Financials

• Deputy PM Choi Sang-mok commits to aggressively pursue separate taxation of dividend income, marking a shift towards concrete action for value-up policies.
• Ever since the introduction of the Value-up policy earlier this year, the primary incentive championed by the local capital market has been the separate taxation of dividend income.
• Hence, the government’s official commitment to this marks a crucial step in reshaping the Value-up momentum.

• Unprecedented levels of FII option-buying & increasing geo-political risk causing IVs to re-price higher.
• Skew/ Smile characteristics of the Vol Surface reflect increased risk aversion but not it panic mode – yet.
• BankNifty IVs exhibiting unusual “kink-in-the-curve”. Enter barbell structures to position for reversion in curve shape.

• Bell Financial Group Ltd (ASX:BFG) is a diversified provider of financial products and software solutions within, and increasingly outside, its traditional full-service stockbroking business.
• A Q1 FY24 trading update provided at the group’s AGM on 19 April points to revenue growth of 17% and PBT growth of 60% to $9.3m, with all divisions said to be profitable.
• This compares to a RaaS H1 FY24 PBT growth estimate of 69%, placing the group on track to achieve our H1 estimates.

• USDJPY is breaking 154, almost 20-year high.  In general, weaker Yen is positive for investment in real estate as properties look cheaper from a foreign investor perspective
• Yen weakness is also positive to tourism in Japan, as weak currency will drive tourist arrival and boost tourism
• We like Japan Hotel REIT on the back of attractive valuation and weaker Yen.  We also like other Japan RE names like 8801 and 8802

• The S&P 500 index tracks the 500 largest names listed in the US and it is one of the most highly-tracked indices in the world.
• The index is reviewed quarterly. The next review will be in June 2024 and the evaluation date for the rankings for the constituent selection process is 6th June 2024.
• In this insight, we take a look at the Potential ADDs and Potential DELs for the June 2024 index rebal event and the intra-review ADDs/DELs.

• The S&P500 has been falling for 3 weeks and 6 days, it is very oversold.
• The current Market Reversal Matrix pattern suggests a high probability LONG trade for this coming week and the next.
• The support price area where to enter LONG is the 4950-4900 but also higher prices between 5000 and 4950 could be a good entry point, although a bit riskier.

• The Financial System Report published on April 18th focuses on the key Japanese bank issues, including the prospect of domestic rate hikes
• We focus primarily on the key take-aways from the BoJ report, in particular with relation to potential rate hikes; our key picks appear to be better geared than the average
• We highlight Resona, Mizuho and Concordia in the bigger caps, with positive views on Suruga, Gunma and Tokyo Kiraboshi in the regional banks

Foxtons Group’s Q1 revenue grew by 9%, supported by growth in all three divisions as the strategic initiatives continue to gain significant momentum, driven by investment in staff, best-in-class bespoke IT and data platforms. This implies that Foxtons’ medium-term targets are now coming into focus. Market share is being gained in all divisions, which puts Foxtons in a good position as the sales market stabilises. We maintain our valuation of 132p/share and believe that if interest rates stabilise or ease further, there are upside risks to our forecasts.

• Aadhar Housing Finance (AHF) is now looking to raise around US$600m in its India IPO, via selling a mix of primary and secondary shares.
• AHF is focused on the low income housing segments (ticket size less than INR1.5m) in India. It offers a range of mortgage-related loan products.
• In this note, we look at the updates from the company’s recent filings.

• In issue #17 of Crypto Moves, we described MicroStrategy’s co-founder and Chairman, Michael Saylor, as today’s Satoshi Nakamoto when it comes to Bitcoin narratives.
• While Satoshi Nakamoto was the creator of Bitcoin and the miner of its genesis block, Michael Saylor has emerged as a key leader in the last few years, promoting and supporting the current narratives that have driven Bitcoin to new peaks.
• These narratives have primarily centered on Bitcoin being a store of value, especially as an inflation hedge and a safe haven during economic crises and geopolitical instability.

• Flame Acquisition Corp (FLME) is merging with Sable Offshore in a $1 billion deal to acquire and revive oil and gas assets in California
• Strong investment demand seen with SPAC shares trading above cash value and $520 million raised in PIPE capital
• Deal offers high-quality asset, access to infrastructure, attractive pricing, strong balance sheet, and capable management team, with a 30-50% discount to peers and limited downside risk pre-deal close

This content is sourced through publicly available sources and has been machine generated. Information displayed is for general informational purposes only. This article was originally published 3 months ago on Value Investors Club.

• GBFH operates a successful community bank in Las Vegas with high insider ownership and focus on innovative banking services
• Recently announced plans to acquire key intellectual property related to cashless betting
• Shows impressive net interest margin and expected growth in credit card interest income, remaining a well-managed and profitable institution

This content is sourced through publicly available sources and has been machine generated. Information displayed is for general informational purposes only. This article was originally published 3 months ago on Value Investors Club.

