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.

Equity Capital Markets

ANE, an express freight network operator in China for less-than-truckload (LTL) market, aims to raise around US$500m in its Hong Kong IPO. The company is backed by a host of financial investors including Centurium, Carlyle, CDH, CPE, NWS, Ping An, Goldman Sachs and Yili.As per iResearch, ANE’s network was the largest in China in terms of total freight volume over 2017-20 with a market share of 17.2% in 2020.By Dec 2020, it had collaborated with approximately 26,400 freight partners and agents to serve 3.6m shippers across approximately 96% of the counties and townships in China. Both the freight partners and freight agents operate under its brand and are required to adhere to its service guidelines and policies.ANE’s overall volume and top line growth has been decent. However, not all of its offerings have been growing, while some of its revenue growth was driven by accounting changes. Moreover, despite claiming to be the largest player in its segment, it appears to be losing market share and like the rest of the industry, it appears to have little pricing power.

ANE, an express freight network operator in China for less-than-truckload (LTL) market, aims to raise around US$500m in its Hong Kong IPO. The company is backed by a host of financial investors including Centurium, Carlyle, CDH, CPE, NWS, Ping An, Goldman Sachs and Yili.As per iResearch, ANE’s network was the largest in China in terms of total freight volume over 2017-20 with a market share of 17.2% in 2020.By Dec 2020, it had collaborated with approximately 26,400 freight partners and agents to serve 3.6m shippers across approximately 96% of the counties and townships in China. Both the freight partners and freight agents operate under its brand and are required to adhere to its service guidelines and policies.ANE’s overall volume and top line growth has been decent. However, not all of its offerings have been growing, while some of its revenue growth was driven by accounting changes. Moreover, despite claiming to be the largest player in its segment, it appears to be losing market share and like the rest of the industry, it appears to have little pricing power.

ANE Logistics Pre-IPO - Margins Expanding but Appears to Be Falling Behind

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.

Event-Driven

China Logistics Property Holdings / Event-Driven

<a href="https://www.smartkarma.com/entities/china-logistics-property-holdings-co-ltd" target="_blank" data-smartkarma-citation="entities:22799:1" rel="noopener">China Logistics Property Holdings (1589 HK)</a>/CNLP is a leading provider of premium logistics facilities in China. As of 30 June 2021, CNLP had 179 logistics facilities in operation in 38 logistics parks located in logistics hubs in 19 provinces or centrally administered municipalities. After market close on Thursday, CNLP announced that Mr Li Shifa, the founder and the Chairman, is in discussions with a potential purchaser to sell his 26.38% stake in CNLP. If the transaction is completed, it may lead to a change in control and a mandatory general offer (MGO) under Rule 26.1 of the Takeovers Code. The announcement was in response to a Bloomberg article that claimed that <a href="https://www.smartkarma.com/entities/jd-com-inc-adr" target="_blank" data-smartkarma-citation="entities:446:1" rel="noopener">JD.com Inc (ADR) (JD US)</a> is in discussions to purchase Mr Li Shifa along with RRJ Capital’s stake in CNLP at a valuation of about $2 billion (implies a price of HK$4.48 per share). JD.com is the fourth-largest shareholder and represent 10.11% of the outstanding shares. Speculation on the fate of Mr Li Shifa and RRJ Capital’s stakes have been ongoing for several months. On 29 December 2020, CNLP announced that both Mr Li Shifa and RRJ Capital were conducting a preliminary strategic review of their stakes which could lead to a sale of all or part of the stakes. Press reports at that time suggested that Mr Li Shifa and RRJ Capital were looking for around HK$4.70 per share.If JD.com acquires Mr Li Shifa stake it will own 30% or more of the voting rights, which will trigger an MGO under Rule 26.1 of the Takeovers Code. Notably, JD.com is also CNLP’s largest customer accounting for 29.9% of total revenue in 2020.CNLP recently raised HK$767 million through a placement which completed on 17 June 2021. Post the placement, the public float of 24.02% was below the minimum level of 25% as prescribed by Rule 8.08(1)(a) of the Listing Rules. CNLP noted that it is in discussions with various substantial shareholders to place down their shares. <div class="content-highlight">We think the transaction is sensible for JD.com as it provides a quicker "buy" route than the "build" route to securing premium logistics facilities in China. We think that a deal will be struck as an agreement will be beneficial to both sides. At the last close price of HK$4.22, the gross spread to the potential MGO price of HK$4.48 per share implied by a $2 billion valuation is 6.2%. </div>

