Cheap Financials Emerging Markets
THE AIR WAS THICK WITH EXCITEMENT LAST WEEK about Asian banks, as Aozora Bank, the rehabilitated Nippon Credit Bank, touted its Nov. 14 initial public offering estimated at 393 billion yen ($3.3 billion), and Industrial & Commercial Bank of China (1398.HK) came public in the world's largest IPO, raising $19.1 billion simultaneously in mainland China and Hong Kong.
If an overallotment option is exercised, ICBC could be the world's sixth largest bank by market value, $131 billion, when it begins trading this week, just below $135 billion for Mitsubishi UFJ. Mighty Citigroup has a market cap of $248 billion. ICBC was priced at 2.3 times book value.
There are certainly plenty of cheaper banks, including those in Korea, Thailand and Taiwan. Tim Dickson, investment director at Scottish Widows in Edinburgh, says the stock, at a 10% to 15% discount to China Construction Bank (939.HK) and Bank of China (3988.HK), is "cheap enough to make it interesting, but quite expensive in absolute terms; I'd sum it up as a trading buy." What could cause a reversal in Chinese bank valuations? Possibly a fully convertible currency, which nobody expects soon.
Christopher Woods of CLSA Asia-Pacific Markets wrote: "It is not recommended to short these names....Long-only index managers regard the [Chinese] banks as moral-hazard trades." Fitch estimates bad loans are 4.7% of ICBC's assets.
The deal underscored the cheapness of other Asian financials, including the Japanese consumer-finance sector. Those companies took up the slack when Japanese banks, stung by bad corporate loans, abandoned retail borrowers. Today, some 20 million Japanese rely on consumer-finance companies, borrowing at rates of up to 29% while the companies have built up significant databases. Lately, the government has made plans to cap the maximum rate at 20% and force companies to reimburse customers for excessive interest payments. Ayako Sato of UBS Securities notes, too, that the most creditworthy customers are migrating to other institutions. But consumer-finance companies like Takefuji (8564.TO), Aiful (8515.TO), Acom (8572.TO) and Promise (8574.TO) have competitive advantages. "Even if banks wanted to enter this area, they don't have the credit database," says Egor Rybakov of Tradewinds Capital in Los Angeles.
To Rybakov, these stocks are good buys. Takefuji now trades at 0.7 times book, versus three times in 1999 and between one and 1.5 since late '02. Promise sold at 2.5 times book in '99, fell to 1.5 and now trades at 0.7. Book is probably overstated, Rybakov says: "You have to assume they're forgiving principal to a certain percentage of borrowers." Nonetheless, the companies are overcapitalized. Today, equity at Takefuji is a high 54% of assets; at Promise, it's 44%; at Acom, 45%, and at Aiful, 23%, leaving plenty of room to boost returns.
Rybakov's thesis: Even at 0.7 times book and assuming the companies set aside 30% of book for interest reimbursements and loan forgiveness, they still trade at one times book. "This is a strong value proposition," he says.
FOLLOWING THE ARREST OF YOSHIAKI MURAKAMI for insider trading, activist investors in Japan have been quiet. Japanese small-caps have been shredded. A hostile takeover bid by Oji Paper for Hokuetsu Paper Mills failed. Yet people expect more bids, and last week, one materialized: Dalton Investments offered to raise its stake in SunTelephone (8083.TO) to 40% from 31% now. Dalton has a Japanese management-buyout fund and had proposed an MBO to the communications-leasing company, whose shares it has owned for five years.
Last week SunTelephone rejected Dalton's proposals, saying Dalton "has no experience in a successful management buyout in Japan" -- where MBOs are rare. Dalton is tendering for shares at ￥1,100 each, versus ￥1,037 last week. Indeed, Dalton principal Jamie Rosenwald says the firm told management it was willing to pay ￥1,200 a share for the remaining shares.
A stake of 40% would boost Dalton's prospects for a buyout because in Japan, explains Rosenwald, "less than 75% of votes are ever cast at an annual meeting." And 40% is more than half of 75%. "We're not interested in doing a greenmail," he says. "We have no interest in running the company, and we like existing management. We're calling their bluff and taking them to the court of public opinion."
