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>Tong Yang Industry is now seeing record profit in FY23 and this appears to be in place to continue during FY24</li>
<li>The automobile and motorcycle parts manufacturing company is seeing strong growth in the US market</li>
<li>Electric vehicle parts R&amp;D is well underway and this should support continued growth in coming years</li>
</ul>


Tong Yang Industry is now seeing record profit in FY23 and this appears to be in place to continue during FY24
The automobile and motorcycle parts manufacturing company is seeing strong growth in the US market
Electric vehicle parts R&amp;D is well underway and this should support continued growth in coming years


Tong Yang Industry - Record Profit With Improving Financial Position

Thematic (Sector/Industry)

<ul>
<li>Monthly high frequency data from Taiwan's banks shows strong profit acceleration through May YTD, which will include insurance investment gains for some</li>
<li>This can be driven by accelerating loan growth to technology companies, to related companies, indirectly and may explain in part, Taiwan's leading loan growth rate vs other countries</li>
<li>Credit metrics and net profit growth can be supported for Taiwan's banks by a sector focus that differs from many others in the region and the world</li>
</ul>


Monthly high frequency data from Taiwan's banks shows strong profit acceleration through May YTD, which will include insurance investment gains for some
This can be driven by accelerating loan growth to technology companies, to related companies, indirectly and may explain in part, Taiwan's leading loan growth rate vs other countries
Credit metrics and net profit growth can be supported for Taiwan's banks by a sector focus that differs from many others in the region and the world


Taiwan Banks - HFD Profit Figures Good, Tech Exposure Can Support Credit Metrics, Loan Growth

<ul>
<li>Aisin is already achieving strong growth, across many markets, and this should continue with more sales into EV and HEV markets</li>
<li>Financial strength is improving, with gearing moving lower, and debt/ebitda moving lower</li>
<li>Balance sheet clean up can lead to some volatility, but overall a general positive, as is the focus on capital management</li>
</ul>


Aisin is already achieving strong growth, across many markets, and this should continue with more sales into EV and HEV markets
Financial strength is improving, with gearing moving lower, and debt/ebitda moving lower
Balance sheet clean up can lead to some volatility, but overall a general positive, as is the focus on capital management


Aisin - 141% Profit Growth, With Future to Have More Sales for Electric and Hybrid Vehicles

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

Brian Freitas

Pan-Asia Index Rebalances/ Events/ Delta One

Periscope Analytics

Periscope Analytics focuses on event-driven trades across Asia Pacific and provides comprehensive, timely and systematic coverage of index changes to major Asia Pacific indices in a structured manner.

The analysis includes forecasted inclusions and exclusions to all major Asian indices that have significant amount of tracking assets, including estimates of passive buy/sell flow on the stocks. The service also provides commentary and impact of market consultations, ground rule changes, and other events (IPOs, spin-offs, M&A) that could lead to index changes and passive flow.

Periscope Analytics works with multi-strategy hedge funds, proprietary trading firms, stat arb trading groups and long-only investors that invest and trade in the Asia Pacific region with the data being used to trade index rebalances, avoid pre-positioning and passive flow, and to time entry into and exit from stocks.

Event-Driven Trades Across Asia Pacific

Event-Driven

Nan Ya Printed Circuit Board / Event-Driven

<ul>
<li>There are 5 adds and 5 deletes to the Yuanta/​P-Shares Taiwan Dividend Plus ETF in June with implementation taking place from 21-27 June.</li>
<li>The constituent changes and capping changes result in an estimated one-way turnover of 12.8% and in a one-way trade of TWD 37.2bn (US$1.15bn).</li>
<li>The changes are in line with our forecasts with one exception. <a href="https://www.smartkarma.com/entities/uni-president-enterprises-corp" target="_blank" data-smartkarma-citation="entities:7973:1" rel="noopener">Uni President Enterprises (1216 TT)</a> was not added and Yulon Finance (9941 TT) was added instead.</li>
</ul>


There are 5 adds and 5 deletes to the Yuanta/​P-Shares Taiwan Dividend Plus ETF in June with implementation taking place from 21-27 June.
The constituent changes and capping changes result in an estimated one-way turnover of 12.8% and in a one-way trade of TWD 37.2bn (US$1.15bn).
The changes are in line with our forecasts with one exception. Uni President Enterprises (1216 TT) was not added and Yulon Finance (9941 TT) was added instead.


