Global Bank Equity Specialist, Creative Portfolios

Paul Hollingworth

Global Bank Equity Specialist

Creative Portfolios

Equity Bottom-Up

South Korean banks are cheap globally. They trade on average at a P/Book of 0.5x and a PER of 6x.Fundamental trends are highly positive as testified by the financial metric progression revealed by the PH Score™ at Q118. If the business improves, the stock price should follow.It is hardly as if the macro and political backdrop have deteriorated either.

South Korean banks are cheap globally. They trade on average at a P/Book of 0.5x and a PER of 6x.Fundamental trends are highly positive as testified by the financial metric progression revealed by the PH Score™ at Q118. If the business improves, the stock price should follow.It is hardly as if the macro and political backdrop have deteriorated either.

South Korean Banks: Buying into a Better Future

<a href="https://www.smartkarma.com/entities/16104" target="_blank" data-smartkarma-citation="entities:16104:1">Jb Financial Group Co Ltd (175330 KS)</a><table class="table table-striped"><tbody>
<tr>
<td>JB Financial</td>
<td style="text-align: center;">'13</td>
<td style="text-align: center;">'14</td>
<td style="text-align: center;">'15</td>
<td style="text-align: center;">'16</td>
<td style="text-align: center;">'17</td>
<td style="text-align: center;">17 v '16</td>
</tr>
<tr>
<td>CAPITAL ADEQUACY</td>
<td style="text-align: center;"> </td>
<td style="text-align: center;"> </td>
<td style="text-align: center;"> </td>
<td style="text-align: center;"> </td>
<td style="text-align: center;"> </td>
<td style="text-align: center;"> </td>
</tr>
<tr>
<td>BIS Ratio</td>
<td style="text-align: center;">12.90%</td>
<td style="text-align: center;">13.12%</td>
<td style="text-align: center;">12.51%</td>
<td style="text-align: center;">12.05%</td>
<td style="text-align: center;">12.16%</td>
<td style="text-align: center;">↑</td>
</tr>
<tr>
<td>Tier1 Ratio</td>
<td style="text-align: center;">7.24%</td>
<td style="text-align: center;">8.34%</td>
<td style="text-align: center;">8.59%</td>
<td style="text-align: center;">9.20%</td>
<td style="text-align: center;">9.70%</td>
<td style="text-align: center;">↑</td>
</tr>
<tr>
<td>CET1 Ratio</td>
<td style="text-align: center;">5.88%</td>
<td style="text-align: center;">7.12%</td>
<td style="text-align: center;">7.40%</td>
<td style="text-align: center;">7.92%</td>
<td style="text-align: center;">8.57%</td>
<td style="text-align: center;">↑</td>
</tr>
<tr>
<td>ASSET QUALITY</td>
<td style="text-align: center;"> </td>
<td style="text-align: center;"> </td>
<td style="text-align: center;"> </td>
<td style="text-align: center;"> </td>
<td style="text-align: center;"> </td>
<td style="text-align: center;"> </td>
</tr>
<tr>
<td>Delinquency Ratio</td>
<td style="text-align: center;">1.66%</td>
<td style="text-align: center;">1.14%</td>
<td style="text-align: center;">1.19%</td>
<td style="text-align: center;">1.04%</td>
<td style="text-align: center;">0.87%</td>
<td style="text-align: center;">↓</td>
</tr>
<tr>
<td>NPL Coverage Ratio (New)</td>
<td style="text-align: center;"> </td>
<td style="text-align: center;"> </td>
<td style="text-align: center;"> </td>
<td style="text-align: center;">72.71%</td>
<td style="text-align: center;">67.92%</td>
<td style="text-align: center;">↓</td>
</tr>
<tr>
<td>NPL Coverage Ratio (Old)</td>
<td style="text-align: center;">82.39%</td>
<td style="text-align: center;">63.00%</td>
<td style="text-align: center;">130.52%</td>
<td style="text-align: center;">144.33%</td>
<td style="text-align: center;">154.57%</td>
<td style="text-align: center;">↑</td>
</tr>
<tr>
<td>PROFITABILITY</td>
<td style="text-align: center;"> </td>
<td style="text-align: center;"> </td>
<td style="text-align: center;"> </td>
<td style="text-align: center;"> </td>
<td style="text-align: center;"> </td>
<td style="text-align: center;"> </td>
</tr>
<tr>
<td>ROA</td>
<td style="text-align: center;">0.40%</td>
<td style="text-align: center;">1.71%</td>
<td style="text-align: center;">0.40%</td>
<td style="text-align: center;">0.47%</td>
<td style="text-align: center;">0.56%</td>
<td style="text-align: center;">↑</td>
</tr>
<tr>
<td>ROE </td>
<td style="text-align: center;">6.59%</td>
<td style="text-align: center;">26.71%</td>
<td style="text-align: center;">6.28%</td>
<td style="text-align: center;">7.17%</td>
<td style="text-align: center;">8.64%</td>
<td style="text-align: center;">↑</td>
</tr>
<tr>
<td>ROE </td>
<td style="text-align: center;">3.37%</td>
<td style="text-align: center;">41.34%</td>
<td style="text-align: center;">5.72%</td>
<td style="text-align: center;">6.45%</td>
<td style="text-align: center;">7.84%</td>
<td style="text-align: center;">↑</td>
</tr>
<tr>
<td>NIM (Bank, Quarterly)</td>
<td style="text-align: center;">2.</td>
</tr>
</tbody></table>…