China Logistics Property Holdings (1589 HK)/CNLP is a leading provider of premium logistics facilities in China. As of 30 June 2021, CNLP had 179 logistics facilities in operation in 38 logistics parks located in logistics hubs in 19 provinces or centrally administered municipalities. After market close on Thursday, CNLP announced that Mr Li Shifa, the founder and the Chairman, is in discussions with a potential purchaser to sell his 26.38% stake in CNLP. If the transaction is completed, it may lead to a change in control and a mandatory general offer (MGO) under Rule 26.1 of the Takeovers Code. The announcement was in response to a Bloomberg article that claimed that JD.com Inc (ADR) (JD US) is in discussions to purchase Mr Li Shifa along with RRJ Capital’s stake in CNLP at a valuation of about $2 billion (implies a price of HK$4.48 per share). JD.com is the fourth-largest shareholder and represent 10.11% of the outstanding shares. Speculation on the fate of Mr Li Shifa and RRJ Capital’s stakes have been ongoing for several months. On 29 December 2020, CNLP announced that both Mr Li Shifa and RRJ Capital were conducting a preliminary strategic review of their stakes which could lead to a sale of all or part of the stakes. Press reports at that time suggested that Mr Li Shifa and RRJ Capital were looking for around HK$4.70 per share.If JD.com acquires Mr Li Shifa stake it will own 30% or more of the voting rights, which will trigger an MGO under Rule 26.1 of the Takeovers Code. Notably, JD.com is also CNLP’s largest customer accounting for 29.9% of total revenue in 2020.CNLP recently raised HK$767 million through a placement which completed on 17 June 2021. Post the placement, the public float of 24.02% was below the minimum level of 25% as prescribed by Rule 8.08(1)(a) of the Listing Rules. CNLP noted that it is in discussions with various substantial shareholders to place down their shares. We think the transaction is sensible for JD.com as it provides a quicker "buy" route than the "build" route to securing premium logistics facilities in China. We think that a deal will be struck as an agreement will be beneficial to both sides. At the last close price of HK$4.22, the gross spread to the potential MGO price of HK$4.48 per share implied by a $2 billion valuation is 6.2%. 

China Logistics Property’s Potential MGO from JD.com

Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

<div>
<a href="https://www.smartkarma.com/entities/esr-cayman-ltd" target="_blank" data-smartkarma-citation="entities:27983:1" rel="noopener">ESR Cayman (1821 HK)</a> has <a href="https://links.sgx.com/FileOpen/202108_01%20Major%20and%20Connected%20Transaction%20in%20Relation%20to%20the%20Proposed%20Acquisition%20of%20ARA%20Asset%20Managament%20Limited.ashx?App=Announcement&amp;FileID=677405" target="_blank" rel="noopener">announced</a> it is acquiring unlisted ARA Asset Management for US$5.2bn, the completion of which will result in the world's third-largest real estate management company with total assets under management of ~US$129bn.
Under the terms of the US$5,192mn transaction, ESR will issue US$4.7bn via new ESR shares (US$4.286mn) and vendor loan notes (US$387mn); and US$519mn in cash, to be funded by a US$250mn placement to SMBC, and the remainder (US$269mn) in debt. The scrip/cash split is 90/10.
All of the ARA shareholders are rolling over their shares  - and will mostly be subject to a six-month lock-up - and will hold ~28% of the enlarged entity at completion.
The transaction requires the approval from ESR shareholders by way of an ordinary resolution. Irrevocables totaling 4.6%, to vote in favour of the deal, have been received from ESR's founders, together with OMERS and <a href="https://www.smartkarma.com/entities/jd-com-inc" target="_blank" data-smartkarma-citation="entities:29043:1" rel="noopener">JD.com Inc. (9618 HK)</a>.
There are various pre-conditions attached to the deal, with an EGM expected to be convened before 31 October. The deal may be wrapped up late 4Q21, early 1Q22.
Much more below the fold. 
</div>


ESR Cayman (1821 HK) has announced it is acquiring unlisted ARA Asset Management for US$5.2bn, the completion of which will result in the world's third-largest real estate management company with total assets under management of ~US$129bn.
Under the terms of the US$5,192mn transaction, ESR will issue US$4.7bn via new ESR shares (US$4.286mn) and vendor loan notes (US$387mn); and US$519mn in cash, to be funded by a US$250mn placement to SMBC, and the remainder (US$269mn) in debt. The scrip/cash split is 90/10.
All of the ARA shareholders are rolling over their shares  - and will mostly be subject to a six-month lock-up - and will hold ~28% of the enlarged entity at completion.
The transaction requires the approval from ESR shareholders by way of an ordinary resolution. Irrevocables totaling 4.6%, to vote in favour of the deal, have been received from ESR's founders, together with OMERS and JD.com Inc. (9618 HK).
There are various pre-conditions attached to the deal, with an EGM expected to be convened before 31 October. The deal may be wrapped up late 4Q21, early 1Q22.
Much more below the fold. 


