Asian Equities Analyst, Logistics & Transport, Tracking Traffic

Daniel Hellberg

Asian Equities Analyst, Logistics & Transport

Tracking Traffic

Focusing on Asian logistics, transportation, and travel companies

Thematic (Sector/Industry)

<ul>
<li>Domestic and outbound Chinese air traffic continued to recover in April, but aircraft deployed on international routes continued to operate far below capacity</li>
<li>Headline numbers from the recent Labor Day holiday period show an increase in domestic travel activity to above 2019 levels, but spending per trip remains depressed</li>
<li>Tourism activity has increased dramatically compared to 2022, but five months after most Covid-19 restrictions were lifted there are few signs of stong demand for leisure travel</li>
</ul>


Domestic and outbound Chinese air traffic continued to recover in April, but aircraft deployed on international routes continued to operate far below capacity
Headline numbers from the recent Labor Day holiday period show an increase in domestic travel activity to above 2019 levels, but spending per trip remains depressed
Tourism activity has increased dramatically compared to 2022, but five months after most Covid-19 restrictions were lifted there are few signs of stong demand for leisure travel


Monthly Chinese Tourism Tracker | Recovery Continues | But Seats Stay Empty | (May 2023)

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>
<a href="https://www.smartkarma.com/entities/rakuten-group-inc" target="_blank" data-smartkarma-citation="entities:31:1" rel="noopener">Rakuten (4755 JP)</a> aims to raise up to US$2.4bn (JPY323bn) via a global offering.</li>
<li>We have covered various aspects of the deal in our earlier notes, see <a href="https://www.smartkarma.com/insights/rakuten-possible-us-2-2bn-placement-will-be-a-huge-deal-to-digest-but-it-s-not-all-bad" target="_blank" rel="noopener">here</a> and <a href="https://www.smartkarma.com/insights/rakuten-us-2-4bn-placement-larger-than-rumored-some-indications-of-finality" target="_blank" rel="noopener">here</a>.</li>
<li>In this note, we will talk about the updates since our last note, as well as the performance of some of the past large primary raises in Japan.</li>
</ul>



Rakuten (4755 JP) aims to raise up to US$2.4bn (JPY323bn) via a global offering.
We have covered various aspects of the deal in our earlier notes, see here and here.
In this note, we will talk about the updates since our last note, as well as the performance of some of the past large primary raises in Japan.


Rakuten US$2.4bn Placement - Recent Updates and Comparison to past Deals

Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

Pan-Asia Catalysts/Events

Quiddity Advisors

<ul>
<li>The Nikkei 225 March 2023 Rebalance is 31 March at the close. There is about US$1.75bn of funding to sell against US$1.85bn of 3 names to buy. </li>
<li>The impact on the Buy Side is middling at 3, 6.4, and 6.9 days of ADV to buy. The three DELETES are larger on average but they are all smallcaps. </li>
<li>One trade - long an ADD vs a Peer - is still worth doing. Indexers buy the stock, it goes into a dark closet, and never comes out.</li>
</ul>


The Nikkei 225 March 2023 Rebalance is 31 March at the close. There is about US$1.75bn of funding to sell against US$1.85bn of 3 names to buy. 
The impact on the Buy Side is middling at 3, 6.4, and 6.9 days of ADV to buy. The three DELETES are larger on average but they are all smallcaps. 
One trade - long an ADD vs a Peer - is still worth doing. Indexers buy the stock, it goes into a dark closet, and never comes out.


Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

Equity Bottom-Up

<ul>
<li>Singapore Airlines (SIA) was recently named the best airline in the world for the year 2023 in the 49th Annual Air Transport World (ATW) Airline Industry Achievement Awards.</li>
<li>Despite its excellent reputation and its ranking again as the top airline in the world, we have a negative view of Singapore Airlines' share price in the next 6-12 months.</li>
<li>SIA is trading at EV/EBITDA of 8.9x in 2023 (FY ending March), which is higher multiple than in 2020 (FY ending March) when it had EV/EBITDA of 6.7x. </li>
</ul>


Singapore Airlines (SIA) was recently named the best airline in the world for the year 2023 in the 49th Annual Air Transport World (ATW) Airline Industry Achievement Awards.
Despite its excellent reputation and its ranking again as the top airline in the world, we have a negative view of Singapore Airlines' share price in the next 6-12 months.
SIA is trading at EV/EBITDA of 8.9x in 2023 (FY ending March), which is higher multiple than in 2020 (FY ending March) when it had EV/EBITDA of 6.7x. 