Jb Financial Group Co Ltd (175330 KS)

JB Financial
'13
'14
'15
'16
'17
17 v '16


CAPITAL ADEQUACY
 
 
 
 
 
 


BIS Ratio
12.90%
13.12%
12.51%
12.05%
12.16%
↑


Tier1 Ratio
7.24%
8.34%
8.59%
9.20%
9.70%
↑


CET1 Ratio
5.88%
7.12%
7.40%
7.92%
8.57%
↑


ASSET QUALITY
 
 
 
 
 
 


Delinquency Ratio
1.66%
1.14%
1.19%
1.04%
0.87%
↓


NPL Coverage Ratio (New)
 
 
 
72.71%
67.92%
↓


NPL Coverage Ratio (Old)
82.39%
63.00%
130.52%
144.33%
154.57%
↑


PROFITABILITY
 
 
 
 
 
 


ROA
0.40%
1.71%
0.40%
0.47%
0.56%
↑


ROE 
6.59%
26.71%
6.28%
7.17%
8.64%
↑


ROE 
3.37%
41.34%
5.72%
6.45%
7.84%
↑


NIM (Bank, Quarterly)
2.

…

Japan TMT Analyst

Pelham Smithers

Market Intel on Asian Tech with a Japan focus

Pelham Smithers Associates

Founded in 2009, Pelham Smithers Associates (PSA) provides market intelligence on Asian technology, focusing in particular on Japan. The industries covered by our team of specialists are: consumer electronics, telecomms, pharmaceuticals, internet, electronic parts and materials, automotive technology, retail and capital goods. 

Research is provided by the following:
Pelham Smithers: Macro, consumer electronics, telecoms & pharma
Joel Scheiman: Electronics materials / components
Julie Boote: Autos
Will Nestuk: Capital goods, machinery & transportation equipment parts
Thao Nguyen: eCommerce, internet content, marketing & advertising

Up until now, we have viewed the key opportunity set for SBI Ripple Asia, the 60% owned subsidiary of <a href="https://www.smartkarma.com/entities/10928" target="_blank" data-smartkarma-citation="entities:10928:1">SBI Holdings (8473 JP)</a>, as the credit card foreign exchange market, where execution / settlement costs in Japan can hit 60bp (according to sources at <a href="https://www.smartkarma.com/entities/13631" target="_blank" data-smartkarma-citation="entities:13631:1">GMO Internet (9449 JP)</a>. However, a suite of products announced for the banking industry shows that this industry’s forex business is also in SBI Ripple Asia’s sights. Last week SBI Ripple Asia introduced two new Ripple initiatives, xRapid and xVia…

Up until now, we have viewed the key opportunity set for SBI Ripple Asia, the 60% owned subsidiary of SBI Holdings (8473 JP), as the credit card foreign exchange market, where execution / settlement costs in Japan can hit 60bp (according to sources at GMO Internet (9449 JP). However, a suite of products announced for the banking industry shows that this industry’s forex business is also in SBI Ripple Asia’s sights. Last week SBI Ripple Asia introduced two new Ripple initiatives, xRapid and xVia…

