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

Brian Freitas

Pan-Asia Index Rebalances/ Events/ Delta One

Index Rebalance

<p>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> is the main index of the Philippines Stock Exchange (PSE). The index is free float market cap weighted and is made up of the 30 largest and most active common stocks listed at the PSE.</p><p>Even though the passive assets tracking the index are very small, the strategy of buying the inclusions and selling the exclusions has performed very well at every rebalance over the last 5 years.</p><p>For the August rebalance, we see a possibility of <a href="https://www.smartkarma.com/entities/ac-energy-corp" target="_blank" data-smartkarma-citation="entities:23188:1" rel="noopener">AC Energy Corp (ACEN PM)</a> being included in the index, which would see <a href="https://www.smartkarma.com/entities/dmci-holdings-inc" target="_blank" data-smartkarma-citation="entities:8026:1" rel="noopener">DMCI Holdings (DMC PM)</a> being excluded.</p><p>The SEC has approved <a href="https://www.smartkarma.com/entities/ac-energy-corp" target="_blank" data-smartkarma-citation="entities:23188:1" rel="noopener">AC Energy Corp (ACEN PM)</a>'s <a href="https://acenergy.ph/wp-content/uploads/2021/04/SEC-17C-Update-on-the-Company-Follow-on-Offering.pdf" target="_blank" rel="noopener">follow on offering</a> for the sale of 2.01bn shares at a price range of PHP 6-8.2/share, of which 1.58bn shares will be a primary offering and 330.248m shares will be a secondary offering by AC Energy &amp; Infrastructure Corp (ACEIC). The public offering will run from 3-7 May and the shares will be listed on 14 May.</p>

The Philippines Stock Exchange PSEi Index (PCOMP INDEX) is the main index of the Philippines Stock Exchange (PSE). The index is free float market cap weighted and is made up of the 30 largest and most active common stocks listed at the PSE.Even though the passive assets tracking the index are very small, the strategy of buying the inclusions and selling the exclusions has performed very well at every rebalance over the last 5 years.For the August rebalance, we see a possibility of AC Energy Corp (ACEN PM) being included in the index, which would see DMCI Holdings (DMC PM) being excluded.The SEC has approved AC Energy Corp (ACEN PM)'s follow on offering for the sale of 2.01bn shares at a price range of PHP 6-8.2/share, of which 1.58bn shares will be a primary offering and 330.248m shares will be a secondary offering by AC Energy &amp; Infrastructure Corp (ACEIC). The public offering will run from 3-7 May and the shares will be listed on 14 May.

PSEi Index Rebalance Preview: Follow-On Offering Could See ACEN Added, DMC Deleted

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

<div><p><a href="https://www.smartkarma.com/entities/mr-d-i-y-group" target="_blank" data-smartkarma-citation="entities:28430:1" rel="noopener">MR D.I.Y. Group (MRDIY MK)</a> is the largest home improvement retailer in Malaysia, with a revenue market share of 29.1% in 2019, according to Frost &amp; Sullivan. At the fixed IPO price of RM1.60 per share, Mr DIY will raise proceeds of $362 million (primary/secondary split of 20%/80%). Fourteen cornerstone investors will subscribe for 234.7 million of the offer shares. The cornerstone investors include Aberdeen Standard Investments, AIA, BlackRock, Fidelity and JP Morgan Asset Management. </p></div><div><div><div class="content-highlight"><p>In <a href="https://www.smartkarma.com/insights/mr-d-i-y-group-ipo-make-your-own" target="_blank" rel="noopener">our previous note</a>, we highlighted that with a commendable performance during the COVID-19 outbreak, we continue to believe that Mr DIY’s fundamentals offer more positives than negatives. Overall, we think that an attractive valuation and solid cornerstone support makes Mr DIY tempting at the proposed price. </p></div></div></div>

MR D.I.Y. Group (MRDIY MK) is the largest home improvement retailer in Malaysia, with a revenue market share of 29.1% in 2019, according to Frost &amp; Sullivan. At the fixed IPO price of RM1.60 per share, Mr DIY will raise proceeds of $362 million (primary/secondary split of 20%/80%). Fourteen cornerstone investors will subscribe for 234.7 million of the offer shares. The cornerstone investors include Aberdeen Standard Investments, AIA, BlackRock, Fidelity and JP Morgan Asset Management. In our previous note, we highlighted that with a commendable performance during the COVID-19 outbreak, we continue to believe that Mr DIY’s fundamentals offer more positives than negatives. Overall, we think that an attractive valuation and solid cornerstone support makes Mr DIY tempting at the proposed price. 

Central Retail Corporation / Equity Capital Markets

<p><a href="https://www.smartkarma.com/entities/central-retail-corp-ltd" target="_blank" data-smartkarma-citation="entities:28240:1" rel="noopener">Central Retail (CRC TB)</a>, the retail arm of Central Group, is the leading multi-format, multi-category retailing platform in Thailand, Italy and Vietnam. Central Retail has set its IPO price range at THB40-43 per share to raise a total of THB67.6-72.7 billion ($2.2-2.4 billion). The subscription period for institutional investors will begin on 6 February.</p><div class="content-highlight"><p>In <a href="https://www.smartkarma.com/insights/central-retail-corp-ipo-initiation-trouble-at-till" target="_blank" rel="noopener">our initiation note</a>, we stated that that Central Retail’s fundamentals are less than inspiring and characterised by pressure on the top-line and bottom-line along with low returns. In <a href="https://www.smartkarma.com/insights/central-retail-corp-ipo-valuation-palatable-at-the-low-end" target="_blank" rel="noopener">our valuation note</a>, we grudgingly noted that we would participate at most at the low-end of the IPO price range due to an undemanding rating. However, recent events have tipped the balance in favour of giving the IPO a pass. </p></div>

