Avior Capital Markets - Peregrine Holdings Ltd. (10HX) Peregrine | A buyout or buyback

Report

Avior Capital Markets

David Talpert ...

Harry Botha

Peregrine | A buyout or buyback

Peregrine Holdings (PGR) reported improved H1 '20 results as normalised HEPS increased by 15%. Citadel's 18% earnings growth offset disappointing results from Peregrine Capital and Stenham. We believe Citadel is a high-quality asset, which is not receiving a fair rating in the group structure as PGR trades at a discount to our SOTP fair value. We estimate a current fair value of R21.33/share. In our view, the market is applying a discount to PGR's NAV similar to other SA holding companies. However, a buyout (currently under cautionary) or share buybacks could unlock the discount.

19/11/2019 13 EN

Underlying

Peregrine Holdings Ltd.

Peregrine Holdings Limited is a financial services company. The Company provides with investment management solutions in wealth and alternative assets. Its segments include Wealth Management, Asset Management, Broking & Structuring, Stenham and Advisory. The Company operates wealth and asset management through its subsidiaries, Citadel Holdings Limited and Peregrine Capital Proprietary Limited. The Broking & Structuring segment includes brokerage, scrip lending income, interest and dividend income earned on trading, equities and futures transactions and fees charged for consulting and executing derivative strategies on behalf of clients. The Company operates Stenham segment through its subsidiary, Stenham Limited and its subsidiaries. Its advisory segment represents the returns on corporate finance, advisory and investment business generated from services, which range from financial, commercial and legal advisory and transaction execution services.

See profile

ZAE000078127 South Africa

Provider

Avior Capital Markets

Avior is a globally recognised capital markets research and trading firm, with the broadest research coverage within the region, with 100+ SA and 20+ SSA companies under coverage. Avior services clients from offices in London, Cape Town and Johannesburg.

Our research quality is consistently recognised in local and global surveys, with 18 analysts currently rated in their respective sectors (FM 2017). Value add through in-depth, innovative, high quality and consistent research with comprehensive underlying fundamental modelling supported by regular analyst and roadshow interactions.

Avior has proven that by working closely with our clients we can mutually develop dominant positions in certain sectors, going from strength to strength. Avior has a dedicated ESG team, having been ranked #1 in Corporate Governance research since 2008.

See profile

Analysts

David Talpert

Harry Botha

Other Reports on these Companies

Avior Capital Markets

Avior Financials | Coronation | Peregrine | Repo rate cut | Investment Banking statistics

Coronation's Dec '19 institutional factsheets highlight impressive 2019 investment returns. We estimate Group Q1 FY â€˜20f net outflows of R17.8bn and Dec '19 AUM to remain flat at R577bn. Peregrine's hedge funds generated strong returns in FY '19. We expect PGR to report improved performance fees in H2 â€˜20f. > Due to heightened credit risk in the SA economy, SA Repo rate cuts are positive for SA banks' earnings growth prospects in our view (as lower impairment charges and higher advances growth offset lower NIMs). Our top picks in the sector are Standard Bank and ABSA. Standard Bank ...

January 21, 2020 January 21, 2020 11 EN

Avior Capital Markets

Peregrine | Setting up for a rebound

Peregrine reported a 7% decline in FY '19 ongoing normalised HEPS as performance fees declined by 65%. The current earnings represent a low base with 92% annuity earnings. We believe PGR's earnings will rebound by 18% in FY '20f due to higher performance fees and a weak ZAR. In our view, despite a 10.5% historic dividend yield, the market is not putting sufficient value on the cash generative nature of PGR's capital light operations. We believe the share will rerate as PGR delivers improved earnings growth.

June 28, 2019 June 28, 2019 13 EN

Tiger Brands | ESG | Pressed to execute

TBS receives a corporate governance score of 3.37 out of 5 (FY '18: 3.42) and is rated as â€˜good'. TBS receives an ESG risk score of 2.6 (FY '18: 2.6) which we consider moderate. As in FY '18, there were various changes to the Board which raises corporate governance concerns surrounding succession planning and the execution of strategies. Post year-end, L Mac Dougall retired as CEO of the Group. N Doyle has become the new CEO of the Group as of 1 Feb '20. We note the corporate governance concerns around the appointment of N Doyle given that he left the Group at an important juncture in FY...

February 7, 2020 February 7, 2020 15 EN

Ayan Ghosh

Ayan Ghosh

SA Investment Strategy | Review of January 2020 for SA investors: Coronavirus weighs on the ZAR

From an SA asset-allocation perspective, SA Bonds (ALBI +1.2%) outperformed cash (STEFI +0.6%) and equities (Capped SWIX -2.6%) in Jan â€˜20. The ZAR was the worst performing EM currency in Jan â€˜20, depreciating by 6.8% against the USD, as EM risk appetite declined, with the Coronavirus spreading further than the Sars virus, which began in 2002, likely to hit global growth. Our discussions with various corporates in China suggest that the Coronavirus will peak over the coming weeks and could take until Mar '20 to resolve. In USDs, MSCI SA (-8.8%) underperformed MSCI EM (-4.7%) in 2020, as ...

February 5, 2020 February 5, 2020 9 EN

Harry Botha

Harry Botha

SA Banks | Low credit risk in commercial property | Time to buy SA banks

Challenging SA economic conditions bring SA REITs credit health and banks' lending to the sector into the spotlight. Our analysis in this report provides greater detail on SA banks' exposure to commercial property and listed REITs. Our stress tests highlight that SA banks' lending to listed REITs (exposed to SA or offshore operations) has been conservative to date. REITs' equity capital and diversified portfolios support the property companies' credit health. While SA banks' near-term earnings growth prospects are geared to SA economic conditions, we highlight that valuations are undemandin...

January 28, 2020 January 28, 2020 36 EN

Sign-up for free to access full reports immediately

Email Address*

Choose Password* ( 6 or more characters )

Due to regulatory restrictions regarding the distribution of financial research, this report is restricted to a specific region or investor type. Get access to exclusive reports by answering the questions below.

Select your country*

Get financial insights straight to your inbox

By clicking "register" you accept the Terms and Conditions & Privacy Policy

Already on ResearchPool?

Almost there...

Are you a professional investor?

Select your country

REGISTER

Create a free ResearchPool account to access full reports, get a personalised dashboard and follow providers or companies

In order to access this report please create an account.

LOGIN

Peregrine | A buyout or buyback

Avior Financials | Coronation | Peregrine | Repo rate cut | Investment Banking statistics

Peregrine | Setting up for a rebound

Tiger Brands | ESG | Pressed to execute

SA Investment Strategy | Review of January 2020 for SA investors: Coronavirus weighs on the ZAR

SA Banks | Low credit risk in commercial property | Time to buy SA banks

Create a free ResearchPool account to access full reports, get a personalised dashboard and follow providers or companies

Sign-up for free to access full reports immediately

ResearchPool Subscriptions

Get the most out of your insights

Why subscribe?

How to subscribe

ResearchPool Subscriptions

This report is only available to subscribers

Why subscribe?

How to subscribe