In today’s briefing:
- WealthNavi (7342 JP): MUFG (8306 JP)’s Opportunistic Tender Offer
- Bank Rakyat Indonesia (BBRI IJ) – Ultra Attractive
- Bajaj Finance (BAF): Mixed Q2 But Growth Remains Robust
- MUFG Launches a TOB to Take Out Robo-Advisor WealthNavi (7342) – The 81.4% Premium Is Light
- GDS: The Leading Data Center Provider in China, Riding the AI Mega Trend – BUY
WealthNavi (7342 JP): MUFG (8306 JP)’s Opportunistic Tender Offer
- In response to a Nikkei article, WealthNavi (7342 JP) disclosed Mitsubishi UFJ Financial (MUFG) (8306 JP)’s tender offer at JPY1,950 per share, an 84.3% premium to the undisturbed price.
- The high premium reflects WealthNavi’s steep 46% YTD share price decline, i.e., the timing is opportunistic. The offer is below the Board’s requested price.
- While the irrevocable has a competing offer clause, a competing proposal is unlikely due to MUFG’s stake. However, a bump is possible if activist(s) take around a 15% stake.
Bank Rakyat Indonesia (BBRI IJ) – Ultra Attractive
- Bank Rakyat Indonesia should have a stronger finish to the year with stable credit costs and continuing growth in micro recoveries driving fee income growth, with NIMs remaining stable
- Loan growth will increase in 4Q2024 but may see a slowdown in 2025 but the bank should see stable credit costs and a rebound in earnings with lower provisions.
- Foreign ownership and vaulations are back to 2015 lows apart from the pandemic at 2.1x PBV is also a 10-year ex-pandemic low of 1.8x, and trades on 9.6x PER.
Bajaj Finance (BAF): Mixed Q2 But Growth Remains Robust
- Q2FY25 performance was mixed with good growth in AUM and volumes, however, loan losses were elevated. AUM growth came in at 29% YoY and 5.5%+ QoQ in Q2.
- Asset quality deteriorated led by retail and SME segments. GNPA worsened to 1.06% in Q2FY25 vs 0.86% QoQ. Credit cost has been around 2.1% vs 1.75%-1.85% guided.
- BAF successfully listed its housing finance subsidiary, BHFL, on Sep 16 2024. Its shareholding in BHFL is down to 88.75% from 100%.
MUFG Launches a TOB to Take Out Robo-Advisor WealthNavi (7342) – The 81.4% Premium Is Light
- MUFG (8306) bought 15.5% of WealthNavi (7342 JP) in February at ¥1,718/share – zero premium. The shares fell. Now they are bidding for the rest 13.5% higher.
- WealthNavi forecasts fantastic growth. Dec29 OP is specifically estimated at ¥13.822bn. Everyone agrees there are synergies, but they’re not “valued” because they “cannot be specifically estimated at this moment.”
- I believe investors should start demanding Synergy CVRs of acquirors when synergies are not included in the fair value calculations.
GDS: The Leading Data Center Provider in China, Riding the AI Mega Trend – BUY
- GDS is the leader in China’s data center market. GDS is well positioned to capture growing demand from generative AI cloud growth
- GDS consists of GDSH (China) and GDSI (international), both businesses are delivering growth and operational excellence
- GDS US share price has rallied 100% YTD, we believe there is further room to grow due to capital flows and attractive valuation
💡 Before it’s here, it’s on Smartkarma
Sign Up for Free
The Smartkarma Preview Pass is your entry to the Independent Investment Research Network
- ✓ Unlimited Research Summaries
- ✓ Personalised Alerts
- ✓ Custom Watchlists
- ✓ Company Data and News
- ✓ Events & Webinars
