Global Mobility/Transport, Equity Long-Short

Mohshin Aziz

Thematic (Sector/Industry)

<ul>
<li>Jet fuel price has declined in the past two months and is 20% lower than the September peak. Positive for airlines but we have yet to see any earnings upgrade   </li>
<li>All the Chines state carriers (Air China, China Eastern and China Southern) and Taiwan's EVA Airways are unhedged, benefiting the most from this lower fuel price trend </li>
<li>Worst off due to fuel hedge cover at higher than current market prices are Qantas Airways (75% hedged), Air New Zealand (54% hedged) and Japan Airlines (40% hedged)  </li>
</ul>


Jet fuel price has declined in the past two months and is 20% lower than the September peak. Positive for airlines but we have yet to see any earnings upgrade   
All the Chines state carriers (Air China, China Eastern and China Southern) and Taiwan's EVA Airways are unhedged, benefiting the most from this lower fuel price trend 
Worst off due to fuel hedge cover at higher than current market prices are Qantas Airways (75% hedged), Air New Zealand (54% hedged) and Japan Airlines (40% hedged)  


Lower Fuel Price, Which Asia Pacific Airline Benefits and Suffers the Most?

Founder & Managing Director, AIR Control Tower, AIR Control Tower

Neil Glynn

Founder & Managing Director, AIR Control Tower

AIR Control Tower

AIR Control Tower is an independent research and analysis platform. Its mission is to provide impactful insight and analysis across the global airline industry at a company and market level via detailed financial models to aid decision making for key stake holders at a time when risks have seldom, if ever, been higher and the global sector grapples with the imperative of funding de-carbonisation. Unique analysis forecasting global carrier-level earnings/cash flows, and restructuring/de-leveraging prospects, is designed to dynamically assess the health of the industry, predict surprises and identify potential requirements for third party support.

Insights on the global airline industry

Equity Bottom-Up

Virgin Australia Holdings / Equity Bottom-Up

<ul>
<li>FY23 performance positions VA at the top table relative to global LCC financial performance</li>
<li>Global analysis of #2 positions behind a strong market leaders suggests an efficient VA should be well positioned to sustainably outperform the global airline industry's average financial performance</li>
<li>Forecasting mean reversion for operating performance but aircraft financing savings should sustain superior profitability and cash flow generation than pre-COVID.</li>
</ul>


FY23 performance positions VA at the top table relative to global LCC financial performance
Global analysis of #2 positions behind a strong market leaders suggests an efficient VA should be well positioned to sustainably outperform the global airline industry's average financial performance
Forecasting mean reversion for operating performance but aircraft financing savings should sustain superior profitability and cash flow generation than pre-COVID.


Virgin Australia - Outperforming Most LCCs Globally; Positioned for New Era of Cash Flow Generation

APAC IPOs & Placements, Aequitas Research

Ethan Aw

APAC 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

Skymark Airlines / Equity Capital Markets

<ul>
<li>
<a href="https://www.smartkarma.com/entities/skymark-airlines-inc" target="_blank" data-smartkarma-citation="entities:20430:1" rel="noopener">Skymark Airlines (9204 JP)</a> raised US$242m in its Japan IPO. The shares began to trade on 14th Dec 2022, its six-month lockup will expire on 11th Jun 2023.</li>
<li>Skymark Airlines (SA) is a Japanese low-cost airline, being the third largest domestic airline  according to the company. Unlike major airlines and other low-cost carriers, Skymark operates only domestic flights.</li>
<li>In this note, we will talk about the lock-up dynamics and updates since our last note.</li>
</ul>



Skymark Airlines (9204 JP) raised US$242m in its Japan IPO. The shares began to trade on 14th Dec 2022, its six-month lockup will expire on 11th Jun 2023.
Skymark Airlines (SA) is a Japanese low-cost airline, being the third largest domestic airline  according to the company. Unlike major airlines and other low-cost carriers, Skymark operates only domestic flights.
In this note, we will talk about the lock-up dynamics and updates since our last note.


Skymark Airlines Lockup Expiry - Still Doesn’t Seem Cheap with 50% of the Shares Being Unlocked

Head of Research, IPOs & Placements, Aequitas Research

Sumeet Singh

Head of Research, IPOs & Placements

<ul>
<li>
<a href="https://www.smartkarma.com/entities/digico-reit" target="_blank" data-smartkarma-citation="entities:44091:1" rel="noopener">DigiCo REIT (DIGICO AU)</a> aims to raise over US$1bn in its Australian IPO.</li>
<li>DigiCo REIT (DREIT) aims to be a diversified owner, operator and developer of data centres, with a global portfolio and broad investment mandate across stabilised, value-add and development opportunities</li>
<li>In this note, we talk about the positive aspects of the deal.</li>
</ul>



DigiCo REIT (DIGICO AU) aims to raise over US$1bn in its Australian IPO.
DigiCo REIT (DREIT) aims to be a diversified owner, operator and developer of data centres, with a global portfolio and broad investment mandate across stabilised, value-add and development opportunities
In this note, we talk about the positive aspects of the deal.


