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>We update our views on ten Japanese midcap banks targeting attractively valued beneficiaries of the realization of big strategic shareholdings, as well as beneficiaries of the improving interest rate outlook</li>
<li>We re-iterate our buys on Hachijuni Bank and Hokuhoku Financial; there is potential to realize their large strategic holdings relative to their market capitalizations combined with their attractive PTBV ratios</li>
<li>We take Gunma Bank off the buy list, replacing it with Iyogin; Iyogin has a constructive mix of large strategic holdings, attractive valuations and healthy gearing to higher interest rates</li>
</ul>


We update our views on ten Japanese midcap banks targeting attractively valued beneficiaries of the realization of big strategic shareholdings, as well as beneficiaries of the improving interest rate outlook
We re-iterate our buys on Hachijuni Bank and Hokuhoku Financial; there is potential to realize their large strategic holdings relative to their market capitalizations combined with their attractive PTBV ratios
We take Gunma Bank off the buy list, replacing it with Iyogin; Iyogin has a constructive mix of large strategic holdings, attractive valuations and healthy gearing to higher interest rates


Japanese Midcap Banks – Hachijuni (8359 JP) Is Our Top Pick

Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

<ul>
<li>So far, 10 regional banks have upgraded guidance since Q1 results. One of them (Iyogin) twice. The average gain is +71.7% vs original H1 guidance (if we count Iyogin once).</li>
<li>This week will be the big push for new guidance ahead of a flood earnings reports the following week. Election results will cause concern, and the BOJ meets Thursday.</li>
<li>I expect a move in December (positive for banks), but it may be US Fed and $/¥-dependent. In the meantime banks enjoy tailwinds.</li>
</ul>


So far, 10 regional banks have upgraded guidance since Q1 results. One of them (Iyogin) twice. The average gain is +71.7% vs original H1 guidance (if we count Iyogin once).
This week will be the big push for new guidance ahead of a flood earnings reports the following week. Election results will cause concern, and the BOJ meets Thursday.
I expect a move in December (positive for banks), but it may be US Fed and $/¥-dependent. In the meantime banks enjoy tailwinds.


Japan 2024 H1 Bank Guidance: Interest/Fees ⬆︎, Expenses/Credit Costs⬇︎ - Opportunity Good Still

Equity Capital Markets

<ul>
<li>Today (27 June 2024) after the close, <a href="https://www.smartkarma.com/entities/aisin-corp" target="_blank" data-smartkarma-citation="entities:11809:1" rel="noopener">Aisin (7259 JP)</a> announced three Toyota Group companies (Toyota, Toyota Industries, and Denso) would sell shares in Aisin in a ¥180bn offering.</li>
<li>This is ALL of Denso's holdings, 63% of Toyota Industries stake, and ~12% of Toyota's stake. Separately, Aisin announced a 17mm share (6.3%) ¥100bn buyback and a 3:1 split Oct1.</li>
<li>The recent yuho shows us the progress of Aisin's promised selldown of crossholdings. There are three large chunks left. One is easy. The climb to capital allocation credibility easier too.</li>
</ul>


Today (27 June 2024) after the close, Aisin (7259 JP) announced three Toyota Group companies (Toyota, Toyota Industries, and Denso) would sell shares in Aisin in a ¥180bn offering.
This is ALL of Denso's holdings, 63% of Toyota Industries stake, and ~12% of Toyota's stake. Separately, Aisin announced a 17mm share (6.3%) ¥100bn buyback and a 3:1 split Oct1.
The recent yuho shows us the progress of Aisin's promised selldown of crossholdings. There are three large chunks left. One is easy. The climb to capital allocation credibility easier too.


Big Aisin (7259) Offering Sets Stage for First Toyota Group Full Unwind

Japan

Iyogin Holdings, Inc. operates as a holding company. The Company provides operation and management of bank related subsidiary companies. Iyogin Holdings provides its services throughout Japan.

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Iyogin Holdings (5830 JP)

Japanese Midcap Banks – Hachijuni (8359 JP) Is Our Top Pick

Japanese midcap banks: stick with buys on Hachijuni Bank and Hokuhoku Financial, replacing Gunma Bank with Iyogin for potential gains from equity...

Victor Galliano

Japan 2024 H1 Bank Guidance: Interest/Fees ⬆︎, Expenses/Credit Costs⬇︎ - Opportunity Good Still

10 of about 70 Japanese regional banks have revised guidance for the H1 to end-Sep 2024. The average gain is near 70% vs previous guidance. That's...

Travis Lundy

Big Aisin (7259) Offering Sets Stage for First Toyota Group Full Unwind

Aisin today announced a large equity offering by 3 Toyota Group companies. ¥180bn of offering against a buyback of ¥100bn. Some overhang. Some...

Travis Lundy

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

Japanese Midcap Banks – Hachijuni (8359 JP) Is Our Top Pick

​Japanese midcap banks: stick with buys on Hachijuni Bank and Hokuhoku Financial, replacing Gunma Bank with Iyogin for potential gains from equity...

Victor Galliano

Japan 2024 H1 Bank Guidance: Interest/Fees ⬆︎, Expenses/Credit Costs⬇︎ - Opportunity Good Still

10 of about 70 Japanese regional banks have revised guidance for the H1 to end-Sep 2024. The average gain is near 70% vs previous guidance. That's...

Travis Lundy

Big Aisin (7259) Offering Sets Stage for First Toyota Group Full Unwind

Aisin today announced a large equity offering by 3 Toyota Group companies. ¥180bn of offering against a buyback of ¥100bn. Some overhang. Some...

Travis Lundy

Japanese midcap banks: stick with buys on Hachijuni Bank and Hokuhoku Financial, replacing Gunma Bank with Iyogin for potential gains from equity...