Fintech & EM-focused Analyst, KT Capital Group

Alec Tseung

Fintech & EM-focused Analyst

KT Capital Group

Principal investments and advisory firm that focuses on connecting the CIS countries with East Asia.

Principal investments and advisory firm

Equity Bottom-Up

<ul>
<li>Pru is currently trading below its embedded value, with the valuation assigning a negative value for the group’s new business profits.</li>
<li>Given its quality franchise across all key markets in Asia and continued strong new business recovery (to pre-Covid levels), this doesn’t seem to make sense at all.</li>
<li>We would continue underwriting the investment case of Pru in the coming year, with the stock offering significant upside potential. </li>
</ul>


Pru is currently trading below its embedded value, with the valuation assigning a negative value for the group’s new business profits.
Given its quality franchise across all key markets in Asia and continued strong new business recovery (to pre-Covid levels), this doesn’t seem to make sense at all.
We would continue underwriting the investment case of Pru in the coming year, with the stock offering significant upside potential. 


2024 High Conviction: Underwriting Prudential’s Investment Case into 2024

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.

Event-Driven

<ul>
<li>
<a href="https://www.smartkarma.com/entities/oversea-chinese-banking-corp" target="_blank" data-smartkarma-citation="entities:114:1" rel="noopener">OCBC (OCBC SP)</a> has announced a voluntary unconditional general offer for <a href="https://www.smartkarma.com/entities/great-eastern-holdings-ltd" target="_blank" data-smartkarma-citation="entities:13993:1" rel="noopener">Great Eastern Holdings (GE SP)</a> at S$25.60 per share, a 36.90% premium to the undisturbed price.</li>
<li>OCBC aims to privatise Great Eastern by delisting resolutions or exercising compulsory acquisition rights. The offer has not been declared final.</li>
<li>While the offer is reasonable, it is not a knockout bid which would comfortably allow OCBC to privatise through either option. A bump is highly likely.   </li>
</ul>



OCBC (OCBC SP) has announced a voluntary unconditional general offer for Great Eastern Holdings (GE SP) at S$25.60 per share, a 36.90% premium to the undisturbed price.
OCBC aims to privatise Great Eastern by delisting resolutions or exercising compulsory acquisition rights. The offer has not been declared final.
While the offer is reasonable, it is not a knockout bid which would comfortably allow OCBC to privatise through either option. A bump is highly likely.   


Great Eastern Holdings (GE SP): OCBC’s Offer Needs a Bump to Achieve Privatisation Ambitions

Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

<ul>
<li>It seems like every week, Bloomberg reports a HK-listed company weighing privatisation options. <a href="https://www.smartkarma.com/entities/hkbn-ltd" target="_blank" data-smartkarma-citation="entities:289:1" rel="noopener">HKBN (1310 HK)</a>, <a href="https://www.smartkarma.com/entities/esr-group-ltd" target="_blank" data-smartkarma-citation="entities:27983:1" rel="noopener">ESR (1821 HK)</a>, and <a href="https://www.smartkarma.com/entities/samsonite-international-sa" target="_blank" data-smartkarma-citation="entities:12790:1" rel="noopener">Samsonite (1910 HK)</a> have all been rumoured of late.</li>
<li>Last Friday, Samsonite <a href="https://www1.hkexnews.hk/listedco/listconews/sehk/2024/0322/2024032200048.pdf" target="_blank" rel="noopener">announced</a> it was focused on pursuing the listing of its shares on a second exchange.</li>
<li>No preferred exchange was mentioned. Nor whether the goal is to secure a dual primary listing, or a secondary listing. A buyout, for now, appears to be on the backburner.</li>
</ul>


It seems like every week, Bloomberg reports a HK-listed company weighing privatisation options. HKBN (1310 HK), ESR (1821 HK), and Samsonite (1910 HK) have all been rumoured of late.
Last Friday, Samsonite announced it was focused on pursuing the listing of its shares on a second exchange.
No preferred exchange was mentioned. Nor whether the goal is to secure a dual primary listing, or a secondary listing. A buyout, for now, appears to be on the backburner.