ESR Cayman (1821 HK) Takes Out ARA Asset Management

Research from SooChow CSSD Capital Markets (Asia), SCCM Asia Research

SCCM Asia Research

Research from SooChow CSSD Capital Markets (Asia)

Thematic (Sector/Industry)

<h2>Singapore</h2><h3>SREITs results in a glance (see detailed spreadsheet and calendar attached)</h3><table class="table table-striped"><tbody><tr><td style="width: 242.047px; height: 14px;"> </td><td style="width: 241.969px; height: 14px;">FLT</td><td style="width: 241.984px; height: 14px;">ARAUS (US$)</td></tr><tr><td style="width: 242.047px; height: 15px;">Period</td><td style="width: 241.969px; height: 15px;">3Q21</td><td style="width: 241.984px; height: 15px;">2Q21</td></tr><tr><td style="width: 242.047px; height: 15px;">Gross Revenue (S$m)</td><td style="width: 241.969px; height: 15px;">NA</td><td style="width: 241.984px; height: 15px;">33.3 (+69.9% QoQ)</td></tr><tr><td style="width: 242.047px; height: 14px;">NPI (S$m)</td><td style="width: 241.969px; height: 14px;">NA</td><td style="width: 241.984px; height: 14px;">8.7 (+2,075% QoQ)</td></tr><tr><td style="width: 242.047px; height: 14px;">DPU (S$ c)</td><td style="width: 241.969px; height: 14px;">NA</td><td style="width: 241.984px; height: 14px;">NA</td></tr><tr><td style="width: 242.047px; height: 14px;">NAV per Unit (S$)</td><td style="width: 241.969px; height: 14px;">Based on last qtr: 1.14</td><td style="width: 241.984px; height: 14px;">0.61</td></tr><tr><td style="width: 242.047px; height: 14px;">P/B (x)</td><td style="width: 241.969px; height: 14px;">1.33</td><td style="width: 241.984px; height: 14px;">0.87</td></tr><tr><td style="width: 242.047px; height: 14px;">Occupancy (%)</td><td style="width: 241.969px; height: 14px;">96.3</td><td style="width: 241.984px; height: 14px;">51.2 (Overall)55.8 (Hyatt Place)64.7 (Hyatt House)68 (AC Hotels)75.7 (Courtyard by Marriott)95 (Residence Inn)</td></tr><tr><td style="width: 242.047px; height: 7px;">Reversion (%)</td><td style="width: 241.969px; height: 7px;">0.8</td><td style="width: 241.984px; height: 7px;">RevPAR (% QoQ):66.7 (Overall Portfolio)70.6 (Hyatt Place)68.3 (Hyatt House)77.4 (AC Hotels)55.4 (Courtyard by Marriott)46.2 (Residence Inn)</td></tr><tr><td style="width: 242.047px; height: 14px;">Gearing (%)</td><td style="width: 241.969px; height: 14px;">36.4</td><td style="width: 241.984px; height: 14px;">49</td></tr><tr><td style="width: 242.047px; height: 14px;">Cost of Debt (%)</td><td style="width: 241.969px; height: 14px;">1.7</td><td style="width: 241.984px; height: 14px;">3.4</td></tr><tr><td style="width: 242.047px; height: 14px;">1 Yr Fwd Yield (%)</td><td style="width: 241.969px; height: 14px;">5.07</td><td style="width: 241.984px; height: 14px;">4.67</td></tr><tr><td style="width: 242.047px; height: 14px;">Debt Hedged (%)</td><td style="width: 241.969px; height: 14px;">69.4</td><td style="width: 241.984px; height: 14px;">76.7</td></tr><tr><td style="width: 242.047px; height: 14px;">Target Price</td><td style="width: 241.969px; height: 14px;">N/A</td><td style="width: 241.984px; height: 14px;">N/A</td></tr><tr><td style="width: 242.047px; height: 15px;">Rating</td><td style="width: 241.969px; height: 15px;">N/A</td><td style="width: 241.984px; height: 15px;">N/A</td></tr></tbody></table>

