Financials & FinTech research, Galliano’s Financials Research

Victor Galliano

Financials & FinTech research

Financials & FinTech, EM & Developed Markets

Galliano’s Financials Research

Galliano's Financials Research provides fundamental research in Emerging Markets financials, including FinTech, as well as financials in select Developed Markets.

The investment style applied is generally value oriented, although Growth At Reasonable Price (GARP) strategies can also be used where appropriate. 

Our investment research approach aim is often contrarian, looking to capitalise on overly sceptical or optimistic consensus views. In terms of valuation techniques, the focus is on PBV ratio to ROE, PE multiples and dividend yield, as well as the application of PEG ratios and, where appropriate, Sum of the Parts (SOTP) valuations.

Equity Bottom-Up

<ul>
<li>The six value oriented Thai banks all have healthy credit quality, NPL coverage and sound capital adequacy ratios; in addition, encouraging cost of risk trends support the earnings outlook</li>
<li>Of these, we believe Krung Thai Bank screens well, with its attractive pre-provision and post-provision profitability versus peers, whilst trading on relatively undemanding multiples; we also like Kasikorn Bank</li>
<li>We see TMBThanchart as an early stage “turn around” stock, especially if management can improve credit quality, and push down its cost of risk sustainably to lower levels</li>
</ul>


The six value oriented Thai banks all have healthy credit quality, NPL coverage and sound capital adequacy ratios; in addition, encouraging cost of risk trends support the earnings outlook
Of these, we believe Krung Thai Bank screens well, with its attractive pre-provision and post-provision profitability versus peers, whilst trading on relatively undemanding multiples; we also like Kasikorn Bank
We see TMBThanchart as an early stage “turn around” stock, especially if management can improve credit quality, and push down its cost of risk sustainably to lower levels


Thai Banks Screener; Krung Thai and Kasikorn Are Our Top Picks

Head of Research, IPOs & Placements, Aequitas Research

Sumeet Singh

Head of Research, IPOs & Placements

IPOs and Placements coverage across Asia Pacific

Aequitas Research

We cover all listing across the Asia Pacific along with follow-up placements. As of Dec 2020, our team had covered 539 IPOs with a hit rate of 73.5% and 685 placements with a hit rate of 66.8%.

We combine fundamental bottom-up views with our proprietary quantitative framework to provide a holistic coverage across new listings and placements. Our coverage includes pre-IPO notes before the deal is launched, follow-up analysis once the deal is live and post-listing trading analysis as well.

Equity Capital Markets

<ul>
<li>Ngern Tid Lor (NTL), a financial service provider based in Thailand, raised around US$1bn in its Thailand IPO in May 2021.</li>
<li>NTL provides hire purchase loans for motorcycles and cars, along with new and used trucks. It also provides insurance brokerage services through its branches for non-life and life insurance. </li>
<li>The lock-up on its two main shareholders will expire today.</li>
</ul>


Ngern Tid Lor (NTL), a financial service provider based in Thailand, raised around US$1bn in its Thailand IPO in May 2021.
NTL provides hire purchase loans for motorcycles and cars, along with new and used trucks. It also provides insurance brokerage services through its branches for non-life and life insurance. 
The lock-up on its two main shareholders will expire today.


Ngern Tid Lor IPO Lock-Up - A US$660m Overhang. Selldown Is a Question of When, Not If.

ASEAN Insight Provider, CrossASEAN Research

Angus Mackintosh

ASEAN Insight Provider

CrossASEAN Research

At CrossASEAN Research we strive to produce unbiased and differentiated on the ground insights on companies across South East Asia. Our Research is produced for the most part after face to face meetings and conversations with company management to dig deep into the long term vision and strategy of the companies we cover. We seek to deliver investable and actionable themes on sectors and markets across SE Asia, often in collaboration with other Insight Providers across the region, pooling the vast experience of the analysts within the Smartkarma Ecosystem. We also offer bespoke work and tailor made trips for our clients. 

