Asian Equities Analyst, Logistics & Transport, Tracking Traffic

Daniel Hellberg

Asian Equities Analyst, Logistics & Transport

Tracking Traffic

Focusing on Asian logistics, transportation, and travel companies

Equity Bottom-Up

<ul>
<li>Outbound continues to improve, March load factor matched pre-Covid level</li>
<li>Appears Chinese tourists are "spreading their wings", travelling farther afield</li>
<li>Trip.com has been best YTD performer in the space; can airlines catch up?</li>
</ul>


Outbound continues to improve, March load factor matched pre-Covid level
Appears Chinese tourists are "spreading their wings", travelling farther afield
Trip.com has been best YTD performer in the space; can airlines catch up?


Monthly Chinese Tourism Tracker | Outbound Recovery Continues, but Some Regional Destinations Lag

HK/China Equity Long-Short

Osbert Tang, CFA

<ul>
<li>
<a href="https://www.smartkarma.com/entities/air-china-ltd-h" target="_blank" data-smartkarma-citation="entities:8239:1" rel="noopener">Air China Ltd (H) (753 HK)</a> had 15.4% interest-bearing debt denominated in USD, vs. 21.3% for <a href="https://www.smartkarma.com/entities/china-southern-airlines-co-ltd" target="_blank" data-smartkarma-citation="entities:1078:1" rel="noopener">China Southern Airlines (1055 HK)</a>, making it less exposed to Rmb depreciation. </li>
<li>Recovery of international traffic and routes will help to lower unit costs. Air China's unit costs for FY23 were Rmb4.0445, whereas CSA's were only Rmb3.2000.</li>
<li>There is more upside for Air China's load factor which was down 7.8pp YoY in FY23, compared with -4.7pp for CSA. </li>
</ul>



Air China Ltd (H) (753 HK) had 15.4% interest-bearing debt denominated in USD, vs. 21.3% for China Southern Airlines (1055 HK), making it less exposed to Rmb depreciation. 
Recovery of international traffic and routes will help to lower unit costs. Air China's unit costs for FY23 were Rmb4.0445, whereas CSA's were only Rmb3.2000.
There is more upside for Air China's load factor which was down 7.8pp YoY in FY23, compared with -4.7pp for CSA. 


China Pair Trade Idea: Long Air China (753 HK), Short CSA (1055 HK)

Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

<ul>
<li>The trade of being short <a href="https://www.smartkarma.com/entities/fast-retailing-co-ltd" target="_blank" data-smartkarma-citation="entities:751:1" rel="noopener">Fast Retailing (9983 JP)</a> vs Nikkei 225 or Sector Basket is fundamentally slightly short Nikkei 225 froth.</li>
<li>
<a href="https://www.smartkarma.com/entities/giordano-international-ltd" target="_blank" data-smartkarma-citation="entities:13899:1" rel="noopener">Giordano (709 HK)</a>'s SGM will likely pivot off how the shareholders under Halcyon Securities vote. Digging a little deeper as to who these shareholders are, provides some (not-altogether) surprising results.</li>
<li>
<a href="https://www.smartkarma.com/entities/az-com-maruwa-holdings" target="_blank" data-smartkarma-citation="entities:17280:1" rel="noopener">AZ-Com Maruwa Holdings (9090 JP)</a> intends to launch a Tender Offer on <a href="https://www.smartkarma.com/entities/chilled-frozen-logistics-holdings-co-ltd" target="_blank" data-smartkarma-citation="entities:40987:1" rel="noopener">Chilled &amp; Frozen Logistics Holdings (9099 JP)</a> without having contacted C&amp;F first. A HOSTILE deal. Yum!</li>
</ul>


The trade of being short Fast Retailing (9983 JP) vs Nikkei 225 or Sector Basket is fundamentally slightly short Nikkei 225 froth.

Giordano (709 HK)'s SGM will likely pivot off how the shareholders under Halcyon Securities vote. Digging a little deeper as to who these shareholders are, provides some (not-altogether) surprising results.

AZ-Com Maruwa Holdings (9090 JP) intends to launch a Tender Offer on Chilled &amp; Frozen Logistics Holdings (9099 JP) without having contacted C&amp;F first. A HOSTILE deal. Yum!