SingaporeSREITs results in a glance (see detailed spreadsheet and calendar attached) FLTARAUS (US$)Period3Q212Q21Gross Revenue (S$m)NA33.3 (+69.9% QoQ)NPI (S$m)NA8.7 (+2,075% QoQ)DPU (S$ c)NANANAV per Unit (S$)Based on last qtr: 1.140.61P/B (x)1.330.87Occupancy (%)96.351.2 (Overall)55.8 (Hyatt Place)64.7 (Hyatt House)68 (AC Hotels)75.7 (Courtyard by Marriott)95 (Residence Inn)Reversion (%)0.8RevPAR (% QoQ):66.7 (Overall Portfolio)70.6 (Hyatt Place)68.3 (Hyatt House)77.4 (AC Hotels)55.4 (Courtyard by Marriott)46.2 (Residence Inn)Gearing (%)36.449Cost of Debt (%)1.73.41 Yr Fwd Yield (%)5.074.67Debt Hedged (%)69.476.7Target PriceN/AN/ARatingN/AN/A

ASEAN Builder's Scoop (05Aug21) - FLT Acq-Driven Growth

<h2>Singapore</h2><h3><a href="https://www.smartkarma.com/entities/frasers-centrepoint-trust" target="_blank" data-smartkarma-citation="entities:2870" rel="noopener">Frasers Centrepoint Trust (FCT SP)</a> to sell YewTee Point for S$220m; 75% upside from original purchase price</h3>FCT will divest YewTee Point for S$220m, having entered into a sale-and-purchase agreement with an unrelated third party. The transaction is expected to be completed on 28May21. The sales proceed will be used to repay debts and lower gearing level. The Choa Chu Kang mall was valued at S$200m by Savills as at 31Jan21. On a pro-forma FY20 (Sep20) basis, the DPU dilution is 2.33% and NAV would rise by 0.8%. The divestment is in line with the manager’s proactive portfolio management strategy to optimise the trust's portfolio composition. Upon completion of the divestment, FCT's retail portfolio will comprise nine retail properties, all located in the suburbs of Singapore.Comments: The S$220m offer price is ~16% higher than the latest book value (as at end FY20) and translates to S$2,986psf (based on NLA). It also represents a significant 75% upside from purchase price of S$125.7m in 2010.

SingaporeFrasers Centrepoint Trust (FCT SP) to sell YewTee Point for S$220m; 75% upside from original purchase priceFCT will divest YewTee Point for S$220m, having entered into a sale-and-purchase agreement with an unrelated third party. The transaction is expected to be completed on 28May21. The sales proceed will be used to repay debts and lower gearing level. The Choa Chu Kang mall was valued at S$200m by Savills as at 31Jan21. On a pro-forma FY20 (Sep20) basis, the DPU dilution is 2.33% and NAV would rise by 0.8%. The divestment is in line with the manager’s proactive portfolio management strategy to optimise the trust's portfolio composition. Upon completion of the divestment, FCT's retail portfolio will comprise nine retail properties, all located in the suburbs of Singapore.Comments: The S$220m offer price is ~16% higher than the latest book value (as at end FY20) and translates to S$2,986psf (based on NLA). It also represents a significant 75% upside from purchase price of S$125.7m in 2010.

ASEAN Builder's Scoop - FCT to Sell YewTee Point; Activists at SSREIT Asked ESR to Buy Assets

China

ESR Group Limited operates as an integrated logistics real estate platform. The Company provides real estate private equity fund management, real estate investment trust, and other services. ESR Group conducts businesses in China, Japan, South Korea, Australia, Singapore, India, New Zealand, and other countries.

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ESR Group (1821 HK)

ANE Logistics Pre-IPO - Margins Expanding but Appears to Be Falling Behind

ANE, an express freight network operator in China for less-than-truckload (LTL) market, aims to raise around US$500m in its Hong Kong IPO.

Sumeet Singh

China Logistics Property’s Potential MGO from JD.com

CNLP announced that Mr Li Shifa is in discussions with a purchaser to sell his 26.38% stake, which may trigger an MGO. The gross spread to the...

Arun George

ESR Cayman (1821 HK) Takes Out ARA Asset Management

This looks like a great deal for ESR. But the company looks full here compared to historical metrics. Plus there is an indication of further...

David Blennerhassett

ASEAN Builder's Scoop (05Aug21) - FLT Acq-Driven Growth

FLT acq-driven growth; ARAUS QoQ recovery on full speed; ESR/ARA - what's next?; MEG 2Q21 NI underperforms; SEC approves RLC, MEG REITs; Indo...

SCCM Asia Research

ASEAN Builder's Scoop - FCT to Sell YewTee Point; Activists at SSREIT Asked ESR to Buy Assets

Activists at SSREIT asked ESR to buy its assets; GLL to be acquired and delisted; Sheng Tai-IWG expands workspace in Melaka

SCCM Asia Research

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