• And eagle-eyed reader spotted Hang Lung Properties (101 HK)‘s scrip dividend option for the FY23 final dividend. That’s the first time I’ve seen HLP provide this alternative. 
• Over the years, the Chan family and Hang Lung (10 HK) have chipped away at HLG’s and HLP’s minorities. HLP and HLG are currently trading at all-time low P/Bs. 
• This scrip dividend, which takes a page out of Jardine Matheson (JM SP)‘s playbook, would boost HLG’s stake in HLP to ~63% from 61.24% currently; if opting only for scrip.

• In its final results on 30 January, the Hang Lung Properties (101 HK) board declared a final dividend of HK$0.60 per share, which can be paid in cash or by scrip.
• The Chan family’s share of outstanding shares has steadily increased from 53.15% in 2013 to 61.89%. The scrip dividend could increase the family to 63.57% of post-dividend outstanding shares. 
• The Chan family have plenty of headroom to chip away at minorities before breaching the 25% public float requirements. HPL’s valuation is undemanding, but a privatisation offer is unlikely.

• The SET50 index tracks the performance of the top 50 largest and most liquid names listed on the Stock Exchange of Thailand (SET).
• In this insight, we take a look at the potential ADDs/DELs for SET during the index rebal event in June 2024.
• With roughly half of the 3-month reference period now complete, I see three changes for the SET 50 index but one of those names is still close to the border.

• In this insight, we explore Mitsubishi Estate, who is the second largest real estate company in terms of market cap
• Mitsubishi Estate major business is in office (Tokyo CBD), residential/condo, as well as some retail and hotel
• Japan stock market is upbeat and saw the largest inflow among Asia YTD.  8802 valuation is not demanding.

• Canara Bank has seen stunning profit expansion over the past several years
• Lower NPLs can drive lower credit costs to support profit expansion further
• ROE moved from 11.7% to 17.3% over the past several years

Lucror Analytics Morning Views comprise our fundamental credit analysis, opinions and trade recommendations on high yield issuers in the region, based on key company-specific developments in the past 24 hours. Our Morning Views include a section with a brief market commentary, key market indicators and a macroeconomic and corporate event calendar.

• Meituan

• NB Bancorp has grown as a mutual bank, allowing flexibility to pursue growth opportunities without shareholder constraints
• Strong financial performance and potential for market growth make NBBK a promising long-term investment
• Recommended for investors seeking opportunities for growth and financial stability

This content is sourced through publicly available sources and has been machine generated. Information displayed is for general informational purposes only. This article was originally published 3 months ago on Value Investors Club.

• HomeStreet Inc. focuses on MultiFamily lending in western states and recently surged in stock value due to a merger agreement with FirstSun Capital Bancorp
• Shareholders of HomeStreet will receive shares of FSUN under the deal, expected to close in the middle of 2024
• The author recommends building a position in FSUN, believing it is undervalued and has potential growth over the next 3 years

This content is sourced through publicly available sources and has been machine generated. Information displayed is for general informational purposes only. This article was originally published 3 months ago on Value Investors Club.

• During the period under consideration, i.e. February 28th 2024 to March 29th, 2024, the USD/JPY pair fluctuated between 146 and 152 Yen per 1 Dollar.
• The MA-10 line at the beginning of the period considered was moving above the MA-20 line.
• From March 7th until March 22nd the MA-10 line trend changed and was moving below the MA-20. 

• The HSI INDEX is currently down for the 2nd week in a row and it is quite oversold on a WEEKLY basis.
• A temporary reversal could come as soon as this week or next week, but we don’t think this will mark a restart of the previous rally.
• Look at the 16250-16050 area to go LONG, this is the area where the index most likely will print a temporary bottom.

IP Group’s NAV declined by 13% in total return (TR) terms in FY23, affected by continued soft valuations across venture capital (VC) markets, as well as funding delays at some of its holdings. That said, management indicated that many of IP Group’s portfolio companies continued to make strong progress. Its maturing portfolio offers a number of potential NAV triggers and is now available at a wide 59% discount to NAV. We note that, as at end-2023, only 14% of IP Group’s portfolio was valued based on funding rounds completed more than 12 months ago and 46% of its private portfolio was valued by a third-party specialist. IP Group’s holding-level liquidity was solid, with gross cash of £227m (or 19% of NAV) and 87% of its portfolio holdings (by value) had a cash runway to 2025 or beyond.

Tetragon Financial Group (Tetragon) posted a 6.4% net asset value (NAV) per share total return (TR) in US dollar terms in FY23. Tetragon’s returns normally have a low correlation with broader markets, and therefore its FY23 performance was below the 26.3% return of the S&P 500 Index, which rallied on the artificial intelligence (AI) theme. Tetragon’s FY23 return on equity (RoE) of 5.5% was below its target of 10–15% pa. That said, its performance since listing was within the target range at 11.3%. Tetragon continues payouts to its shareholders, distributing US$83.6m in FY23 through buybacks and dividends (3.0% of opening NAV), with the dividend yield standing at 4.4%.

