In today’s briefing:
- Adani Enterprises – A Record Follow-On Public Offering May Be in the Works
- Straits Times Index Quiddity Leaderboard Mar 23: SMM Index Treatment Clearer Under New Terms
- Skymark IPO – Ready For Takeoff
- Chip Eng Seng (CHIP SP)’s S$0.72 VGO from the Tangs
- Growatt Technology Pre-IPO – PHIP Updates – Profitability Still Accelerating
- 2023 High Conviction: AviChina Industry (2357 HK) – The Sky Is the Limit
Adani Enterprises – A Record Follow-On Public Offering May Be in the Works
- Adani Enterprises (ADE IN) (“ADL”) on Tuesday announced a Board Meeting for Friday to consider capital raising options. Multiple media sources suggest a record Indian Follow-on Public Offering of INR200bn.
- The company has bid for/bought multiple assets recently, and proposed investments plan of up to US$150bn in 10yrs in renewables, cement, airports, healthcare to aim at a US$1trln valuation.
- This will get complicated, interesting, and is not necessarily going to come out well.
Straits Times Index Quiddity Leaderboard Mar 23: SMM Index Treatment Clearer Under New Terms
- In this insight, we take a look at the potential index changes for the FTSE Straits Times Index (STI) (STI INDEX) between now and the March 2023 index review.
- The Sembcorp Marine (SMM SP) – Keppel Corp (KEP SP) deal terms were revised recently and our latest expectation is for SMM to become an STI member in March 2023.
- At present, SATS (SATS SP) and Keppel DC REIT (KDCREIT SP) are the lowest-ranked STI members – one of which could get removed due to SMM’s addition in March 2023.
Skymark IPO – Ready For Takeoff
- Skymark will be re-listing following a successful turnaround under the guidance of ANA and Integral.
- Listing proceeds will mainly be directed towards improving the fuel efficiency of its fleet.
- Skymark offers an attractive play on reopening in Japan as it is geared into the simpler domestic market where elevated cargo rates and revenue per passenger are not downside risks.
Chip Eng Seng (CHIP SP)’s S$0.72 VGO from the Tangs
- Chip Eng Seng Corp (CHIP SP) disclosed a conditional VGO from the Tangs at S$0.720, a 6.7% premium to the undisturbed price (6 September). The price is not declared final.
- Irrevocables and family represent 41.44% of outstanding shares. The VGO has a 50%+ minimum acceptance condition which requires around a 15% minorities acceptance rate.
- While the last close is in line with the offer, it is attractive in the context of historical prices/multiples. Therefore, there is a good chance of hitting the 50% threshold.
Growatt Technology Pre-IPO – PHIP Updates – Profitability Still Accelerating
- Growatt Technology (1833969D CH) is looking to raise about US$1bn in its upcoming Hong Kong IPO.
- Growatt Technology is a global distributed energy solution provider, specializing in sustainable energy generation, storage and consumption, as well as energy digitalization.
- In our previous notes, we looked at the company’s past performance, peer comparison and our thoughts on valuation. In this note, we will talk about the updates from its PHIP.
2023 High Conviction: AviChina Industry (2357 HK) – The Sky Is the Limit
- AviChina Industry & Technology H (2357 HK) offers unique exposure to China’s aerospace and defense sector and it will ride on China’s ambition to solidify its military strengths.
- We think the key drivers are increase in civil and defense demand, commercialisation of C919 aircraft, localisation of helicopters and potential for corporate restructuring.
- The stock is undervalued with its holdings in four listed A-shares amounted to Rmb70.6bn, against its own market cap of HK$25bn. Also, earnings multiples are cheap relative to global peers.
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