Daily Brief Financials: Suruga Bank Ltd, WuXi XDC Cayman , OCBC, SBFC Finance Limited, Greentown China, Hang Seng Index, Muthoot Microfin, Target Healthcare REIT PLC and more

• I wrote Japan H1 Bank Earnings: Interest/Fees Up, Expenses/Credit Costs Down – Opportunity Abounds, Still last week mentioning the trends in guidance revisions.
• Since then, five have reported H1. +20%, +53%, +23% vs guidance; +25.6%, and +28.2% vs Last Year. Eight more have added new guidance, weighted average H1 up 48%. 
• Four more report tomorrow, eight on Thurs, 43 on Friday. The Top 5 are all next Mon/Tues. Watch for comments about portfolio restructuring efforts in H2 as market yields rise.

• WuXi XDC Cayman (1877628D HK) is a leading contract research, development and manufacturing organisation (CRDMO) focused on the global antibody-drug conjugate (“ADC”) and broader bioconjugate market.
• The company has announced the terms for its HKEx IPO and plans to raise proceeds of around US$470m through the IPO.
• Wuxi XDC’s revenues have seen robust growth during the last 3-years driven by growth in ADC market while margins have continued to decline.

• In past 2 quarters OCBC (OCBC SP) saw its credit costs rise 150% YoY and then 250% YoY. For almost all of the preceding 8 quarters YoY growth was negative.
• It holds 3.8% of total loans in Greater China CRE, a sector that has seen visible deterioration in some banks, like Standard Chartered (STAN LN) and HSBC Holdings (HSBA LN).
• Great Eastern Holdings (GE SP) is seeing weakness in main revenue lines, with worsening policy claims. Its profit delta this year is distorted from the base effect.

• While the earnings season continues, this will be the final dedicated earnings edition.
• For reference, the previous earnings editions are [Week 8] Namaste India 🙏 | Earnings Edition – Part I & [Week 9] Namaste India 🙏 | Earnings Edition – Part II 
• At the bottom, we provide a consolidated view of all earnings (~ 50) tracked so far and we would be happy to engage in discussions on any of them.

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.

• Delta Dunia Makmur
• ENN Natural Gas
• Greentown China

• The Hang Seng Index closed last week at 17664.12 (CC=+2), currently rallying this week, but there is a chance for a short-lived pullback (i.e. closing this week down).
• The current global equities bounce should continue for the entire month of November: the HSI may continue rallying for +2 weeks (if it does not close down this week).
• Price targets to watch for the end of the rally (i.e. shortable) are between 18300 and 18700.

• Muthoot Microfin (1363943D IN) is looking to raise up to US$163m in its upcoming India IPO. 
• Muthoot Microfin (MMF) is a microfinance institution providing micro-loans to women customers with a focus on the rural regions of India.
• MMF has undergone fast network expansion, which allowed the firm to nearly double its AUM over the track record period. 

Target Healthcare REIT’s mid-year rebasing of DPS sought to establish a base for growth on a fully covered basis. With FY23 results in line with previous indications, and progress continuing, the company has increased the quarterly rate of DPS by 2% from Q124. With rent collection restored, we expect rental growth, development completions and fixed debt costs to support continued, progressive, fully covered dividend growth.