Last Week in Event SPACE: Fast Retailing, Giordano, C&F Logistics, Swire, Japan's Big Dividend

<ul>
<li>
<a href="https://www.smartkarma.com/entities/swire-pacific-ltd-cl-a" target="_blank" data-smartkarma-citation="entities:10433:1" rel="noopener">Swire Pacific (19 HK)</a>'s discount to NAV is around a one-year high; and its implied stub (net of <a href="https://www.smartkarma.com/entities/swire-properties-ltd" target="_blank" data-smartkarma-citation="entities:5775:1" rel="noopener">Swire Properties (1972 HK)</a> has just rolled over from a multi-year high. </li>
<li>45%-Held <a href="https://www.smartkarma.com/entities/cathay-pacific-airways-ltd" target="_blank" data-smartkarma-citation="entities:243:1" rel="noopener">Cathay Pacific Airways (293 HK)</a> recently reported its highest annual profit in more than a decade.</li>
<li>Reportedly (Bloomberg) <a href="https://www.smartkarma.com/entities/air-china-ltd-a" target="_blank" data-smartkarma-citation="entities:1080:1" rel="noopener">Air China Ltd (A) (601111 CH)</a> is mulling a stake increase in the Hong Kong carrier. This is inevitable. It's just a question of timing. </li>
</ul>



Swire Pacific (19 HK)'s discount to NAV is around a one-year high; and its implied stub (net of Swire Properties (1972 HK) has just rolled over from a multi-year high. 
45%-Held Cathay Pacific Airways (293 HK) recently reported its highest annual profit in more than a decade.
Reportedly (Bloomberg) Air China Ltd (A) (601111 CH) is mulling a stake increase in the Hong Kong carrier. This is inevitable. It's just a question of timing. 


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.

<ul>
<li>
<a href="https://www.smartkarma.com/entities/interglobe-aviation-ltd" target="_blank" data-smartkarma-citation="entities:24877:1" rel="noopener">InterGlobe Aviation Ltd (INDIGO IN)</a>’s co-founder Rakesh Gangwal’s 25%+ stake will be released from lock-up tomorrow.</li>
<li>He had earlier stated his intention to pare down his stake. He has sold shares in Sep 2022, Feb 2023 and Aug 2023.</li>
<li>In this note, we will talk about the lockup dynamics and possible placement.</li>
</ul>



InterGlobe Aviation Ltd (INDIGO IN)’s co-founder Rakesh Gangwal’s 25%+ stake will be released from lock-up tomorrow.
He had earlier stated his intention to pare down his stake. He has sold shares in Sep 2022, Feb 2023 and Aug 2023.
In this note, we will talk about the lockup dynamics and possible placement.


Interglobe Aviation (Indigo) Lockup - Still Has US$3bn+ Stake Left, After Three Prior Selldowns

Hong Kong

Cathay Pacific Airways Limited operates scheduled airline services. The Company also provides related services, including airline catering, aircraft handling, and engineering.

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Cathay Pacific Airways (293 HK)

Monthly Chinese Tourism Tracker | Outbound Recovery Continues, but Some Regional Destinations Lag

The recovery in Chinese outbound tourism demand continued in March, but certain data suggest the pace of growth for some regional destinations is...

Tracking Traffic

China Pair Trade Idea: Long Air China (753 HK), Short CSA (1055 HK)

Air China has lower USD debt than CSA, making it less exposed to Rmb depreciation. Recovery of international traffic will lower unit costs and...

Osbert Tang, CFA

Last Week in Event SPACE: Fast Retailing, Giordano, C&F Logistics, Swire, Japan's Big Dividend

The weekend is here! Pour yourself a coffee, grab a comfortable seat, and sift through a brief summary of insights on various events discussed...

David Blennerhassett

Swire Pac (19 HK): Flying High

I still prefer Swire Pac here over Prop, but it's not a high-conviction trade. I don't foresee an imminent and material change in the shareholder...

David Blennerhassett

Interglobe Aviation (Indigo) Lockup - Still Has US$3bn+ Stake Left, After Three Prior Selldowns

The founder is now looking up to US$450m via selling around 3.3% of the company. This deal is well flagged although the timing is a few days later...

Sumeet Singh

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

Monthly Chinese Tourism Tracker | Outbound Recovery Continues, but Some Regional Destinations Lag

The recovery in Chinese outbound tourism demand continued in March, but certain data suggest the pace of growth for some regional destinations is...

Tracking Traffic

China Pair Trade Idea: Long Air China (753 HK), Short CSA (1055 HK)

​Air China has lower USD debt than CSA, making it less exposed to Rmb depreciation. Recovery of international traffic will lower unit costs and...

Osbert Tang, CFA

Last Week in Event SPACE: Fast Retailing, Giordano, C&F Logistics, Swire, Japan's Big Dividend

The weekend is here! Pour yourself a coffee, grab a comfortable seat, and sift through a brief summary of insights on various events discussed...

David Blennerhassett

Swire Pac (19 HK): Flying High

I still prefer Swire Pac here over Prop, but it's not a high-conviction trade. I don't foresee an imminent and material change in the shareholder...

David Blennerhassett

Interglobe Aviation (Indigo) Lockup - Still Has US$3bn+ Stake Left, After Three Prior Selldowns

The founder is now looking up to US$450m via selling around 3.3% of the company. This deal is well flagged although the timing is a few days later...

Sumeet Singh

Air China has lower USD debt than CSA, making it less exposed to Rmb depreciation. Recovery of international traffic will lower unit costs and...