Bottom-Up EquitiesDaily Briefs

Equity Bottom-Up: Evergrande, Crown Resorts, Citigroup Inc, Money Forward and more

In today’s briefing:

  • China Evergrande Group – More Casualties
  • Crown Resorts: Blackstone Group Raises Offer to AU$13.10 a Share Confirming Our May 20th Guidance
  • Citigroup – Many Moving Parts and Confused Mexican Exit
  • Money Forward (3934) – Solid, Not Spectacular

China Evergrande Group – More Casualties

By Thomas J. Monaco

  • Evergrande Is Breaking Down More Rapidly Than Banks Have Kept Up;
  • Minsheng Has Significant Exposure to Evergrande and Other Problem Developers; and
  • Minsheng Is Not Insolvent, But It Is Getting There Very Quickly.

Crown Resorts: Blackstone Group Raises Offer to AU$13.10 a Share Confirming Our May 20th Guidance

By Howard J Klein

  • Crown’s Board which  had rejected two prior Blackstone offers is now seen as embracing its latest bid, but negotiations will be non-exclusive.
  • Our contention was that due diligence undertaken by Blackstone would result in a higher bid. They already hold 9.9%.
  • Stock has long been dead pooled at AU$11 due to regulatory uncertainties prompted by New South Wales investigative report of alleged irregularities in VIP and money laundering.

Citigroup – Many Moving Parts and Confused Mexican Exit

By Thomas J. Monaco

  • Weaker Result Across Almost All Geographic Segments – Led By Negative Jaws;    
  • Credit Modestly Weaker, Although Reserve Coverage Remains Strong. Watch For Credit Turn; and
  • Progress On Asian Consumer Exits, But Sea Change In View On Mexico.  

Money Forward (3934) – Solid, Not Spectacular

By Mark Chadwick

  • Money Forward reported full year results post close on Friday. The stock will react negatively…probably.  
  • The stock is down 45% from its 52-week high, along with most high growth SaaS stocks 
  • The fundamentals, earnings and growth remain intact, but valuations are unlikely to recover as excess liquidity drains out of the market.  One for patient LT investors

Related tickers: Evergrande (3333.HK), Crown Resorts (CWN.AX), Citigroup Inc (C.N), Money Forward (3994.T)

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