. As investors in Chinese travel-related stocks begin thinking about a return to 'normal' market conditions for the sector, now is probably a good time to revisit what 'normal' means. In the months prior to the emergence of Covid19, Chinese travel demand -- outbound and domestic -- was by several measures quite weak. While there will likely be a brief period in 2021 during which pent-up demand is finally met with easing travel restrictions, we believe that in the medium-term demand growth will sink back to the single digits.

Trip.com (TCOM US) rallied 14% on Monday in the US on news that Pfizer Inc (PFE US)'s Covid19 vaccine had been found highly effective, and that distribution of the vaccine would begin before the end of 2020. Many travel-related stocks, such as airlines (American Airlines Group (AAL US), +15%) and cruise operators (Royal Caribbean Cruises (RCL US), +29%) also rallied by 10% or more. We have anticipated a rebound in Chinese travel-related shares when there is positive news about a 'normalization' of travel, especially cross-border travel, which has been hit harder than domestic travel. As investors in Chinese travel-related stocks begin thinking about a return to 'normal' market conditions for the sector, now is probably a good time to revisit what 'normal' means. In the months prior to the emergence of Covid19, Chinese travel demand -- outbound and domestic -- was by several measures quite weak. While there will likely be a brief period in 2021 during which pent-up demand is finally met with easing travel restrictions, we believe that in the medium-term demand growth will sink back to the single digits. 

Trip.com Rallies 14% on Vaccine News. But What's the 'Normal' We'll Return To in 2021?

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

Thematic (Sector/Industry)

Less than a year since the news hit that the Chinese outbreak spread to the world, <a href="https://www.smartkarma.com/entities/pfizer-inc" target="_blank" data-smartkarma-citation="entities:1131:1" rel="noopener">Pfizer Inc (PFE US)</a> has announced its vaccine with more than 90% effective in preventing Covid-19 among those without evidence of prior infection. Similar to <a href="https://www.smartkarma.com/insights/china-outbreak-theme-winners-and-losers" target="_blank" data-smartkarma-citation="insights:35971" rel="noopener">China Outbreak Theme: Winners and Losers</a> , this insight will discuss the potential winners and losers from the announcement of the vaccine. Travel-related names such as airlines, airport operators, tour operators, the duty-free operators are the clear beneficiaries of this news while auto dealership will also benefit from the potential lower unemployment later on. Instant noodle makers, pc makers that benefit from the work-from-home rush, as well as glove makers will no longer enjoy the same growth rate in 1H, and in the case of the glove makers, both ASP and volumes may see a decline.

Less than a year since the news hit that the Chinese outbreak spread to the world, Pfizer Inc (PFE US) has announced its vaccine with more than 90% effective in preventing Covid-19 among those without evidence of prior infection. Similar to China Outbreak Theme: Winners and Losers , this insight will discuss the potential winners and losers from the announcement of the vaccine. Travel-related names such as airlines, airport operators, tour operators, the duty-free operators are the clear beneficiaries of this news while auto dealership will also benefit from the potential lower unemployment later on. Instant noodle makers, pc makers that benefit from the work-from-home rush, as well as glove makers will no longer enjoy the same growth rate in 1H, and in the case of the glove makers, both ASP and volumes may see a decline. 

Head of Research, IPOs & Placements, Aequitas Research

Sumeet Singh

Head of Research, IPOs & Placements

IPOs and Placements coverage across Asia Pacific

Aequitas Research

We cover all listing across the Asia Pacific along with follow-up placements. As of Dec 2020, our team had covered 539 IPOs with a hit rate of 73.5% and 685 placements with a hit rate of 66.8%.

We combine fundamental bottom-up views with our proprietary quantitative framework to provide a holistic coverage across new listings and placements. Our coverage includes pre-IPO notes before the deal is launched, follow-up analysis once the deal is live and post-listing trading analysis as well.

Equity Capital Markets

<a href="https://www.smartkarma.com/entities/japan-airlines-co-ltd" target="_blank" data-smartkarma-citation="entities:1184:1" rel="noopener">Japan Airlines (9201 JP)</a> plans to raise around US$1.4bn in order to shore up its balance sheet and aid its longer term transformation.
The shares are down over 50% this year, after having corrected by another 10% today.
In this insight, I'll talk about the deal dynamics and run the deal through our ECM framework.

