Asia L/S Equity PM/Macro/Thematic Idea Generation

Rikki Malik

Equity Bottom-Up

<ul>
<li>Non-Controversial changes in asset allocation will provide a big boost to earnings.</li>
<li>Demand problems brewing in the JGB market may provide the catalyst</li>
<li>The path is clear to enter new businesses after parent lowers  stake below 50%</li>
</ul>


Non-Controversial changes in asset allocation will provide a big boost to earnings.
Demand problems brewing in the JGB market may provide the catalyst
The path is clear to enter new businesses after parent lowers  stake below 50%


Japan Post Bank: From Stagnation to Opportunity

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.

SBI Sumishin Net Bank  / Equity Bottom-Up

<ul>
<li>This is not a typo: SBI Sumishin Net Bank saw loans up 21% YoY in 1Q24, operating in Japan</li>
<li>The bank has achieved cost scale, with acquisition cost per account a fraction of 2 yrs ago</li>
<li>Credit quality remains exceptional, amongst best in Japan, with 0.06% NPL ratio in 1Q24</li>
</ul>


This is not a typo: SBI Sumishin Net Bank saw loans up 21% YoY in 1Q24, operating in Japan
The bank has achieved cost scale, with acquisition cost per account a fraction of 2 yrs ago
Credit quality remains exceptional, amongst best in Japan, with 0.06% NPL ratio in 1Q24


SBI Sumishin Net Bank - Dramatic ROA Expansion, Steady & Strong, Profit & Loan Growth, ROE at 19%

Asia Pac IPO & Placement Research, China biotech, Aequitas Research

Ke Yan, CFA, FRM

Asia Pac IPO & Placement Research, China biotech

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.

Quantitative Analysis

<ul>
<li>We analyzed the changes in margin trading positions of JPX stocks as of May 23rd. The aggregated net margin trading position is USD16,904m.</li>
<li>We tabulate league tables for top/bottom net long/short of margin trading by value, net margin buy as multiple of ADT.</li>
<li>We highlight net margin buy/sell changes in Mitsubishi Heavy Industries, Kusuri No Aoki, Toyota Industries, Fujikura, Sompo, Sumitomo Mitsui Financial, Furukawa Electric, Softbank, Advantest, Mizuho Financial.</li>
</ul>


We analyzed the changes in margin trading positions of JPX stocks as of May 23rd. The aggregated net margin trading position is USD16,904m.
We tabulate league tables for top/bottom net long/short of margin trading by value, net margin buy as multiple of ADT.
We highlight net margin buy/sell changes in Mitsubishi Heavy Industries, Kusuri No Aoki, Toyota Industries, Fujikura, Sompo, Sumitomo Mitsui Financial, Furukawa Electric, Softbank, Advantest, Mizuho Financial.


JPX Margin Trading Weekly (May 23rd): Mitsubishi Heavy Industries, Kusuri No Aoki, Toyota Industries

Thematic (Sector/Industry)

<ul>
<li>There is very high delta in 30-year JGB yields in the recent month, and preceding periods</li>
<li>This is very much unlike what we see with the 1-year JGBs, different implications.</li>
<li>Insurance companies are the major holders of long-dated JGBs where banks have low duration on their bond holdings.</li>
</ul>


There is very high delta in 30-year JGB yields in the recent month, and preceding periods
This is very much unlike what we see with the 1-year JGBs, different implications.
Insurance companies are the major holders of long-dated JGBs where banks have low duration on their bond holdings.


Japan - Sharply Higher Long-Dated JGBs Should Mean Sizable Valuation Losses at Insurers, Not Banks

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.