Yuanta/​P-Shares Taiwan Div+ ETF Rebalance: One Surprise as Round-Trip Trade Hits US$2.3bn

Pan-Asia Index Flows & Special Situations, Quiddity Advisors

Janaghan Jeyakumar, CFA

Pan-Asia Index Flows & Special Situations

Quiddity Advisors

Pan-Asia Catalysts/Events

<ul>
<li>The index changes for the T50/100 index family and the TDIV index were confirmed after market close on Friday 7th June 2024.</li>
<li>While the T50 and T100 index changes were perfectly in line with our expectations there were some surprises among the TDIV index changes.</li>
<li>In this insight, we take a look at Quiddity's final flow expectations for the June 2024 index rebal event and potential trade ideas based on the flow dynamics.</li>
</ul>


The index changes for the T50/100 index family and the TDIV index were confirmed after market close on Friday 7th June 2024.
While the T50 and T100 index changes were perfectly in line with our expectations there were some surprises among the TDIV index changes.
In this insight, we take a look at Quiddity's final flow expectations for the June 2024 index rebal event and potential trade ideas based on the flow dynamics.


Quiddity TDIV/50/100 Jun 24 Rebal: 15/18 Hits; Updated Flow Expectations and Trade Ideas

Taiwan

Nan Kang Rubber Tire Co., Ltd. manufactures tires for automobiles, trucks, buses, and motorcycles.

Depo Auto Parts Ind Co Ltd manufactures and markets various kinds of auto lamps and auto parts for After Market usage.  The Company's products include headlamps, back-up lamps, fog lamps, side bumpers, plates, etc.  Depo Auto Parts markets its products under the brand name DEPO.

Kenda Rubber Industrial Co., Ltd. manufactures and markets tires for bicycles, motorcycles, automobiles, as well as agricultural and industrial vehicles.

Kenda Rubber Industrial Co., Ltd (2106 TT)

TYC Brother Industrial Co., Ltd. manufactures and markets automobile lights. The Company is a supplier of light products to both original and replacement parts markets.  TYC Brother mainly exports its products to the United States.

Actron Technology Corporation manufactures diodes for automotive alternator.

Hota Industrial Manufacturing Co., Ltd. manufactures gears and shafts for automobiles, motorcycles, and agricultural tractors.

Superalloy Industrial Co Ltd engaged into manufacturing and retail business of aircraft parts, auto parts, aluminum and copper parts. The company is also involved into the import and export business of raw materials.

CUB ELECPARTS INC manufactures and distributes automobile parts. The Company's major products include automobile electric switches and automobile electric sensors.

Eurocharm Holdings Co., Ltd. manufactures medical equipment and motorcycle parts. The Company offers its services throughout Vietnam.

Hu Lane Associate Inc. manufactures and markets electrical terminals for automobiles, motorcycles, electronics, computers, and others.

Dana Incorporated engineers, manufactures, and distributes components and systems for worldwide automotive, heavy truck, off-highway, engine, and industrial markets. The Company also provides leasing services in selected markets.

Zhejiang Yinlun Machinery Co.,Ltd. develops, manufactures and markets steel plate oil cooler, concentric oil cooler, shell and tube oil cooler. The company's products are used in automobile engine systems and automatic transmission systems.

Zhejiang Yinlun Machinery Co,Ltd. (002126 CH)

TS TECH CO., LTD. manufactures seats for two-wheeled and four-wheeled vehicles. The Company also produces other automobile accessories.

Ningbo Huaxiang Electronic Co., Ltd. manufactures nonmetallic automobile parts such as case assembly, harness protection system, engine accessories, fuel pipe system, shock absorber accessories, and interior trim parts.

Ningbo Huaxiang Electronic Co, Ltd. (002048 CH)

HL Mando Corp manufactures and markets automotive parts and equipments.  The Company's product line includes brake systems, suspension systems, and steering systems.

