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.

Equity Bottom-Up

<ul>
<li>Profit continues to expand at Mitsui E&amp;S after its transition to a holding company, now reporting over 400% profit growth for 9 months YTD. </li>
<li>The company is doing well to keep its operating costs down, with an improving funding structure and balance, as its revenue grows more than COGs.</li>
<li>We wonder if there will be more revisions upward to profit, with new initiatives and with a more proven recent track record.</li>
</ul>


Profit continues to expand at Mitsui E&amp;S after its transition to a holding company, now reporting over 400% profit growth for 9 months YTD. 
The company is doing well to keep its operating costs down, with an improving funding structure and balance, as its revenue grows more than COGs.
We wonder if there will be more revisions upward to profit, with new initiatives and with a more proven recent track record.


Mitsui E&S - Near Record ROE as Profit Continues to Expand From Multiple Drivers

Japan/Asia Long-Short, LightStream Research

Mio Kato

Japan/Asia Long-Short

Long-Short Analysis on Japan, Asia and the World

LightStream Research

LightStream conducts quantitatively rigorous and data-driven analysis with a focus on Japan and Asia.

We consistently cover the Tech, Consumer and Industrial sectors, and provide ECM and Events coverage more broadly.

We supplement traditional qualitative insights from company relationships with a robust quantitative foundation that examines as much historical data as is available.
We further refine the accuracy of our insights and calls through the use of alternative data to flesh out current trends, and through a valuation framework that emphasises non-superficial peer group selection and a proper attempt to understand the metrics and changes that have driven security valuations in the past.

<ul>
<li>Chiyoda results were slightly weak driven by a poor gross margin in the fourth quarter but revenue guidance was punchy at ¥500bn vs. consensus at ¥354bn. </li>
<li>We had flagged previously that Chiyoda would be moving to the favourable portion of the construction s-curve shortly and that appears to be coming through. </li>
<li>That drove OP guidance of ¥20bn which is far above consensus at ¥14bn and could eventually help Chiyoda reduce potential dilution.</li>
</ul>


Chiyoda results were slightly weak driven by a poor gross margin in the fourth quarter but revenue guidance was punchy at ¥500bn vs. consensus at ¥354bn. 
We had flagged previously that Chiyoda would be moving to the favourable portion of the construction s-curve shortly and that appears to be coming through. 
That drove OP guidance of ¥20bn which is far above consensus at ¥14bn and could eventually help Chiyoda reduce potential dilution.


<ul>
<li>Recent events in Ukraine should be highly favourable for Chiyoda as they raise the potential for LNG capex. </li>
<li>US to Europe deliveries could involve significant liquefaction capacity build-out at good pricing points and even hydrogen could be in the mix. </li>
<li>If orders come through and rising profit drives the share price up that could also lead to positive capital structure changes.</li>
</ul>


Recent events in Ukraine should be highly favourable for Chiyoda as they raise the potential for LNG capex. 
US to Europe deliveries could involve significant liquefaction capacity build-out at good pricing points and even hydrogen could be in the mix. 
If orders come through and rising profit drives the share price up that could also lead to positive capital structure changes.


Chiyoda – Breaking Out of Downtrend and Setup For a Pref Buyback

Index Rebal Trades & Special Situations, Quiddity Advisors

Janaghan Jeyakumar, CFA

Index Rebal Trades & Special Situations

Quiddity Advisors

Pan-Asia Catalysts/Events

Event-Driven

<ul>
<li>JPX-Nikkei 400 is composed of common stocks listed in the Tokyo Stock Exchange. It is a free-float-adjusted market-value-weighted (capped) index composed of 400 constituents.</li>
<li>A periodic review is conducted by the Index providers, the JPX Group and Nikkei Inc, in August every year.</li>
<li>Below is a look at potential Inclusions and Removals for the JPX-Nikkei 400 Rebalance to come in August 2022 based on trading data as of end-<em>February 2022</em>.</li>
</ul>


JPX-Nikkei 400 is composed of common stocks listed in the Tokyo Stock Exchange. It is a free-float-adjusted market-value-weighted (capped) index composed of 400 constituents.
A periodic review is conducted by the Index providers, the JPX Group and Nikkei Inc, in August every year.
Below is a look at potential Inclusions and Removals for the JPX-Nikkei 400 Rebalance to come in August 2022 based on trading data as of end-February 2022.


JPX-Nikkei 400 Rebalance 2022: Leaderboard End-Feb 2022

<ul>
<li>Chiyoda’s 3Q numbers weren’t especially surprising nor impactful as the company continues its recovery. </li>
<li>We have been detailing for some time how current valuations look depressed and upside risk was present from the capital structure. </li>
<li>Now we believe that revenue trends are improving to the extent that they may put a floor under the stock.</li>
</ul>


Chiyoda’s 3Q numbers weren’t especially surprising nor impactful as the company continues its recovery. 
We have been detailing for some time how current valuations look depressed and upside risk was present from the capital structure. 
Now we believe that revenue trends are improving to the extent that they may put a floor under the stock.


Chiyoda – Momentum Turn Could Be Around the Corner

Japan

CHIYODA CORPORATION constructs, inspects, and maintains industrial plants around the world.  Those plants include oil refinery, petrochemical, food, and pharmaceutical plants.  The Company also provides comprehensive engineering services for such as energy saving, factory automation (FA), and environmental preservation for water treatment and soil purification.

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Chiyoda Corp (6366 JP)

Mitsui E&S - Near Record ROE as Profit Continues to Expand From Multiple Drivers

Mitsui E&S is recording strong expansion in profit from multiple drivers which can continue and there is room for the company and the market to...

Daniel Tabbush

Chiyoda – Just Getting Started

Chiyoda guidance was extremely strong and well above consensus but could still prove conservative while valuations remain depressed even ignoring...

Mio Kato

Chiyoda – Breaking Out of Downtrend and Setup For a Pref Buyback

As Chiyoda stocks breaks out of its downtrend on strong volume we ponder European LNG demand, hydrogen technology and buybacks of pref shares.

Mio Kato

JPX-Nikkei 400 Rebalance 2022: Leaderboard End-Feb 2022

A look at potential Inclusions and Removals for the JPX-Nikkei 400 Rebalance to come in August 2022 based on trading data as of end-February 2022.

Janaghan Jeyakumar, CFA

Chiyoda – Momentum Turn Could Be Around the Corner

Chiyoda's current valuations look depressed and upside risk is present from the capital structure. Now revenue trends are improving to the extent...

Mio Kato

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