In today’s briefing:
- Hostile or Not?
- China Postal Savings Bank – Lower NIM, But Steady Lending & Credit Costs Suggests All Is Fine?
- Bitcoin Battles ETF Outflows
- Custodian Property Income REIT – Significant uplift in fully covered DPS
- East West Bancorp Inc (EWBC) – Tuesday, Feb 6, 2024
- RE Royalties Ltd. – 4Q23 Results: Finance Income Continues Uptrend
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Hostile or Not?
- On 6 May, the Board of Sabadell rejected the merger proposal as “it significantly undervalues its growth prospects and is not aligned with the interests of its customers and shareholders”.
- BBVA could take the offer directly to Sabadell shareholders, but a hostile offer seems extremely unlikely and there are no precedents in the Spanish banking sector.
- I find it unlikely that both parties reach an agreement because the terms would likely be unfavourable for BBVA (premium 40%-50%). Market sentiment also suggests a low probability.
China Postal Savings Bank – Lower NIM, But Steady Lending & Credit Costs Suggests All Is Fine?
- NIM is continuing to decline, from ~2.5% at its recent peak to ~1.8% in the most recent quarter. This may be from higher rescheduled loans.
- Loan growth ascent is strangely steady, and not indicative at all, of any business cycle. This alone is a concern, for true visibility of figures.
- Impairment costs do not suggest concern on underlying credit metrics, but with far higher loan balances in the past few years, this is an even greater worry.
Bitcoin Battles ETF Outflows
- BTC Spot ETFs Unlock Institutional Capital: Explore the impact of Bitcoin Spot ETFs, opening doors to institutional investment.
- Market Insights Drive BTC Performance: Understand BTC’s resilience and trajectory through market dynamics and performance analysis.
- Token Unlocks Shape Market Dynamics: Stay ahead of market shifts by monitoring upcoming token unlocks.
Custodian Property Income REIT – Significant uplift in fully covered DPS
Custodian Property Income REIT (CREI) produced a strong Q424 performance, driven by leasing progress and rental growth, rounding off a positive year. Reflecting FY24 performance, the company will pay a special dividend of 0.3p per share, additional to aggregate quarterly DPS of 5.5p, fully covered by EPRA earnings. The FY25 annual DPS target is increased by 9% to 6.0p, underpinned by the continuing strength of the commercial property occupier market and CREI’s increasing confidence in the outlook.
East West Bancorp Inc (EWBC) – Tuesday, Feb 6, 2024
Key points
- Short shares of EWBC, a medium-sized regional bank serving the Chinese/Asian expat community
- Trading at 1.5x price/TBV with compression in NIM and increased deposit costs
- Concerns about CRE exposure, uninsured deposits, investments in China/HK, and creditworthiness due to uniquely correlated customer base and soft guidance from management
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.
RE Royalties Ltd. – 4Q23 Results: Finance Income Continues Uptrend
- E Royalties reported its 4Q23 results. During the conference call hosted by management, the company said it continues to see substantial new quality investment opportunities, including solar projects in Asia.
- The company also mentioned a potential “tidal wave” in EV battery charging and storage opportunities in North America.
- The company reported 4Q23 revenue of C$2.6 million, up 64.7% Y/Y.