BOC Aviation 2588

BOC Aviation 2588

Postby winston » Tue May 17, 2016 9:13 am

Aircraft lessor attracts big backers for IPO

BOC Aviation., the aircraft leasing unit of Bank of China (3988), attracted investors including Boeing and the Chinese sovereign wealth fund to buy shares in its US$1.1 billion (HK$8.58) initial public offering in Hong Kong.

China Investment Corp and the Silk Road Fund agreed to each invest US$100 million in the offering, while Oman Investment Fund will buy US$50 million of stock.

Boeing, the world's biggest planemaker, committed US$30 million, and Chinese billionaire Guo Guangchang's Fosun International will purchase US$35 million of shares, the terms show.

With this IPO, BOC Aviation will become the second dedicated Asian air lessor to go public after smaller competitor China Aircraft Leasing Group Holdings made its debut in Hong Kong in July 2014.

BOC Aviation is offering a combined 208.2 million shares in the IPO at a fixed price of HK$42 apiece.

China Development Bank Corp will invest US$60 million in the share sale, while China Life Insurance and Chinese private-equity firm Hony Capital will each purchase US$50 million of stock, the terms show.

The company aims to begin trading June 1.

Source: BLOOMBERG
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Re: BOC Aviation IPO

Postby winston » Tue May 17, 2016 9:14 am

China’s CIC, Hony Capital among 11 cornerstone investors in BoC Aviation IPO

Cornerstone investors are contributing 52 percent of BoC Aviation’s base deal size.


The company is selling shares at a fixed price of HK$42.00 each to purchase new aircraft. BoC, China’s fourth-biggest lender by assets, said last week the IPO would value the aviation leasing unit at about $3.8 billion..


Source: Deal Street Asia

Read more at: http://www.dealstreetasia.com/stories/c ... -246495057
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Re: BOC Aviation IPO

Postby winston » Wed May 18, 2016 8:51 pm

BOC Aviation’s Hong Kong flotation deserves to fly

By Peter Thal Larsen

Hong Kong is finally welcoming a Chinese-owned financial group whose listing can take off.

BOC Aviation, the plane-hire group controlled by Bank of China, is taxiing towards a $1.1 billion initial public offering. As long as it remains under the state-backed lender’s wing, a premium valuation should be justified.

The 23-year old aircraft leasing company could hardly be more different from the Chinese banks and brokers that have recently landed in Hong Kong in search of investors.

For one, BOC Aviation is solidly profitable, with return on equity above 15 percent in each of the past three years. Second, despite the name, its exposure to Greater China is fairly small, accounting for less than 17 percent of rental income in 2015.

BOC Aviation does, however, get a big financial uplift from the People’s Republic. Being part of Bank of China, which acquired the Singapore-based group for almost $1 billion a decade ago, allows it to borrow more at lower rates than standalone rivals.

Debt was 3.7 times equity at the end of last year, yet average funding costs were just 2 percent. New York-listed Air Lease, which has a similar-sized fleet and balance sheet, paid 3.6 percent on its debt even though leverage is lower.

The question for prospective investors is whether BOC Aviation can maintain this altitude. Bank of China will own at least 65.5 percent of the company after the offering, and has supplied a $2 billion backstop credit line until at least 2022.

Besides, the Chinese government has made developing the leasing industry a priority. However, Western banks and insurers were forced to jettison their leasing arms after receiving bailouts after the financial crisis. As bad debts rise on the mainland, Bank of China’s long-term support cannot be taken for granted.

The offering price of HK$42 per share values BOC Aviation at about 1.3 times last year’s book value, after taking account of new money, according to Breakingviews calculations. Other listed groups trade below book.

A cluster of big Chinese investors – and, surprisingly, manufacturer Boeing – have already committed to buy half the offering. Yet unlike other recent IPOs, this is one Chinese financial group investors can consider boarding.

Source: Reuters
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Re: BOC Aviation IPO

Postby winston » Thu May 19, 2016 6:17 am

Aircraft leasing firm takes off

by Wiki Su

BOC Aviation (2588) will open the retail book today for its HK$8.7 billion initial public offering, with the existing major shareholder absorbing half of the listing amount.

The aircraft leasing company offered a total of 208.2 million shares, half being existing shares owned by Bank of China (3988). Investors need to pay HK$4,242.32 per board lot, with the share price fixed at HK$42, representing 1.25 times price to book ratio.

Cornerstone investors consisting of certain state-owned groups will subscribe to about HK$4.5 billion worth of shares, accounting for 51.7 percent of the total offering any overallotment.

Aircraft maker Boeing, sovereign wealth funds Oman Investment, China Investment Corporation and Fullerton Fund Management, a subsidiary of Singapore-based Temasek, are among the cornerstone investors.

"Asia Pacific is where the growth is," said Robert Martin, managing director and chief executive of BOC Aviation, adding that Hong Kong has the most liquidity in Asia.

After the IPO, Bank of China will remain a majority shareholder.

Net proceeds estimated to be HK$4.2 billion will be entirely used to fund predelivery payments for the purchase of aircraft. The stock is due to start trading on June 1.

