Daily Brief Financials: Huafa Property Services Group, Samsung Kodex Banks ETF, BFI Finance Indonesia, EURO/US DOLLAR, Terrafina, Funding Circle Holdings, Longfor Properties, Greentown China, Yuexiu Real Estate Investment Trust and more

• A state-owned Offeror pitching a lifetime high Offer Price – with a solid premium –  for an illiquid company? Sounds like a slam dunk.
• Yet  property manager Huafa Property Services Group (982 HK) has perennially traded wide to Huafa Industrial Co., Ltd. Zhuhai (600325 CH)‘s terms. This is not justified. 
• The Scheme Meeting/SGM is tomorrow (28 August), with payment on (or before) the 30 September. Or a gross/annualised return of 4%/46%. Buy here. Then buy some more. 

• KRX plans to launch the Value-Up Index as two separate indices: the “Excellent Value-Up Index” and the “Promising Value-Up Index.”
• The universe will include 150 constituents from KOSPI 200 and KOSDAQ 150. Allocation between indices is undecided, with sector limits on number and weight confirmed.
• The key indicators (ROE, PBR, shareholder return rate) remain unchanged. The Promising Index’s weights are undisclosed, but the Excellent Index favors financial and automotive stocks.

• BFI Finance Indonesia (BFIN IJ) adopted a cautious stance to new bookings in 2Q2024 given domestic and geopolitical risks but total receivables remained steady as did credit costs.
• The company remained focused on non-dealer 4W financing, increased heavy equipment, and reduced 2W exposure, with a move towards dealer-used 4W financial and generally loans with higher value collateral. 
• BFIN maintains solid funding from banks at a lower cost than its peers and it is expected to start to move to higher-yielding assets in 2H2024. Valuations remain attractive.

• The biggest shift in FX markets is a lower range of interest rates in the US, signaling a regime shift towards Fed rate cuts.
• Dollar strength is diminishing due to lower rates and softer US inflation, impacting carry trades and high yield currencies.
• Euro-Dollar may benefit from lower yields, but its upside potential is uncertain amidst ongoing market volatility and economic uncertainty.

This content is sourced through publicly available sources and has been machine generated. Information displayed is for general informational purposes only.

• Terrafina is an industrial REIT in Mexico with a strategic portfolio in key regions
• Nearshoring trend during COVID-19 has helped lower vacancy rates and increase asking rents for Terrafina
• Fibra Prologis intends to acquire Terrafina, attracting interest from other potential bidders as the market consolidates

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.

• Funding Circle is in the investment phase in the US, working towards profitability
• The company’s current valuation reflects a conservative and streamlined approach
• With a net tangible asset value of 65p per share compared to a stock price of 80p, investors may see growth potential

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.

Longfor Group’s H1/24 results were acceptable. Earnings declined in line with expectations, driven by lower revenue and margins in the Property Development segment. That said, earnings growth from rentals and services remained robust, with LTM profit from recurring income covering interest expense by 1.6x (FY 2023: 1.4x).

Negatively, net debt increased marginally in H1/24, even though total debt declined. Going forward, we expect the company to continue reducing debt using OCF and refinance its maturing debt using additional operating loans backed by its investment properties. Overall, we believe near-term default risk for Longfor remains low, as the company’s pipeline of new malls should continue to support its access to secured bank loans for refinancing.

Greentown’s H1/24 results were acceptable, given the above-industry sales and top-line growth. While gross profit declined, the property development gross margin was stable from FY 2023, and remained robust relative to peers. In addition, net debt was stable from FYE 2023. More importantly, the company’s access to onshore financing appears healthy, and liquidity is adequate.

The company remains active in land acquisitions and has a good quality land bank, mostly in high-tier cities in the Yangtze River Delta. Although Greentown is considered a pure-play developer (as its recurring income businesses are small), the company appears to have navigated the industry downturn well, thanks to its cautious approach towards land investments and operating efficiency to support a fast-churn model.

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 Oil And Gas
• First Pacific Co