Pan-Asia Index Rebalances/ Events/ Delta One, Periscope Analytics

Brian Freitas

Pan-Asia Index Rebalances/ Events/ Delta One

Event-Driven

<ul>
<li>
<a href="https://www.smartkarma.com/entities/sbi-sumishin-net-bank" target="_blank" data-smartkarma-citation="entities:34572:1" rel="noopener">SBI Sumishin Net Bank (7163 JP)</a>'s listing has been approved by the JPX and the stock is expected to start trading on 24 March. </li>
<li>News reports indicate a raise of US$1bn (JPY 115.5bn). This translates to an IPO price of JPY 1,920/share, valuing the company at JPY 300bn (US$2.59bn).</li>
<li>The stock should be added to the <a href="https://www.smartkarma.com/entities/tokyo-stock-exchange-tokyo-price-index-topix" target="_blank" data-smartkarma-citation="entities:22910:1" rel="noopener">TPX INDEX</a> at the close on 27 April where trackers will need to buy over 14% of the stock issued in the IPO.</li>
</ul>



SBI Sumishin Net Bank (7163 JP)'s listing has been approved by the JPX and the stock is expected to start trading on 24 March. 
News reports indicate a raise of US$1bn (JPY 115.5bn). This translates to an IPO price of JPY 1,920/share, valuing the company at JPY 300bn (US$2.59bn).
The stock should be added to the TPX INDEX at the close on 27 April where trackers will need to buy over 14% of the stock issued in the IPO.


SBI Sumishin Net Bank (7163 JP) IPO: Listing in March, TPX Inclusion Possibly in April

Financials & FinTech research, Galliano’s Financials Research

Victor Galliano

Financials & FinTech research

Financials & FinTech, EM & Developed Markets

Galliano’s Financials Research

Galliano's Financials Research provides fundamental research in Emerging Markets financials, including FinTech, as well as financials in select Developed Markets.

The investment style applied is generally value oriented, although Growth At Reasonable Price (GARP) strategies can also be used where appropriate. 

Our investment research approach aim is often contrarian, looking to capitalise on overly sceptical or optimistic consensus views. In terms of valuation techniques, the focus is on PBV ratio to ROE, PE multiples and dividend yield, as well as the application of PEG ratios and, where appropriate, Sum of the Parts (SOTP) valuations.

<ul>
<li>Citi is to sell its Mexican retail and SME banking operations, which we call new Banamex; it is an attractive banking franchise that needs investment and a focus on costs</li>
<li>Based on peer group valuations, and on new Banamex’s disclosed parameters, we estimate that the disposal entity’s valuation range could range from USD7bn to USD10bn, and we identify potential bidders</li>
<li>We believe that our new Banamex valuation range emphasizes BanBajio’s attractive valuations, we stick with our positive view on mid-cap BanBajio; we believe that Banorte is fully valued</li>
</ul>


Citi is to sell its Mexican retail and SME banking operations, which we call new Banamex; it is an attractive banking franchise that needs investment and a focus on costs
Based on peer group valuations, and on new Banamex’s disclosed parameters, we estimate that the disposal entity’s valuation range could range from USD7bn to USD10bn, and we identify potential bidders
We believe that our new Banamex valuation range emphasizes BanBajio’s attractive valuations, we stick with our positive view on mid-cap BanBajio; we believe that Banorte is fully valued


Citi’s Mexican Exit; Our Thoughts on “new Banamex”

Equity Capital Markets

<ul>
<li>Nubank’s shares are above the issue price post-IPO, with investors buying into the digital banking opportunity in Brazil as well as Mexico and Colombia</li>
<li>The bulls argue that the growth potential is not yet reflected in valuations; it has very low costs, and its positive returns will follow from greater loan and product penetration</li>
<li>Nubanks’s valuation is very stretched; good customer penetration does not yet equal deep product penetration which drives revenue growth, and new markets – Mexico and Colombia – will pressure costs</li>
</ul>


Nubank’s shares are above the issue price post-IPO, with investors buying into the digital banking opportunity in Brazil as well as Mexico and Colombia
The bulls argue that the growth potential is not yet reflected in valuations; it has very low costs, and its positive returns will follow from greater loan and product penetration
Nubanks’s valuation is very stretched; good customer penetration does not yet equal deep product penetration which drives revenue growth, and new markets – Mexico and Colombia – will pressure costs


Nubank (NU US) – IPO Done, Now Comes the Hard Part

<ul>
<li>Nubank has revised down its IPO pricing range by close to 20% to USD41.5bn, driven largely by challenging market conditions; this verifies our negative valuation opinion in our previous report</li>
<li>The revised prospectus includes Softbank as Nubank’s new potential cornerstone investor; this is putting pressure on the shares of digital challenger Banco Inter, in which Softbank has a 15% stake</li>
<li>The revised Nubank pricing range narrows the valuation gap with other digital and commercial banks; yet Nubank’s premium valuations need to be justified by medium term super premium earnings growth</li>
</ul>


Nubank has revised down its IPO pricing range by close to 20% to USD41.5bn, driven largely by challenging market conditions; this verifies our negative valuation opinion in our previous report
The revised prospectus includes Softbank as Nubank’s new potential cornerstone investor; this is putting pressure on the shares of digital challenger Banco Inter, in which Softbank has a 15% stake
The revised Nubank pricing range narrows the valuation gap with other digital and commercial banks; yet Nubank’s premium valuations need to be justified by medium term super premium earnings growth


Nubank’s Revised IPO Pricing Range, and the Emergence of a New Potential Cornerstone Investor

Brazil

NU Holdings Ltd. of the Cayman Islands operates as a holding company. The Company, through its subsidiaries, provides loans and digital banking services, as well as issues, administrates, processes, and transfers payments to post-paid credit cards and equity investments in other entities. NU Holdings serves clients worldwide.

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NU Holdings (NU US)

SBI Sumishin Net Bank (7163 JP) IPO: Listing in March, TPX Inclusion Possibly in April

JPX has approved SBI Sumishin Net Bank's IPO and the stock should list on 24 March. First Section on listing and then to the Prime Market. TOPIX...

Brian Freitas

Citi’s Mexican Exit; Our Thoughts on “new Banamex”

Citi sale of its Mexican commercial bank, new Banamex, will need the acquirer to control opex; in this report we estimate the valuation range &...

Victor Galliano

Nubank (NU US) – IPO Done, Now Comes the Hard Part

More than other digital banks, Nubank suffers from a disconnect between size of customer base & loan & deposit balances; also, we estimate that...

Victor Galliano

Nubank’s Revised IPO Pricing Range, and the Emergence of a New Potential Cornerstone Investor

Post the price reduction, the jury is still out on the after-market in Nubank shares; Banco Inter is nearing attractive value territory even if...

Victor Galliano

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