Central Retail (CRC TB), the retail arm of Central Group, is the leading multi-format, multi-category retailing platform in Thailand, Italy and Vietnam. Central Retail has set its IPO price range at THB40-43 per share to raise a total of THB67.6-72.7 billion ($2.2-2.4 billion). The subscription period for institutional investors will begin on 6 February.In our initiation note, we stated that that Central Retail’s fundamentals are less than inspiring and characterised by pressure on the top-line and bottom-line along with low returns. In our valuation note, we grudgingly noted that we would participate at most at the low-end of the IPO price range due to an undemanding rating. However, recent events have tipped the balance in favour of giving the IPO a pass. 

Central Retail Corp IPO: Coronavirus Outbreak and Robins Share Price Are Warning Signs

<p><a href="https://www.smartkarma.com/entities/mr-d-i-y-group" target="_blank" data-smartkarma-citation="entities:28430:1" rel="noopener">MR D.I.Y. Group (1706769D MK)</a> is the largest home improvement retailer in Malaysia, with a revenue market share of 25.4% in 2018, according to Frost &amp; Sullivan. Mr DIY plans to raise up to RM1.5 billion ($370 million) and is targeting an IPO in 2Q, according to press reports. </p><div class="content-highlight"><p>With enviable exposure to the underpenetrated home improvement retail sector in Malaysia, Mr DIY seems to have a reasonable runway to maintain its high growth, high returns equity story. Overall, we believe that Mr DIY’s fundamentals offers more positives than negatives and could prove to be attractive at the right valuation.</p></div>

MR D.I.Y. Group (1706769D MK) is the largest home improvement retailer in Malaysia, with a revenue market share of 25.4% in 2018, according to Frost &amp; Sullivan. Mr DIY plans to raise up to RM1.5 billion ($370 million) and is targeting an IPO in 2Q, according to press reports. With enviable exposure to the underpenetrated home improvement retail sector in Malaysia, Mr DIY seems to have a reasonable runway to maintain its high growth, high returns equity story. Overall, we believe that Mr DIY’s fundamentals offers more positives than negatives and could prove to be attractive at the right valuation.

Mr D.I.Y. Group IPO Initiation: Bare Necessities

<div><p><a href="https://www.smartkarma.com/entities/central-retail-corp-ltd" target="_blank" data-smartkarma-citation="entities:28240:1" rel="noopener">Central Retail (CRC TB)</a>, the retail arm of Central Group, is the leading multi-format, multi-category retailing platform in Thailand, Italy and Vietnam. Central Retail has set its IPO price range at THB40-43 per share to raise a total of THB67.6-72.7 billion ($2.2-2.4 billion).</p></div><div><div><div class="content-highlight"><p>In <a href="https://www.smartkarma.com/insights/central-retail-corp-ipo-initiation-trouble-at-till" target="_blank" rel="noopener">our initiation note</a>, we stated that that Central Retail’s fundamentals are less than inspiring and characterised by pressure on the top-line and bottom-line along with low returns. Based on our assertion that the IPO needs to be priced at a discount to the sector to reflect the fundamentals, we would participate at most at the low-end of the IPO price range.</p></div></div></div>

Central Retail (CRC TB), the retail arm of Central Group, is the leading multi-format, multi-category retailing platform in Thailand, Italy and Vietnam. Central Retail has set its IPO price range at THB40-43 per share to raise a total of THB67.6-72.7 billion ($2.2-2.4 billion).In our initiation note, we stated that that Central Retail’s fundamentals are less than inspiring and characterised by pressure on the top-line and bottom-line along with low returns. Based on our assertion that the IPO needs to be priced at a discount to the sector to reflect the fundamentals, we would participate at most at the low-end of the IPO price range.

Central Retail Corp IPO: Valuation Palatable at the Low-End

Philippines

Wilcon Depot is the Philippines' leading home improvement and construction supplies retailer, offering an extensive selection of tiles, sanitary wares, plumbing, furniture, home interior items, building materials, hardware, electrical products, appliances, and other DIY items. The company serves individual and corporate customers across the Philippines. Wilcon Depot was founded in 1977 and is headquartered in Quezon City, Philippines.

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Wilcon Depot (WLCON PM)

PSEi Index Rebalance Preview: Follow-On Offering Could See ACEN Added, DMC Deleted

AC Energy could be added to the PCOMP Index due to its upcoming follow-on offering. DMCI could be deleted. Inclusions have historically...

Brian Freitas

Mr D.I.Y. Group IPO: Valuation Insights

Converge ICT Solutions Inc (ITC PM) is the only major pure-play fixed broadband provider, with an exclusive focus on serving the Philippine fixed...

Arun George

Mr D.I.Y. Group IPO Initiation: Bare Necessities

MR D.I.Y. Group (1706769D MK) is the largest home improvement retailer in Malaysia, with a revenue market share of 25.4% in 2018, according to...

Arun George

Central Retail Corp IPO: Valuation Palatable at the Low-End

Central Retail (CRC TB), the retail arm of Central Group, is the leading multi-format, multi-category retailing platform in Thailand, Italy and...

Arun George

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