Utilities Sector

• Leading Pure-Play Renewable Power Platform: Brookfield Renewable Partners (BEP) is one of the world’s largest publicly traded, pure-play renewable power platforms, with a diversified portfolio across hydro, wind, solar, and energy transition assets. Its global scale and the strong sponsorship of Brookfield Asset Management provide significant competitive advantages in sourcing and financing growth opportunities.
• Visible Growth Trajectory Fueled by Decarbonization: The company has a massive development pipeline and is well-positioned to capitalize on the accelerating global demand for clean energy, driven by corporate decarbonization goals and trends like AI and electrification. Management targets 12%-15% long-term total annualized returns, supported by a goal of 5%-9% annual distribution increases.
• Financial Profile Under Pressure: Despite strong revenue growth and a track record of increasing distributions, the company has consistently reported net losses and negative free cash flow due to high growth-oriented capital expenditures and depreciation. Its high debt load is a key consideration, although near-term maturities are limited and a majority of its debt is at fixed rates.

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• Geographically Diversified Asset Portfolio Driving Growth: Sermsang Power operates a diverse portfolio of renewable energy assets, including solar, wind, and biomass, across several Asian countries such as Thailand, Japan, Vietnam, and Mongolia. This diversification mitigates country-specific regulatory risks and captures growth across various high-potential markets.
• Clear Expansion Strategy Amid Industry Tailwinds: Management has outlined a clear growth strategy to significantly expand its power generation portfolio, targeting a substantial increase in capacity through both greenfield development and strategic acquisitions. This is supported by strong regional tailwinds, including government initiatives like Thailand’s Power Development Plan (PDP) and Vietnam’s PDP8, which promote renewable energy adoption.
• Financial Performance Under Pressure Despite Revenue Growth: While the company has demonstrated strong top-line growth over the past several years, recent profitability has declined. Net income has fallen from its 2022 peak, and the most recent available quarterly data shows a net loss. This highlights challenges related to rising expenses, interest rates, and potential inefficiencies that are currently weighing on bottom-line performance and investor sentiment.

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• Barito Renewables Energy (BREN IJ)‘s stock price has been buffeted by expectations of index inclusion and then an unwind of that positioning a few times over the last year.
• With selling from some big shareholders, free float appears to have increased to a point where the stock could be added to a global index in November.
• There is also a possibility of being added to another global index in March, but that is a question for the next year.

• I summarise the latest spreads and newsflow of merger arb situations we cover across Hong Kong, Australia, New Zealand, Singapore, Japan, Indonesia, Malaysia, Philippines, Thailand and Chinese ADRs.
• Highest spreads: Mandarin Oriental International (MAND SP), Smart Share Global (EM US), Soft99 Corp (4464 JP), ENN Energy (2688 HK), Mayne Pharma (MYX AU), Dongfeng Motor (489 HK). 
• Lowest spreads: Bright Smart Securities (1428 HK), Pacific Industrial (7250 JP), Mandom Corp (4917 JP), Humm Group (HUM AU), Seven West Media (SWM AU), Toyota Industries (6201 JP). 

• In today’s Morning Views publication we comment on developments of the following high yield issuers: China Water Affairs
• The UST curve twisted slightly flatter yesterday, largely undoing Tuesday’s steepening. The yield on the 2Y UST rose 2 bps to 3.50%, while the yield on the 10Y UST was stable at 4.03%. Equities ended higher, despite choppy price action during the day. The S&P 500 increased 0.4% to 6,671, and the Nasdaq was up 0.7% at 22,670.
• The Fed Beige Book stated that US economy activity was little changed from the previous month’s report, with three districts reporting slight to modest growth in activity, five reporting no change and four noting a slight softening.

• On the latest WTR Small-Cap Spotlight, we were joined by William (Bill) Alessi, Founder & CEO, and Chris Chumas, Chief Strategy Officer, of Alpha Modus Holdings, Inc. (NASDAQ: AMOD) and our host, Tim Gerdeman, WTR’s Vice Chair, Co-Founder, and Chief Marketing Officer.
• We discussed the company’s IP-driven retail AI strategy, its partner-centric “super- aggregator” model, monetization via services and licensing, and the planned rollout of financial services kiosks for underbanked consumers.
• AMOD aims to be the “backbone of AI-driven retail intelligence” at the intersection of computer vision, behavioral analytics, and retail media—supported by 10+ patents and partner deals (including a master services agreement with a large tech provider, in-store retail media network operator Shelf Nine (a VSBLTY subsidiary), and Genmega for kiosks).

• On the latest WTR Small-Cap Spotlight, we were joined by Inna Braverman, CEO of Eco Wave Power (NASDAQ: WAVE) and our host, Tim Gerdeman, WTR’s Vice-Chair & Co- Founder, and Chief Marketing Officer.
• Eco Wave Power’s innovative approach to generating clean electricity from ocean and sea waves uses patented, cost-effective onshore wave energy technology.
• Unlike most competitors who deploy large offshore systems, WAVE connects its unique floaters to existing man-made structures such as piers and breakwaters, simplifying installation and reducing costs.

• China Water Affairs (CWA) is roadshowing an issuance of senior unsecured Reg-S only 5NC3 USD notes.
• The notes are being issued as blue bonds under the company’s green and blue finance framework.
• Moody’s has provided a second-party opinion, and assigned a SQS2 (very good) sustainability quality score to the framework. 

• Falcon Oil & Gas agreed to sell its assets to TBN, distributing TBN shares to shareholders at 0.00687 ratio.
• The merger’s spread fluctuates due to hedging concerns and potential TBN stock decline to pre-announcement levels.
• Lamesa Holdings’ shares are excluded from distribution due to sanctions, affecting the stock exchange ratio calculation.

• A pullback is finally underway following Trump’s Friday tape bomb and the decisive loss of the 20-day MA on the SPX, though $ACWI is testing the 4-month uptrend at $136
• We are no longer near-term bullish which had been in place since our April 22 report, but we are still bullish intermediate-term and are buyers on pullbacks.
• Short-Term supports to watch on ACWI-US include the 4+ month uptrend (currently at $136), $134-$134.50, $131.50-$132, $130, $128, and $125-$126.

• Rights done; allocations set; new shares list 10 Oct under DK0060094928; temp ISIN DK0064307755 subscription-only; ISIN merge 13 Oct 17:59 CEST.
• Tape orderly into listing; shares 106.5→119 since ex-rights; rights basis tightened to ±~2% versus parity; expect single-line supply/digestion as subscribed stock meets the tape.
• Trade stance: fade the listing flush; buy 103–106, add 108–110 reclaim; target 114–118 (stretch 121–124); hard stop <101; confirm ≥DKK 1.0–1.5bn day-one value.

• IGL is set for a significant margin boost from a VAT reduction on Gujarat-sourced gas, the new PNGRB two-zone tariff, and lower crude-linked input costs
• The reduced VAT, new tariff structure, and falling oil prices position IGL for significant margin growth, potentially boosting PAT by 8-15% in the coming years.
• Favorable regulatory changes and reduced raw material costs create a clear pathway for IGL to achieve its higher EBITDA per SCM guidance and sustain robust volume growth.

• Maynilad Water Services (MYNLD PH) (MWS) is looking to raise around US$450m in its upcoming Philippines IPO.
• MWS is a leading global water utility player operating the largest concession by population served within a single concession area in the Philippines and Southeast Asia (SEA), as per GlobalData.
• We have looked at the past performance in our previous note. In this note, we talk about the IPO pricing