Japan Airlines (9201 JP) plans to raise around US$1.4bn in order to shore up its balance sheet and aid its longer term transformation.
The shares are down over 50% this year, after having corrected by another 10% today.
In this insight, I'll talk about the deal dynamics and run the deal through our ECM framework.

Japan Airlines Placement - Given the Uncertain Outlook, Might Need Further Correction

Travis Lundy

The <a href="https://www.smartkarma.com/entities/rolls-royce-holdings-plc" target="_blank" data-smartkarma-citation="entities:22121:1" rel="noopener">Rolls-Royce Holdings (RR/ LN)</a> Rights Offering announced on 1 October has confounded me. I thought that a situation where shares were trading at GBp130 and offering 10 rights for every three shares held to be exercised at GBp32 each, meaning that investors who owned shares had to decide to reinvest 82% of their existing exposure just to buy the new shares and NOT get diluted would mean that long-only holders would sell. Instead, after seeing shares drop 20% in two days, they promptly rallied 100% in the next five days and have basically settled at just below 80% up from where they were at announcement. Today, Rolls Royce holders <a href="https://www.reuters.com/article/us-health-coronavirus-rolls-royce-hldg/rolls-royce-shareholders-approve-two-billion-pound-rights-issue-idUSKBN27C1KX" target="_blank" rel="noopener">approved</a> the Rights Issue at the shareholder meeting today ("overwhelmingly" according to Chairman Ian Davis). Formal results will be published later.The Rights go ex- tomorrow.  The change in share price changes the exposure for long/short funds who happen to have shorted it here. That is the nature of rights offerings. With the rights exercise price so far below where the real-time TERP (Theoretical Ex-Rights Price) stands, it would seem shareholders have become significantly more bullish.

The Rolls-Royce Holdings (RR/ LN) Rights Offering announced on 1 October has confounded me. I thought that a situation where shares were trading at GBp130 and offering 10 rights for every three shares held to be exercised at GBp32 each, meaning that investors who owned shares had to decide to reinvest 82% of their existing exposure just to buy the new shares and NOT get diluted would mean that long-only holders would sell. Instead, after seeing shares drop 20% in two days, they promptly rallied 100% in the next five days and have basically settled at just below 80% up from where they were at announcement. Today, Rolls Royce holders approved the Rights Issue at the shareholder meeting today ("overwhelmingly" according to Chairman Ian Davis). Formal results will be published later.The Rights go ex- tomorrow.  The change in share price changes the exposure for long/short funds who happen to have shorted it here. That is the nature of rights offerings. With the rights exercise price so far below where the real-time TERP (Theoretical Ex-Rights Price) stands, it would seem shareholders have become significantly more bullish. 

Singapore

Singapore Airlines Limited provides air transportation, engineering, pilot training, air charter, and tour wholesaling services. The Company's airline operation covers Asia, Europe, the Americas, South West Pacific, and Africa.

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Singapore Airlines (SIA SP)

Last Week in Event SPACE: NTT Docomo, Car, Sunac Services, Evergrande, Jardine Cycle, PRC Antitrust

The weekend is here! Pour yourself a coffee, grab a comfortable seat, and sift through a brief summary of insights on various events discussed...

David Blennerhassett

Trip.com Rallies 14% on Vaccine News. But What's the 'Normal' We'll Return To in 2021?

An effective vaccine is part of what will get China and the world back to 'normal' travel demand. But even before Covid19 erupted, Chinese travel...

Tracking Traffic

Pfizer Vaccine: Winners and Losers

Similar to China Outbreak Theme: Winners and Losers , this insight will discuss the potential winners and losers from the announcement of the vaccine.

Henry Soediarko

Japan Airlines Placement - Given the Uncertain Outlook, Might Need Further Correction

Japan Airlines (9201 JP) plans to raise around US$1.4bn in order to shore up its balance sheet and aid its longer term transformation.

Sumeet Singh

Rolls Royce Rights Roll Off

Rolls Royce Rights go ex- on 28 October. A sharp pop in shares since the Rights were confirmed at end-Sep has led to shares 70+% higher vs pre...

Travis Lundy

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