Daily Brief Financials: Haitong Securities Co Ltd (H), Affirm Holdings , NIFTY Index, China Vanke and more

• On 6 September, Guotai Junan Securities (2611 HK) and Haitong Securities Co Ltd (H) (6837 HK) entered a legally binding agreement to merge through absorption and share exchange. 
• The high-profile merger aligns with the Chinese government’s ambition to reform the brokerage sector and create world-class investment banks. The merger would result in the largest China broker by assets.
• In this note, we evaluate the potential share exchange ratio and the risks to satisfying the conditions for implementing the potential merger.

• Affirm Holdings recently reported its Fourth Quarter Fiscal 2024 Earnings and the management emphasized the company’s robust performance both in terms of growth and profitability for the fiscal year.
• The discussion underlined Affirm’s management’s ability to leverage technological advancements, particularly in artificial intelligence and machine learning, to maintain control over credit outcomes, which they describe as an intentional result of their strategies.
• 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.

• Late week Equity weakness pulled IVs off Summer Lows – IVs back at 14.0%. A dose of skepticism is required, given End-of-Summer Seasonality effect. 
• PCR drops to 0.92 & put-strike OI looks weak as weekly expiry rolls to 12.09 date – likely contributing to index’s inability to hold support levels.  
• Vol-Regime Switching Model held back from switching to Low-Vol state, highlighting sticky nature of “High & Down” Vol-state. Retain Short Vega & Skew-selling bias.

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.

• China Vanke