Singapore Airlines: The Best Airline in the World but Not the Stock Price

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

<ul>
<li>
<a href="https://www.smartkarma.com/entities/oriental-land-co-ltd" target="_blank" data-smartkarma-citation="entities:13517:1" rel="noopener">Oriental Land (4661 JP)</a>, <a href="https://www.smartkarma.com/entities/renesas-electronics-corp" target="_blank" data-smartkarma-citation="entities:15933:1" rel="noopener">Renesas Electronics (6723 JP)</a>, <a href="https://www.smartkarma.com/entities/japan-airlines-co-ltd" target="_blank" data-smartkarma-citation="entities:1184:1" rel="noopener">Japan Airlines (9201 JP)</a> will replace <a href="https://www.smartkarma.com/entities/toyobo-co-ltd" target="_blank" data-smartkarma-citation="entities:6187:1" rel="noopener">Toyobo (3101 JP)</a>, <a href="https://www.smartkarma.com/entities/nippon-light-metal-holdings" target="_blank" data-smartkarma-citation="entities:1485:1" rel="noopener">Nippon Light Metal (5703 JP)</a>, <a href="https://www.smartkarma.com/entities/toho-zinc-co-ltd" target="_blank" data-smartkarma-citation="entities:2796:1" rel="noopener">Toho Zinc (5707 JP)</a> in the <a href="https://www.smartkarma.com/entities/nikkei-225" target="_blank" data-smartkarma-citation="entities:22909:1" rel="noopener">Nikkei 225</a>.</li>
<li>Estimated one-way turnover at the rebalance is 1.08% and will result in a round-trip trade of JPY 412.8bn (US$3.16bn) at the close on 31 March.</li>
<li>There has been recent pre-positioning on the stocks as well as movement in short interest over the last couple of months.</li>
</ul>



Oriental Land (4661 JP), Renesas Electronics (6723 JP), Japan Airlines (9201 JP) will replace Toyobo (3101 JP), Nippon Light Metal (5703 JP), Toho Zinc (5707 JP) in the Nikkei 225.
Estimated one-way turnover at the rebalance is 1.08% and will result in a round-trip trade of JPY 412.8bn (US$3.16bn) at the close on 31 March.
There has been recent pre-positioning on the stocks as well as movement in short interest over the last couple of months.


Nikkei 225 Index Rebalance: Passives Trade on Friday

Japan

Japan Airlines Co. Ltd. provides air transportation services. The Company offers a variety of scheduled  flights and unscheduled flights throughout the world as well as offers air courier services. Japan Airlines also provides tickets, resort hotels, and travel agencies services.

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Japan Airlines (9201 JP)

Monthly Chinese Tourism Tracker | Recovery Continues | But Seats Stay Empty | (May 2023)

In April domestic and international air traffic continued to improve from depressed pandemic levels, but there are growing signs that Chinese...

Tracking Traffic

Rakuten US$2.4bn Placement - Recent Updates and Comparison to past Deals

Rakuten (4755 JP) aims to raise up to US$2.4bn (JPY323bn) via a global offering. In this note, we talk about the updates since our last note. and...

Sumeet Singh

Nikkei 225 March 2023 Rebal Tomorrow

The Nikkei 225 Rebalance for March 2023 is tomorrow (Friday 31 March 2023) at the close. There is a US$1.75bn funding sell at the close.

Travis Lundy

Singapore Airlines: The Best Airline in the World but Not the Stock Price

Despite its excellent reputation and the company ranking again as the top airline in the world, we have a negative view of Singapore Airlines'...

Douglas Kim

Nikkei 225 Index Rebalance: Passives Trade on Friday

Oriental Land, Renesas, JAL replace Toyobo, Nippon Light Metal, Toho Zinc. Estimated one-way turnover at the rebalance is 1.08% resulting in a...

Brian Freitas

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