HONG KONG, Apr 5, 2024 – (ACN Newswire) – The abandoning of Ageas’ SA/NV (AGSN:BB) bid for Direct Line Group has reignited interest in the company’s trajectory. Following the announcement of shelving a potential third bid, Ageas experienced a remarkable surge in its stock price by over 10%, reflecting a resounding vote of confidence from the market in its enduring value proposition. Furthermore, the highly anticipated decision to restart share buyback initiatives, alongside acquisition rumors and sustained strong performance, has further bolstered market optimism.

The Extraordinary General Meeting of Shareholders of Ageas, slated for April 17, is expected to be highly significant. However, historical trends indicate that attendance may fall short of the requisite 50% threshold, necessitating a rescheduled ordinary and extraordinary shareholders’ meeting (the “Meeting”) on May 15. This Meeting holds two significant focal points of interest. Firstly, Ageas Group CEO Hans De Cuyer’s tenure renewal is expected to be a significant agenda item, particularly following the company’s decision to cease its bid for Direct Line. Envisaged measures to attract investors include the potential utilization of the company’s surplus cash reserves exceeding €1 billion to recommence a large-scale share buyback program. Although Ageas has a history of implementing such initiatives, the program was paused for several years since 2022. The resumption of the buyback plan is poised to invigorate the capital markets and significantly enhance EPS, acting as a potent catalyst for the company’s stock price. As the Meeting approaches, it presents an opportune moment to delve into the financial landscape and assess the current valuation of Ageas’ stock. The undervaluation of Ageas’ shares could present an opportunity for those who recognize the potential for significant returns.

Amidst the challenges posed by the pandemic, Ageas’ Asian operations have encountered a downturn in market assessment. However, a glimmer of hope shines through its endeavors. The Taiping Life joint venture, a flagship initiative, stands tall among China’s elite insurers, highlighting its profitability amidst a competitive landscape. Particularly noteworthy is Taiping’s commendable performance in 2023. Yet, Ageas extends its footprint across vibrant markets in Thailand, Vietnam, Malaysia, India, and the Philippines. Although Ageas may not hold the majority stake in all these ventures (with the exception of acquiring the majority stake in the Indian Life JV in 2022), its strategic alliances with local financial institutions and influential family enterprises underscore its pervasive presence throughout the region. Furthermore, Ageas boasts leading positions in each market and holds a treasure trove of valuable assets. When considering past merger and acquisition transactions, it’s evident that the collective value of Ageas’ Asian operations forms a significant portion of its current market value.

Recent market rumors hint at keen interest from heavyweight buyers like Generali, BNP and possibly some Belgian banks, which is hardly surprising given Ageas’ current market cap nudging close to €8 billion, rendering it an irresistible acquisition target. Adding to the allure is the Danish Compromise, a Basel Rule that has rekindled enthusiasm for bank investments in insurers. With interest rates on the rise, banks are sitting on ample surplus cash, primed for strategic maneuvers like share buybacks and M&A activity, which could serve as a pivotal catalyst for Ageas.

Berenberg’s latest analysis paints an enticing outlook for Ageas, underscoring its current trading price at a notably low 5.9x 2025 Bloomberg consensus price-to-earnings (P/E) ratio, a sharp contrast with its historical five-year average of 8x. Additionally, Bloomberg’s average target price for Ageas stock is around €48, with KBC Securities, Berenberg, and Barclays offering target values of €50.0, €54.9, and €51.5 respectively. These varied targets suggest significant upward movement potential in Ageas’ stock price. Moreover, the enticing prospects of potential share buybacks and mergers and acquisitions (M&A) ventures further emphasize the compelling upside potential for Ageas investors.

On a standalone basis, Ageas has demonstrated stellar performance. In 2023, the company reported insurance premiums of EUR 17.1 billion, representing an 8% increase at constant foreign exchange rates, along with a steady net income of approximately EUR 1 billion. The robust performance is reflected in Ageas’ return on shareholders’ equity, which stood at 16.2%, complemented by a Solvency II ratio of 217%. Analysts anticipate continued growth in Ageas’s net profit. With an attractive annual dividend yield and the potential for buybacks, Ageas presents itself as a stable investment option, particularly appealing to shareholders focused on long-term value. Additionally, investors are patiently awaiting the development and recovery of Ageas’ Asian business, which adds to the company’s overall appeal and potential for sustained growth.

Copyright 2024 ACN Newswire. All rights reserved. http://www.acnnewswire.com

HONG KONG, Apr 2, 2024 – (ACN Newswire) – Value Convergence Holdings Limited (“VC Holdings”, together with its subsidiaries, the “Group”; Stock Code: 0821.HK), a well-established and one-stop financial services institution in Hong Kong, is pleased to announce its audited annual results for the year ended 31 December 2023 (the “Reporting Year”). During the Reporting Year, the Group achieved improvement in its newly-acquired asset management business, and also in its insurance brokerage and digital assets businesses. Meanwhile, the Group made a breakthrough by entering mainland China’s promising natural gas industry.

During the Reporting Year, the Group managed to achieve progress in business diversification amid market volatility, while the expansion of asset management, insurance brokerage and digital assets businesses contributed to a moderate rise in the Group’s revenue. During the Reporting Year, the Group’s consolidated revenue increased by about 3.9% year on year to approximately HK$76.1 million (2022: approximately HK$73.3 million). Despite the Group implemented stringent cost control measures, the Group recorded a bigger loss during the Reporting Year than it did during the previous year, due to a one-off share-based payment expense, devaluation of proprietary holding value and higher impairment losses on accounts receivable. Loss for the year amounted to approximately HK$288.2 million (2022: loss for the year of HK$178.1 million). Basic loss per share was HK12.05 cents (2022: basic loss per share of HK8.57 cents).

