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

Dayamitra Telekomunikasi PT / Equity Capital Markets

<a href="https://www.smartkarma.com/entities/pt-dayamitra-telekomunikasi" target="_blank" data-smartkarma-citation="entities:34741:1" rel="noopener">Mitratel (1319Z IJ)</a> is the largest telco tower owner and operator in Indonesia based on the number of telecommunication towers owned as of 30 June 2021, according to Analysys Mason. Mitratel is a subsidiary of <a href="https://www.smartkarma.com/entities/telekomunikasi-indonesia" target="_blank" data-smartkarma-citation="entities:1051:1" rel="noopener">Telekomunikasi Indonesia (TLKM IJ)</a>.Mitratel has launched an IPO to raise IDR20.0-24.9 trillion ($1.4-1.8 billion) at the IPO price range of IDR775-975 per share. Bookbuilding will close on 4 November and the shares are set to list on 22 November. Indonesia's tower industry is fast consolidating into an oligopoly with three large tower companies which are Mitratel, <a href="https://www.smartkarma.com/entities/sarana-menara-nusantara-pt" target="_blank" data-smartkarma-citation="entities:6848:1" rel="noopener">Sarana Menara Nusantara (TOWR IJ)</a> (Protelindo) and <a href="https://www.smartkarma.com/entities/tower-bersama-infrastructure" target="_blank" data-smartkarma-citation="entities:3537:1" rel="noopener">Tower Bersama Infrastructure (TBIG IJ)</a>. In comparison to other major regions (US, Western Europe, China and India), the tower industry in Indonesia offers an attractive mix of high EBITDA margin, low capex, no colocation discount and no obligation to provide power in the contract.<div class="content-highlight">The tower industry also benefits from predictable revenue due to long-term contracts and high renewal rates. Mitratel's contracted revenue based on agreements with customers for all types of leases is IDR30.7 trillion, and the average remaining life of lease agreements is 6.3 years, as of 30 June 2021. Overall, Mitratel's fundamentals tick all the right boxes, in our view. </div>

Mitratel (1319Z IJ) is the largest telco tower owner and operator in Indonesia based on the number of telecommunication towers owned as of 30 June 2021, according to Analysys Mason. Mitratel is a subsidiary of Telekomunikasi Indonesia (TLKM IJ).Mitratel has launched an IPO to raise IDR20.0-24.9 trillion ($1.4-1.8 billion) at the IPO price range of IDR775-975 per share. Bookbuilding will close on 4 November and the shares are set to list on 22 November. Indonesia's tower industry is fast consolidating into an oligopoly with three large tower companies which are Mitratel, Sarana Menara Nusantara (TOWR IJ) (Protelindo) and Tower Bersama Infrastructure (TBIG IJ). In comparison to other major regions (US, Western Europe, China and India), the tower industry in Indonesia offers an attractive mix of high EBITDA margin, low capex, no colocation discount and no obligation to provide power in the contract.The tower industry also benefits from predictable revenue due to long-term contracts and high renewal rates. Mitratel's contracted revenue based on agreements with customers for all types of leases is IDR30.7 trillion, and the average remaining life of lease agreements is 6.3 years, as of 30 June 2021. Overall, Mitratel's fundamentals tick all the right boxes, in our view. 

Mitratel (Dayamitra Telekomunikasi) IPO Initiation: Control Tower

Technical Analyst, Vermilion Research

Joe Jasper

Technical Analyst

Technical and Quantitative Research

Vermilion Research

Vermilion’s objective is to deliver timely, actionable, and unique technical research to professional investors through the application of our various technical indicators.

Our research strategists seek to highlight securities which we believe are at major inflection points, based on our various technical and quantitative indicators, and offer asymmetric risk/return profiles. Our unique research methodology, centered on relative strength, enables our strategists to deliver superior investment recommendations.

Our process begins by organizing the universe of actively traded stocks into discrete sectors, then into industry groups. We then apply our technical and quantitative tools to identify developing price trends. Once attractive trends are identified within a selected sector or group, we screen for individual stocks which we believe offer the best risk/reward profile. We provide a historical perspective that often reveals, through our long-term charts, how price patterns often repeat themselves over time.

