IPOs and Catalysts/Events, Global Equity Research Ltd

Arun George

IPOs and Catalysts/Events

Uncompromised, Independent, Conflict-Free Research

Global Equity Research Ltd

Global Equity Research was started in 2017 by a group of experienced research professionals. It was founded on a passionate belief in the importance and the need for uncompromised, independent, conflict-free research. We aim to provide differentiated and actionable primary and bottom up fundamental research.

Event-Driven

<ul>
<li>
<a href="https://www.smartkarma.com/entities/brainpad-inc" target="_blank" data-smartkarma-citation="entities:11499:1" rel="noopener">Brainpad Inc (3655 JP)</a> has recommended a tender offer from <a href="https://www.smartkarma.com/entities/fujitsu-ltd" target="_blank" data-smartkarma-citation="entities:16968:1" rel="noopener">Fujitsu Ltd (6702 JP)</a> at JPY2,706, a 100.0% premium to the undisturbed price.</li>
<li>The offer is attractive compared to historical trading ranges and is above the midpoint of the target IFA DCF valuation range. </li>
<li>The huge takeover premium resulted from an auction. The tender offer runs from 31 October to 15 December (30 business days). This is a done deal.  </li>
</ul>



Brainpad Inc (3655 JP) has recommended a tender offer from Fujitsu Ltd (6702 JP) at JPY2,706, a 100.0% premium to the undisturbed price.
The offer is attractive compared to historical trading ranges and is above the midpoint of the target IFA DCF valuation range. 
The huge takeover premium resulted from an auction. The tender offer runs from 31 October to 15 December (30 business days). This is a done deal.  


BrainPad (3655 JP): Fujitsu (6702 JP)’s 100% Premium Tender Offer

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>Along with political turbulence, expectations of a near term BoJ rate hike may be diminishing; nonetheless, we believe that these rate hikes will, at worst, be delayed and not derailed</li>
<li>We take profits on Mizuho in big caps and on Hirogin Holdings in mid-caps, downgrading these names from buy to neutral whilst generally retaining banks with higher levels of cross-holdings</li>
<li>We maintain the following Japanese banks on buy ratings; in the big-caps, we keep Resona and Shizuoka and in the mid-caps we stick with Iyogin Holdings, Hokuhoku and Hachijuni</li>
</ul>


Along with political turbulence, expectations of a near term BoJ rate hike may be diminishing; nonetheless, we believe that these rate hikes will, at worst, be delayed and not derailed
We take profits on Mizuho in big caps and on Hirogin Holdings in mid-caps, downgrading these names from buy to neutral whilst generally retaining banks with higher levels of cross-holdings
We maintain the following Japanese banks on buy ratings; in the big-caps, we keep Resona and Shizuoka and in the mid-caps we stick with Iyogin Holdings, Hokuhoku and Hachijuni


Japanese Banks – We Clip Our Key Positive Picks in the Big-Caps and Mid-Caps

Kyoto Financial Group  / Equity Bottom-Up

<ul>
<li>Kyoto Financial has equity holdings relative to market cap of 135%, well above its larger cap Japanese peer banks, and amounting to a market value of over JPY1.1trillion</li>
<li>Management has stated that it is targeting JPY100bn+ of disposals in terms of market value by March 2029, but we believe that the market expected more</li>
<li>Sizeable disposals of equity holdings is Kyoto’s primary source of prospective shareholder value creation; aside from this, its fundamental attractions are limited and so we downgrade Kyoto to a neutral</li>
</ul>


Kyoto Financial has equity holdings relative to market cap of 135%, well above its larger cap Japanese peer banks, and amounting to a market value of over JPY1.1trillion
Management has stated that it is targeting JPY100bn+ of disposals in terms of market value by March 2029, but we believe that the market expected more
Sizeable disposals of equity holdings is Kyoto’s primary source of prospective shareholder value creation; aside from this, its fundamental attractions are limited and so we downgrade Kyoto to a neutral


Kyoto Financial Group (5844 JP): Disposals Plan for Equity Holdings Warrants More Ambitious Target

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%

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

Japan

Resona Holdings, Inc. operates as a holding company. The Company, through its subsidiaries, provides financial services, including banking, trust operations, and credit card services. Resona Holdings also offers consulting services related to personal loans, asset management, and asset succession.

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Resona Holdings (8308 JP)

BrainPad (3655 JP): Fujitsu (6702 JP)’s 100% Premium Tender Offer

The huge takeover premium resulted from an auction. The offer is attractive compared to historical trading ranges and is above the midpoint of the...

Arun George

Japanese Banks – We Clip Our Key Positive Picks in the Big-Caps and Mid-Caps

With easier-for-longer monetary policy in Japan being a growing risk, we keep buys on select big and mid-cap banks with big equity cross-holdings,...

Victor Galliano

Kyoto Financial Group (5844 JP): Disposals Plan for Equity Holdings Warrants More Ambitious Target

Kyoto's planned equity holdings disposals are key to shareholder value creation, but company targets may not meet market expectations, and its...

Victor Galliano

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

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

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

BrainPad (3655 JP): Fujitsu (6702 JP)’s 100% Premium Tender Offer

The huge takeover premium resulted from an auction. The offer is attractive compared to historical trading ranges and is above the midpoint of the...

Arun George

Japanese Banks – We Clip Our Key Positive Picks in the Big-Caps and Mid-Caps

​With easier-for-longer monetary policy in Japan being a growing risk, we keep buys on select big and mid-cap banks with big equity cross-holdings,...

Victor Galliano

Kyoto Financial Group (5844 JP): Disposals Plan for Equity Holdings Warrants More Ambitious Target

​Kyoto's planned equity holdings disposals are key to shareholder value creation, but company targets may not meet market expectations, and its...

Victor Galliano

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

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

With easier-for-longer monetary policy in Japan being a growing risk, we keep buys on select big and mid-cap banks with big equity cross-holdings,...

Kyoto's planned equity holdings disposals are key to shareholder value creation, but company targets may not meet market expectations, and its...