Research and consultancy, Tabbush Report

Daniel Tabbush

Research and consultancy

Tabbush Report

We provide research and consultancy on Asian banks. Our focus is on what we call “Asian bank research, without the noise.” We are interested in the most critical swing-factors for banks, the NPL and credit cycle, and where we believe there is a gap between perception and reality. We often focus on the less studied components of bank financial statements.  Our research is highly thematic, sometimes examining unlisted banks and companies as a window on mainstream banks. 

Being independent allows us to look at smaller banks, often overlooked by others. Analysis of BIS bank guidelines in the context of Asia, is also a focal point, while we also analyze global banks operating in the region. We use what we believe is the most comprehensive, reliable financials database, SNL Financial. S&P Capital IQ augments our database, with corporate data and CEIC, with economics. 

Asian bank research, without the noise.

Thematic (Sector/Industry)

It is strange to see that so many China banks are reporting nearly identical net profit, close to 0% in their just announced 2015 results. We presume there is some posturing and positioning amongst banks, to be sure no single bank is too out of line and reported rates of growth are similarly poor.  Gone are the days of heady growth, which is no surprise, given the ramp up of bad loans, worsening credit growth and pressure on net interest margins. As we look at a few of China’s banks newly…

It is strange to see that so many China banks are reporting nearly identical net profit, close to 0% in their just announced 2015 results. We presume there is some posturing and positioning amongst banks, to be sure no single bank is too out of line and reported rates of growth are similarly poor.  Gone are the days of heady growth, which is no surprise, given the ramp up of bad loans, worsening credit growth and pressure on net interest margins. As we look at a few of China’s banks newly…

China Bank Profit on the Way to Contraction

Leading Independent Investment Research, Morningstar, Inc.

Morningstar

Leading Independent Investment Research

Morningstar, Inc.

Morningstar, Inc. is a leading provider of independent investment research in North America, Europe, Australia, and Asia. We offer an extensive line of products and services for individual investors, financial advisors, asset managers, and retirement plan providers and sponsors. 

Morningstar provides data on more than 500,000 investment offerings, including stocks, mutual funds, and similar vehicles, along with real-time global market data on more than 16 million equities, indexes, futures, options, commodities, and precious metals, in addition to foreign exchange and Treasury markets. Morningstar also offers investment management services through its investment advisory subsidiaries, with more than $180 billion in assets under advisement or management as of June 30, 2015. We have operations in 27 countries.

Download the Morningstar Fact Sheet : http://corporate.morningstar.com/US/documents/MarketingFactSheets/AboutMorningstarFactsheet.pdf

Risks regarding bill-financing business have recently become a new source of concern for Chinese banks.  Bill-financing frauds seen at both the Agricultural Bank of China, or ABC, and China Citic Bank, or Citic, indicate high operational risks.Since late 2015, the China Banking Regulatory Commission has been strengthening controls by identifying violations, including fraudulent transactions, the use of financing to inflate deposits and loans, and adjustments intended to lower capital charges.  We expect this to negatively affect certain banks with relatively heavy business exposures, including ABC, China Minsheng Bank, or CMBC, and Citic.Analyst: Iris Tan, CFA

Risks regarding bill-financing business have recently become a new source of concern for Chinese banks.  Bill-financing frauds seen at both the Agricultural Bank of China, or ABC, and China Citic Bank, or Citic, indicate high operational risks.Since late 2015, the China Banking Regulatory Commission has been strengthening controls by identifying violations, including fraudulent transactions, the use of financing to inflate deposits and loans, and adjustments intended to lower capital charges.  We expect this to negatively affect certain banks with relatively heavy business exposures, including ABC, China Minsheng Bank, or CMBC, and Citic.Analyst: Iris Tan, CFA 

Tightened Regulations on China's Bill Financing Pose NIM Pressures for Certain Banks

Global Special Situations

Charles Nave

Event-Driven

The First Pacific ex-PLDT/Indofood stub has rallied from -HK$2.93 to current levels of -HK$2.06.This comes primarily on the back of poor nine-month earnings figures at the subsidiaries. &nbsp;Both PLDT and Indofood took a large FX hit, however, fundamentally, Indofood also struggled with their exposure to segments such as palm oil.Would look to be unwinding the stub at current levels.

