Capital markets executive summary | Mon 20 Nov 2023

Capital markets executive summary | Mon 20 Nov 2023

Panda EcoSystem IPO oversubscribed 153.47 times

The retail management solutions company, which will be listed on the ACE Market on 27 Nov, offered 33.56m shares to the public and received 20,021 applications for 5.18b shares worth RM829.41m. The bumiputra portion received 11,444 applications for 2.42b or 142.85 times oversubscribed. The remaining public portion received 8,577 applications for 2.77b shares or 164.08 times oversubscribed. 42.77m shares for directors, employees and persons who have contributed were fully subscribed. Also placed out were 32.95m new shares and 61.81m offer shares for private placement to selected investors. The company will raise RM17.5m with 17.2% for headquarters expansion, 16.2% for working capital, 15.6% for listing expenses, 15.5% for research and development, 15.1% for additional service hubs and workforce expansion, and 10.8% for Asean regional expansion. M&A Securities is the adviser, sponsor, underwriter and placement agent.

Digi Telecommunications’ AAA and P1 sukuk ratings affirmed

RAM Ratings affirmed the ratings of the wholly-owned subsidiary of CelcomDigi Berhad RM5b Islamic medium term notes programme and RM1b Islamic commercial papers programme with a RM5b combined limit. CelcomDigi, formerly Digi.Com Berhad, was formed after the merger of Celcom Axiata Berhad and Digi.Com Berhad on 30 Nov 2022. Digi Telecommunications runs the former Digi’s side of business and operations. CelcomDigi’s revenue grew from RM6.1b in 1H2022 to RM6.3b in 1H2023 due to non-service-based revenue. Although the debt level rose, the financial metrics should stay within AAA rating thresholds. Net present value of total net synergies over 5 years should be RM8b. Network integration and modernisation covers 24k existing sites nationwide. CelcomDigi is on track to fulfil merger-related undertakings with the Malaysian Communications and Multimedia Commission (MCMC). The catalyst for the telecommunications industry is 5G, although any earnings uplift from its rollout and adoption will only be in the medium term. The counter closed at RM4.26.
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MAHB’s senior debt AAA rating affirmed

RAM Ratings affirmed the rating of Malaysia Airports Holdings Berhad’s (MAHB) senior sukuk and the AA2 rating of the perpetual subordinated sukuk. The key rating driver is sole operatorship of all 39 government-owned airports in Malaysia. The company also benefits from diversifying into Sabiha Gokcen International Airport (SGIA) in Turkiye and expected extraordinary support from the Malaysian government. Domestic airport passenger movement increased 72% year-on-year to 60.68m in 9M2023, or 78% of 9M2019. Passenger traffic at SGIA rose 23% year-on-year to 28.1 mil in 9M2023, above pre-covid. Full recovery at domestic airports to pre-covid levels should be achieved in 2025. After deducting the concession fees for SGIA, adjusted operating profit before depreciation, interest and tax (OPBDIT) for 2022 was RM362.0m and for 1H2023 was RM328.6m. Full year 2023 adjusted OPBDIT should be RM800m-RM900m. Adjusted debt fell to RM5.5b at end-Jun 2023. Adjusted funds from operations debt coverage (FFODC) improved from 0.10 times in 2022 to 0.17 times annualised in 1H2023, and should rise to 0.20-0.30 times in 2024. The new operating agreements has been delayed despite government’s in-principle approval in Feb. The counter closed at RM7.43.

Berjaya Land gets USD50m Exim Bank loan for Four Seasons Okinawa

Seikou Okinawa Construction KK, wholly-owned by Berjaya Construction Berhad, signed a construction loan from Export-Import Bank of Malaysia Bhd (Exim Bank). The financing will be used by Seikou Okinawa as the primary contractor for the construction of the 32-acre Four Seasons Resort and Private Residences Okinawa in Japan. Four Seasons Okinawa’s gross development value is USD1.12b and has 279 accommodations consisting of 127 resort rooms, 124 high-end condominiums and 28 private villas. Civil works have been completed and it will take 40 months to complete the main construction. After that, the resort will undergo a 3-month hotel pre-opening phase. The grand opening is in 2Q2027. The counter closed at 27 sen.

US-based AES in talks to sell 51% of 1,200MW Mong Duong 2 coal-fired power plant

The US energy firm is discussing with Sev.en Global Investments, part of Czech billionaire Pavel Tykac’s companies, as part of its global strategy to divest coal assets by end-2025. South Korea’s Posco International it also considering selling its 30% interest. Sovereign wealth fund China Investment Corporation (CIC) is considering selling its 19% interest under AES’ terms with potential buyers. AES is one of the US largest investors in Vietnam and has indicated plans to build a liquefied natural gas (LNG) terminal and gas-fired power plant in the country. AES signed a sale agreement in 2021 with a consortium led by a US-based investor but the deal fell through. Posco’s 30% was valued at USD185m in a sale attempt in 2021 that would have valued the plant at over USD600m. The plant will be transferred to the Vietnamese government by 2040 and Vietnam expects to stop producing electricity by burning coal by 2050.