Daily Brief Financials: Nice Information Service Co, Mizuho Financial Group, CK Asset Holdings, Yuexiu Property , Moody’s Corp, Chubb , Foxtons, Lloyds Banking Group and more

• On 1 August, the Korea Exchange approved the transfer of listing of Nice Information Service Co (030190 KS) from KOSDAQ to KOSPI. 
• Nice Information Service will also be deleted from KOSDAQ 150 index and it will be replaced by Hydro Lithium (101670 KS). 
• The recent share price decline in Nice Info Service has resulted in more attractive valuations for the company.

• Mizuho has well positioned for YCCC relief with its balance sheet management in 1Q24
• Less low yielding cash assets, higher loans, securities, shift into NCDs, from deposits
• Mizuho reports credit costs reversals and better credit metrics are clear in NPL detail

• CKA is a well diversified conglomerate with residential DP and IP (office and retail) in HK and China, with sizable business in UK (pubs) and infra assets in EU
• CKA focuses on capital mgmt (share buybacks, M&As, disposals), and consistently unlock value for shareholders.  CKA is in net cash, its strongest balance sheet position for 20 years
• Valuation is extremely compelling. We recommend CKA as a long-term buy and hold for investors and traders

We view Yuexiu Property (YXP) as “Low Risk” on the LARA scale. Our assessment takes into account the company’s: [1] parental support from Guangzhou Yuexiu (GYX), which is an SOE; [2] sound operating track record; [3] good contracted sales performance; and [4] geographical diversity, with a focus on the Greater Bay Area. These are balanced against weak market sentiment and a change in government policy.

Our fundamental Credit Bias on YXP is “Stable”. We expect its near-term credit profile to be supported by stable sales and cash collection, with Transit-oriented Development being a key factor underpinning the company’s growth. While YXP likely has limited room for margin improvement given the industry trends, we believe YXP could still outperform most of its competitors in terms of profitability. In addition, we expect the developer to have good funding access, given parent GYX’s SOE status and close relationship with the municipal government.

Controversies are “Immaterial” and the ESG Impact on Credit is “Neutral”.

We maintain our “Buy” recommendation on the YUEXIU curve. We like the company’s fundamentals and its support from GYX. We also expect YXP’s near-term credit profile to be supported by stable sales and cash collection.

• Moodys delivered a positive result and managed an all-around beat in the last quarter.
• Amid a consistent improvement in issuance, Moody’s Investor Services (MIS) had its first quarter of revenue gain in six quarters.
• Its revenue growth exceeded issuance growth by growing by 6%.

• Chubb managed to deliver a mixed set of results in its most recent result, with revenues below analysts’ expectations but above-par earnings.
• This quarter, Chubb experienced double-digit growth in its consumer and commercial P&C businesses in North America and abroad and in its life business.
• Commercial premiums increased in the quarter.

Foxtons’ interim results highlighted revenue and margin expansion as well as market share gains, evidence of success in rolling out the new strategy, which focuses growth on non-cyclical revenue streams and decouples performance from sales market cycles. If the strategy succeeds, over the medium term Foxtons expects margins to expand by c 500bp and operating profit to more than double. We retain our base case valuation of 59p/share, which implies c 50% upside, and our preferred ‘bull’ case valuation of 124p/share.

• Lloyds Banking Group delivered a solid financial performance in the first half and Q2 and managed an all-around beat in the last quarter.
• Lloyds’ structural hedge continued to provide a substantial earnings tailwind while the bank exhibited effective cost management and prudent risk practices.
• We give Lloyds Banking Group a ‘Hold’ rating with a revised target price.