Lucror Analytics Morning Views comprise our fundamental credit analysis, opinions and trade recommendations on high yield issuers in the region, based on key company-specific developments in the past 24 hours. Our Morning Views include a section with a brief market commentary, key market indicators and a macroeconomic and corporate event calendar.

• Vista Land & Lifescapes

• The weekend did not go as expected.
• The attack on Israel by Iran, which occurred overnight between Saturday and Sunday, had a noticeable impact on the crypto market.
• This led to Bitcoin and Ethereum dropping by 8% and 12% respectively by Sunday.

• We look at Asia, and see where there are interesting trade idea.  While HK/CH see investors’ capitulation, there are some interesting ideas in Singapore
• We focus on real estate and look at S-REITs, which just wrap up their 4Q 23 results.  We see divergence in terms of industry fundamentals
• Within S-REITs, we like industrial and retail given stronger industry fundamentals and stable asset valuation

• Findi is an illiquid Australian microcap company that controls TSI India, one of the largest owners and operators of ATMs in India
• TSI India has shown signs of improvement and is expected to perform well in the future
• Findi plans to list its operating business in India on the Indian stock market and issued convertible bonds in preparation for its IPO at a valuation of A$190.6 million

This content is sourced through publicly available sources and has been machine generated. Information displayed is for general informational purposes only. This article was originally published 3 months ago on Value Investors Club.

• During the period under consideration, i.e. February 28 th , 2024 to March 29th, 2024, the USD/JPY pair fluctuated between 146 and 152 Yen per 1 Dollar.
• The MA-10 line at the beginning of the period considered was moving above the MA-20 line. From March 7 th until March 22 nd , the MA-10 line trend changed and was moving below the MA-20.
• By the end of the examined period, the MA-10 line ended up above the MA-20 line.

• With HK/China continue to see risk-off sentiment; we switch our focus to Japan.  Nikkei is up 19% YTD, one of the best performing markets in the world
• Among Japan real estate names, Mitsui Fudosan is a well held name with the largest market cap.  8801 is up 45% YTD while 8802 is up 57% YTD
• Valuation is un-demanding, it is an interesting name to own if investors want exposure to Japan.  It is still not too late to chase the rally

• Downtrend in IVs stall as market sentiment deteriorates. Vol Regime Model sticks to “High & Down” state.
• Consider Equity Tail hedges/ buying OTM puts in current environment. Roll strikes lower if/when equities weaken further.
• Skew compression seen in BankNifty options as preference for out-of-money puts wane. Skew selling an unsuitable strategy at current levels.

Lucror Analytics Morning Views comprise our fundamental credit analysis, opinions and trade recommendations on high yield issuers in the region, based on key company-specific developments in the past 24 hours. Our Morning Views include a section with a brief market commentary, key market indicators and a macroeconomic and corporate event calendar.

• Anton Oilfield
• Greentown China

• While most HK/China stocks continue to be traded at depressed valuation, we view ESR as an interesting play among most real estate stocks
• The investment highlights of ESR are: 1) as a leading fund manager with growing AUM and fee income 2) leader in new economy sector, and 3) APAC focused
• ESR’s EBIT mainly comes from 3 segments: investment, fund management and new economy development.  ESR is now trading at deep discount to NAV

• 9 weeks ago, the FT reported Elliott Management had a stake in Mitsui Fudosan (8801 JP) and had asked them to sell cross-holdings and do a ¥1trln buyback. Mitsui responds.
• Lawrence Ho is buying Melco(200 HK). While it often pays to follows where the family invests, Melco is trading too tight for what is a simple holding company structure.
• Avoid being long Aozora Bank Ltd (8304 JP) vs the Banks Index, a portfolio of other cheaper banks, etc. Minimal/negligible upside in following Murakami-san here. And Activism on Banks is difficult.

• We explore Citibank’s upcoming division of CitiBanamex and the forthcoming legacy Banamex IPO; given the market’s premium PBV ratios, this should support the Banamex IPO valuation
• Sector trends to January show continued loan growth, but headwinds are building; rising funding costs are eroding credit spreads and credit costs are worsening, even though NPL coverage is healthy
• BanBajio generates an ROE of 28%+, whilst highly capitalized and on more modest multiples than Banorte; we stay cautious on Banorte, due to the growing risks to returns and valuation

• The Nikkei 225 Index last week bounced back, after a 2-weeks down pullback.
• The index is at a fork in our view: it could go higher from here, but we would like to see a sustained, multi-week rally to be convinced.
• If doubt about this potential rally continuation is strong, target the 40500-40800 price area to place SHORT trades against the index.

EML Payments has entered into an agreement to settle all the outstanding deferred consideration payments relating to the acquisition of Prepaid Financial Services Group (PFS) for £15.0m/A$28.8m, which represents a £7.9m/A$15.2m discount to the originally agreed amount. This agreement concludes all outstanding actual and potential liabilities relating to the PFS acquisition in 2020. Combined with the agreed sale of Sentenial for A$54m, this substantially strengthens EML’s balance sheet and simplifies the group’s structure.