Daily Brief Financials: Japan Post Bank, Gresham House PLC, SBFC Finance Limited, Hang Lung, Fedbank Financial Services, Yanlord Land, Howard Hughes Corp, NatWest Group, Vista Land & Lifescapes and more

• Results show dramatically lower NIM, net interest income, but stock gains in spades
• The only way to analyze 7182 is to have a view on its stock, bonds, investment gains
• Unrealized gains more than doubled to JPY472bn: fire-power remains, but is it valuable?

• SBFC Finance Limited (1547353D IN) raised around US$131m in its India IPO, after the deal was priced at INR57/share, the top end of its IPO price range.
• SBFC Finance is a systematically important, non-deposit taking non-banking finance company (NBFC-ND-SI), offering secured MSME Loans and Loans against Gold. 
• In this note, we will talk about the demand for the deal and other trading dynamics.

• The data in this insight is collated from the “shareholding disclosure” link on the HKEx website.
• Often there is a corresponding HKEx announcement on the increase – or decrease – in the shareholding by directors. Or pledging. However, such disclosures are by no means an absolute.
• The key stocks mentioned in this regular insight are Hang Lung (10 HK) and Hang Lung Properties (101 HK).

• Fedbank Financial Services (0702066D IN) is looking to raise about US$200m in its upcoming India IPO.
• Fedbank Financial Services (Fedbank) is a retail-focused non-banking finance company (NBFC) promoted by The Federal Bank Limited.
• As per CRISIL, the firm had the second lowest cost of borrowing across the MSMEs, gold loan and MSME & gold loan peer set in India in FY23. 

Yanlord Land’s H1/23 results were acceptable, in our view, with the company reporting strong top-line growth. That said, the gross margin contracted, as Yanlord delivered projects outside of Tier 1 cities. Still, cash collection was strong, which supported net debt reduction and deleveraging.

Going forward, the company faces material near-term debt maturities, including a USD 600 mn syndicated loan and the USD 376 mn YLLGSP 6.8 24 (both due February 2024). Our base case assumes that Yanlord can refinance its syndicated loan, and repay the USD bond using cash on hand. We also expect the company to continue rolling over its secured SGD loan.

Overall, Yanlord’s credit profile is underpinned by its clean debt structure and moderately sizeable portfolio of investment properties. This is as the company may be able to monetise its unencumbered investment properties in China and Singapore to raise funds. Management is exploring a CMBS issuance backed by Yanlord Landmark in Chengdu. In addition, Yanlord may be able to pledge the Yanlord Reverie Plaza in Shenzhen for bank financing, as the asset has reached more than 80% occupancy (since its soft opening in late 2022). Moreover, the company’s unencumbered investment properties in Singapore may be used as credit enhancement to support the offshore notes in the unlikely event of default.

• HHH continues to exhibit the benefits of having operating assets as part of its MPCs. These operating assets provide essential cash flow to the rest of HHH
• Operating assets becoming the core part of the business and HHH no longer requiring debt to fund its expansion needs
• The Company has six unstabilized properties that could add $13.7 million of NOI by 2025 and has another six properties under construction to be completed by 2026.

• Natwest Group PLC managed to surpass the revenue expectations as well as the earnings expectations of Wall Street.
• With the liquidity portfolio being predominantly composed of central bank deposits, the liquidity coverage ratio was 141%, providing Natwest with a comfortable excess above the minimum requirements.
• We give Natwest Group PLC a ‘Hold’ rating with a revised target price.

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.

• Vista Land & Lifescapes