Utilities Sector

• Silver Dragon Water Supply Group (2210081D CH) is looking to raise at least US$100m in its upcoming Hong Kong IPO. The bookrunners on the deal are HSBC and Huatai International.
• Silver Dragon Water Supply Group (SDW) is principally engaged in the supply of tap water, raw water and pipeline direct drinking water in China.
• As per Frost & Sullivan (F&S), the firm had the largest water pipeline network in terms of water pipeline length among all water supply companies in China in 2022.

Lucror Analytics Morning Views comprise our fundamental credit analysis, opinions and trade recommendations on high yield issuers in the region, based on key company-specific developments in the past 24 hours. Our Morning Views include a section with a brief market commentary, key market indicators and a macroeconomic and corporate event calendar.

• China Water Affairs

Lucror Analytics Morning Views comprise our fundamental credit analysis, opinions and trade recommendations on high yield issuers in the region, based on key company-specific developments in the past 24 hours. Our Morning Views include a section with a brief market commentary, key market indicators and a macroeconomic and corporate event calendar.

• Azure Power Global Ltd
• Sino-Ocean Service

• Soybeans spike due to weather worries The worst U.S. Midwest drought since 2012 expanded over the past week despite mild temperatures as a lack of rain across the heart of the American farm belt threatened newly seeded crops.
• Below-average rainfall and high winds also exacerbated drought conditions in many regions.
• In the early growing stage of the crops, drought can be compensated by more rain in the later stages.

• Antin Infrastructure Partners (ANTIN FP) offers €5.85/share in cash for renewable producer Opdenergy Holdings (OPDE SM) (46% premium). Minimum acceptance is 75%, with irrevocables >71%, just 13.2% of the float is needed.
• Virtually a done deal, at fair price. Nevertheless, an agreement similar to those in MásMóvil and Solarpack takeouts leaves minorities with virtually no capacity to ask for a sweetening.
• Spread is Spread is 3.25%/6.56% (gross/annualised, assuming 20 December). Readacross: Ecoener, Grenergy, Audax, Solaria could all be the object of takeover bids (either from private equity or minority buyouts).

• Infratil Ltd (IFT NZ) aims to raise around US$456m (NZ$750m) via an institutional placement.
• Proceeds from the placement will be used to acquire the remaining stake on One New Zealand from Brookfields.
• In this note, we will talk about the placement and run the deal through our ECM framework.

• Infratil Ltd (IFT NZ) is acquiring Brookfield Asset Management Lt (BAM US)‘s 49.95% stake in One NZ for NZ$1.8bn. This will be partly funded through a NZ$850m placement.
• There will be a NZ$750m underwritten placement at NZ$9.2/share (an 8.9% discount to the last close) and a retail offering of NZ$100m.
• There will be passive buying from index trackers post the completion of the placement and the settlement of the shares and that will remove some of the overhang.

• Late March, SOE-backed power play China Resources Power Holdings Co Ltd. (836 HK) announced it intends to spin off its energy unit via an A-share listing. 
• Shares gained 4.9% on the news – gains which were promptly given back over the ensuing fortnight.
• Renewable energy profits have been the driving force behind CRP’s bottom line strength the last two years. But how best to assign a value to the remaining loss-making thermal ops? 

• El Nino effects start to sink in? During last week grain prices saw building up some momentum.
• The DSCI drought index also surged after many weeks of continuous declines.
• Nevertheless, we should actually see lots of rain during the summer in the US if we’ll see a classic El Nino.

• There continues to be little traction above $93 on the MSCI ACWI (ACWI-US), which remains the top-end of our anticipated 2023 trading range.
• At the same time, we cannot get too bearish until there is a break below $90.50 short-term support.
• EURO STOXX 50 pulling back to 4100-4200 buy area. TOPIX holding above 2120 support. Buy ideas within Technology, Construction Materials, gold miners, Utilities, other defensives.

• S&P has raised Naturgy Energy Group SA (NTGY SM)‘s credit outlook from negative to stable considering that the company may not finally carry out the Gemini spin-off project.
• Naturgy’s shares do not trade on fundamentals, rather on expectations that IFM tries to increase its stake (free float is just 15%). There’s some potential overhang risk though.
• IFM has not acquired any significant stake since April, but I would not short the shares as IFM could resume share purchases on an opportunistic basis.

Lucror Analytics Morning Views comprise our fundamental credit analysis, opinions and trade recommendations on high yield issuers in the region, based on key company-specific developments in the past 24 hours. Our Morning Views include a section with a brief market commentary, key market indicators and a macroeconomic and corporate event calendar.

• Azure Power Global Ltd