Daily Brief Financials: ICICI Bank Ltd, SBI Shinsei Bank, Hang Seng Bank, Agricultural Bank Of China, Philippine Business Bank, Wellex Industries Inc, Cityland Development, F&J Prince Holdings, Turkiye Vakiflar Bankasi Tao, Vantage Equities and more

• Context: This Insight follows up on previously highlighted relative value opportunities, using a statistical methodology based on mean-reversion to identify opportunities in paired securities.
• Opportunity: Currently eight pair trade opportunities across four markets and five sectors persist.
• Why read: Statistical analysis offers a unique perspective on relative value. Gain insights into actionable statistical pair trade opportunities and monitor performance of previously highlighted pairs.

• Aequitas Research’s weekly update on the IPOs, placements, lockup expiry and other ECM linked events that were covered by the team over the past week.
• On the IPO front, this week will probably see the last of the big listings in Asia this year
• On the placements front, Swiggy was the main deal in the market. There are still a few lockup expiries left for 2025.

• Back on the 9th October, Hang Seng Bank (11 HK) announced an Offer from controlling parent, HSBC Holdings (5 HK), by way of a Scheme.
• HSBC offered HK$155/share, a 30.3% premium to last close. The price was final. A third interim dividend was bolted on. Optically – and fundamentally – the price was bang on.
• The Scheme Doc is now out, with the Court Meeting on the 8th January 2026.  Payment around 4th Feb. The IFA, in a bare-bones report, concluded “fair & reasonable”. 

• HK$77bn/Day of gross SOUTHBOUND activity last week vs HK$88bn the week before, HK$100+bn the week before. Gross flows are winding down.
• Watch for news on the Dual Counter (RMB) Trading eligibility for SOUTHBOUND near-term. That could re-up the pace. The SFC expected it “soon” in July. Later, by year-end.
• The data tables below update on a daily basis in the Tools section of Smartkarma. The Southbound Flow Monitor and AH Pairs Monitor are both there – free – for all SK readers.

• Philippine Business Bank (PBB) is a thrift bank strategically focused on the underserved Small and Medium Enterprise (SME) sector, which constitutes the vast majority of registered enterprises in the Philippines.
• The bank demonstrates a strong operational growth trajectory, with significant increases in revenue and net income over the past three years. This is complemented by a high dividend yield, making it attractive from a value and income perspective.
• Despite robust fundamental growth, the company’s market capitalization has declined, indicating a significant valuation gap. Key risks include high sensitivity to macroeconomic conditions, intense competition within the Philippine banking sector, and potential asset quality pressures inherent in its SME-focused loan portfolio.

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• Wellex Industries (WIN) is a Philippine holding company with primary interests in mining, oil exploration, and real estate leasing through its subsidiary, Plastic City Industrial Corporation.
• The company’s financial performance is characterized by extreme volatility, highlighted by a significant one-off net income gain in 2024 that masks underlying operational weaknesses, such as a return to quarterly losses and persistent negative cash flows.
• Future performance is subject to high uncertainty, contingent on the successful execution of its strategy to revitalize its mining and exploration activities and the performance of the broader Philippine real estate and resources sectors.

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• Attractive Valuation and High Dividend Yield: Cityland Development trades at a significant discount to its peers, with a low P/E ratio of 3.8x and a P/B ratio of 0.2x. This is complemented by a robust and growing dividend, offering a latest yield of 6.82%, making it a compelling proposition for value and income-focused investors.
• Stable Operator in a Cyclical Market: The company has a long track record, having been incorporated in 1978, and has weathered numerous economic cycles. Its focus on the affordable to mid-market segment provides a degree of resilience, though it faces intense competition from larger, more diversified developers in the Philippines.
• Subdued Growth Profile: Despite consistent profitability, the company exhibits a low growth profile, reflected in a 3-year market cap CAGR of -2.84% and a low ‘Growth’ Smartscore of 2/5. Future performance is heavily tied to the cyclical nature of the Philippine property market and the successful execution of its project pipeline.

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• F&J Prince Holdings is a Philippine-based investment holding company with a diversified portfolio, trading at a significant valuation discount to its peer group.
• The company exhibits a strong value proposition and high resilience, supported by a flawless balance sheet. However, it faces challenges with highly volatile financial performance and negative cash flow generation.
• Despite a high current dividend yield, the company’s history of declining dividend payments and poor market momentum present considerable risks for investors.

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• State-Owned Enterprise with Systemic Importance: As the second-largest bank in Turkey by asset size, VakıfBank is a systemically important financial institution with a significant market share. Its majority ownership by the Turkey Wealth Fund underscores its strategic importance to the national economy, suggesting a high probability of sovereign support if required.
• Navigating a Challenging Macroeconomic Environment: The bank’s performance is intrinsically linked to Turkey’s economic health, which is characterized by high inflation and a dynamic interest rate environment. Recent monetary policy has shifted towards a more orthodox approach to curb inflation, with the Central Bank of the Republic of Turkey (CBRT) engaging in a tightening and subsequent cautious easing cycle. This environment presents both risks (credit quality, funding costs) and opportunities (margin expansion).
• Strong Growth Trajectory Amidst Margin Pressure: VakıfBank has demonstrated a robust growth track record in revenue and net income over the past several years. However, recent quarterly results indicate pressure on net interest margins due to the high-cost funding environment. Future profitability will heavily depend on the success of the national disinflationary policy, the trajectory of policy rates, and the bank’s ability to manage its cost of funds and asset quality effectively.

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• Vantage Equities is a Philippine-based investment holding company transitioning its portfolio, leading to significant financial volatility but a recent return to strong profitability in 2023 and 2024.
• The company’s core operations are divided into three segments: Investment Holdings, Remittance Services, and Mutual Fund Management, with its key subsidiaries being Vantage Financial Corporation and a majority stake in Philequity Management, Inc.
• While long-term growth metrics have been poor and the dividend profile is weak, recent performance, a high growth score, and a low price-to-book ratio may attract investors with a high tolerance for risk and a focus on turnaround situations.

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