<ul>
<li>BoJ’s lower GDP growth forecasts add weight to the rate hike deferral; we focus on big-cap banks that have more in the tank than high gearing to rising benchmark rates</li>
<li>An increasingly important factor, in our view, is the share of strategic equity holdings relative to market capitalization; Kyoto is top on this metric, followed by Shizuoka, Resona and Mizuho</li>
<li>With the lack of the rate hike catalyst in the near term, we remove SMFG from the buy list and would look to lighten holdings selectively in other Japanese banks</li>
</ul>


BoJ’s lower GDP growth forecasts add weight to the rate hike deferral; we focus on big-cap banks that have more in the tank than high gearing to rising benchmark rates
An increasingly important factor, in our view, is the share of strategic equity holdings relative to market capitalization; Kyoto is top on this metric, followed by Shizuoka, Resona and Mizuho
With the lack of the rate hike catalyst in the near term, we remove SMFG from the buy list and would look to lighten holdings selectively in other Japanese banks


Japanese Big Cap Banks – Focusing on Strategic Equity Holdings as BoJ Likely to Defer Rate Hikes

Japan

Mizuho Financial Group, Inc. provides comprehensive financial services through its subsidiaries. The Group provides variety of financial services such as general banking, securities brokerage, trust banking, and assets management.

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Mizuho Financial Group (8411 JP)

Japan Post Bank: From Stagnation to Opportunity

Non-controversial changes in asset allocation can boost earnings, with a potential catalyst from demand problems in JGB market. Clear path to...

Rikki Malik

SBI Sumishin Net Bank - Dramatic ROA Expansion, Steady & Strong, Profit & Loan Growth, ROE at 19%

With NTT Docomo tender bid of SBI Sumishin, well highlighted by Travis Lundy, it may be worthwhile looking at core banking merits of the internet...

Daniel Tabbush

JPX Margin Trading Weekly (May 23rd): Mitsubishi Heavy Industries, Kusuri No Aoki, Toyota Industries

We analyzed JPX margin trading positions report for the past week and highlighted Mitsubishi Heavy Industries (7011 JP), Kusuri No Aoki (3549 JP),...

Ke Yan, CFA, FRM

Japan - Sharply Higher Long-Dated JGBs Should Mean Sizable Valuation Losses at Insurers, Not Banks

Japan's insurance companies are more exposed and highly exposed to rising long-dated JGB yields, unlike for banks. The former will have more...

Daniel Tabbush

Japanese Big Cap Banks – Focusing on Strategic Equity Holdings as BoJ Likely to Defer Rate Hikes

Focusing on big-cap banks that have more in the tank than high gearing to rising interest rates; Kyoto is top in terms of share of equity holdings...

Victor Galliano

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

Japan Post Bank: From Stagnation to Opportunity

​Non-controversial changes in asset allocation can boost earnings, with a potential catalyst from demand problems in JGB market. Clear path to...

Rikki Malik

SBI Sumishin Net Bank - Dramatic ROA Expansion, Steady & Strong, Profit & Loan Growth, ROE at 19%

With NTT Docomo tender bid of SBI Sumishin, well highlighted by Travis Lundy, it may be worthwhile looking at core banking merits of the internet...

Daniel Tabbush

JPX Margin Trading Weekly (May 23rd): Mitsubishi Heavy Industries, Kusuri No Aoki, Toyota Industries

We analyzed JPX margin trading positions report for the past week and highlighted Mitsubishi Heavy Industries (7011 JP), Kusuri No Aoki (3549 JP),...

Ke Yan, CFA, FRM

Japan - Sharply Higher Long-Dated JGBs Should Mean Sizable Valuation Losses at Insurers, Not Banks

Japan's insurance companies are more exposed and highly exposed to rising long-dated JGB yields, unlike for banks. The former will have more...

Daniel Tabbush

Japanese Big Cap Banks – Focusing on Strategic Equity Holdings as BoJ Likely to Defer Rate Hikes

Focusing on big-cap banks that have more in the tank than high gearing to rising interest rates; Kyoto is top in terms of share of equity holdings...

Victor Galliano

Non-controversial changes in asset allocation can boost earnings, with a potential catalyst from demand problems in JGB market. Clear path to...