Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

<ul>
<li>
<a href="https://www.smartkarma.com/entities/bank-of-kyoto" target="_blank" data-smartkarma-citation="entities:5248:1" rel="noopener">Bank of Kyoto (8369 JP)</a> has been on a relative tear recently. This is a bit surprising.  On a static equity-portfolio discount measure, it has outperformed regional banks.</li>
<li>On a static regional bank PBR basis, it has outperformed its equity portfolio and the discount to the After Tax Equity Portfolio Value (ATEPV) is the smallest in eight years.</li>
<li>Is there a sea change? There is a possibility, however remote, that domestic investor disappointment rears its voting head. That's the dream scenario. But I don't see it coming soon.</li>
</ul>



Bank of Kyoto (8369 JP) has been on a relative tear recently. This is a bit surprising.  On a static equity-portfolio discount measure, it has outperformed regional banks.
On a static regional bank PBR basis, it has outperformed its equity portfolio and the discount to the After Tax Equity Portfolio Value (ATEPV) is the smallest in eight years.
Is there a sea change? There is a possibility, however remote, that domestic investor disappointment rears its voting head. That's the dream scenario. But I don't see it coming soon.


Research and consultancy, Tabbush Report

Daniel Tabbush

Research and consultancy

Tabbush Report

We provide research and consultancy on Asian banks. Our focus is on what we call “Asian bank research, without the noise.” We are interested in the most critical swing-factors for banks, the NPL and credit cycle, and where we believe there is a gap between perception and reality. We often focus on the less studied components of bank financial statements.  Our research is highly thematic, sometimes examining unlisted banks and companies as a window on mainstream banks. 

Being independent allows us to look at smaller banks, often overlooked by others. Analysis of BIS bank guidelines in the context of Asia, is also a focal point, while we also analyze global banks operating in the region. We use what we believe is the most comprehensive, reliable financials database, SNL Financial. S&P Capital IQ augments our database, with corporate data and CEIC, with economics. 

Asian bank research, without the noise.

Equity Bottom-Up

Mizuho Financial Group / Equity Bottom-Up

<ul>
<li>Mizuho's current tax expenses can see normalization that restores profitability by June quarter</li>
<li>Yield curve control relief coming at a time of tax normalization, can be significant to profit</li>
<li>Credit costs have moved higher, but the magnitude may wane, given NPL distribution</li>
</ul>


Mizuho's current tax expenses can see normalization that restores profitability by June quarter
Yield curve control relief coming at a time of tax normalization, can be significant to profit
Credit costs have moved higher, but the magnitude may wane, given NPL distribution


Mizuho - Tax Rate Normalization, Yield Curve Control Relief, Can Mean Profit Surge

Thematic (Sector/Industry)

<ul>
<li>MUFG has assets of USD2,909,711m compared with USD471m at Mandala Multifinance</li>
<li>MUFG's profit is USD8,880m compared with USD44m at Mandala Multifinance</li>
<li>There is nothing wrong with expansion outside Japan, but perspective is key</li>
</ul>


MUFG has assets of USD2,909,711m compared with USD471m at Mandala Multifinance
MUFG's profit is USD8,880m compared with USD44m at Mandala Multifinance
There is nothing wrong with expansion outside Japan, but perspective is key


MUFG & PT Mandala Multifinance - Too Small To Matter, LT Perspective ROA Is Key

<ul>
<li>The Japan stock market is at ~33 year highs with TOPIX now at July 1990 levels</li>
<li>Japan's banks can see greater gains on stocks as they divest sizable holdings</li>
<li>Vast differences how stocks holdings compare with profit, equity, assets</li>
</ul>


The Japan stock market is at ~33 year highs with TOPIX now at July 1990 levels
Japan's banks can see greater gains on stocks as they divest sizable holdings
Vast differences how stocks holdings compare with profit, equity, assets


Japan Banks - TOPIX at July 1990 Levels, Banks' Stock Holdings In Perspective

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.

Equity Capital Markets

<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.


Japan

The Chiba Bank, Ltd. is a regional bank based in Chiba Prefecture. The Bank offers general banking services including deposits, loans, and foreign exchange transactions. The Chiba Bank also develops software and provides financial services such as leasing, securities brokerage, letter of credit, and credit cards.

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Chiba Bank (8331 JP)

Bank of Kyoto (8369) - Too Far Too Fast

Bank of Kyoto (8369) has a 50% payout but its shareholder base isn’t that supportive of activism need to monetise the value of the equity...

Travis Lundy

Mizuho - Tax Rate Normalization, Yield Curve Control Relief, Can Mean Profit Surge

A normalization of current tax expenses, can completely restore profit, and where this occurs with YCC relief, the profit impact can be...

Daniel Tabbush

MUFG & PT Mandala Multifinance - Too Small To Matter, LT Perspective ROA Is Key

MUFG's purchase of Mandala in Indonesia may sound enticing, but the reality is that this is too small to matter, while perspective shows no major...

Daniel Tabbush

Japan Banks - TOPIX at July 1990 Levels, Banks' Stock Holdings In Perspective

Japan stock market keeps setting record highs, we should remember that banks have major stock holdings. Stock holdings can be very high relative to...

Daniel Tabbush

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

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