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 remain positive on Rakuten Bank, with its group ecosphere as a source of customer growth, its low cost base, and extremely low NPL ratio</li><li>Rakuten Bank trades on the lowest PE multiple of the neobank peer group , with the low ROE to PBV ratio close to the best of its neobank peers</li><li>Nubank shares have done well since we upgraded to a buy in January; we recommend investors to take profits given Nubank’s  limited potential for positive surprises and its stretched valuations</li></ul>

We remain positive on Rakuten Bank, with its group ecosphere as a source of customer growth, its low cost base, and extremely low NPL ratioRakuten Bank trades on the lowest PE multiple of the neobank peer group , with the low ROE to PBV ratio close to the best of its neobank peersNubank shares have done well since we upgraded to a buy in January; we recommend investors to take profits given Nubank’s  limited potential for positive surprises and its stretched valuations

EM & Japan Neobanks – Stick with Rakuten Bank (5838 JP), but Time to Take Profits on Nubank (NU US)

Event-Driven

<ul>
<li>Rakuten Bank’s imminent TOPIX index inclusion is a further share price support, to a neobank with a fundamentally attractive outlook</li>
<li>Rakuten Bank trades on a LTM PE multiple of 10.9x, LTM PBV ratio of 1.5x and an ROE of 13.8%, the best ROE to PBV ratio of its neobank peers</li>
<li>Aside from its premium long-run growth prospects and low prospective PEG ratio, Rakuten Bank is also the lowest cost to serve Japanese neobank</li>
</ul>


Rakuten Bank’s imminent TOPIX index inclusion is a further share price support, to a neobank with a fundamentally attractive outlook
Rakuten Bank trades on a LTM PE multiple of 10.9x, LTM PBV ratio of 1.5x and an ROE of 13.8%, the best ROE to PBV ratio of its neobank peers
Aside from its premium long-run growth prospects and low prospective PEG ratio, Rakuten Bank is also the lowest cost to serve Japanese neobank


Rakuten Bank (5838 JP) - Attractive Versus Domestic Neobank Peers, with Added Technical Support

Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

Pan-Asia Catalysts/Events

Quiddity Advisors

Equity Capital Markets

<ul>
<li>To look at the <a href="https://www.smartkarma.com/entities/rakuten-bank-ltd" target="_blank" data-smartkarma-citation="entities:35638:1" rel="noopener">Rakuten Bank (5838 JP)</a> IPO and how trading and pricing may occur, some are looking at <a href="https://www.smartkarma.com/entities/sbi-sumishin-net-bank" target="_blank" data-smartkarma-citation="entities:34572:1" rel="noopener">SBI Sumishin Net Bank (7163 JP)</a>. </li>
<li>To understand the movements of SBI Sumishin Net Bank, it may help to look at other IPOs in Japan and how they trade post-IPO.</li>
<li>I looked at the last 200+ IPOs in Japan to understand volume decay and price evolution. It leads to suggestions for investors regarding Rakuten Bank.</li>
</ul>


To look at the Rakuten Bank (5838 JP) IPO and how trading and pricing may occur, some are looking at SBI Sumishin Net Bank (7163 JP). 
To understand the movements of SBI Sumishin Net Bank, it may help to look at other IPOs in Japan and how they trade post-IPO.
I looked at the last 200+ IPOs in Japan to understand volume decay and price evolution. It leads to suggestions for investors regarding Rakuten Bank.


Rakuten Bank (5838) IPO - Post-IPO Trading Volume Decay and RB's Place Among Banks (Part 3)

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.

