Daily Brief Financials: KE Holdings , S&U PLC, K Bank, Nesco Ltd, DLocal, Molten Ventures and more

• In 2Q24, KE’s revenue grew by 20% YoY despite the weak property market.
• We believe property developers and personal landlords need KE more than the prosperous time.
• We believe the stock has an upside of 148% for the end of 2025. Buy.

Interim results, for the six months to 31 July (H125), will be published on 8 October. Ahead of that, S&U has alerted the market that based on the H1 performance, full year PBT is unlikely to meet the previous market consensus expectations. We believe this to be primarily a timing issue, reflecting the continuing impact of the temporary FCA restrictions on collections activity in the motor finance business. Once regulatory clarity has been established, we expect a significant recovery. Meanwhile, as previously reported, the property lending division continues to perform strongly. We have reduced our FY25 PBT estimate by 7% to £27m and will review our FY26 forecasts with the interim results.

• K Bank (279570 KS) plans to raise up to US$740m in its upcoming South Korean IPO.
• K Bank is one of three Internet-only banks in Korea. It provides a full range of commercial banking products and services.
• In our previous note, we have looked at the company’s past performance. In this note, we will undertake a peer comparison.

• Nesco reported a mixed Q1FY25. The IT Park business reported strong growth led by improved occupancy. IT Park revenue grew 20%+ YoY and 7.4% QoQ.
• The BEC business saw decline in its revenue due to seasonality. Q1 tends to be the weakest quarter for BEC. This also impacted the Nesco Foods business to an extent.
• BEC revenue declined -19% YoY. Nesco Foods revenue declined -14% YoY. Overall, Nesco’s PBT increased 7% YoY, however PAT declined -8% YoY due to deferred tax impact. 

• DLocal’s Q2 2024 earnings report indicates a complex blend of growth, challenges, and strategic adaptation amid volatile market conditions.
• The company reported a significant achievement with its Total Payment Volume (TPV) reaching $6 billion, depicting a strong year-on-year growth of 38% despite a high comparative in the previous year.
• This growth attests to DLocal’s ongoing capability to deepen relationships with existing global merchants and to attract new ones, contributing positively toward its long-term expansion prospects.

Molten Ventures has already surpassed its £100m realisation target for FY25 (ending March 2025) with exits from Perkbox, Endomag, Graphcore and M-Files, which in aggregate represent £124m in exit proceeds. Consequently, Molten launched a £10m buyback programme in July 2024. All these transactions were agreed at or slightly above the previous carrying values. Molten’s H125 results will likely benefit from Revolut’s recent secondary sale, which values the fintech at US$45bn compared with US$33bn during the previous funding round in July 2021. Finally, several of Molten’s core holdings raised capital this year, providing additional validation points for Molten’s H125 carrying values.