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

<ul>
<li>Singapore credit growth turned negative at -3% YoY in July where STAN has major exposure, while many regions, are not high growth, where credit metrics are worsening, like HK, China</li>
<li>88% of loans in well-developed countries, so that the old moniker of STAN being 'an Emerging Market Bank' may no longer apply, with NPLs as an overlying risk</li>
<li>Credit costs rose 6x from 1Q23 to 2Q23, but the 19bps level in 2Q23 remains low relative to its longer-term 62bps average - which excludes the Asian Financial Crisis</li>
</ul>


Singapore credit growth turned negative at -3% YoY in July where STAN has major exposure, while many regions, are not high growth, where credit metrics are worsening, like HK, China
88% of loans in well-developed countries, so that the old moniker of STAN being 'an Emerging Market Bank' may no longer apply, with NPLs as an overlying risk
Credit costs rose 6x from 1Q23 to 2Q23, but the 19bps level in 2Q23 remains low relative to its longer-term 62bps average - which excludes the Asian Financial Crisis


Standard Chartered - Singapore Credit Growth Negative In July | Credit Costs Up 6x QoQ But Still Low

<ul>
<li>Credit metrics appear worse than headlines, with what may be inflated substandard loans now at 66% of total NPLs in 1H23 compared with 21% in 1H21, requiring low provisions</li>
<li>High net charge-offs can partly explain this, but high growth from RMB1.6bn during 2H18/1H19 compared with RMB7.5bn during 2H22/1H23, shows major deterioration</li>
<li>2Q23 saw CZB take credit costs of RMB10.3bn or 2.48% of loans, far higher than most other periods, but there remains high volatility, where very high figures rarely repeat QoQ</li>
</ul>


Credit metrics appear worse than headlines, with what may be inflated substandard loans now at 66% of total NPLs in 1H23 compared with 21% in 1H21, requiring low provisions
High net charge-offs can partly explain this, but high growth from RMB1.6bn during 2H18/1H19 compared with RMB7.5bn during 2H22/1H23, shows major deterioration
2Q23 saw CZB take credit costs of RMB10.3bn or 2.48% of loans, far higher than most other periods, but there remains high volatility, where very high figures rarely repeat QoQ


China Zheshang Bank- Substandard Loans 66% of NPLs from 21% | NCO's Avg RMB7.5bn Vs RMB1.6bn In Past

Asia Pac IPO & Placement Research, China biotech, Aequitas Research

Ke Yan, CFA, FRM

Asia Pac IPO & Placement Research, China biotech

IPOs and Placements coverage across Asia Pacific

Aequitas Research

We cover all listing across the Asia Pacific along with follow-up placements. As of Dec 2020, our team had covered 539 IPOs with a hit rate of 73.5% and 685 placements with a hit rate of 66.8%.

We combine fundamental bottom-up views with our proprietary quantitative framework to provide a holistic coverage across new listings and placements. Our coverage includes pre-IPO notes before the deal is launched, follow-up analysis once the deal is live and post-listing trading analysis as well.

Quantitative Analysis

<ul>
<li>We analyze the monthly Shanghai/Shenzhen northbound Connect flows with our data engine.</li>
<li>We estimate the outflows to be $12.8bn in August and consumer staples, and financials sectors led the outflows.</li>
<li>We highlight flows for CATL, Wuxi Wapptec, Fuyao Glass, Foxconn Industrial, CMB, Wuliangye, Mindray, Moutai, Longi Green.</li>
</ul>


We analyze the monthly Shanghai/Shenzhen northbound Connect flows with our data engine.
We estimate the outflows to be $12.8bn in August and consumer staples, and financials sectors led the outflows.
We highlight flows for CATL, Wuxi Wapptec, Fuyao Glass, Foxconn Industrial, CMB, Wuliangye, Mindray, Moutai, Longi Green.


Northbound Flows Monthly (August): $12.8bn Outflows

<ul>
<li>We analyzed the latest HK SFC report for aggregate short position as of Aug 25th.</li>
<li>Top short increases and decreases were tabulated for one week and four week period. </li>
<li>We highlight short changes in Wuxi Apptec, Baba, Anta Sports, Hkex.</li>
</ul>


We analyzed the latest HK SFC report for aggregate short position as of Aug 25th.
Top short increases and decreases were tabulated for one week and four week period. 
We highlight short changes in Wuxi Apptec, Baba, Anta Sports, Hkex.


HK Short Interest Weekly: Wuxi Apptec, Baba, Anta Sports, HKex

<ul>
<li>We analyze the weekly Shanghai/Shenzhen northbound Connect flows with our data engine for holding position as of September 1st.</li>
<li>We estimate the weekly outflows to be US$2,251.0 million, led by financials, consumer staples, and offset by consumer discretionary, information technology, health care.</li>
<li>We highlight flows for BYD, CATL, Wuliangye, Citic Securities, Ping An Bank, Moutai, East Money Information, Haitian Flavouring.</li>
</ul>


We analyze the weekly Shanghai/Shenzhen northbound Connect flows with our data engine for holding position as of September 1st.
We estimate the weekly outflows to be US$2,251.0 million, led by financials, consumer staples, and offset by consumer discretionary, information technology, health care.
We highlight flows for BYD, CATL, Wuliangye, Citic Securities, Ping An Bank, Moutai, East Money Information, Haitian Flavouring.


Northbound Flows (Sep 1st): BYD, CATL, Wuliangye, Citic Securities, Ping An Bank, Moutai

China

China Merchants Bank Co., Ltd. operates as a commercial bank. The Company provides deposits, loans, wealth management, asset custody, finance leasing, investment banking, and other banking services. China Merchants Bank conducts businesses domestically and internationally.

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China Merchants Bank H (3968 HK)

Standard Chartered - Singapore Credit Growth Negative In July | Credit Costs Up 6x QoQ But Still Low

Sing credit -3% July, a key region for STAN. The old descriptive is no longer valid , 'The Emerging Market Bank', given its footprint. Credit costs...

Daniel Tabbush

China Zheshang Bank- Substandard Loans 66% of NPLs from 21% | NCO's Avg RMB7.5bn Vs RMB1.6bn In Past

Substandard loans are now 66% of NPLs up from 21% two years ago, potentially flattering credit costs. NCO's though are surging, possibly a good...

Daniel Tabbush

Northbound Flows Monthly (August): $12.8bn Outflows

We analyzed the Shanghai/Shenzhen Connect Scheme for August and highlight flows for CATL, Wuxi Wapptec, Fuyao Glass, Foxconn Industrial, CMB,...

Ke Yan, CFA, FRM

HK Short Interest Weekly: Wuxi Apptec, Baba, Anta Sports, HKex

We analyzed the latest HK SFC report for aggregate short position as of Aug 25th and highlight short interest changes in Wuxi Apptec, Baba, Anta...

Ke Yan, CFA, FRM

Northbound Flows (Sep 1st): BYD, CATL, Wuliangye, Citic Securities, Ping An Bank, Moutai

We analyzed the Shanghai/Shenzhen Connect Scheme for last week and highlight flows for BYD, CATL, Wuliangye, Citic Securities, Ping An Bank,...

Ke Yan, CFA, FRM

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