DigiCo REIT - The Positives - Hot Sector with Built in Growth

Quantitative Researcher, MRM Research

Nico Rosti

Quantitative Researcher

MRM Research

Quantitative Research

Event-Driven

<ul>
<li>This week the <a href="https://www.smartkarma.com/entities/s-p-asx-200" target="_blank" data-smartkarma-citation="entities:22901:1" rel="noopener">S&amp;P/ASX 200 INDEX</a> entered WEEKLY OVERBOUGHT status intra-week, peaking at 8384.50, then pulling back to 8283.20 at Close.</li>
<li>In this insight we will examine resistance levels the index will have a hard time to clear, without pulling back first at least 1 week.</li>
<li>According to our quantitative models, a pullback is highly likely to happen this week, or the next.</li>
</ul>


This week the S&amp;P/ASX 200 INDEX entered WEEKLY OVERBOUGHT status intra-week, peaking at 8384.50, then pulling back to 8283.20 at Close.
In this insight we will examine resistance levels the index will have a hard time to clear, without pulling back first at least 1 week.
According to our quantitative models, a pullback is highly likely to happen this week, or the next.


EQD | Upcoming ASX200 Pullback in 1-2 Weeks

Australia

Qantas Airways Limited provides transportation of passengers through two airlines including Qantas (full service carrier) and Jetstar (low cost carrier), operating international, domestic and regional services. The Company also includes Qantas Frequent Flyer and Qantas Freight which generates diverse revenue streams and adds value for customers and investors.

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

Qantas Airways (QAN AU)

Lower Fuel Price, Which Asia Pacific Airline Benefits and Suffers the Most?

Jet fuel prices have been declining and this is good for airlines. The impact varies according to average flight length and fuel hedge exposure....

Mohshin Aziz

Virgin Australia - Outperforming Most LCCs Globally; Positioned for New Era of Cash Flow Generation

Privately held Virgin Australia is preparing to IPO and our coverage launch is likely to be the only substantive research report, including short...

Neil Glynn

Skymark Airlines Lockup Expiry - Still Doesn’t Seem Cheap with 50% of the Shares Being Unlocked

Skymark Airlines (9204 JP) raised US$242m in its Japan IPO. The shares began to trade on 14th Dec 2022, its six-month lockup will expire on 11th...

Ethan Aw

DigiCo REIT - The Positives - Hot Sector with Built in Growth

DigiCo REIT (DIGICO AU) aims to raise over US$1bn in its Australian IPO. In this note, we talk about the positive aspects of the deal.

Sumeet Singh

EQD | Upcoming ASX200 Pullback in 1-2 Weeks

The ASX 200 INDEX has entered WEEKLY-overbought status, it is going to pull back in the next 1-2 weeks, but the overall trend appears healthy....

Nico Rosti

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

Lower Fuel Price, Which Asia Pacific Airline Benefits and Suffers the Most?

​Jet fuel prices have been declining and this is good for airlines. The impact varies according to average flight length and fuel hedge exposure....

Mohshin Aziz

Virgin Australia - Outperforming Most LCCs Globally; Positioned for New Era of Cash Flow Generation

Privately held Virgin Australia is preparing to IPO and our coverage launch is likely to be the only substantive research report, including short...

Neil Glynn

Skymark Airlines Lockup Expiry - Still Doesn’t Seem Cheap with 50% of the Shares Being Unlocked

Skymark Airlines (9204 JP) raised US$242m in its Japan IPO. The shares began to trade on 14th Dec 2022, its six-month lockup will expire on 11th...

Ethan Aw

DigiCo REIT - The Positives - Hot Sector with Built in Growth

DigiCo REIT (DIGICO AU) aims to raise over US$1bn in its Australian IPO. In this note, we talk about the positive aspects of the deal.

Sumeet Singh

EQD | Upcoming ASX200 Pullback in 1-2 Weeks

​The ASX 200 INDEX has entered WEEKLY-overbought status, it is going to pull back in the next 1-2 weeks, but the overall trend appears healthy....

Nico Rosti

Jet fuel prices have been declining and this is good for airlines. The impact varies according to average flight length and fuel hedge exposure....

The ASX 200 INDEX has entered WEEKLY-overbought status, it is going to pull back in the next 1-2 weeks, but the overall trend appears healthy....