Daily Brief Financials: QV Equities Ltd, Shriram Finance , Bank Negara Indonesia Persero, Atour Lifestyle Holdings, Marsh & Mclennan, StoneCo , Picton Property Income, IP Group PLC, Grand City Properties Sa and more

• WAM Leaders Ltd (WLE AU) has launched an all-scrip off-market takeover offer for QV Equities Ltd (QVE AU) at 1 WLE share per 1.4675 QVE shares.
• The offer is subject to a 50.1% minimum acceptance condition and several onerous conditions, which disproportionately shift the risk to QVE shareholders. 
• The lack of meaningful premium (5.0% to undisturbed price) and unattractive deal metrics suggest a high probability of Board rejection. The Board has started a formal strategic review. 

• Due to the ongoing earnings season, for the next couple of weeks, we will temporarily deviate from our regular format and instead focus on reported earnings.
• This edition focuses on earnings commentary from Financials highlighting the commentary on costs, growth, and elections. 
• Earnings review includes AU Small Finance Bank Limited (AUBANK IN), Home First Finance (HOMEFIRS IN), IIFL Holdings (IIFL IN), Shriram Finance (SHFL IN). 

• Bank Negara Indonesia Persero (BBNI IJ) has stated its target of achieving an FY28e ROE of 20%, with ambition to join the other three big Indonesian Banks already doing it. 
• Although the current results are not on par with the other three, the bank has outlined its strategy to reach the target (1% credit cost; 37% CIR by 2028 exit)
• Projecting a gradual re-rating to align with peers by 2028 and extrapolating book value growth over the 5-year period provides a shareholder return of 30% CAGR

• We expect Atour to report 4Q23 revenue 3.5% higher than consensus, and non-GAAP NI 15.1% higher than consensus, mainly due to (1) stable business travellers in tourism off-season;
• (2) raising retail sales drive up gross margin. We think hotel supply and demand will turn to equilibrium in 2024.
• Occupancy may stabilize but ADR will fall, especially economy hotels. Atour, however, will be immune to the price fall, in our view.

• This is our first report on global insurance major, Marsh McLennan.
• The company had a mixed quarterly result as it failed to meet the revenue expectations of analysts but managed an earnings beat.
• The company recently announced the acquisition of MZI (McDonald Zaring Insurance), a full-service agency situated in Walla Walla, Washington.

• WAM Leaders Ltd (WLE AU), an investment company managed by Wilson Asset Management, has made an all-scrip off-market Offer for QV Equities Ltd (QVE AU).
• Terms are one WLE for every 1.4675 shares of QVE, for an implied price of A$0.95/share, a 5% premium to undisturbed.  
• The key condition is a 50.1% acceptance condition. WLE-related entities hold a 15.8% stake. QVE should hold out for an improved Offer.

• This is our first report on fintech solutions provider, StoneCo.
• The company delivered strong financial results in Q3 2023 with a 25% increase in total revenue YoY, achieving BRL 3.1 billion which surpassed its guidance by 2%.
• The impressive growth in the top line was followed by a 3.3x increase in adjusted EBT, hitting BRL 545 million.

Picton Property Income’s (PCTN’s) Q324 trading update details a range of positive leasing events that provided underpinning to income, reflected in its well-covered DPS. Together with progress on specific asset management initiatives this mitigated the impact of market-wide outward yield movements on NAV.

IP Group has released its year-end update, indicating that its end-2023 NAV per share will be in the range of 111p to 117p. This would represent a NAV total return decline of c 7–12% versus end-June 2023 and 11–16% versus end-2022. Management highlighted that this was driven by a further softening of valuations of early-stage companies in Q423. That said, management indicated that many of IP Group’s leading portfolio companies continued to make strong progress and it expects some major inflection points in 2024. IP Group’s balance sheet remains robust with gross cash and deposits of £227m at end-2023 (vs £250m at end-June 2023). IP Group expects to release its FY23 results on 13 March 2024.

Key points (machine generated)

• Grand City Properties is offering a 5.90% perpetual bond that provides a double-digit annualized total return potential for bearing Investment Grade risk.
• The bonds are currently trading at 57 cents on the euro, offering a cash-on-cash yield of 10.4%.
• Grand City Properties is a real estate company focused on the German residential sector, holding 76k units in various locations. The company’s balance sheet shows a market cap of 1,448 million and gross debt of 4,032 million, with cash and liquid assets of 714 million.

This article is sourced from an online content aggregator through publicly available sources and is displayed below for general informational purposes only. This article was originally published 3 months ago on Value Investors Club.