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

Virgin Australia Holdings / Equity Capital Markets

<ul>
<li>Bain Capital is looking to raise around US$440m via selling some of its stake in <a href="https://www.smartkarma.com/entities/virgin-australia-holdings-ltd" target="_blank" data-smartkarma-citation="entities:814:1" rel="noopener">Virgin Australia Holdings (VAH AU).</a>
</li>
<li>Virgin Australia is the second largest airline group operating in the Australian aviation market, with an average 32% domestic RPT capacity market share in CY24.</li>
<li>In this note, we look at the company’s past performance and provide our thoughts on valuations.</li>
</ul>


Bain Capital is looking to raise around US$440m via selling some of its stake in Virgin Australia Holdings (VAH AU).

Virgin Australia is the second largest airline group operating in the Australian aviation market, with an average 32% domestic RPT capacity market share in CY24.
In this note, we look at the company’s past performance and provide our thoughts on valuations.


Virgin Australia IPO - Not Terribly Exciting, After Significant Items Adjustment

Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

<a href="https://www.smartkarma.com/entities/sydney-airport" target="_blank" data-smartkarma-citation="entities:19063:1" rel="noopener">Sydney Airport (SYD AU)</a> has <a href="https://cdn-api.markitdigital.com/apiman-gateway/ASX/asx-research/1.0/file/2924-02391761-2A1307944?access_token=83ff96335c2d45a094df02a206a39ff4" target="_blank" rel="noopener">announced</a> a consortium comprising IFM Investors, QSuper, and fund manager Global Infrastructure Management has made an indicative, non-binding Offer by way of a Scheme at $8.25/share,  a 42% premium to last close.  
SYD has commenced an assessment of the proposal but mentions the Offer price is below the Covid-cliff, and that the pandemic effect on operations is expected to be short-term.  
Separately, the Offer is conditional on regulatory approvals such as FIRB and ACCC. As a critical aviation asset, it's not just the opportunistic price that could torpedo this deal.
More below the fold.

Sydney Airport (SYD AU) has announced a consortium comprising IFM Investors, QSuper, and fund manager Global Infrastructure Management has made an indicative, non-binding Offer by way of a Scheme at $8.25/share,  a 42% premium to last close.  
SYD has commenced an assessment of the proposal but mentions the Offer price is below the Covid-cliff, and that the pandemic effect on operations is expected to be short-term.  
Separately, the Offer is conditional on regulatory approvals such as FIRB and ACCC. As a critical aviation asset, it's not just the opportunistic price that could torpedo this deal.
More below the fold.

Sydney Airports (SYD AU): Opportunistic Tilt Amid Cloudy Future

Equity Bottom-Up

Guangzhou Baiyun International Airport / Equity Bottom-Up

Guangzhou Baiyun International Airport (600004 CH)

