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>Among the EM digital banks covered, we turn constructive on Inter, we remain cautious on Nubank and see Bank Jago as an over-valued growth play; we are neutral on Kakaobank</li>
<li>Client penetration is key, yet digital banks also need to achieve loan and other banking product penetration to drive revenue growth and ultimately better returns</li>
<li>We believe that neobanks’ key hurdles to enhanced profitability are “old school” banking metrics; delinquency and cost of risk charges, as well as high capital absorption from fast loan growth</li>
</ul>


Among the EM digital banks covered, we turn constructive on Inter, we remain cautious on Nubank and see Bank Jago as an over-valued growth play; we are neutral on Kakaobank
Client penetration is key, yet digital banks also need to achieve loan and other banking product penetration to drive revenue growth and ultimately better returns
We believe that neobanks’ key hurdles to enhanced profitability are “old school” banking metrics; delinquency and cost of risk charges, as well as high capital absorption from fast loan growth


EM Digital Banks Overview - Brazil, South Korea and Indonesia

Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

Event-Driven

<ul>
<li>On 22 August, it was announced that KB Kookmin Bank invested 200 billion won worth of TMap Mobility, valuing the company at 2.2 trillion won ($1.7 billion).</li>
<li>At the end of 2021, SK Square owned a 66.3% stake in TMap Mobility. After this investment, KB Kookmin Bank will own an 8.2% stake in TMap Mobility.</li>
<li>TMap Mobility generated sales of 74.5 billion won,  operating loss of 67.8 billion won, and net loss of 5.3 billion won in 2021.</li>
</ul>


On 22 August, it was announced that KB Kookmin Bank invested 200 billion won worth of TMap Mobility, valuing the company at 2.2 trillion won ($1.7 billion).
At the end of 2021, SK Square owned a 66.3% stake in TMap Mobility. After this investment, KB Kookmin Bank will own an 8.2% stake in TMap Mobility.
TMap Mobility generated sales of 74.5 billion won,  operating loss of 67.8 billion won, and net loss of 5.3 billion won in 2021.


KB Kookmin Bank Invests 200 Billion Won in SK Square's TMap Mobility

<ul>
<li>On 19 August, KB Kookmin Bank sold a 3.1% stake (14.76 million shares) in KakaoBank (323410 KS). </li>
<li>The block deal sale price was 28,704 won, which was 8% discount to the previous day's closing price.</li>
<li>We continue to have a Negative view of Kakao Bank, due to further overhang on more share sales, concerns about partial ban of simple remittance, and unattractive valuations.</li>
</ul>


On 19 August, KB Kookmin Bank sold a 3.1% stake (14.76 million shares) in KakaoBank (323410 KS). 
The block deal sale price was 28,704 won, which was 8% discount to the previous day's closing price.
We continue to have a Negative view of Kakao Bank, due to further overhang on more share sales, concerns about partial ban of simple remittance, and unattractive valuations.


A Block Deal Sale of 3.1% of Kakao Bank by KB Kookmin Bank

Asset Allocation & Fund Positioning, Copley Fund Research

Steven Holden

Asset Allocation & Fund Positioning

Copley Fund Research

Copley Fund Research provide research and data on asset allocation among Global and Emerging Market equity funds.  The analysis details absolute and relative positioning across countries, sectors and industries together with highly granular data on single stock and single fund allocations.  The data is updated monthly with time series going back to January 2011.

Global Research - Analysis of 165 prominent Global equity funds, combined AUM $335bn
GEM Research - Analysis of 127 prominent global EM equity funds, combined AUM $250bn

Asset Allocation - Global and GEM Equity

Thematic (Sector/Industry)

<ul>
<li>Over the past decade, Cyclical sectors have traded places with Sensitive sectors as the largest allocation among active Asia Ex-Japan investors. </li>
<li>The last cycle started in early 2019 and saw Sensitive overtake Cyclicals and move to a key overweight, but this peaked in mid-2021 and has started to reverse.</li>
<li>The major rotation on the year so far has been a scaling back of Technology and Communication Services allocations in favour of Financials and Consumer Discretionary/Staples</li>
</ul>


Over the past decade, Cyclical sectors have traded places with Sensitive sectors as the largest allocation among active Asia Ex-Japan investors. 
The last cycle started in early 2019 and saw Sensitive overtake Cyclicals and move to a key overweight, but this peaked in mid-2021 and has started to reverse.
The major rotation on the year so far has been a scaling back of Technology and Communication Services allocations in favour of Financials and Consumer Discretionary/Staples


Asia Ex-Japan:  Tech to Financials Rotation

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>WCP aims to raise around US$690m via selling a mix of primary and secondary shares in its Korean IPO.</li>
<li>WCP designs, manufactures, and sells separators, which are one of the four core materials for secondary Lithium-ion batteries</li>
<li>In this note, we talk about the recent refiling updates, peer comparison and valuations.</li>
</ul>


WCP aims to raise around US$690m via selling a mix of primary and secondary shares in its Korean IPO.
WCP designs, manufactures, and sells separators, which are one of the four core materials for secondary Lithium-ion batteries
In this note, we talk about the recent refiling updates, peer comparison and valuations.


WCP IPO - Peer Comparison and Valuation - Needs a Price Cut Not a Timeline Extension

South Korea

KakaoBank Corp. operates bank businesses. The Company provides deposit money, withdraw money, credit cards, stock accounts, linked loans, and other services. KakaoBank conducts businesses in South Korea.

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KakaoBank (323410 KS)

EM Digital Banks Overview - Brazil, South Korea and Indonesia

We turn constructive on Inter with its best combination of trends on fintech and bank metrics; we remain cautious on Nubank and see Bank Jago as an...

Victor Galliano

KB Kookmin Bank Invests 200 Billion Won in SK Square's TMap Mobility

On 22 August, it was announced that KB Kookmin Bank invested 200 billion won worth of TMap Mobility, valuing the company at 2.2 trillion won ($1.7...

Douglas Kim

A Block Deal Sale of 3.1% of Kakao Bank by KB Kookmin Bank

We continue to have a Negative view of Kakao Bank following block deal sale, due to further overhang on more share sales, concerns about partial...

Douglas Kim

Asia Ex-Japan: Tech to Financials Rotation

Asia Ex-Japan funds are in the midst of a major rotation out of Technology and Communication Services stocks and in to Financials and Consumer...

Steven Holden

WCP IPO - Peer Comparison and Valuation - Needs a Price Cut Not a Timeline Extension

WCP aims to raise around US$690m via selling a mix of primary and secondary shares in its Korean IPO. In this note we talk about the refiling...

Sumeet Singh

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