Technical Analysis

SPDR S&P Oil & Gas Exploration / Technical Analysis

Weak market dynamics continue to be counterbalanced by the fact that there is an absence of breakdowns at the index and Sector level; even the weakest Sectors such as Energy (XLE, XOP, RYE) and Transportation (IYT, XTN, JETS) are holding above key supports. Until we start to see breakdowns at the Sector and index level, we remain constructive overall.Charts highlighted: XOP, JETS, S&amp;P 500, IWM, IWC, WTI Crude Oil, Copper, US dollar, CMCSA, CHTR, LBRDA, AMT, SBAC, ACN, INFY, EQIX, WIT, CTSH, IT, WM, RSG, WCN, and ROL

Weak market dynamics continue to be counterbalanced by the fact that there is an absence of breakdowns at the index and Sector level; even the weakest Sectors such as Energy (XLE, XOP, RYE) and Transportation (IYT, XTN, JETS) are holding above key supports. Until we start to see breakdowns at the Sector and index level, we remain constructive overall.Charts highlighted: XOP, JETS, S&amp;P 500, IWM, IWC, WTI Crude Oil, Copper, US dollar, CMCSA, CHTR, LBRDA, AMT, SBAC, ACN, INFY, EQIX, WIT, CTSH, IT, WM, RSG, WCN, and ROL

U.S. Equity Index and Sector Breakdowns Remain Absent; Buying Communications & Services Stocks

Our weight of the evidence approach continues to lead us to our view that the market remains mixed-yet-constructive overall. We explain our outlook below. The S&amp;P 500 remains bullish, progressing past our first target of 4350 and now on its way to our next target of 4400-4406. As long as 4257-4275 support holds, we expect to see 4400 followed by 4460. Should 4257 fail to hold, our next support levels to watch would be 4164 followed by 4120; we are constructive as long as 4120 holds.

Our weight of the evidence approach continues to lead us to our view that the market remains mixed-yet-constructive overall. We explain our outlook below. The S&amp;P 500 remains bullish, progressing past our first target of 4350 and now on its way to our next target of 4400-4406. As long as 4257-4275 support holds, we expect to see 4400 followed by 4460. Should 4257 fail to hold, our next support levels to watch would be 4164 followed by 4120; we are constructive as long as 4120 holds.

U.S. Equity Strategy: SPX 4400 Target In Sight

Amid the prolonged 5G rollout, various industry groups have had their time to shine. Today we explain why we believe the cell towers are next to benefit, and we recommend adding exposure at current levels.

Amid the prolonged 5G rollout, various industry groups have had their time to shine. Today we explain why we believe the cell towers are next to benefit, and we recommend adding exposure at current levels.

Cell Tower Stocks Turning The Corner -- Buy AMT, SBAC, and CCI

European Event-Driven Analyst

Jesus Rodriguez Aguilar

Event-Driven

Telxius, a subsidiary of <a href="https://www.smartkarma.com/entities/telefonica-sa" target="_blank" data-smartkarma-citation="entities:21299:1" rel="noopener">Telefonica SA (TEF SM)</a> (50% Telefonica, 40% KKR, 10% Pontegadea) reached an agreement with Boston-based <a href="https://www.smartkarma.com/entities/american-tower-corp" target="_blank" data-smartkarma-citation="entities:6365:1" rel="noopener">American Tower (AMT US)</a> to sell its entire tower unit (30,722 sites across Argentina, Brazil, Chile, Germany, Peru and Spain).
<ul>
<li>The EV is €7.7 bn including the remaining payments to be done by Telxius to <a href="https://www.smartkarma.com/entities/telefonica-deutschland-holding" target="_blank" data-smartkarma-citation="entities:21687:1" rel="noopener">Telefonica Deutschland Holding (O2D GR)</a> to complete the German transaction.</li>
<li>The price is 30.x EBITDA, above the usual 23x.</li>
<li>Telefónica will reduce its debt by €4.6 bn, 12.5% of the total.</li>
<li>Debt reduction and pending corporate operations provide the group with sufficient liquidity to maintain its commitment to shareholders for the time being.</li>
</ul>
In the current context, Telefonica focuses on the management of FCF to preserve the payment of the dividend, by reducing investments. The dividend remains at €0.4 per share and debt, one of the group's main drawbacks, fell c.15% LTM. In the long term, the potential for structural growth is low, competition high, and room to maneuver limited. The current environment makes it difficult to sell non-strategic assets at adequate prices and questions the sustainability of the dividend.
<h3>Recommendation</h3>
Telefonica: DCF valuation is €4.2 (Capital IQ consensus, WACC 6.4%, g 0.3%).
<ul>
<li>The sale of Telxius may support market expectations for a potential acceleration in the execution of the strategic reshuffle announced by management, thus leading to a re-rating of the company.</li>
<li>But there are risks: slower deleverage, lower economic growth in Spain (24% of EBITDA), macro deterioration and currency depreciations in Central and South America (c. 15% of EBITDA). Positive surprises may come from further disposals at high multiples thus leading to faster deleverage, better than expected economic growth in Central and South America and a reduction of the (so far unsustainable) dividend.</li>
</ul>
Cellnex, reiterate TP of €64.36. Cellnex could become the object of a take-over.

