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.

Event-Driven

<ul>
<li>Earlier this month, <a href="https://www.smartkarma.com/entities/british-american-tobacco-plc" target="_blank" data-smartkarma-citation="entities:21828:1" rel="noopener">British American Tobacco (BATS LN)</a>’s management stated that they were reviewing their stake in <a href="https://www.smartkarma.com/entities/itc-ltd" target="_blank" data-smartkarma-citation="entities:327:1" rel="noopener">ITC Ltd (ITC IN)</a> to enhance its balance sheet flexibility.</li>
<li>BAT has owned its stake in ITC for over a century and remains its largest shareholder.</li>
<li>In this note, we talk about the possible deal structure and dynamics.</li>
</ul>


Earlier this month, British American Tobacco (BATS LN)’s management stated that they were reviewing their stake in ITC Ltd (ITC IN) to enhance its balance sheet flexibility.
BAT has owned its stake in ITC for over a century and remains its largest shareholder.
In this note, we talk about the possible deal structure and dynamics.


BAT’s Possible US$2.5bn ITC Selldown - Will Be Well Flagged but Still Won’t Be an Easy One to Digest

Pan-Asia Index Rebalances/ Events/ Delta One, Periscope Analytics

Brian Freitas

Pan-Asia Index Rebalances/ Events/ Delta One

Periscope Analytics

Periscope Analytics focuses on event-driven trades across Asia Pacific and provides comprehensive, timely and systematic coverage of index changes to major Asia Pacific indices in a structured manner.

The analysis includes forecasted inclusions and exclusions to all major Asian indices that have significant amount of tracking assets, including estimates of passive buy/sell flow on the stocks. The service also provides commentary and impact of market consultations, ground rule changes, and other events (IPOs, spin-offs, M&A) that could lead to index changes and passive flow.

Periscope Analytics works with multi-strategy hedge funds, proprietary trading firms, stat arb trading groups and long-only investors that invest and trade in the Asia Pacific region with the data being used to trade index rebalances, avoid pre-positioning and passive flow, and to time entry into and exit from stocks.

Event-Driven Trades Across Asia Pacific

Tower Bersama Infrastructure / Event-Driven

<ul>
<li>The review period for the LQ45 Index ended on 29 December. The changes should be announced in the last week of January, becoming effective after the close on 31 January.</li>
<li>Based on the index methodology, there could be up to 5 changes at the rebalance. Plus there will be capping changes for <a href="https://www.smartkarma.com/entities/bank-rakyat-indonesia-persero" target="_blank" data-smartkarma-citation="entities:484:1" rel="noopener">Bank Rakyat (BBRI)</a> and <a href="https://www.smartkarma.com/entities/bank-central-asia-tbk-pt" target="_blank" data-smartkarma-citation="entities:440:1" rel="noopener">Bank Central Asia (BBCA)</a>.</li>
<li>The impact of passive trading will be higher on the deletions than the inclusions since lower liquidity stocks are replaced with higher liquidity stocks.</li>
</ul>


The review period for the LQ45 Index ended on 29 December. The changes should be announced in the last week of January, becoming effective after the close on 31 January.
Based on the index methodology, there could be up to 5 changes at the rebalance. Plus there will be capping changes for Bank Rakyat (BBRI) and Bank Central Asia (BBCA).
The impact of passive trading will be higher on the deletions than the inclusions since lower liquidity stocks are replaced with higher liquidity stocks.


LQ45 Index Rebalance Preview (Jan): Reading the Tea Leaves

External broker reports(aggregated public sources), BRI Danareksa Research

BRI Danareksa Research

External broker reports(aggregated public sources)

As a one-stop financial solution with the vision to be the most valuable securities house, BRI Danareksa Sekuritas (BRIDS) has maintained an excellent track record and extensive experience in the capital market as an underwriter, broker, and financial advisor for individual, institutional, foreign and domestic, private and government clients. Established in 1992, PT Danareksa Sekuritas is a securities company that performs activities as a securities broker, underwriter, or arranger and financial advisor.

Thematic (Sector/Industry)

<ul><li>FY24 excise revenue target growth of 5% yoy and 10% avg. tariff growth implies negative industry volume growth will continue.</li><li>Tepid 4% growth in 2024 minimum wages may lead to further downtrading; we expect the SKT category to continue gaining share.</li><li>We maintain OW rating as the sector’s 10.6x FY24F PE (24% disc. to avg 3yr PE) has priced in the downside, with cushion from 6-11% div. yield.</li></ul>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

FY24 excise revenue target growth of 5% yoy and 10% avg. tariff growth implies negative industry volume growth will continue.Tepid 4% growth in 2024 minimum wages may lead to further downtrading; we expect the SKT category to continue gaining share.We maintain OW rating as the sector’s 10.6x FY24F PE (24% disc. to avg 3yr PE) has priced in the downside, with cushion from 6-11% div. yield.Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Cigarette: Attractive Value Proposition Despite Lingering Regulatory Headwinds...

Cigarette: Attractive Value Proposition Despite Lingering Regulatory Headwinds

<ul><li>Our cigarette price survey revealed no significant movements in retail prices during August to Sept 2023, likely given the soft/negative volume growth (especially in the tier-1 category).</li><li>However, we expect higher ASPs to still translate to better margins and earnings growth in 3Q23 (+36% yoy), especially for GGRM.</li><li>Maintain Overweight. Price tracker: no significant movements in the past few months. </li></ul>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Our cigarette price survey revealed no significant movements in retail prices during August to Sept 2023, likely given the soft/negative volume growth (especially in the tier-1 category).However, we expect higher ASPs to still translate to better margins and earnings growth in 3Q23 (+36% yoy), especially for GGRM.Maintain Overweight. Price tracker: no significant movements in the past few months. Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Cigarette - Upbeat 3Q23 yoy earnings growth; attractive yield play

Indonesia

PT Gudang Garam Tbk manufactures and distributes cigarettes and operates activities related to the cigarette industry. Through its subsidiaries, the Company also operates in the paper-related activities.

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Gudang Garam (GGRM IJ)

BAT’s Possible US$2.5bn ITC Selldown - Will Be Well Flagged but Still Won’t Be an Easy One to Digest

The deal is now live for a target raising of US$2bn, which will drop BAT's stake to 25.5%. The news of the deal was leaked earlier today so its...

Sumeet Singh

LQ45 Index Rebalance Preview (Jan): Reading the Tea Leaves

There could be 5 potential changes for the LQ45 Index in January. The potential adds have performed well while the potential deletes are trading...

Brian Freitas

Cigarette: Attractive Value Proposition Despite Lingering Regulatory Headwinds...

FY24 excise revenue target growth of 5% yoy and 10% avg. tariff growth implies negative industry volume growth will continue.

BRI Danareksa Research

Cigarette: Attractive Value Proposition Despite Lingering Regulatory Headwinds

FY24 excise revenue target growth of 5% yoy and 10% avg. tariff growth implies negative industry volume growth will continue.

BRI Danareksa Research

Cigarette - Upbeat 3Q23 yoy earnings growth; attractive yield play

Our cigarette price survey revealed no significant movements in retail prices during August to Sept 2023, likely given the soft/negative volume...

BRI Danareksa Research

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