Equity Research Analyst - Long-Short

Raj S, CA, CFA

Thematic (Sector/Industry)

<ul>
<li>
<a href="https://www.smartkarma.com/entities/geely-automobile-holdings-ltd" target="_blank" data-smartkarma-citation="entities:127:1" rel="noopener">Geely Auto (175 HK)</a> is at a pivotal stage in its transformation, and we expect it to outperform peers in the medium term.</li>
<li>Investors are seeing progress and strategic direction in three critical areas: new EV brands, increasing exports, and sustaining the success of ICE brands.</li>
<li>We are bullish about the EV capabilities of Chinese local OEMs and their ambition to enter global markets assertively. Geely Auto is one of the best plays on this theme.</li>
</ul>



Geely Auto (175 HK) is at a pivotal stage in its transformation, and we expect it to outperform peers in the medium term.
Investors are seeing progress and strategic direction in three critical areas: new EV brands, increasing exports, and sustaining the success of ICE brands.
We are bullish about the EV capabilities of Chinese local OEMs and their ambition to enter global markets assertively. Geely Auto is one of the best plays on this theme.


Geely Auto (175 HK): Initiation: A Key Play on China EV and Global Expansion Theme

<ul>
<li>We discuss the recent developments and financial performance of Indian Life Insurers note in this Primer</li>
<li>The big news this quarter is that a significant regulatory risk has passed on without any dent. This has turned the outlook on the sector more positive.</li>
<li>Expect a secular low-mid double-digit premium growth for the Neutral on <a href="https://www.smartkarma.com/entities/hdfc-standard-life-insurance" target="_blank" data-smartkarma-citation="entities:26004:1" rel="noopener">HDFCLIFE IN</a> Short on <a href="https://www.smartkarma.com/entities/icici-prudential-life-insurance" target="_blank" data-smartkarma-citation="entities:23608:1" rel="noopener">IPRU IN</a> and <a href="https://www.smartkarma.com/entities/life-insurance-corp-of-india" target="_blank" data-smartkarma-citation="entities:28829:1" rel="noopener">LICI IN</a>
</li>
</ul>


We discuss the recent developments and financial performance of Indian Life Insurers note in this Primer
The big news this quarter is that a significant regulatory risk has passed on without any dent. This has turned the outlook on the sector more positive.
Expect a secular low-mid double-digit premium growth for the Neutral on HDFCLIFE IN Short on IPRU IN and LICI IN



Indian Life Insurance Primer -  April 2024 Update (FY24)

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Equity Bottom-Up

HDFC Bank Ltd. offers a wide range of services to the global corporate sector. The Bank provides corporate banking and custodial services and is active in the treasury and capital markets. HDFC also markets project advisory services and capital market products such as Global Deposit Receipts, Euro currency loans, and Euro currency bonds.

<ul>
<li>
<a href="https://www.smartkarma.com/entities/hdfc-bank-ltd-4b6b7a92-9087-468d-9dbe-ab169e77f014" target="_blank" data-smartkarma-citation="entities:558:1" rel="noopener">HDFC Bank (HDFCB IN)</a> has been the most successful bank in India over the last two decades, delivering best-in-class performance consistently; Things changed drastically with the merger with HDFC Ltd.</li>
<li>The negatives outweigh the positives in the near-term from the merger; the synergies, which are significant, are long-term in nature and hence would take time to play out.</li>
<li>We remain long-term believers, but it is a "Short" in the short-term as we expect further -20% correction in valuations</li>
</ul>



HDFC Bank (HDFCB IN) has been the most successful bank in India over the last two decades, delivering best-in-class performance consistently; Things changed drastically with the merger with HDFC Ltd.
The negatives outweigh the positives in the near-term from the merger; the synergies, which are significant, are long-term in nature and hence would take time to play out.
We remain long-term believers, but it is a "Short" in the short-term as we expect further -20% correction in valuations


HDFC Bank (HDFCB IN): Initiating Coverage – Long Term Compounder; But "Short" For Now

PT Bank Mandiri (Persero) Tbk is formed by the merger of four state-owned banks, namely Pt Bank Bumi Daya, PT Bank Dagang Negara, PT Bank Ekspor Import Indonesia (Bank Exim), PT Bank Pembangunan Indonesia (Bank Bapindo). The Bank operates in the commercial banking services.

<ul>
<li>
<a href="https://www.smartkarma.com/entities/bank-mandiri-persero-tbk-pt" target="_blank" data-smartkarma-citation="entities:441:1" rel="noopener">BMRI</a> is more profitable than <a href="https://www.smartkarma.com/entities/bank-negara-indonesia-persero" target="_blank" data-smartkarma-citation="entities:8285:1" rel="noopener">BBNI</a>, less cyclical than <a href="https://www.smartkarma.com/entities/bank-rakyat-indonesia-persero" target="_blank" data-smartkarma-citation="entities:484:1" rel="noopener">BBRI</a>  and less expensive than <a href="https://www.smartkarma.com/entities/bank-central-asia-tbk-pt" target="_blank" data-smartkarma-citation="entities:440:1" rel="noopener">BBCA</a>. This combination makes it an attractive play on the Indonesia credit growth story.</li>
<li>BMRI's FY23 results are a strong beat with industry-leading loan growth and strong ROE; BMRI also has the potential to aggressively grow its retail portfolio which still is likely under-appreciated</li>
<li>BMRI still trades at a discount to BBRI and has the potential to re-rate by another 20% in the near term, apart from the compounding driven by strong loan growth.</li>
</ul>



BMRI is more profitable than BBNI, less cyclical than BBRI  and less expensive than BBCA. This combination makes it an attractive play on the Indonesia credit growth story.
BMRI's FY23 results are a strong beat with industry-leading loan growth and strong ROE; BMRI also has the potential to aggressively grow its retail portfolio which still is likely under-appreciated
BMRI still trades at a discount to BBRI and has the potential to re-rate by another 20% in the near term, apart from the compounding driven by strong loan growth.