Within the hospitality-affected complex, the airline industry garners the lion's share of the negative news from the Covid fall-out. The <a href="https://www.bloomberg.com/quote/280456Z:CN" target="_blank" rel="noopener">International Air Transport Association</a> said last month it estimates losses in 2021 of US$48bn, up from $38bn previously. And that's on top of an estimated $370bn of losses to the industry in FY20, <a href="https://www.icao.int/Newsroom/Pages/2020-passenger-totals-drop-60-percent-as-COVID19-assault-on-international-mobility-continues.aspx" target="_blank" rel="noopener">according</a> to the International Civil Aviation Organization.
But spare a thought for the airports which facilitate the arrival and departure of these airlines, as this crisis becomes increasingly protracted, and in many ways, deeper than many anticipated 18 months ago.
Amid the doom and gloom, there are parking bays of good news. April's domestic air passenger traffic in China was ~96% of December 2019 levels. <a href="https://www.smartkarma.com/entities/shenzhen-airport-co-ltd" target="_blank" data-smartkarma-citation="entities:15522:1" rel="noopener">Shenzhen Airport Co A (000089 CH)</a> (SZAC) is at level pegging with overall traffic numbers in 2019, and domestic flow into SZAC, <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>, and <a href="https://www.smartkarma.com/entities/guangzhou-baiyun-international-airport" target="_blank" data-smartkarma-citation="entities:10819:1" rel="noopener">Guangzhou Baiyun International Airport (600004 CH)</a> all exceed 2019 levels. 
Yet outside of the Chinese airport space, where international passenger throughput has historically commanded &gt;40%+ of total throughput - up to 80% for <a href="https://www.smartkarma.com/entities/airports-of-thailand-pcl" target="_blank" data-smartkarma-citation="entities:239:1" rel="noopener">Airports of Thailand (AOT TB)</a> -  the outlook remains subdued, and largely uncertain.
Just this week, Thailand recorded its highest level of Covid-related fatalities, Taiwan is facing its first serious outbreak, and Australia's state of Victoria entered its fourth lockdown. 
Provided airports have sufficient funds to ride out the tough times to the other side of the valley, all will undergo a major re-rate when international travel restarts. Yet the vaccine rollout - and uptake - and when international borders will reopen, remain indeterminate.
<div class="content-highlight">
What's Original?
This insight presents a comprehensive view of the key Chinese airports (<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>, Shenzhen Airport, <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>, and <a href="https://www.smartkarma.com/entities/guangzhou-baiyun-international-airport" target="_blank" data-smartkarma-citation="entities:10819:1" rel="noopener">Guangzhou Baiyun International Airport (600004 CH)</a>, together with <a href="https://www.smartkarma.com/entities/airports-of-thailand-pcl" target="_blank" data-smartkarma-citation="entities:239:1" rel="noopener">Airports of Thailand (AOT TB)</a>, <a href="https://www.smartkarma.com/entities/malaysia-airports-hldgs-bhd" target="_blank" data-smartkarma-citation="entities:117:1" rel="noopener">Malaysia Airports Hldgs (MAHB MK)</a>, <a href="https://www.smartkarma.com/entities/japan-airport-terminal-co" target="_blank" data-smartkarma-citation="entities:18034:1" rel="noopener">Japan Airport Terminal Co (9706 JP)</a>, <a href="https://www.smartkarma.com/entities/sydney-airport" target="_blank" data-smartkarma-citation="entities:19063:1" rel="noopener">Sydney Airport (SYD AU)</a> and <a href="https://www.smartkarma.com/entities/auckland-intl-airport-ltd" target="_blank" data-smartkarma-citation="entities:597:1" rel="noopener">Auckland Intl Airport (AIA NZ)</a>.
</div>

Within the hospitality-affected complex, the airline industry garners the lion's share of the negative news from the Covid fall-out. The International Air Transport Association said last month it estimates losses in 2021 of US$48bn, up from $38bn previously. And that's on top of an estimated $370bn of losses to the industry in FY20, according to the International Civil Aviation Organization.
But spare a thought for the airports which facilitate the arrival and departure of these airlines, as this crisis becomes increasingly protracted, and in many ways, deeper than many anticipated 18 months ago.
Amid the doom and gloom, there are parking bays of good news. April's domestic air passenger traffic in China was ~96% of December 2019 levels. Shenzhen Airport Co A (000089 CH) (SZAC) is at level pegging with overall traffic numbers in 2019, and domestic flow into SZAC, Shanghai International Airport (600009 CH), and Guangzhou Baiyun International Airport (600004 CH) all exceed 2019 levels. 
Yet outside of the Chinese airport space, where international passenger throughput has historically commanded &gt;40%+ of total throughput - up to 80% for Airports of Thailand (AOT TB) -  the outlook remains subdued, and largely uncertain.
Just this week, Thailand recorded its highest level of Covid-related fatalities, Taiwan is facing its first serious outbreak, and Australia's state of Victoria entered its fourth lockdown. 
Provided airports have sufficient funds to ride out the tough times to the other side of the valley, all will undergo a major re-rate when international travel restarts. Yet the vaccine rollout - and uptake - and when international borders will reopen, remain indeterminate.

What's Original?
This insight presents a comprehensive view of the key Chinese airports (Beijing Capital International Airport (BCIA) (694 HK), Shenzhen Airport, Shanghai International Airport (600009 CH), and Guangzhou Baiyun International Airport (600004 CH), together with Airports of Thailand (AOT TB), Malaysia Airports Hldgs (MAHB MK), Japan Airport Terminal Co (9706 JP), Sydney Airport (SYD AU) and Auckland Intl Airport (AIA NZ).


<a href="https://www.smartkarma.com/entities/qantas-airways-ltd" target="_blank" data-smartkarma-citation="entities:677:1" rel="noopener">Qantas Airways (QAN AU)</a> aims to raise around US$933m (A$1.36bn) via an institutional placement and another US$343m (A$500m) via a share purchase plan. The company has also announced a host of other cost savings measures and is now gearing up for an extended slowdown which will last a year or two.In this insight, I'll talk about the deal dynamics and run the deal through our ECM framework.

