In today’s briefing:
- Hong Kong Earnings in the Week Commencing March 24
- LICHF: Benign Credit Cost Led to Strong Q3FY25
- Last Week in Event SPACE: Hankyu Hanshin REIT, ENN Energy, Idemitsu, HKBN, Jardine Matheson
Hong Kong Earnings in the Week Commencing March 24
- The Hong Kong earnings season enters its final week with at least 17 Hang Seng Index companies reporting their 2024 results and announcing dividends.
- The proportion of companies reporting in the coming week and the week after is significant at an index level, with notable weightings in the HSI, HSCEI, and HS TECH indices.
- Opportunities to profit from price movement around earnings are manifold and include event-focused trading, statistical arbitrage, hedging, and capitalizing on changes in dividends and implied volatility.
LICHF: Benign Credit Cost Led to Strong Q3FY25
- LICHF reported PAT growth of 23% YoY in Q3FY25 led by benign credit cost. Credit cost was negative (-44cr) in Q3FY25 vs INR 435cr (0.2%+ of AUM) in Q3FY24.
- Stage 1 assets improved to 93.25% of AUM vs 93.09% QoQ. NIM continues to be stable at around 2.7%, similar to last quarter, making the earnings predictable now.
- Led by low credit cost, LICHF is on track to achieve FY25 PAT as per our estimate of INR 5400cr+. This implies LICHF is currently trading at below 6x P/E.
Last Week in Event SPACE: Hankyu Hanshin REIT, ENN Energy, Idemitsu, HKBN, Jardine Matheson
- Buy Hankyu Hanshin REIT, Inc. (8977 JP) on any weakness. There will be strength ahead.
- With ENN Energy (2688 HK) suspended pursuant to the Takeovers Code, a third party Offer, as opposed to ENN Group, seems more likely.
- Be long Idemitsu (5019 JP) vs ENEOS for the next several weeks. Light and easy drift trade based on pressure increasing and pressure ending before new news in May.
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