Samsonite (1910 HK): Dual-Listing Musings

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.

Thematic (Sector/Industry)

<ul>
<li>China insurance sector may seem like there is strong growth prospects due the population, but relatively long term data on insurance premium growth is not robust in recent years.</li>
<li>Aggregate impairment losses on assets of insurance companies have been soaring in recent years, well higher than in the GFC, which can continue with weak CRE, investments.</li>
<li>Ping An Insurance has seen sharp fall in operating income in the past 2 quarters, with levels near quarterly lows in the past five years. Lower rates may hurt further. </li>
</ul>


China insurance sector may seem like there is strong growth prospects due the population, but relatively long term data on insurance premium growth is not robust in recent years.
Aggregate impairment losses on assets of insurance companies have been soaring in recent years, well higher than in the GFC, which can continue with weak CRE, investments.
Ping An Insurance has seen sharp fall in operating income in the past 2 quarters, with levels near quarterly lows in the past five years. Lower rates may hurt further. 


Ping An Insurance - Recent Profit Growth Is Weak, Industry Aggregates Do Not Suggest a Change

<ul>
<li>The earnings decline at <a href="https://www.smartkarma.com/entities/ping-an-insurance-group-co-of-c2975d60-47cd-4246-a7a6-25297586242b" target="_blank" data-smartkarma-citation="entities:24682:1" rel="noopener">Ping An Insurance Group of (601318 CH)</a> is well in place for the past three years and including the last 12 months and YTD. </li>
<li>A worsening China should see accelerated weakness at Ping An Insurance: bond mark downs, less product sales, lower bank contribution, falling investment returns as rates are cut.</li>
<li>Earnings risk perspective: profit RMB79bn in LTM against bond holdings of RMB2,622bn putting its bonds/profit at 33x. Bonds to capital is 2.9x: book value risk too.</li>
</ul>


The earnings decline at Ping An Insurance Group of (601318 CH) is well in place for the past three years and including the last 12 months and YTD. 
A worsening China should see accelerated weakness at Ping An Insurance: bond mark downs, less product sales, lower bank contribution, falling investment returns as rates are cut.
Earnings risk perspective: profit RMB79bn in LTM against bond holdings of RMB2,622bn putting its bonds/profit at 33x. Bonds to capital is 2.9x: book value risk too.


Ping An Insurance - Worsening Profit for Some Years, Can Accelerate with Corporate Bond Impairments

Hong Kong

Prudential Public Limited Company provides long term savings and protection products. The Company offers life and health insurance for long term business including asset management services. Prudential serves customers in Asia and Africa.

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Prudential (2378 HK)

2024 High Conviction: Underwriting Prudential’s Investment Case into 2024

We continue underwriting Pru’s investment case into 2024, with the market now assigning a negative new business multiple. Any modest improvement in...

Alec Tseung

Great Eastern Holdings (GE SP): OCBC’s Offer Needs a Bump to Achieve Privatisation Ambitions

While the offer is reasonable, it is not a knockout bid which would comfortably allow OCBC to privatise Great Eastern. Shares are trading slightly...

Arun George

Samsonite (1910 HK): Dual-Listing Musings

A secondary NASDAQ listing appears preferable. One that is a dual primary listing. A privatisation cannot be ruled out. But it won't come cheap. If...

David Blennerhassett

Ping An Insurance - Recent Profit Growth Is Weak, Industry Aggregates Do Not Suggest a Change

Ping An Insurance demonstrates weakening profit, China insurance industry aggregates, do not suggest this will change. Rather, investment returns...

Daniel Tabbush

Ping An Insurance - Worsening Profit for Some Years, Can Accelerate with Corporate Bond Impairments

Ping An Insurance can see meaningful risk to profit and book value from mark downs in its corporate bonds with a weak China economy.

Daniel Tabbush

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