Qantas Airways (QAN AU) aims to raise around US$933m (A$1.36bn) via an institutional placement and another US$343m (A$500m) via a share purchase plan. The company has also announced a host of other cost savings measures and is now gearing up for an extended slowdown which will last a year or two.In this insight, I'll talk about the deal dynamics and run the deal through our ECM framework.

Qantas Placement - Banking on a Trans-Tasman Travel Bubble

Leading Independent Investment Research, Morningstar, Inc.

Morningstar

Leading Independent Investment Research

Morningstar, Inc.

Morningstar, Inc. is a leading provider of independent investment research in North America, Europe, Australia, and Asia. We offer an extensive line of products and services for individual investors, financial advisors, asset managers, and retirement plan providers and sponsors. 

Morningstar provides data on more than 500,000 investment offerings, including stocks, mutual funds, and similar vehicles, along with real-time global market data on more than 16 million equities, indexes, futures, options, commodities, and precious metals, in addition to foreign exchange and Treasury markets. Morningstar also offers investment management services through its investment advisory subsidiaries, with more than $180 billion in assets under advisement or management as of June 30, 2015. We have operations in 27 countries.

Download the Morningstar Fact Sheet : http://corporate.morningstar.com/US/documents/MarketingFactSheets/AboutMorningstarFactsheet.pdf

Virgin Australia Holdings / Equity Bottom-Up

Virgin announced a AUD 852 million fully underwritten entitlement share offer which is fully supported by the majority of its existing and new airline shareholders, with only Etihad still to make a decision.   This will be in addition to the proposed AUD 159 million placement to new Chinese shareholder, HNA (yet to receive regulatory approval) and potentially a further AUD 136 million top-up placement to HNA. We estimate the equity raisings will reduce net debt to AUD 710 million and we forecast its financial leverage ratio will improve from 5.5 times to 3.5 times, providing the company with more flexibility if its ultimate goal is to increase its domestic market share from our estimated 36.6%, closer to Qantas' 63.4%.Analyst: Carolyn Holmes

Virgin announced a AUD 852 million fully underwritten entitlement share offer which is fully supported by the majority of its existing and new airline shareholders, with only Etihad still to make a decision.   This will be in addition to the proposed AUD 159 million placement to new Chinese shareholder, HNA (yet to receive regulatory approval) and potentially a further AUD 136 million top-up placement to HNA. We estimate the equity raisings will reduce net debt to AUD 710 million and we forecast its financial leverage ratio will improve from 5.5 times to 3.5 times, providing the company with more flexibility if its ultimate goal is to increase its domestic market share from our estimated 36.6%, closer to Qantas' 63.4%.Analyst: Carolyn Holmes

Corporate Action: Take Up Virgin Australia's Significantly Discounted Entitlement Offer

Australia

Virgin Australia Holdings Limited is an Australian-based  full service airline providing domestic and international operations.

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Virgin Australia Holdings (VAH AU)

Virgin Australia IPO - Not Terribly Exciting, After Significant Items Adjustment

Bain Capital is looking to raise around US$440m via selling some of its stake in Virgin Australia Holdings (VAH AU). In this note, we look at the...

Sumeet Singh

Sydney Airports (SYD AU): Opportunistic Tilt Amid Cloudy Future

A full Offer probably needs to be tabled at $9+, ~9% up from the current proposal, and an additional $2bn outlay from the Consortium. I think DD...

David Blennerhassett

Asia-Pac Airports: Ups, But Mostly Downs

Domestic passenger flow into Shenzhen Airport (000089 CH), Shanghai International Airport (600009 CH), and Guangzhou Baiyun International Airport...

David Blennerhassett

Qantas Placement - Banking on a Trans-Tasman Travel Bubble

Qantas Airways (QAN AU) aims to raise around US$933m (A$1.36bn) via an institutional placement and another US$343m (A$500m) via a share purchase...

Sumeet Singh

Corporate Action: Take Up Virgin Australia's Significantly Discounted Entitlement Offer

Virgin announced a AUD 852 million fully underwritten entitlement share offer which is fully supported by the majority of its existing and new...

Morningstar, Inc.

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