In today’s briefing:
- Lotte Non-Life Insurance: Who Will Buy?
- Integral Corporation IPO: Trading Debut
- EQD | Nikkei 225 (NKY) Enters WEEKLY OVERBOUGHT Resistance Area
- Longfor 960 HK: Continue to Be the Best Among POEs, yet Valuation Premium Might Narrow over Time
- Seoul Guarantee Insurance IPO: The Bull Case
- Seoul Guarantee Insurance Pre-IPO – The Positives – Broad Coverage Across Guarantee Insurance
- Integral Corporation IPO Trading – Low Demand but Somewhat Cornered
- Challenger (CGF AU) – Bank Sale 1H24 | ROC Highest in 23 Yrs | 85% Market Share Annuity FUM
- Global Banks Led Stocks on the Week with Arm IPO & Growth Outlook
- Bank Negara Indonesia (BBNI IJ) – Increasingly Quality Focused Through a Digital Lens
Lotte Non-Life Insurance: Who Will Buy?
- It was reported in numerous local media that the sale process of Lotte Non Life Insurance Co (000400 KS) could start in October 2023.
- There are four companies including Shinhan Financial (055550 KS), Hana Financial (086790 KS), Woori Financial Group (316140 KS), and Kyobo Life Insurance that may be interested in acquiring Lotte Non-Life Insurance.
- Minority shareholders are not likely to benefit from this potential huge management M&A premium of Lotte Non-Life Insurance.
Integral Corporation IPO: Trading Debut
- Integral Corporation (5842 JP) priced its IPO at JPY2,400 per share to raise gross proceeds of US$122 million. The shares will start trading on 20 September.
- We previously discussed the IPO in Integral Corporation IPO: The Bull Case, Integral Corporation IPO: The Bear Case and Integral Corporation IPO: New Price Range Is Tempting.
- The market sentiment on the sector has steadily improved since the prospectus’ release. Our analysis suggests that the IPO price remains attractive.
EQD | Nikkei 225 (NKY) Enters WEEKLY OVERBOUGHT Resistance Area
- The Nikkei 225 INDEX is getting WEEKLY OVERBOUGHT after just +1 week up. Rallying further during the next 2-3 weeks may be hard, it could stall or fall.
- If the index rallies further this week, it could fall the following week. Alternatively it could stall this week and rally the following week/s, but OVERBOUGHT status won’t go away.
- 34256 is the Q3 resistance target on CC=+3, this should be a hard barrier to breach. An earlier barrier is Q3 resistance on the Gen.Pattern Boxplot = 33835.
Longfor 960 HK: Continue to Be the Best Among POEs, yet Valuation Premium Might Narrow over Time
- In this insight, we conducted fundamental analysis on Longfor, which has always been perceived as the best Chinese developer among all private players
- However, since Chairlady resigns due to personal reasons, and given the policy clamp down, we think Longfor may not be able to sustain its competitive advantages over time
- Longfor was trading at a premium to CRL and COLI, we believe the valuation premium should narrow over time. On a relative basis we are not positive on Longfor
Seoul Guarantee Insurance IPO: The Bull Case
- Seoul Guarantee Insurance (031210 KS), a leading guarantee provider in Korea, is pre-marketing an IPO to raise up to KRW362 billion (US$272 million).
- The IPO price range is KRW39,500-51,800 per share. The bookbuilding will run from 13 to 19 October, with pricing on 25 October. The shares will be listed in November.
- The bull case rests on a leading market share, solid premium growth, the highest industry margins, a high solvency ratio and a high dividend payout.
Seoul Guarantee Insurance Pre-IPO – The Positives – Broad Coverage Across Guarantee Insurance
- Seoul Guarantee Insurance (031210 KS) is looking to raise around US$270m in its Korean IPO.
- Seoul Guarantee Insurance (SGI) is a guarantee insurance firm operating predominantly in Korea.
- In this note, we will talk about the positive aspects of the deal.
Integral Corporation IPO Trading – Low Demand but Somewhat Cornered
- Integral Corporation (5842 JP) raised around US$123m in its Japan IPO.
- Integral is a private equity management company advising funds that invest in both listed and unlisted companies in Japan, with a focus on mid-sized companies.
- In our previous notes, we looked at the company’s past performance and valuation. In this note, we talk about the trading dynamics.
Challenger (CGF AU) – Bank Sale 1H24 | ROC Highest in 23 Yrs | 85% Market Share Annuity FUM
- During 1H24 CGF expects to sell its bank for ~AUD36m which could include a AUD11m gain and allow to free-up bank capital of around AUD40-50m.
- Return on capital is now at the highest it has been since FY10 at 6.2% with a substantial 160bps increase in normalized ROE in 2H23 YoY to 13.1%
- 85% market share of annuity FUM from 50% about 10 years ago, operating in system with strong forced savings in superannution funds now at AUD3.5tr up 91% over 10 yrs.
Global Banks Led Stocks on the Week with Arm IPO & Growth Outlook
- Last week, the trio of DBS, UOB and OCBC averaged 3.4% gains, bringing their average 3Q23-to-date total return to 8.7%.
- The 3Q23-to-date has seen the trio of DBS, UOB & OCBC report combined 2Q23 Net Interest Income (NII) of S$8.26 billion, marking the third-consecutive quarter that combined quarterly NII has been above the S$8.0 billion mark.
- DBS Group Holdings (DBS), United Overseas Bank (UOB) and Oversea-Chinese Banking Corporation (OCBC) also moved in tandem averaging a 4% gain on the week.
Bank Negara Indonesia (BBNI IJ) – Increasingly Quality Focused Through a Digital Lens
- Bank Negara Indonesia (BBNI IJ)continues to focus on growing the quality end of its corporate loan book, and de-risking its smaller sized commercial loans, whilst growing consumer exposure.
- The bank’s digital initiatives remain core, with strong growth in mobile transactions by value as well as the number of users, whilst BNI Direct is driving digitisation of business customers.
- Hibank has launched, growing FMCG related loans fast, with the help of Mayora Indah. BNI valuations remain attractive, with the bank trading on 1.2x FY2023E PBV with 15% ROE.
💡 Before it’s here, it’s on Smartkarma
Sign Up for Free
The Smartkarma Preview Pass is your entry to the Independent Investment Research Network
- ✓ Unlimited Research Summaries
- ✓ Personalised Alerts
- ✓ Custom Watchlists
- ✓ Company Data and News
- ✓ Events & Webinars
