In today’s briefing:
- Merger Arb Mondays (30 May) – Yancoal, Link Net, Link Admin, Alliance Aviation, True Corp, DTAC
- PT Avia Avian (AVIA IJ) – Painting Indonesia From Top to Bottom
- Indonesian Banks Screener; Bank Mandiri Is Our Top Pick
Merger Arb Mondays (30 May) – Yancoal, Link Net, Link Admin, Alliance Aviation, True Corp, DTAC
- We summarise the latest spreads and newsflow of merger arb situations covered by us across Hong Kong, Australia, New Zealand, Singapore, Indonesia, Thailand and Chinese ADRs.
- This week, the highest gross spreads are Sezzle Inc (SZL AU), 21Vianet Group (VNET US), Link Administration Holdings (LNK AU), Alliance Aviation Services (AQZ AU), True Corp Pcl (TRUE TB).
- Lowest gross spreads are Yancoal Australia (3668 HK), Hwa Hong Corp (HWAH SP), AKM Industrial (1639 HK), Virtus Health (VRT AU), Irongate Group (IAP AU), Uniti Group Ltd (UWL AU).
PT Avia Avian (AVIA IJ) – Painting Indonesia From Top to Bottom
- PT Avia Avian (AVIA IJ) is the leading decorative paint and coatings player in Indonesia listing last December and trading 20% below its IPO price but with an institutional following.
- 1Q2022 results were weaker due to a high base last year but has seen a strong pick-up since. It has raised prices twice to offset higher raw material prices.
- PT Avia Avian is an interesting proxy for the recovery in the domestic economy together with the property market plus M&A could be a further catalyst this year.
Indonesian Banks Screener; Bank Mandiri Is Our Top Pick
- The six Indonesian banks have strong capital adequacy ratios, healthy credit quality and good NPL coverage; also, GDP recovery supports positive cost of risk trends and the bank earnings outlook
- We believe that Bank Mandiri screens best, with its attractive pre-provision profitability and steadily improving cost of risk, whilst trading on undemanding multiples versus peers; we also like Bank Rakyat
- We see Bank Permata as a potential “turn around” stock, especially if management can improve credit quality, and keep lowering its cost of risk to boost returns
Before it’s here, it’s on Smartkarma