Insights across South East Asia

<ul>
<li>
<a href="https://www.smartkarma.com/entities/siam-commercial-bank-pub-co" target="_blank" data-smartkarma-citation="entities:214:1" rel="noopener">Siam Commercial Bank (SCB TB)</a>recently published a solid set of results reflecting the gradual recovery of its core banking business and increasing digitalisation of its customers base.</li>
<li>The real excitement will come with the formation of SCBX, involving the reallocation of excess capital, which will be invested in adjacent lending and high-growth technology businesses.</li>
<li>
<a href="https://www.smartkarma.com/entities/siam-commercial-bank-pub-co" target="_blank" data-smartkarma-citation="entities:214:1" rel="noopener">Siam Commercial Bank (SCB TB)</a>trades at a slight premium to peers on 0.92x FY2022E PBV but has the potential to generate higher returns, which should lead to further re-rating.</li>
</ul>



Siam Commercial Bank (SCB TB)recently published a solid set of results reflecting the gradual recovery of its core banking business and increasing digitalisation of its customers base.
The real excitement will come with the formation of SCBX, involving the reallocation of excess capital, which will be invested in adjacent lending and high-growth technology businesses.

Siam Commercial Bank (SCB TB)trades at a slight premium to peers on 0.92x FY2022E PBV but has the potential to generate higher returns, which should lead to further re-rating.


Siam Commercial Bank (SCB TB) - Let the Games Begin

Silver Point

Thomas J. Monaco

Silver Point is a boutique research firm that focuses on the broader financial services sector, with a particular focus on troubled institutions globally. 

Asia Ex Japan

*Weak Numerics: Bangkok Bank (BBL.TB) [BBL] reported 2Q21 bottom-line results of THB 6.4 bn, declining THB 566 mn (8.2%) on a linked quarter basis. Core operating results were far worse, however, coming in at THB 553 mn or down 86.2% over the same period; and*Credit Risk Remains Elevated: We find that BBL’s annualized net new NPLs during the period are THB 4.2 bn or 8.3% annualized. Given the increase in net new NPLs, moratorium credits are unknown and remain a wild card, and that COVID-19 continues to wreak havoc, we find that while loss reserves are hefty, the aggressive push to build reserves and de minimis NCOs despite the consistently high NPLs may suggest a big clean-up is coming.

*Weak Numerics: Bangkok Bank (BBL.TB) [BBL] reported 2Q21 bottom-line results of THB 6.4 bn, declining THB 566 mn (8.2%) on a linked quarter basis. Core operating results were far worse, however, coming in at THB 553 mn or down 86.2% over the same period; and*Credit Risk Remains Elevated: We find that BBL’s annualized net new NPLs during the period are THB 4.2 bn or 8.3% annualized. Given the increase in net new NPLs, moratorium credits are unknown and remain a wild card, and that COVID-19 continues to wreak havoc, we find that while loss reserves are hefty, the aggressive push to build reserves and de minimis NCOs despite the consistently high NPLs may suggest a big clean-up is coming.

IPOs and Catalysts/Events, Global Equity Research Ltd

Arun George

IPOs and Catalysts/Events

Uncompromised, Independent, Conflict-Free Research

Global Equity Research Ltd

Global Equity Research was started in 2017 by a group of experienced research professionals. It was founded on a passionate belief in the importance and the need for uncompromised, independent, conflict-free research. We aim to provide differentiated and actionable primary and bottom up fundamental research.

