Financials & FinTech research, Galliano’s Financials Research

Victor Galliano

Financials & FinTech research

Financials & FinTech, EM & Developed Markets

Galliano’s Financials Research

Galliano's Financials Research provides fundamental research in Emerging Markets financials, including FinTech, as well as financials in select Developed Markets.

The investment style applied is generally value oriented, although Growth At Reasonable Price (GARP) strategies can also be used where appropriate. 

Our investment research approach aim is often contrarian, looking to capitalise on overly sceptical or optimistic consensus views. In terms of valuation techniques, the focus is on PBV ratio to ROE, PE multiples and dividend yield, as well as the application of PEG ratios and, where appropriate, Sum of the Parts (SOTP) valuations.

Equity Bottom-Up

Woori Financial Group  / Equity Bottom-Up

<ul>
<li>In our latest South Korean banks screener; we add Woori Financial to existing buy KB Financial as our preferred Korean banks picks</li>
<li>Delinquency ratios continued to worsen QoQ, with only Woori bucking the 4Q23 NPL trend; Woori has lagged in terms of returns, but we expect CoR control to support 2024 returns</li>
<li>KB has a low PBV ratio relative to its ROE, it delivers rising post-provision returns,  it has a high CET1 ratio and it maintains a healthy LDR</li>
</ul>


In our latest South Korean banks screener; we add Woori Financial to existing buy KB Financial as our preferred Korean banks picks
Delinquency ratios continued to worsen QoQ, with only Woori bucking the 4Q23 NPL trend; Woori has lagged in terms of returns, but we expect CoR control to support 2024 returns
KB has a low PBV ratio relative to its ROE, it delivers rising post-provision returns,  it has a high CET1 ratio and it maintains a healthy LDR


South Korean Banks; Woori Financial (316140 KS) Added to Buy List, Joining KB Financial (105560 KS)

Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

Quantitative Analysis

<ul>
<li>In this insight, we discuss using Smartkarma's new feature called Smart Score Screener to screen alpha generating stocks in Korea.</li>
<li>There are five major components of the Smart Score Screener including 1) Value, 2) Dividends, 3) Growth, 4) Resilience, and 5) Momentum.</li>
<li>In addition to these five major components, the Smart Score Screener also includes Country, Sector, and Market Cap breakdowns. There is also a Score section which provides cumulative scores. </li>
</ul>


In this insight, we discuss using Smartkarma's new feature called Smart Score Screener to screen alpha generating stocks in Korea.
There are five major components of the Smart Score Screener including 1) Value, 2) Dividends, 3) Growth, 4) Resilience, and 5) Momentum.
In addition to these five major components, the Smart Score Screener also includes Country, Sector, and Market Cap breakdowns. There is also a Score section which provides cumulative scores. 


Using Smartkarma's Smart Score Screener to Screen Alpha Generating Stocks in Korea

<ul>
<li>Hana Financial remains our buy pick among Korean banks; it is close to the top our scorecard, it remains attractively valued and its returns are improving</li>
<li>Hana is trading at a large PBV discount to KB Financial; this currently stands at a 30%+ discount which is over one standard deviation from the historical PBV discount mean</li>
<li>Furthermore, we see that this relatively dovish phase of monetary policy, Hana appears to have more limited downside risk than its peers in terms of further interest spread erosion</li>
</ul>


Hana Financial remains our buy pick among Korean banks; it is close to the top our scorecard, it remains attractively valued and its returns are improving
Hana is trading at a large PBV discount to KB Financial; this currently stands at a 30%+ discount which is over one standard deviation from the historical PBV discount mean
Furthermore, we see that this relatively dovish phase of monetary policy, Hana appears to have more limited downside risk than its peers in terms of further interest spread erosion


Korean Banks; Stick with Hana (086790 KS) On the Buy List

<ul>
<li>We stick with Hana Financial as our sole buy in Korean banks; even though it does not top our proprietary scorecard, it remains attractively valued and its returns are improving</li>
<li>We downgrade Woori to a neutral from a buy, with Woori now trading at a PBV premium to Hana; historically, this has been an indicator of future poor share performance</li>
<li>KB Financial ranks top in our scorecard; KB is one watch, but remains a neutral due to limited appeal in terms of valuation</li>
</ul>


We stick with Hana Financial as our sole buy in Korean banks; even though it does not top our proprietary scorecard, it remains attractively valued and its returns are improving
We downgrade Woori to a neutral from a buy, with Woori now trading at a PBV premium to Hana; historically, this has been an indicator of future poor share performance
KB Financial ranks top in our scorecard; KB is one watch, but remains a neutral due to limited appeal in terms of valuation


