In today’s briefing:
- HDFC Bank: Steady ROA Despite NIM Compression Post Merger
- Cloudchain Pre-IPO Tearsheet
- Japan REITs: Long Japan Hotel REIT and Short Nippon Building Fund on Industry Fundamentals
HDFC Bank: Steady ROA Despite NIM Compression Post Merger
- As highlighted in our prior notes, HDFC Bank (HDFCB IN) has been able to maintain its ROA and ROE despite NIM compression post merger.
- As the excess liquidity (related to the merger) recedes over the next 3-4 quarters, ROA and ROE should further normalize.
- HDFCB has been able to clock 5%ish QoQ growth across deposits and loans, allaying growth concerns on a larger base post merger.
Cloudchain Pre-IPO Tearsheet
- Cloudchain (CC CH) is looking to raise up to US$200m in its upcoming HK IPO. The deal will be run by China Securities International, ABC International, ICBC and Maxa Capital.
- Cloudchain is an independent industry digital finance platform in China, serving anchor enterprises, chain-related enterprises, and financial institutions.
- According to F&S, it is the largest independent digitalized corporate credit confirming platform in China. Its user base had grown at a CAGR of 75.1% from 2020 to 2022.
Japan REITs: Long Japan Hotel REIT and Short Nippon Building Fund on Industry Fundamentals
- In this insight, among the J-REIT universe, we explore the pair trade idea of LONG Japan Hotel REIT and SHORT Nippon Building Fund
- Among the real estate subsectors, we expect hotels continue to see superior performance on the back of tourism recovery, while office market will continue to be weak
- Both JHR and NBF are large caps with good trading liquidity. In terms of valuation, we see more upside in JHR (20%) than NBF (0%)
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