Financials & FinTech research, Galliano’s Financials Research

Victor Galliano

Victor Galliano is an experienced equity banks analyst, having covered Latin America banks and non-bank financials for over 12 years, as well as more recently covering the Italian banks. He has worked in sell side equity research for 30 years in a career spanning Barclays, HSBC, BBVA LatInvest, Barings and NatWest.
Galliano's Financials Research provides fundamental research in Emerging Markets financials, including FinTech, as well as financials in select Developed Markets.
The investment style applied is generally value oriented, although Growth At Reasonable Price (GARP) strategies can also be used where appropriate. Our investment research approach aim is often contrarian, looking to capitalise on overly sceptical or optimistic consensus views. In terms of valuation techniques, the focus is on PBV ratio to ROE, PE multiples and dividend yield, as well as the application of PEG ratios and, where appropriate, Sum of the Parts (SOTP) valuations.

Financials & FinTech research

Alibaba (BABA) Fine – Close, but No Cigar

Ant Group: Regulatory Pressures Drive the State’s “big Data” Grab, and a Revised SOTP Valuation

Ant Group: IPO Suspension and the Big Data Angle

Ant Group: Limited but Positive 3Q20 Data Disclosed

Financials & FinTech, EM & Developed Markets

Galliano’s Financials Research

Galliano's Financials Research provides fundamental research in Emerging Markets financials, including FinTech, as well as financials in select Developed Markets.

The investment style applied is generally value oriented, although Growth At Reasonable Price (GARP) strategies can also be used where appropriate. 

Our investment research approach aim is often contrarian, looking to capitalise on overly sceptical or optimistic consensus views. In terms of valuation techniques, the focus is on PBV ratio to ROE, PE multiples and dividend yield, as well as the application of PEG ratios and, where appropriate, Sum of the Parts (SOTP) valuations.

Equity Bottom-Up

<ul>
<li>With <a href="https://www.smartkarma.com/entities/ant-group-co-ltd" target="_blank" data-smartkarma-citation="entities:24240:1" rel="noopener">Ant Financial Services Group (6688 HK)</a> under regulatory pressure from PBoC, Chinese NBFCs are set to gain market share in Chinese consumer and SMB credit</li>
<li>We review prospects and valuations for four listed names in this report</li>
<li>We see fundamental opportunities still, despite the marked outperformance of three out of four names since November 2020</li>
<li>We would highlight <a href="https://www.smartkarma.com/entities/lexinfintech-holdings-ltd" target="_blank" data-smartkarma-citation="entities:26036:1" rel="noopener">Lexinfintech Holdings (LX US)</a> for its premium returns and most attractive valuations versus peers</li>
<li>
<a href="https://www.smartkarma.com/entities/lufax-holdings" target="_blank" data-smartkarma-citation="entities:29690:1" rel="noopener">Lufax Holdings (LU US)</a> is the unloved name, and it is lower return than its peers; yet it should deliver better returns with faster growth in credit volumes going forward</li>
<li>Delinquency ratios remain ranging from 2% to under 5% in 3Q 2020, and we do not expect these ratios to rise sharply and threaten profitability</li>
<li>Risks to our positive view on Chinese NBFCs generally include a sharp deterioration in credit quality, which could drive far higher credit costs; on the regulatory side, an increase in required capital adequacy for NBFCs could adversely impact the pace of loan origination</li>
</ul>


With Ant Financial Services Group (6688 HK) under regulatory pressure from PBoC, Chinese NBFCs are set to gain market share in Chinese consumer and SMB credit
We review prospects and valuations for four listed names in this report
We see fundamental opportunities still, despite the marked outperformance of three out of four names since November 2020
We would highlight Lexinfintech Holdings (LX US) for its premium returns and most attractive valuations versus peers

Lufax Holdings (LU US) is the unloved name, and it is lower return than its peers; yet it should deliver better returns with faster growth in credit volumes going forward
Delinquency ratios remain ranging from 2% to under 5% in 3Q 2020, and we do not expect these ratios to rise sharply and threaten profitability
Risks to our positive view on Chinese NBFCs generally include a sharp deterioration in credit quality, which could drive far higher credit costs; on the regulatory side, an increase in required capital adequacy for NBFCs could adversely impact the pace of loan origination


China Non-Bank Finance Companies (NBFCs); Ant’s Loss, Their Gain