In today’s briefing:
- Edelweiss: Scaling Up Well | Value Unlocking Is Catalyzing Re-Rating
- Weekly Deals Digest (01 Sep) – ESR, Canvest, China TCM, CPMC, Shinko, Silverlake, Terumo, Midea
- Bank Negara Indonesia (BBNI IJ) – A Distinctly Positive Tone
- RLI Corp.: Expansion and Innovation in Surety Products & Major Drivers
- Globe Life Inc.: A Bear’s Perspective! – Major Drivers
- (Mostly) Asia M&A, Aug 2024: Orora, Fuji Soft, J Tower, Seven & I, Taishin/Shin Kong, PropertyGuru
- Radian Group Inc.: Investment in Growth and Diverse Revenue Streams! – Major Drivers
- Reinsurance Group of America: What Are Its Enhanced In-force Management Strategies? – Major Drivers
- Ryan Specialty Group Holdings: E&S Market Dynamics & Major Drivers
- Selective Insurance Group Inc.: Enhanced Commercial Lines Pricing and Retention Strategies! – Major Drivers
Edelweiss: Scaling Up Well | Value Unlocking Is Catalyzing Re-Rating
- Edelweiss Financial Services (“Edelweiss”) continues to scale up well its asset management and insurance businesses. The credit business has been also turning around led by the co-lending model.
- In particular, the asset management business has been growing rapidly. The alternatives asset management AUM grew 17% YoY, of which fee-paying AUM grew 32% YoY.
- With all its businesses now running independently, Edelweiss is focusing on unlocking value. It already demerged Nuvama and is now close to unlock value in its Alternative Asset management business.
Weekly Deals Digest (01 Sep) – ESR, Canvest, China TCM, CPMC, Shinko, Silverlake, Terumo, Midea
- A weekly summary of key developments across ECM and Event-Driven names tracked by us across Hong Kong, Australia, New Zealand, Singapore, Japan, Indonesia, Malaysia, Thailand, Korea, India and Chinese ADRs.
- ECM developments: Midea Group Co Ltd A (000333 CH) premarketing its H Share listing, Terumo Corp (4543 JP) placement and 99 Speed Mart Retail Holdings (99SPD MK) US$530 million IPO.
- Event-Driven developments: ESR Group (1821 HK), Canvest Environmental Protection Group (1381 HK), China Traditional Chinese Medicine (570 HK), CPMC Holdings (906 HK), Shinko Electric Industries (6967 JP).
Bank Negara Indonesia (BBNI IJ) – A Distinctly Positive Tone
- Bank Negara Indonesia (BBNI IJ) presented an optimistic picture from 2Q2024, with management upgrading the loan growth forecast range for the year by a notch with an improving liquidity backdrop.
- Credit costs remain low with the SME segment the only segment with lingering problems from vintage pre-2022 loans but otherwise, LAR are in decline with room to cut coverage ratios.
- BNI made a big fanfare of the launch of its brand new “wondr” banking app which is already off to a strong start with more active users. Valuations are attractive.
RLI Corp.: Expansion and Innovation in Surety Products & Major Drivers
- RLI Corp. reported strong financial results for the second quarter of 2024, reflecting a comprehensive picture of growth and financial stability across its various segments.
- The company, with its broad portfolio of insurance products, demonstrated robust underwriting profitability and significant net investment income growth.
- The deep dive into each segment reveals both strengths and areas with scope for vigilance.
Globe Life Inc.: A Bear’s Perspective! – Major Drivers
- Globe Life Inc., in the second quarter of 2024, reported a net income of $258 million, or $2.83 per share, compared to $215 million, or $2.24 per share, a year ago—an impressive growth of around 20%.
- The net operating income also saw a notable increase to $271 million, or $2.97 per share, reflecting a 14% rise from the previous year.
- This indicates a robust improvement in profitability, underscoring the company’s operational efficiency and financial strength.
(Mostly) Asia M&A, Aug 2024: Orora, Fuji Soft, J Tower, Seven & I, Taishin/Shin Kong, PropertyGuru
- For the month of August 2024, 10 new transactions (firm and non-binding) were discussed on Smartkarma with an overall announced deal size of ~US$56bn.
- The average premium for the new transactions announced (or first discussed) in August was ~47%. The average premium YTD is ~44%.
- This compares to the average premium for transactions in 2023 (117 transactions), 2022 (106), 2021 (165), 2020 (158), and 2019 (145 ) of 39%, 41%, 33%, 31%, and 31% respectively.
Radian Group Inc.: Investment in Growth and Diverse Revenue Streams! – Major Drivers
- Radian Group Inc. has reported a robust set of results for the second quarter of 2024, indicating consistent progress across its primary sectors of business operations amidst a variable interest rate environment.
- The highlights of the quarter included an increase in book value per share by 12% year-over-year, reaching $29.66, and a revenue surge to $321 million.
- Additionally, the firm achieved a net income of $152 million.
Reinsurance Group of America: What Are Its Enhanced In-force Management Strategies? – Major Drivers
- Reinsurance Group of America, Incorporated (RGA) reported robust second quarter 2024 results, delivering adjusted operating earnings of $5.48 per share, showcasing strong performance across its business lines and geographies.
- This was supported by a pipeline of robust new business activities, contributing to an adjusted operating return on equity of 15.3% for the past 12 months, surpassing intermediate-term targets.
- Baptista Research looks to evaluate the different factors that could influence the company’s price in the near future and attempts to carry out an independent valuation of the company using a Discounted Cash Flow (DCF) methodology.
Ryan Specialty Group Holdings: E&S Market Dynamics & Major Drivers
- Ryan Specialty Holdings continued its robust growth trajectory in the second quarter of 2024, achieving impressive financial results with an 18.8% year-over-year increase in total revenue to $695 million, driven by robust organic growth of 14.2%.
- This growth is underpinned by the company’s clear focus on niche market specialization and talent.
- Adjusted EBITDAC saw a considerable rise of 27.6% to $248 million, while the adjusted EBITDAC margin expanded by 240 basis points to 35.6%.
Selective Insurance Group Inc.: Enhanced Commercial Lines Pricing and Retention Strategies! – Major Drivers
- Selective Insurance Group Inc. delivered a mixed performance in the second quarter of 2024, navigating challenges that reflect broader industry-wide issues affecting insurers.
- John Marchioni, the CEO, highlighted the company’s commitment to disciplined underwriting, pricing, and reserving practices, which remain intact despite the pressures of social inflation affecting liability lines, particularly general liability.
- Baptista Research looks to evaluate the different factors that could influence the company’s price in the near future and attempts to carry out an independent valuation of the company using a Discounted Cash Flow (DCF) methodology.
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