Equity Analyst, LightStream Research

Oshadhi Kumarasiri

An equity research analyst with over 7 years of experience in multiple sectors. Previously worked for one of the world's largest asset managers with about USD2.5trn in AUM, covering small and micro-cap companies in the consumer sphere across Europe and developed Asia. Also experienced in covering multiple industries including banking, insurance and asset management, retail, tech, telco and REIT.

Equity Analyst

Home Credit IPO: NIM Improvement Driven by Mismatch in Maturity of Assets and Liabilities

Long-Short Analysis on Japan, Asia and the World

LightStream Research

LightStream conducts quantitatively rigorous and data-driven analysis with a focus on Japan and Asia.

We consistently cover the Tech, Consumer and Industrial sectors, and provide ECM and Events coverage more broadly.

We supplement traditional qualitative insights from company relationships with a robust quantitative foundation that examines as much historical data as is available.
We further refine the accuracy of our insights and calls through the use of alternative data to flesh out current trends, and through a valuation framework that emphasises non-superficial peer group selection and a proper attempt to understand the metrics and changes that have driven security valuations in the past.

Equity Capital Markets

Home Credit N.V. is an emerging market consumer finance company and they are planning to list on the Hong Kong stock exchange with various media reports suggesting that the company could raise more than $1.0bn through the IPO.
In our previous insight: <a href="https://www.smartkarma.com/insights/home-credit-ipo-nim-improvement-driven-by-mismatch-in-maturity-of-assets-and-liabilities" target="_blank" data-smartkarma-citation="insights:32194" rel="noopener">Home Credit IPO: NIM Improvement Driven by Mismatch in Maturity of Assets and Liabilities</a>, we pointed out some important details such as the NIM outlook, likely reasons for slowing POS loans growth and its long-term repercussions, NPL ratio outlook and a more accurate estimation of the NPL coverage ratio.
Here we focus more on the valuation of the company, using a blend of valuation methodologies. Furthermore, we think it is also important to run bear and bull case scenarios as similar companies in the industry are exposed to macro factors/risks more than most other industries.
We look at the capital adequacy side of the business to assess the minimum capital requirement for achieving the growth estimates.

Home Credit N.V. is an emerging market consumer finance company and they are planning to list on the Hong Kong stock exchange with various media reports suggesting that the company could raise more than $1.0bn through the IPO.
In our previous insight: Home Credit IPO: NIM Improvement Driven by Mismatch in Maturity of Assets and Liabilities, we pointed out some important details such as the NIM outlook, likely reasons for slowing POS loans growth and its long-term repercussions, NPL ratio outlook and a more accurate estimation of the NPL coverage ratio.
Here we focus more on the valuation of the company, using a blend of valuation methodologies. Furthermore, we think it is also important to run bear and bull case scenarios as similar companies in the industry are exposed to macro factors/risks more than most other industries.
We look at the capital adequacy side of the business to assess the minimum capital requirement for achieving the growth estimates.

Oi Wah Pawnshop Credit Holdings (1319 HK)

China Huirong Financial Holdings (1290 HK)

Home Credit IPO Valuation: Pricing Is Likely to Be Towards the Lower End of Our Target Valuation