Blockchain in Japan Moves Further Forward

Korea / Special Situations, Clepsydra Capital

Sanghyun Park

Korea / Special Situations

Event-Driven

What should we make of <a href="https://www.smartkarma.com/entities/393" target="_blank" data-smartkarma-citation="entities:393:1">SK Holdings Co Ltd (034730 KS)</a>'s latest ₩300bil bond issuance?<div class="content-highlight">Below is the regulatory filing submitted by SK Holdings for its latest corporate bond issuance.<a href="https://dart.fss.or.kr/dsaf001/main.do?rcpNo=20171013000777" target="_blank">https://dart.fss.or.kr/dsaf001/main.do?rcpNo=20171013000777</a></div>Below is a summary of SK Holdings' latest corporate bond issuance.<table class="table table-striped"><tbody><tr><td colspan="4"><a href="https://www.smartkarma.com/entities/393" target="_blank" data-smartkarma-citation="entities:393:1">SK Holdings Co Ltd (034730 KS)</a>'s #282 corporate bond issuance summary</td></tr><tr><td>Issuance round/session</td><td style="text-align: center;">282-1</td><td style="text-align: center;">282-2</td><td style="text-align: center;">282-3</td></tr><tr><td>Amount</td><td style="text-align: center;">₩70,000,000,000</td><td style="text-align: center;">₩150,000,000,000</td><td style="text-align: center;">₩80,000,000,000</td></tr><tr><td>Credit rating</td><td colspan="3" style="text-align: center;">AA+* All of Korea's four credit rating agencies rate SK Holdings as AA+.</td></tr><tr><td>Lead manager</td><td colspan="3" style="text-align: center;">KB Securities</td></tr><tr><td>Maturity</td><td style="text-align: center;">3 yearsOct 25, 2020</td><td style="text-align: center;">5 yearsOct 25, 2022</td><td style="text-align: center;">7 yearsOct 25, 2024</td></tr><tr><td>Bookbuilding</td><td colspan="3" style="text-align: center;">Oct 17, 2017</td></tr><tr><td>Yield rate</td><td colspan="3" style="text-align: center;">[Arithmetic avg. of the SK Holdings 3-yr/5-yr/7-yr corporate bond yield rates calculated by the four credit rating agencies on Oct 16, 2017] ±10bp* Final yield rates will be officially announced on Oct 19, 2017.</td></tr><tr><td>Yield rate on Oct 19, 2017</td><td style="text-align: center;">2.335%</td><td style="text-align: center;">2.616%</td><td style="text-align: center;">2.803%</td></tr><tr><td colspan="4">Source: DART</td></tr></tbody></table>

What should we make of SK Holdings Co Ltd (034730 KS)'s latest ₩300bil bond issuance?Below is the regulatory filing submitted by SK Holdings for its latest corporate bond issuance.https://dart.fss.or.kr/dsaf001/main.do?rcpNo=20171013000777Below is a summary of SK Holdings' latest corporate bond issuance.SK Holdings Co Ltd (034730 KS)'s #282 corporate bond issuance summaryIssuance round/session282-1282-2282-3Amount₩70,000,000,000₩150,000,000,000₩80,000,000,000Credit ratingAA+* All of Korea's four credit rating agencies rate SK Holdings as AA+.Lead managerKB SecuritiesMaturity3 yearsOct 25, 20205 yearsOct 25, 20227 yearsOct 25, 2024BookbuildingOct 17, 2017Yield rate[Arithmetic avg. of the SK Holdings 3-yr/5-yr/7-yr corporate bond yield rates calculated by the four credit rating agencies on Oct 16, 2017] ±10bp* Final yield rates will be officially announced on Oct 19, 2017.Yield rate on Oct 19, 20172.335%2.616%2.803%Source: DART

Correlation Between SK Holdings' ₩300bil Bond Issuance & SK Siltron TRS Deals

Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

This report has two parts. First, it discusses the impact of the "trial of the century" involving the Samsung Group heir Lee Jae-Yong as well as major policies enforced and the impact on various industry sectors in the first 110 days of Moon Jae-In as the President of South Korea. The local media has described the trials involving the three key individuals, including former President Park Geun-Hye, her confidant Choi Soon Shil, and the Samsung Group heir Lee Jae-Yong as the "trials of the…

This report has two parts. First, it discusses the impact of the "trial of the century" involving the Samsung Group heir Lee Jae-Yong as well as major policies enforced and the impact on various industry sectors in the first 110 days of Moon Jae-In as the President of South Korea. The local media has described the trials involving the three key individuals, including former President Park Geun-Hye, her confidant Choi Soon Shil, and the Samsung Group heir Lee Jae-Yong as the "trials of the…

The "Trial of the Century", First 110 Days of Moon Jae-In Presidency, and Waiting for Tofu

South Korea

Woori Bank provides a full range of commercial banking services. The Bank offers deposits, loans, insurance, security investments, online banking, credit cards, funds, and pensions. Woori Bank operates in Korea.

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Woori Bank (000030 KS)

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Top PH Scores™ in South Korea

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Blockchain in Japan Moves Further Forward

Up until now, we have viewed the key opportunity set for SBI Ripple Asia, the 60% owned subsidiary of SBI Holdings (8473 JP), as the credit card...

Pelham Smithers Associates

Correlation Between SK Holdings' ₩300bil Bond Issuance & SK Siltron TRS Deals

What should we make of SK Holdings Co Ltd (034730 KS)'s latest ₩300bil bond issuance? Below is the regulatory filing submitted by SK Holdings for...

Sanghyun Park

The "Trial of the Century", First 110 Days of Moon Jae-In Presidency, and Waiting for Tofu

This report has two parts. First, it discusses the impact of the "trial of the century" involving the Samsung Group heir Lee Jae-Yong as well as...

Douglas Kim

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