<ul>
<li>
<a href="https://www.smartkarma.com/entities/rakuten-bank-ltd" target="_blank" data-smartkarma-citation="entities:35638:1" rel="noopener">Rakuten Bank (5838 JP)</a> priced its IPO at JPY1,400 per share to raise gross proceeds of US$620 million. The shares will start trading on 21 April.</li>
<li>We previously discussed the IPO in <a href="https://www.smartkarma.com/insights/rakuten-bank-ipo-the-investment-case" target="_blank" data-smartkarma-citation="insights:98721" rel="noopener">Rakuten Bank IPO: The Investment Case</a>, <a href="https://www.smartkarma.com/insights/rakuten-bank-vs-sbi-sumishin-net-bank" target="_blank" data-smartkarma-citation="insights:98866" rel="noopener">Rakuten Bank Vs SBI Sumishin Net Bank</a> and <a href="https://www.smartkarma.com/insights/rakuten-bank-ipo-new-price-range-is-a-steal" target="_blank" data-smartkarma-citation="insights:99581" rel="noopener">Rakuten Bank IPO: New Price Range Is a Steal</a>. </li>
<li>Peers have re-rated and our valuation analysis points to a fair value of around JPY1,900 per share, 36% above the IPO price. Therefore, the IPO price remains attractive.</li>
</ul>



Rakuten Bank (5838 JP) priced its IPO at JPY1,400 per share to raise gross proceeds of US$620 million. The shares will start trading on 21 April.
We previously discussed the IPO in Rakuten Bank IPO: The Investment Case, Rakuten Bank Vs SBI Sumishin Net Bank and Rakuten Bank IPO: New Price Range Is a Steal. 
Peers have re-rated and our valuation analysis points to a fair value of around JPY1,900 per share, 36% above the IPO price. Therefore, the IPO price remains attractive.


<ul>
<li>
<a href="https://www.smartkarma.com/entities/rakuten-bank-ltd" target="_blank" data-smartkarma-citation="entities:35638:1" rel="noopener">Rakuten Bank (5838 JP)</a> has priced at a new range of ¥1,300-1,400/share, down from ¥1,630-1,930/share. That lowers TTM PER and PBR to well below where SBI Sumishin was priced.</li>
<li>This will now be universally recognised by pre-IPO analysts as a raging buy. Even at the top end. Important considerations:  Rakuten parent TAM, growth, index inclusions, etc. </li>
<li>There are OTHER important considerations going forward which show themselves in the documents. </li>
</ul>



Rakuten Bank (5838 JP) has priced at a new range of ¥1,300-1,400/share, down from ¥1,630-1,930/share. That lowers TTM PER and PBR to well below where SBI Sumishin was priced.
This will now be universally recognised by pre-IPO analysts as a raging buy. Even at the top end. Important considerations:  Rakuten parent TAM, growth, index inclusions, etc. 
There are OTHER important considerations going forward which show themselves in the documents. 


Rakuten Bank (5838) IPO - New Price Is One To Take (Part 1)

Japan

Seven Bank, Ltd. provides banking services mainly through Automated Teller Machine (ATM) across Japan. The bank cooperates with affiliated financial institutions to establish the nationwide ATM network and provide remote banking services, including deposits and loans.

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Seven Bank Ltd (8410 JP)

EM & Japan Neobanks – Stick with Rakuten Bank (5838 JP), but Time to Take Profits on Nubank (NU US)

In listed neobanks, we stay positive on Rakuten bank for its growth potential and attractive valuation, but it is time to take profits on Nubank.

Victor Galliano

Rakuten Bank (5838 JP) - Attractive Versus Domestic Neobank Peers, with Added Technical Support

Fundamentally attractive Rakuten Bank also benefits from imminent TOPIX index inclusion; aside from premium growth prospects and low PEG, it is the...

Victor Galliano

Rakuten Bank (5838) IPO - Post-IPO Trading Volume Decay and RB's Place Among Banks (Part 3)

Rakuten Bank lists tomorrow. Gray is trading up nearly 30%. That's probably still OK to buy as it would not be overly rich to peers, especially...

Travis Lundy

Rakuten Bank IPO: Trading Debut

Peers have re-rated and our valuation analysis points to a fair value of around JPY1,900 per share, 36% above the IPO price. Therefore, the IPO...

Arun George

Rakuten Bank (5838) IPO - New Price Is One To Take (Part 1)

Rakuten Bank (5838) lowered the IPO price range to a level lower than that of SBI Sumishin NetBank's IPO just last week. Ecosystem scale and low...

Travis Lundy

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