Source: The Standard
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Re: BOC Aviation IPO

Postby winston » Thu May 19, 2016 10:27 am

BOC Aviation (2588.HK) - Leader of Regional Aircraft Leasing Business

As of the end of 2015, BOC Aviation was the largest aircraft leasing operator in Asia-Pacific as well as the fifth largest aircraft leasing operator around the world (as measured by owned aircraft)

Additionally, the company's portfolio of owned aircraft has an average age of 3.3 years, making it one of the youngest in the aircraft leasing industry.

The average remaining lease term on the owned portfolio was 7.4 years and it is therefore one of the operators with the longest average lease term in the industry.


The company's revenue was USD1.091 billion, a y-o-y increase of 10.4% and the net profit amounted to USD343 million, a y-o-y increase of 11.3%.

At present, the company has 241 aircraft on order. Also, about 40 new aircraft will be put in to the leasing business every year in the future.


The offered price is HKD42 per share, with the PBR of about 1.1X, which was lower than that of the CALC, more than 2X. Therefore, we regard it worth subscribing.


Risks

The company fails to maintain its advantage of low cost of capital;

The market price or lease rate of aircraft decreases;

Aviation accidents happen and cost of fuel increases dramatically, etc.;

The USD interest rate increases significantly.


Source: Phillips

http://cyberquote.poems.com.hk/Phillip/ ... tock_code=
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Re: BOC Aviation IPO

Postby winston » Fri May 20, 2016 8:00 am

Muted Demand

BOC Aviation (2588), the aircraft leasing arm of Bank of China (3988), opened its retail book yesterday.

It plans to raise HK$8.7 billion, making it the third largest IPO so far this year.

But investor sentiment was muted.

Phillip Securities saw margin demand for the shares at HK$436 million, representing about 5 percent of the IPO. Subscription will close on Tuesday.

Source: The Standard
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Re: BOC Aviation IPO

Postby winston » Wed May 25, 2016 6:54 am

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BOC Aviation has highest take-up

The retail tranche of BOC Aviation Limited (2588) was 37 times oversubscribed, freezing HK$25.5 billion and marking the highest take-up for an initial public offering so far this year.

The Singapore-based aircraft leasing company closed its retail book yesterday.

Margin application also drew to a close with about HK$3.18 billion lent to subscribe to the offering. With the offer price set at HK$42, the firm has raised HK$4.25 billion of net proceeds for purchasing aircraft.

Source: The Standard
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Re: BOC Aviation IPO

Postby winston » Thu Jun 02, 2016 6:35 am

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Plane lessor grounded on debut

by Watson Tan

BOC Aviation (2588) ended its first day of trading at HK$42, unchanged from its offer price, leading losses of HK$42.32 per lot of 100 shares in fees.

Bright Smart Securities marketing director, Francis Kwok Sze-chi said the indifference of investors was expected due to its high share price, "Retail investors usually invest in stocks with the price of dozens of dollars for the medium term, and so do we recommend."

The average age of aircraft belonging to the company was less than four years, an advantage to meet huge demand in the future, Francis Kwok said. "Despite the slow growth in share price, its long- term performance will be bullish."

Chief executive Robert Martin said the company has a large Asian market, in which China is the second largest customer after the US. However, the company will not limit its development to any single region or country.

The increasing demand for aircraft leasing offsets some effects of the economic slowdown on the industry. A rising middle class also benefits the business, he said.

It has no plan for acquisition right now and will focus on existing business.

The capital expenditure of the airline business will increase by 50 percent to US$90 billion (HK$702 billion) this year, and the annual spending is estimated to get to US$120 billion in five years, according to Martin.

Asia's biggest aircraft lessor was oversubscribed almost 38 times in its retail tranche, freezing the largest amount of capital this year at HK$25.3 billion.

The net profit margin of the company last year reached 31.5 percent, in comparision to Cathy Pacific with 5.9 percent in the same period.

Source: The Standard
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Re: BOC Aviation 2588

Postby winston » Tue Aug 30, 2016 8:20 am

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BOC AVIATION Interim Net Profit Up 23.75% to US$212M; Interim Div US6.1 Cents

BOC AVIATION (02588.HK) 0.000 (0.000%) announced that for the interim period as of the end of June, the net profit rose 23.75% yearly to US$212 million.

The EPS equaled US$0.35; an interim dividend of US$0.061 was declared.

Source: AAStocks Financial News
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Re: BOC Aviation 2588

Postby winston » Wed Aug 21, 2019 11:12 am

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BOC AVIATION(2588)

Analysis:

The Group announced the interim result in 2019.

Revenue reached USD 930 mn, a YoY increase of 12.8%.

Net profit reached USD 320 mn, up by 8.1% YoY.

As at 30 June 2019, the group has a portfolio of 499 owned, managed and committed aircraft, where 314 aircraft are owned with an average age of 3.1 years and an average remaining lease term of 8.2 years, each weighted by net book value.

Currently, the orderbook had 162 aircraft scheduled for delivery before 2021, but 18 aircraft scheduled for delivery in the first half of 2019 were delayed, including 12 Airbus aircraft delayed primarily due to industrial constraints and six Boeing aircraft delayed primarily due to the 737 MAX grounding.

Moreover, the Group sold 11 aircraft, including two managed aircraft.

The net lease yield dropped 0.2% to 8.4%.

IATA expects this pace to be maintained for the balance of 2019, with 5% passenger traffic growth projected, which should benefit the future performance of the Group.

Strategy:
Buy-in Price: $67.50, Target Price: $73.00, Cut Loss Price: $60.00

Source: Phillips
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