Korean Banks; Keep Buy on Hana (086790 KS), Take Profits on Woori (316140 KS)

<ul>
<li>Our weighted metrics of share valuations, returns, capital adequacy and credit quality feed into a scorecard matrix; we look for opportunities where the risks are well discounted in current valuations</li>
<li>
<a href="https://www.smartkarma.com/entities/woori-financial-group-inc" target="_blank" data-smartkarma-citation="entities:27995:1" rel="noopener">Woori Financial Group (316140 KS)</a> remains the stand-out in terms of our matrix; this is based on valuation, dividend yield, and its superior credit quality relative to its peers</li>
<li>Hana Financial is second from top in our scorecard due to its attractive PBV ratio versus RoE, healthy dividend yield and sound credit quality; management should deliver improved medium-term returns</li>
</ul>


Our weighted metrics of share valuations, returns, capital adequacy and credit quality feed into a scorecard matrix; we look for opportunities where the risks are well discounted in current valuations

Woori Financial Group (316140 KS) remains the stand-out in terms of our matrix; this is based on valuation, dividend yield, and its superior credit quality relative to its peers
Hana Financial is second from top in our scorecard due to its attractive PBV ratio versus RoE, healthy dividend yield and sound credit quality; management should deliver improved medium-term returns


Korean Banks; Stick with Hana (086790 KS) And Woori (316140 KS)

South Korea

BNK Financial Group Inc. a holding company, provides a full range of consumer and commercial banking-related financial services. The Company's main businesses include banking, trust banking, and assets management to individuals, businesses, and other financial institutions.

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Bnk Financial Group (138930 KS)

South Korean Banks; Woori Financial (316140 KS) Added to Buy List, Joining KB Financial (105560 KS)

Adding Woori as a buy alongside KB; Woori shows undemanding multiples, a promising NPL trend and potential for improved 2024 returns. KB has a low...

Victor Galliano

Using Smartkarma's Smart Score Screener to Screen Alpha Generating Stocks in Korea

In this insight, we discuss using Smartkarma's new feature called Smart Score Screener to screen alpha generating stocks in Korea.

Douglas Kim

Korean Banks; Stick with Hana (086790 KS) On the Buy List

Hana Financial is our buy among Korean banks on attractive valuations - big PBV discount to KB Financial - and improving returns. Hana has limited...

Victor Galliano

Korean Banks; Keep Buy on Hana (086790 KS), Take Profits on Woori (316140 KS)

We stick with Hana as a buy in Korean banks, downgrading Woori to neutral, due to its premium PBV ratio to Hana; scorecard-topping KB Financial is...

Victor Galliano

Korean Banks; Stick with Hana (086790 KS) And Woori (316140 KS)

Weighted scorecard metrics drive opportunities in undervalued stocks; Woori Financial with its strong credit quality and high dividend yield, Hana...

Victor Galliano

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

South Korean Banks; Woori Financial (316140 KS) Added to Buy List, Joining KB Financial (105560 KS)

​Adding Woori as a buy alongside KB; Woori shows undemanding multiples, a promising NPL trend and potential for improved 2024 returns. KB has a low...

Victor Galliano

Using Smartkarma's Smart Score Screener to Screen Alpha Generating Stocks in Korea

In this insight, we discuss using Smartkarma's new feature called Smart Score Screener to screen alpha generating stocks in Korea.

Douglas Kim

Korean Banks; Stick with Hana (086790 KS) On the Buy List

​Hana Financial is our buy among Korean banks on attractive valuations - big PBV discount to KB Financial - and improving returns. Hana has limited...

Victor Galliano

Korean Banks; Keep Buy on Hana (086790 KS), Take Profits on Woori (316140 KS)

​We stick with Hana as a buy in Korean banks, downgrading Woori to neutral, due to its premium PBV ratio to Hana; scorecard-topping KB Financial is...

Victor Galliano

Korean Banks; Stick with Hana (086790 KS) And Woori (316140 KS)

​Weighted scorecard metrics drive opportunities in undervalued stocks; Woori Financial with its strong credit quality and high dividend yield, Hana...

Victor Galliano

Adding Woori as a buy alongside KB; Woori shows undemanding multiples, a promising NPL trend and potential for improved 2024 returns. KB has a low...

Hana Financial is our buy among Korean banks on attractive valuations - big PBV discount to KB Financial - and improving returns. Hana has limited...

We stick with Hana as a buy in Korean banks, downgrading Woori to neutral, due to its premium PBV ratio to Hana; scorecard-topping KB Financial is...

Weighted scorecard metrics drive opportunities in undervalued stocks; Woori Financial with its strong credit quality and high dividend yield, Hana...