Telxius, a subsidiary of Telefonica SA (TEF SM) (50% Telefonica, 40% KKR, 10% Pontegadea) reached an agreement with Boston-based American Tower (AMT US) to sell its entire tower unit (30,722 sites across Argentina, Brazil, Chile, Germany, Peru and Spain).

The EV is €7.7 bn including the remaining payments to be done by Telxius to Telefonica Deutschland Holding (O2D GR) to complete the German transaction.
The price is 30.x EBITDA, above the usual 23x.
Telefónica will reduce its debt by €4.6 bn, 12.5% of the total.
Debt reduction and pending corporate operations provide the group with sufficient liquidity to maintain its commitment to shareholders for the time being.

In the current context, Telefonica focuses on the management of FCF to preserve the payment of the dividend, by reducing investments. The dividend remains at €0.4 per share and debt, one of the group's main drawbacks, fell c.15% LTM. In the long term, the potential for structural growth is low, competition high, and room to maneuver limited. The current environment makes it difficult to sell non-strategic assets at adequate prices and questions the sustainability of the dividend.
Recommendation
Telefonica: DCF valuation is €4.2 (Capital IQ consensus, WACC 6.4%, g 0.3%).

The sale of Telxius may support market expectations for a potential acceleration in the execution of the strategic reshuffle announced by management, thus leading to a re-rating of the company.
But there are risks: slower deleverage, lower economic growth in Spain (24% of EBITDA), macro deterioration and currency depreciations in Central and South America (c. 15% of EBITDA). Positive surprises may come from further disposals at high multiples thus leading to faster deleverage, better than expected economic growth in Central and South America and a reduction of the (so far unsustainable) dividend.

Cellnex, reiterate TP of €64.36. Cellnex could become the object of a take-over.

United States

American Tower Corp. is a real estate investment trust that owns, operates, and develops wireless communications and broadcast towers in the United States. The Company leases antennae sites on multi-tenant towers for a diverse range of wireless communications industries, including personal communications services, paging, and cellular.

Price Gauge
52-week Range	0.00 - 0.00
Market Cap (USDm)	0.00
P/E	0.00
Dividend (Yield)	0.00

American Tower (AMT US)

Mitratel (Dayamitra Telekomunikasi) IPO Initiation: Control Tower

Mitratel has launched an IPO to raise $1.4-1.8 billion. Mitratel is well-placed to benefit from industry consolidation. Overall, Mitratel's...

Arun George

U.S. Equity Index and Sector Breakdowns Remain Absent; Buying Communications & Services Stocks

Until we start to see breakdowns at the Sector and index level, we remain constructive overall. Charts highlighted: XOP, JETS, S&P 500, IWM, IWC,...

Vermilion Research

U.S. Equity Strategy: SPX 4400 Target In Sight

The S&P 500 remains bullish, progressing past our first target of 4350 and now on its way to our next target of 4400-4406. As long as 4257-4275...

Vermilion Research

Cell Tower Stocks Turning The Corner -- Buy AMT, SBAC, and CCI

Amid the prolonged 5G rollout, various industry groups have had their time to shine. We explain why we believe the cell towers are next to benefit,...

Vermilion Research

Telefonica's Disposal of Telxius

Telefonica manages FCF to preserve the divi, by reducing investments. Debt fell c.15% LTM. Structural growth potential is low, competition high,...

Jesus Rodriguez Aguilar

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)