Big cap GEM Bank investment recommendations for 2024
Financials
Galliano's Financials Research
Victor Galliano favours four longs and one short as his conviction calls for the year ahead. 1) Bank Mandiri (Indonesia) continues to generate improving returns and has strong capital ratios, credit quality and liquidity metrics. 2) KB Financial (South Korea) is a deep value pick. 3) China Merchants Bank is a contrarian pick, which looks well positioned to confront concerns re. Chinese NPLs and also on very attractive valuations. 4) Banco do Brasil screens well re. valuations and returns; its growth potential also looks particularly appealing. 5) Victor’s key sell is Kotak Mahindra Bank (India) as it is richly valued, exposed to low prospective earnings growth and has low credit quality coverage.
Edition: 177
- 12 January, 2024
Financials
Korea's leading financial services provider boasts an impressive PH Score™ of 8.8 (top quartile globally from 2000+ banks). This is a solid, diversified, franchise, that offers enhanced capital returns at an attractive valuation - FV of 6%, PBV of 0.5x, Earnings Yield of 19.8%, Dividend Yield of 2.9%, and a Total Return Ratio of 2.2x. KB’s Q321 results highlight improvements in profitability, NIM/Spread, efficiency, provisioning, and headline asset quality. In addition to its stake in Kakao Bank, KB offers exciting growth opportunities with its new digital platform, super app ‘KB Star Banking’.
Edition: 124
- 26 November, 2021