Daily Brief Financials: Perpetual Ltd, RHB Bank Bhd, Allianz , Aoyama Zaisan Networks Co Lt, Nesco Ltd, Yuexiu Property and more

• Yesterday, Washington H. Soul Pattinson and Co. Ltd (SOL AU) made a $3bn scrip offer Aussie-listed equities manager Perpetual Ltd (PPT AU).
• Under the indicative terms, PPT shareholders receive one-third of the Offer in SOL shares, and two-thirds in PPT’s asset management arm via an in-specie spin-off.
• PPT rejected the proposal as it undervalues PPT, its corporate trust and wealth management businesses; and it offers SOL shares as consideration. But the Offer is not without merit.

• Of the six Malaysian banks screened, we keep value play RHB Bank on the buy list and switch our prior CIMB for Maybank
• RHB Bank is our top pick for its undemanding PE and PBV whilst being second from top in post-provision profitability; its high CET1 ratio has not held back its ROE
• We drop CIMB from the buy list for its weaker credit quality and low NPL coverage; we upgrade quality pick Maybank to buy for its attractive valuations

• Below we lay out what we believe is a compelling case to add exposure to European/UK Financial stocks at current levels.
• The EURO STOXX 50 has been on an absolute tear since we discussed the bullish implications of a break above 4200, and it now breaking above 2+year resistance at 4400-4415.
• Financials are one of the leading Sectors within Europe/UK, and banks, insurance, and financial services are all attractive. We highlight several of our favorite names to buy at current levels

• A positive surprise – Q1-3 FY12/2023 results highlighted the positive demand environment for AZN’s services, with Inheritance consulting sales growing 47.1% YoY driven by new customer acquisitions.
• The company’s aim to improve the quality of earnings is demonstrated by improvements in underlying profitability with the sales mix shifting towards Wealth Consulting, while Real Estate Solutions provides cross-selling opportunities and strong access to engage with new customers.
• The company has revised its FY12/2023 earnings estimates and on track to book record-high earnings, and has currently maintained its FY dividend forecast of ¥41 per share.

• Nesco reported strong growth in BEC revenues led by Q2 being a seasonally strong quarter for the exhibition business. Even in YoY terms, the growth was decent at 8%.
• Nesco IT Park revenues also jumped by 14% QoQ, suggesting that the occupancy level in Tower 3 has gone up from 82% earlier.
• Nesco Foods business continues to grow rapidly as the new Food Court and Restaurants have seen strong traction. Revenue in Foods business has more than doubled YoY.

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.

• Kawasan Industri Jababeka
• Yuexiu Property