BMRI IJ Initiation: Growth at Reasonable Price!

State Bank of India provides a wide range of banking and financial services to corporate, institutional, commercial, agricultural, industrial and individual customers throughout India.  The Bank also provides international banking to its Indian customers and has operations in other countries.

<ul>
<li>
<a href="https://www.smartkarma.com/entities/state-bank-of-india" target="_blank" data-smartkarma-citation="entities:160:1" rel="noopener">State Bank Of India (SBIN IN)</a> has reported its 3Q24 (Dec-23) results with a one-off pension and wages revision charge which impacts the short-term earnings profile.</li>
<li>Medium-Term ROE Forecast Intact (16% to 18%) with management confident of even touching 20% in next couple of years; loan growth forecast of 14% to 16% for FY25e-FY26e.</li>
<li>We reiterate our view: P/BV is cheap at 1.3x FY25e. SBIN has the potential to re-rate to P/BV of ~1.6x FY25e in the near term (~40% upside). Opportunity to ADD.</li>
</ul>



State Bank Of India (SBIN IN) has reported its 3Q24 (Dec-23) results with a one-off pension and wages revision charge which impacts the short-term earnings profile.
Medium-Term ROE Forecast Intact (16% to 18%) with management confident of even touching 20% in next couple of years; loan growth forecast of 14% to 16% for FY25e-FY26e.
We reiterate our view: P/BV is cheap at 1.3x FY25e. SBIN has the potential to re-rate to P/BV of ~1.6x FY25e in the near term (~40% upside). Opportunity to ADD.


State Bank of India (SBIN) - 3Q24 Update: Short-Term Pressure Is an Opportunity to Accumulate

I am Raj - CA and CFA

I cover BFSI, NBFCs, Autos and several other sectors across geographies.
   
I am a CA and CFA with 10+ years experience in fundamental equity research across buy-side and sell-side and across geographies.

My research process is primarily focused on highlighting the catalysts which would have a direct impact on a stocks fundamental performance and market valuation. I try to cut through the noise and sort through the detail, in order to organize and simplify my thinking about an investment thesis.  

Please reach out to us for customized services which can help your office or fund, whether that be shadow coverage of specific companies or a more customized service. We provide a wide range of services at efficient pricing. PM me for a discussion. Thank you for your time.

Raj S, CA, CFA
Equity Research Analyst - Long-Short

Geely Auto (175 HK): Initiation: A Key Play on China EV and Global Expansion Theme

Geely Auto poised to outperform peers with focus on new EV brands, exports, making it a top play in context of our bullish view on Chinese OEMs'...

Raj S, CA, CFA

Indian Life Insurance Primer - April 2024 Update (FY24)

India Life Insurance Primer April 2024. Recent developments and financial performance of Indian Life Insurers. Long SBI Life and HDFC Life.

Raj S, CA, CFA

HDFC Bank (HDFCB IN): Initiating Coverage – Long Term Compounder; But "Short" For Now

HDFC Bank has been the most successful bank in India for long, but things changed drastically with the merger with HDFC Ltd. The negatives outweigh...

Raj S, CA, CFA

BMRI IJ Initiation: Growth at Reasonable Price!

BMRI is a profitable, less cyclical, and inexpensive option compared to other Indonesian banks, making it an attractive investment. We also believe...

Raj S, CA, CFA

State Bank of India (SBIN) - 3Q24 Update: Short-Term Pressure Is an Opportunity to Accumulate

SBI's result has one-offs impacting short-term performance. This is an opportunity to accumulate this long-term compounder.

Raj S, CA, CFA

Geely Auto (175 HK): Initiation: A Key Play on China EV and Global Expansion Theme

​Geely Auto poised to outperform peers with focus on new EV brands, exports, making it a top play in context of our bullish view on Chinese OEMs'...

Raj S, CA, CFA

Indian Life Insurance Primer - April 2024 Update (FY24)

India Life Insurance Primer April 2024. Recent developments and financial performance of Indian Life Insurers. Long SBI Life and HDFC Life.

Raj S, CA, CFA

HDFC Bank (HDFCB IN): Initiating Coverage – Long Term Compounder; But "Short" For Now

HDFC Bank has been the most successful bank in India for long, but things changed drastically with the merger with HDFC Ltd. The negatives outweigh...

Raj S, CA, CFA

BMRI IJ Initiation: Growth at Reasonable Price!

BMRI is a profitable, less cyclical, and inexpensive option compared to other Indonesian banks, making it an attractive investment. We also believe...

Raj S, CA, CFA

State Bank of India (SBIN) - 3Q24 Update: Short-Term Pressure Is an Opportunity to Accumulate

SBI's result has one-offs impacting short-term performance. This is an opportunity to accumulate this long-term compounder.

Raj S, CA, CFA

Geely Auto poised to outperform peers with focus on new EV brands, exports, making it a top play in context of our bullish view on Chinese OEMs'...