In today’s briefing:
- Standard Chartered: FAB’s StanChart Bid Could Draw Plenty of Regulatory Scrutiny
- Koolearn (1797 HK): Don’t Overpay for Growth
- Sa Sa Intl (178 HK): On-Ground Observations and Outlook
- South Korean Banks Screener; Highlighting Industrial Bank of Korea (024110 KS)
Standard Chartered: FAB’s StanChart Bid Could Draw Plenty of Regulatory Scrutiny
- FAB’s bid will be the fastest and easiest way to increase its global and product reach.
- The deal is likely to face plenty of scrutiny due to StandChart’s complexity.
- With ample capital, liquidity and on path for profit recovery, StandChart is not in need of a deal.
Koolearn (1797 HK): Don’t Overpay for Growth
- Koolearn’s successful transformation into a live-streaming e-commerce business showcased outstanding entrepreneurship and leadership of its founder Michael Yu, whom we highly respect.
- That said, we expect its growth to decelerate materially after hitting RMB18 billion GMV by 2024. We value Koolearn at RMB36 billion (20% downside), drawing reference to VIPShop growth trajectory.
- While high-frequency data on live-streaming business will drive near-term stock price (and potentially to the upside), its current valuation doesn’t pay off for long -term investors in our view.
Sa Sa Intl (178 HK): On-Ground Observations and Outlook
- We observed that businesses at Sa Sa International Hldgs (178 HK) have picked up during the Chinese New Year, but a significant overall significant recovery is still lacked.
- The full relaxation of mainland-HK border control has brought about a 110% surge in mainland arrival between 6 Feb and 11 Feb. This suggests that momentum is clearly building up.
- Sa Sa has embarked on strategies like re-opening important stores, selectively increase store counts and re-adjusting staff arrangement and opening hours to capture the opportunities.
South Korean Banks Screener; Highlighting Industrial Bank of Korea (024110 KS)
- In our latest South Korean banks screener; we add Industrial Bank of Korea to the buy list alongside Hana Financial; we cut KB Financial to a neutral rating
- Industrial Bank of Korea has very attractive multiples and PEG ratio and the best pre-provision and post-provision returns of the peer group, it also has sound broad credit quality metrics
- We introduce a broader credit quality metric to the screens and also EPS revisions over the last week and last month to give a sense of earnings momentum changes
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