<a href="https://www.smartkarma.com/entities/ngern-tid-lor" target="_blank" data-smartkarma-citation="entities:31103:1" rel="noopener">Ngern Tid Lor (NTL TB)</a>/TIDLOR is the leading auto-for-cash loan provider in Thailand with a 16% market share as measured by the outstanding vehicle title loans in 2019, according to Oliver Wyman. TIDLOR is an affiliate of <a href="https://www.smartkarma.com/entities/bank-of-ayudhya-pcl" target="_blank" data-smartkarma-citation="entities:136:1" rel="noopener">Bank Of Ayudhya (BAY TB)</a> (Krungsri), which is a strategic member of <a href="https://www.smartkarma.com/entities/mitsubishi-ufj-financial-group" target="_blank" data-smartkarma-citation="entities:218:1" rel="noopener">Mitsubishi UFJ Financial (MUFG) (8306 JP)</a>. At the IPO price range of THB34.00-36.50, TIDLOR will raise total gross proceeds of THB30.9-33.1 billion ($1.0-1.1 billion). The offer comprises a primary/secondary spilt of 23:77. A total of 32 domestic and foreign cornerstone investors will subscribe for a total of 626.0 million shares or 69.0% of the offer shares. The foreign cornerstone investors include FIL Investment Management, JP Morgan Asset Management, Lion Global Investors and Neuberger Berman. <div class="content-highlight">In <a href="https://www.smartkarma.com/insights/ngern-tid-lor-ipo-initiation-finance-on-four-wheels" target="_blank" data-smartkarma-citation="insights:50448" rel="noopener">Ngern Tid Lor IPO Initiation: Finance on Four Wheels</a>, we noted that the timing of the IPO is not ideal as a new COVID-19 outbreak has swept through Thailand. Nevertheless, for investors willing to ride the current market uncertainty, we believe that TIDLOR is well placed to capture the long-term opportunity of Thailand’s vehicle title loan market. Our valuation analysis suggests that TIDLOR is fairly valued at the proposed IPO price range.     </div>

Ngern Tid Lor (NTL TB)/TIDLOR is the leading auto-for-cash loan provider in Thailand with a 16% market share as measured by the outstanding vehicle title loans in 2019, according to Oliver Wyman. TIDLOR is an affiliate of Bank Of Ayudhya (BAY TB) (Krungsri), which is a strategic member of Mitsubishi UFJ Financial (MUFG) (8306 JP). At the IPO price range of THB34.00-36.50, TIDLOR will raise total gross proceeds of THB30.9-33.1 billion ($1.0-1.1 billion). The offer comprises a primary/secondary spilt of 23:77. A total of 32 domestic and foreign cornerstone investors will subscribe for a total of 626.0 million shares or 69.0% of the offer shares. The foreign cornerstone investors include FIL Investment Management, JP Morgan Asset Management, Lion Global Investors and Neuberger Berman. In Ngern Tid Lor IPO Initiation: Finance on Four Wheels, we noted that the timing of the IPO is not ideal as a new COVID-19 outbreak has swept through Thailand. Nevertheless, for investors willing to ride the current market uncertainty, we believe that TIDLOR is well placed to capture the long-term opportunity of Thailand’s vehicle title loan market. Our valuation analysis suggests that TIDLOR is fairly valued at the proposed IPO price range.     

Thailand

Bank of Ayudhya Public Co., Ltd., also known as Krungsri, is a leading commercial bank in Thailand providing a comprehensive range of universal banking services. It offers personal, corporate, and SME banking services, including auto loans, home loans, transaction accounts, investment banking, and treasury services. The bank is headquartered in Bangkok, Thailand, and was established in 1945.

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Bank of Ayudhya (BAY TB)

Thai Banks Screener; Krung Thai and Kasikorn Are Our Top Picks

Within this value group of Thai banks, and with GDP recovering, our picks are Krung Thai and Kasikornbank; Bank Ayudhya is attractive but less...

Victor Galliano

Ngern Tid Lor IPO Lock-Up - A US$660m Overhang. Selldown Is a Question of When, Not If.

Ngern Tid Lor (NTL), a financial service provider based in Thailand, raised around US$1bn in its Thailand IPO in May 2021. The lock-up on its two...

Sumeet Singh

Siam Commercial Bank (SCB TB) - Let the Games Begin

Siam Commercial Bank trades at a slight premium to peers on 0.9x FY2022E PBV but has the potential to generate higher returns with the formation of...

Angus Mackintosh

Bangkok Bank – Rotten To The Core

BANGKOK BANK: BBL reported a 2Q21 QOQ core operating results decline of 86.2%. The increase in net new NPLs, unknown moratorium credits, and COVID...

Thomas J. Monaco

Ngern Tid Lor IPO: Valuation Insights

At the IPO price range of THB34.00-36.50, TIDLOR will raise total gross proceeds of $1.0-1.1 billion. Our valuation analysis suggests that TIDLOR...

Arun George

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