Smartkarma Daily Briefs

• EQT’s A$45/share bid for AUB, with a 16% spread, follows a month of exclusive due diligence.
• CVC Asia Pacific proposed forming a consortium with EQT, potentially increasing buyout success likelihood and financial commitment sharing.
• AUB’s valuation metrics include 14.5x FY25 EBITDA and 26.2x P/E, with historical trading at lower multiples.

• The proposed spin-off – from 49.9%-held MPIC – and listing of Maynilad Water Services (MYNLD PH) completed on the 7th November. 
• Priced at PHP 15/share, Maynilad closed yesterday at PHP 14.82/share, down 1.2%. 
• First Pacific Co (142 HK)‘s indirect/direct holding in Maynilad is estimated at 19.1%, accounting for ~6% of NAV. 

• SEGRO is a leading UK-based Real Estate Investment Trust (REIT) specializing in the ownership, management, and development of modern warehouses and light industrial properties. Its portfolio is strategically located in and around major cities and key transportation hubs across the UK and seven other European countries.
• The company is well-positioned to capitalize on structural tailwinds, including the continued growth of e-commerce and the increasing need for resilient and efficient supply chains. These trends are driving strong demand for high-quality logistics and industrial space.
• SEGRO is actively expanding its portfolio through strategic acquisitions and a robust development pipeline, with a growing focus on the high-growth data center sector. The company maintains a strong balance sheet with a prudent loan-to-value ratio, providing financial flexibility to fund its growth ambitions.

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• Macro Relief: The sharp decline in Singapore’s 3M SORA lowers financing costs and supports asset valuation through expected cap rate compression across the group’s diverse property portfolio.
• Execution Premium: UOL has demonstrated best-in-class performance in the recovering residential segment, highlighted by rapid sales take-up in high-margin, prime-location projects, providing robust earnings visibility.
• Financial Fortress: UOL operates with a conservative net gearing ratio that is unparalleled among major listed peers, providing the strategic capacity required for opportunistic land banking.

• Japan Investment Adviser (JIA) is a diversified financial services firm with a core focus on the structuring and sale of Japanese Operating Lease (JOL) products, primarily for aircraft, to small and medium-sized enterprises (SMEs) for tax deferral purposes.
• The company is capitalizing on a favorable aircraft leasing market, driven by a global rebound in air travel and supply chain constraints at major aircraft manufacturers, which increases demand for leased aircraft. This tailwind is a significant driver of JIA’s strong revenue and earnings growth.
• While demonstrating impressive growth, JIA’s business is inherently cyclical and sensitive to economic downturns, interest rate fluctuations, and geopolitical events that can impact the aviation industry and the financial health of its SME client base.

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• Omega Healthcare Investors is a leading real estate investment trust (REIT) specializing in skilled nursing facilities (SNFs), positioned to benefit from powerful long-term demographic tailwinds of an aging population.
• The company’s triple-net lease model is designed to provide stable, predictable cash flows, supporting a historically strong dividend. However, this model’s success is heavily reliant on the financial health and operational stability of its tenant operators.
• Key risks to the investment thesis include the significant dependence on government reimbursement policies (Medicare and Medicaid), which are subject to change, and the persistent operational challenges faced by SNF operators, such as rising labor costs and staffing shortages.

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Record’s H126 results (to 30 September) were mixed, with assets under management (AUM) growing to $110bn. Revenues were down 9% following the termination of previously identified client mandates at the end of last year. The company has cut costs by 4%, offsetting some of the revenue weakness in the period. The outlook for the remainder of the fiscal year is highly dependent on the timing of certain mandates in the pipeline. That said, the company’s strategic refocus on core products that can grow, diversify and enhance the quality of earnings is accelerating. The Infrastructure fund has commenced investment, which will support earnings in FY26 and beyond. Finally, Record maintained the interim dividend at 2.15p, highlighting management’s discipline around capital return.

• HIT recently introduced a key expansion of its Do-It-Yourself Benefit System (eDIYBS) to extend capabilities to employers with 150 or more & is extremely encouraged about the prospects.
• HIT also is testing a 3-year rate hold solution – expected to launch in 1Q26 – that it expects to boost customer retention and provide additional offerings for its distribution partners, and with JV partner AlphaTON Capital plans to jointly develop a blockchain-enabled healthcare insurance claims processing platform, HITChain, to address inefficiency and fraud in the domestic healthcare: claims processing space, lower administrative costs and improve transparency.

• Dominant Latin American Franchise with Diversified Revenue Streams: Banco BTG Pactual stands as a leading investment bank, asset manager, and wealth manager in Latin America, particularly in Brazil. Its integrated business model, spanning Investment Banking, Corporate Lending, Sales & Trading, and Asset & Wealth Management, allows for diversified and resilient revenue generation, mitigating volatility from any single business line.
• Strong Growth Trajectory and Profitability: The bank has a consistent track record of strong growth and profitability across various economic cycles. Recent financial performance underscores this, with record revenues and net income driven by robust expansion in client franchises, particularly in wealth management, asset management, and corporate lending. The firm targets sustained double-digit revenue and earnings growth.
• Strategic Expansion into Digital and New Markets: BTG Pactual is strategically expanding its reach through its digital banking platform, targeting retail and SME clients to diversify its funding base and capture new growth avenues. Concurrently, the bank is deepening its footprint across Latin America and leveraging its international presence in New York and London to enhance its global service offerings.

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