The First Pacific ex-PLDT/Indofood stub has rallied from -HK$2.93 to current levels of -HK$2.06.This comes primarily on the back of poor nine-month earnings figures at the subsidiaries. &nbsp;Both PLDT and Indofood took a large FX hit, however, fundamentally, Indofood also struggled with their exposure to segments such as palm oil.Would look to be unwinding the stub at current levels.

First Pacific (142 HK):  Stub Surges 30% - Unwind

Following on from my earlier note I have dug a little deeper with management to determine what will be the key drivers of growth. &nbsp;Where will the company be taking a hit and what is their near term focus across the board for their group companies.This includes a brief commentary on PLDT, Indofood, Metro Pac (rail, water, toll roads), Goodman Fielder, parent level power business and their mining interests.All in all, the company see the significant discount (off FirstPac numbers it's a&nbsp;50% discount) and are focussed on a number of initiatives to focus the company and do a bit of housework.

Following on from my earlier note I have dug a little deeper with management to determine what will be the key drivers of growth. &nbsp;Where will the company be taking a hit and what is their near term focus across the board for their group companies.This includes a brief commentary on PLDT, Indofood, Metro Pac (rail, water, toll roads), Goodman Fielder, parent level power business and their mining interests.All in all, the company see the significant discount (off FirstPac numbers it's a&nbsp;50% discount) and are focussed on a number of initiatives to focus the company and do a bit of housework.

First Pacific (142 HK):  Discussion with Management on Catalysts/Near Term Events

First Pacific is trading at historically wide discount to NAV levels whilst the relative yield premium at Philippine Long Distance Telecom (PLDT) has narrowed substantially.Goodman Fielder (50% owned) is positioned for further growth into Asia, whilst a number of catalysts at the Metro Pacific level see a good turnaround story for First Pacific ex-PLDT and Indofood.

First Pacific is trading at historically wide discount to NAV levels whilst the relative yield premium at Philippine Long Distance Telecom (PLDT) has narrowed substantially.Goodman Fielder (50% owned) is positioned for further growth into Asia, whilst a number of catalysts at the Metro Pacific level see a good turnaround story for First Pacific ex-PLDT and Indofood.

First Pacific (142 HK):  Goodman and Metro Pacific Set to Reignite the Stub

Hong Kong

First Pacific Company Limited is an investment holding company with operations located in Asia-Pacific. The Company principally invests in consumer food products, infrastructure, natural resources, and telecommunications.

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First Pacific Co (142 HK)

China Bank Profit on the Way to Contraction

It is strange to see that so many China banks are reporting nearly identical net profit, close to 0% in their just announced 2015 results. We...

Daniel Tabbush

Tightened Regulations on China's Bill Financing Pose NIM Pressures for Certain Banks

Risks regarding bill-financing business have recently become a new source of concern for Chinese banks. Bill-financing frauds seen at both the...

Morningstar, Inc.

First Pacific (142 HK): Stub Surges 30% - Unwind

The First Pacific ex-PLDT/Indofood stub has rallied from -HK$2.93 to current levels of -HK$2.06.This comes primarily on the back of poor nine-month...

Charles Nave

First Pacific (142 HK): Discussion with Management on Catalysts/Near Term Events

Following on from my earlier note I have dug a little deeper with management to determine what will be the key drivers of growth. Where will the...

Charles Nave

First Pacific (142 HK): Goodman and Metro Pacific Set to Reignite the Stub

First Pacific is trading at historically wide discount to NAV levels whilst the relative yield premium at Philippine Long Distance Telecom (PLDT)...

Charles Nave

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