日本消费金融类股物美价廉
上周亚洲银行界连续传出让人兴奋的消息，先是日本青空银行(Aozora Bank)（由破产的日本债券信用银行(Nippon Credit Bank)重组而成）宣称其定于11月14日进行的首次公开募股(IPO)计划筹集资金3,930亿日圆（合33亿美元）。随后，中国工商银行(Industrial & Commercial Bank of China)在中国大陆和香港两地的首次公开募股中筹得191亿美元，成为全世界最大规模的IPO。
如果工行行使增售选择权，则其甫一上市时的市值就可达1,310亿美元，由此将成为全球第六大银行。这个数值紧排在日本三菱东京UFJ银行(Mitsubishi UFJ)的1,350亿美元之后。银行巨人花旗集团(Citigroup)的市值是2,480亿美元。工行的发行定价是其帐面价值的2.3倍。
当然，还有大量比较便宜的银行，包括韩国、泰国和台湾的银行。英国Scottish Widows投资主管蒂姆?迪克森(Tim Dickson)说，工行股价比中国建设银行(China Construction Bank)和中国银行(Bank of China)要便宜10%-15%，这足以让该股产生很大吸引力，但从绝对股价上来讲，该股还是很贵的。他将该股评级定在择机买进。有什么因素会让中国银行类股的估值走势出现逆转？如果人民币实现完全可兑换可能会产生这种情况吧，不过人们不认为这种情况会很快发生。
里昂证券亚太区市场(CLSA Asia-Pacific Markets)的克里斯托夫?伍德(Christopher Woods)写到：不建议作空这些股票。只作多头的指数基金经理人将（中国的）银行类股视为有道德风险的交易。据惠誉国际评级(Fitch)估计，工行的坏帐相当于其资产额的4.7%。
工行的定价反衬出其他金融类股、包括日本的消费者金融类股股价是何等便宜。日本零售银行因受企业贷款坏帐的严重拖累，不得不放弃对个人的贷款，于是消费者金融机构乘虚而入。目前，大约有2,000万日本人是消费者金融服务机构的客户，他们的贷款利率最高达到了29%的水平。而这些机构也积累了重要的信用数据库。
最近，日本政府计划将最高贷款利率上限限制在20%以下，并将要求这些公司将过多的利率收入返还给顾客。瑞银证券(UBS Securities)的Ayako Sato指出，信用最好的客户正在向其他机构转移。
但像Takefuji、Aiful、Acom和Promise这样的消费金融类企业很有优势。洛杉矶Tradewinds Capital的伊戈尔?里巴科夫(Egor Rybakov)说，即使银行想进入这一业务领域，他们也没有信用数据库。
在里巴科夫看来，这类股票是很好的买进对象。Takefuji目前的股价是其帐面价值的0.7倍；1999年时是3倍，2002年底时是1-1.5倍。Promise 1999年的股价对帐面价值比率是2.5倍，后来降至1.5倍，现在是0.7倍。里巴科夫说，他们的帐面价值可能被高估了。对这类机构，应该假定总有一定比例的贷款本金收不回来。
不过，这些公司资本化比例过高。比如Takefuji目前的所有者权益与资产额的比率高达54%，Promise是44%，Acom和Aiful分别为45%和23%，可见提高权益回报率的空间还很大。
里巴科夫认为：即使这类公司的股价只有帐面值的0.7倍，假设这些公司把30%的帐面价值用于利息返还和坏帐冲销，那么它们的股价/帐面价值比也只有1倍，“仍然很有价值，”他说。
在村上世彰(Yoshiaki Murakami)因内部交易行为而被捕之后，日本的投资者维权人士一直很沉寂。王子制纸(Oji Paper)对北越制纸(Hokuetsu Paper)发起的敌意收购也已夭折。不过人们预计还会有更多的收购计划诞生。果然，上周就有了一例：Dalton Investments提出将其在SunTelephone的股份从31%增加到40%。Dalton有一家在日本董事管理层收购的基金，它已提出对从事通讯租赁服务的SunTelephone实施管理层收购。5年前Dalton就已开始持有SunTelephone的股票。
SunTelephone上周回绝了Dalton的提议，称后者缺乏在日本从事管理层收购的成功经验。而日本一向缺乏管理层收购的案例。Dalton目前提出以每股1,100日圆的价格收购SunTelephone股票，上周的出价是1,037日圆。
Dalton负责人吉米?罗斯沃德(Jamie Rosenwald)说，公司之前曾对管理层表示，愿意为余下的股票支付每股1,200日圆的价格。
如能持有40%的股份，将为Dalton最终买断该公司打下基础。罗斯沃德解释说，确定这个具体指标是因为，在日本，年度大会上的投票率一般不超过75%，而40%刚好轻松超过75%的半数。“我们可没兴趣对目标公司采取“绿色邮件”式的威逼手段，”他说，“我们无意去自己经营SunTelephone，对现有管理层我们也很欣赏。我们这是激将他们，让他们自己去面对公众的选择。”
Leslie P. Norton