JK Tyre and Industries Limited manufactures a wide range of automobile tires, tubes and flaps. The Company also operates a chain of tire outlets across India which sell the Company's tires in addition to providing a range of automotive services, including wheel alignment and tire changing.

Minth Group Ltd. manufactures exterior automobile body parts.  The Company produces structural body parts, decorative parts, and trim.  Minth supplies multinational automobile manufacturers operating in China.

Hanon Systems manufactures a variety of automotive air control equipment.  The Company's products include air conditioners, heaters, cooling modules, compressors, radiators, fans, evaporators, and condensers. Hanon Systems distributes its products on an original equipment manufacturing (OEM) basis.

Wanxiang Qianchao Co., Ltd. manufactures and markets a variety of auto parts. The Company's products include universal joints, car vibration absorbers, transmission systems, bearings, and other related parts.  Wanxiang also trades merchandises.

Minda Corporation Limited was founded in 1985. The Company's line of business includes the manufacturing of electrical equipment and supplies.

Tong Yang Industry Co., Ltd. manufactures and markets automobile and motorcycle parts such as bumpers, windshields, grilles, fenders, hoods, and light frames. The Company exports its products to North America, Europe, Central and South Americas, Southeast Asia, and the Middle East.

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Tong Yang Industry (1319 TT)

Tong Yang Industry - Record Profit With Improving Financial Position

Tong Yang Industry is now seeing record profit in FY23 better than the preceding 10 years, where 1Q24 shows no let up. Improving sales in the US...

Daniel Tabbush

Taiwan Banks - HFD Profit Figures Good, Tech Exposure Can Support Credit Metrics, Loan Growth

Taiwan's banks may be unique with reasonable tech exposure, a possible driver for some of the best loan volume anywhere, with strong credit...

Daniel Tabbush

Aisin - 141% Profit Growth, With Future to Have More Sales for Electric and Hybrid Vehicles

Buyback just announced of 17m shares or 6.3% of shares, this is significant, and where the Aisin story is already fundamentally strong.

Daniel Tabbush

Yuanta/P-Shares Taiwan Div+ ETF Rebalance: One Surprise as Round-Trip Trade Hits US$2.3bn

The ETF starts rebalancing at the close today and that will continue over the next 4 trading days. Excluding BizLink, the adds have outperformed...

Brian Freitas

Quiddity TDIV/50/100 Jun 24 Rebal: 15/18 Hits; Updated Flow Expectations and Trade Ideas

We estimate one-way flow for the TDIV June 2024 rebal to be around US$1.08bn which translates to a turnover of 17%. We expect the top outflow names...

Janaghan Jeyakumar, CFA

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

Tong Yang Industry - Record Profit With Improving Financial Position

Tong Yang Industry is now seeing record profit in FY23 better than the preceding 10 years, where 1Q24 shows no let up. Improving sales in the US...

Daniel Tabbush

Taiwan Banks - HFD Profit Figures Good, Tech Exposure Can Support Credit Metrics, Loan Growth

Taiwan's banks may be unique with reasonable tech exposure, a possible driver for some of the best loan volume anywhere, with strong credit...

Daniel Tabbush

Aisin - 141% Profit Growth, With Future to Have More Sales for Electric and Hybrid Vehicles

Buyback just announced of 17m shares or 6.3% of shares, this is significant, and where the Aisin story is already fundamentally strong.

Daniel Tabbush

Yuanta/​P-Shares Taiwan Div+ ETF Rebalance: One Surprise as Round-Trip Trade Hits US$2.3bn

The ETF starts rebalancing at the close today and that will continue over the next 4 trading days. Excluding BizLink, the adds have outperformed...

Brian Freitas

Quiddity TDIV/50/100 Jun 24 Rebal: 15/18 Hits; Updated Flow Expectations and Trade Ideas

We estimate one-way flow for the TDIV June 2024 rebal to be around US$1.08bn which translates to a turnover of 17%. We expect the top outflow names...

Janaghan Jeyakumar, CFA

Yuanta/P-Shares Taiwan Div+ ETF Rebalance: One Surprise as Round-Trip Trade Hits US$2.3bn