Mr. Peter Fu, Chairman and Executive Director of Value Convergence Holdings Limited, said, “In 2023, the momentum of growth slowed and was uneven worldwide against a backdrop of interest rate increases, unprecedented monetary policy tightening to combat the highest inflation in decades, and geopolitical conflict. In Hong Kong, the financial landscape was subject to significant market volatility, with a notable decline in stock prices, amid which the Hang Seng Index recorded an unprecedented fourth consecutive year of decline. The difficulties of recent years continued to affect capital markets in both mainland China and Hong Kong, which experienced a succession of challenges that inevitably affected the Group’s business operations. In view of market volatility, the Group adopted stringent cost control measures and stepped up its business diversification efforts to mitigate operational risks, while certain business segments have started to bear fruit.”

Business Overview

Financial Services Business

During the Reporting Year, with its persistent efforts to diversify its business, the contribution of the Group’s traditional brokerage and financing businesses to its total revenue further declined to approximately 79%. The Group maintained its provision of various financial services, including local and overseas securities trading, derivatives and trading in other structured products, placements, underwriting, and margin financing through VC Brokerage Limited (“VC Brokerage”). Additionally, the Group offered financing services through VC Finance Limited (“VC Finance”). The Group also took on the role of placing agent and underwriter for fundraising activities of Hong Kong-listed companies. It provided a range of financial and strategic advisory support services to clients, including offering corporate finance and other advisory services such as mergers and acquisitions advisory through VC Capital Limited (“VC Capital”) and company secretarial services through VC Corporate Services Limited (“VCCS”). Due to market volatility, the Group’s brokerage commissions, underwriting, sub-underwriting, placing and sub-placing commissions declined notably, alongside corporate finance and other advisory fees, resulting in a reduction in segmental revenue.

Following the completed acquisition of VC International Asset Management Limited (“VCIAM”; formerly known as “Anli Asset Management Limited”) and Anli Investment Fund SPC (“AIF”) in April 2023, the Group observed an encouraging expansion in its asset management operations that began to generate revenue. The Group also continued to spearhead the expansion of its insurance brokerage services through Experts Management Limited, which possesses an insurance brokerage license and is authorised to participate in the long-term insurance market. Capturing the opportunities arising from the reopening of the Hong Kong and mainland China borders, the Group’s senior management team proactively reached out and attracted more clientele from mainland China, and the Group’s insurance brokerage segment also began to have revenue contribution.

Proprietary Trading Business

The Group held financial assets for trading, comprising equity securities listed in Hong Kong, worth approximately HK$155.1 million as of 31 December 2023, against the backdrop of a poor-performing equity market and bearish investor sentiment. During the Reporting Year, the Group held stocks mainly in industrial, which tumbled on weak corporate earnings.

Digital Assets Business

During the Reporting Year, by expanding sales and marketing efforts in digital assets segment, the Group sought to leverage the potential of the growing market and capitalise on increasing demand. Thanks to improved sales, the sales and marketing of digital assets business enjoyed a revenue increase during the Reporting Year.

Outlook

Looking ahead, the anticipated global economic outlook for 2024 is multifaceted, with various factors influencing the path of expansion. On a positive note, the Chinese government implemented a wide range of measures to encourage institutional and individual stock purchases in early 2024, while the Hong Kong government also committed to boost financial markets through expanding the Stock Connect scheme and deepening co-operation with Middle Eastern and ASEAN countries.

To further strengthen its market position, in addition to enhancing its insurance brokerage and sales and marketing of digital assets businesses, the Group plans to adopt strategic initiatives and allocate additional resources to the development of its asset management business, expanding into private equity in 2024.

To further enrich its investment portfolio and expand its income sources, the Group proposed to acquire a 24% equity interest in Zhanhua Jiutai Gas Co., Ltd.* (“Zhanhua Jiutai Gas”) in 2024, at the consideration of HK$30 million by the issue of consideration convertible bonds. As a profit guarantee, the net income after tax of Zhanhua Jiutai Gas during the year ended 31 December 2024 shall not be less than HK$20 million. Leveraging its position and resource advantages in the Zhanhua district natural gas market in Shandong Province, and with its main business benefiting from mainland China’s environmental protection policies, Zhanhua Jiutai Gas enjoys extensive business opportunities and prospects. It is believed that Zhanhua Jiutai Gas will realise further growth and provide a stable source of income for the Group in the future.

Mr. Fu concluded, “We believe that the Group’s investment in the natural gas industry will capture significant market opportunities and create a highly lucrative recurring revenue stream, bringing new impetus for the Group’s sustainable development in the ever-changing and competitive markets in which it operates. With substantial efforts being made to drive growth in various parts of our operations, our longstanding ties with clients, and a healthy and balanced investment portfolio, we will continue to advance our development and create long-term shareholder value.”

* For identification purposes only

About VC Holdings Limited

Value Convergence Holdings Limited (Stock code: 0821.HK) was listed on the GEM board of Hong Kong Stock Exchange in 2001, and completed transfer of listing to the Main Board in 2008. Being a well-established financial services group committed to delivering premier financial services and products in the Great China region, the Group’s services include (i) provision of financial services comprising securities and options brokering and dealing, financing services, corporate finance and other advisory services, asset management and insurance brokerage; (ii) proprietary trading; and (iii) sale and marketing of digital assets.

For more details, please visit www.vcgroup.com.hk.

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