Daily Brief Financials: Haitong International Securities Group, Nice Holdings, USD, IREDA, Secure Trust Bank, AGBA Group Holding and more

• Haitong International Securities Group (665 HK)’s scheme meeting is on 15 December. The IFA considers Haitong Securities Co Ltd (H) (6837 HK)’s HK$1.52 per share offer fair and reasonable. 
• Key conditions include approval by at least 75% of independent shareholders (<10% of independent shareholders rejection) and a headcount test. No shareholder holds a blocking stake.
• The high takeover premium ensures a done deal. At the last close and for the 18 January 2024 payment, the gross and annualised spread is 2.7% and 18.2%, respectively.

• On 21 November, Nice Holdings (034310 KS) announced new shareholder return policies that included material increase in dividends and share cancellations.
• First, Nice Holdings has decided to raise dividends by more than 10% every year for the next three years. Nice Holdings paid dividend per share of 410 won last year. 
• Nice Holdings also announced that it will cancel more than 1% of total outstanding shares every year for the next three years. 

• Once the pre-cons were satisfied on the 15th November, it seemed pessimistic to stick to the delayed 29 December dispatch date for Haitong International Securities Group (665 HK)‘s Scheme Document. 
• And right on cue, the Doc was issued last night (21 Nov). The Court Meeting is the 15 December. with an expected cash despatch on or around the 18 January.
• Trading at a gross spread to terms of 2.7%. The headcount test applies. But this should comfortably get up. 

• Welcome to this US rates nugget with three charts on why November data from the US economy could refuel the hawkish bias within the Federal Reserve.
• First, our ISM Services model hints at a large rebound in the ISM number released on December 5.
• ISM Services jumps to >60 in our models when you adjust for the spreadsheet wizardry of the Institute of Supply Management (remember the abysmal prints in Nov/Dec of 2022) as the seasonal adjustment factors are much more helpful than a year ago.

• IREDA (1845911D IN) is looking to raise at around US$258m in its India IPO. 
• Indian Renewable Energy Development Authority (IREDA) is a wholly owned Government of India (GoI) enterprise under the administrative control of the Ministry of New and Renewable Energy (MNRE).
• In this note, we look at the company’s past performance and share our quick thoughts on valuation.

In its Q323 trading update, Secure Trust Bank (STB) posted 1.7% q o q growth in net lending alongside 2.6% growth in its deposits. This was despite a 7% fall in new business lending from an elevated Q223 comparable as consumer spending weakened. More importantly, STB also hosted a capital markets day (CMD), where management reiterated the medium-term 14–16% return on average equity (RoAE) target and presented on the V12 Retail Finance business in detail. The RoAE should be supported by an improved mix weighted towards Retail Finance, combined with moderated volume growth and greater cost efficiency. Project Fusion is developing well and has now been extended to deliver annualised savings of £5m by the end of FY24. We have only changed our estimates for the issue of 0.2m shares under the employee share plan.

AGBA’s Q323 results continued to be affected by the weak recovery in China and consequent subdued mainland demand for Hong Kong health and wealth products. As a result, revenues were flat year-on-year at US$13.2m, but down from US$17.4m in Q223. The pre-tax loss was US$12.9m, putting the company on track to meet its US$49m projected loss for FY23. AGBA also announced that it has entered into term sheets for a US$6.2m private share placing with a new institutional investor, AGBA’s group president and AGBA management at US$0.70 per share plus warrants with an exercise price of US$1.00/share. The amount could expand subject to ongoing conversations with additional potential investors. The significant premium to the current share price signals management’s confidence in AGBA’s long-term value. The capital will go towards funding organic growth, strategic acquisitions and managing liquidity until projected material profitability in FY25.