Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

Douglas Research Advisory

Event-Driven

<ul>
<li>On 14 July, Align Partners sent open letters to the BODs of Jb Financial Group and Bnk Financial Group proposing a merger of the two companies.</li>
<li>Align Partners highlighted recent mergers among regional banks in Japan in the past several years as benchmarks. </li>
<li>I have a positive view on such a merger. Nonetheless, I think the probability of this merger occurring in the next 1-2 years is less than 20%. </li>
</ul>


On 14 July, Align Partners sent open letters to the BODs of Jb Financial Group and Bnk Financial Group proposing a merger of the two companies.
Align Partners highlighted recent mergers among regional banks in Japan in the past several years as benchmarks. 
I have a positive view on such a merger. Nonetheless, I think the probability of this merger occurring in the next 1-2 years is less than 20%. 


Align Partners Proposes A Merger Between JB Financial and BNK Financial

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)

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

Cross Asset Strategy

<ul>
<li>We are starting a new series of insights called "Top 10 Korean Stock Picks Bi-Weekly."
</li>
<li>The main purpose of these insights is to pick top 10 stocks in Korea that could outperform KOSPI in the following two week period.</li>
<li>The top 10 stock picks include Kia Corp, Kangwon Land, OCI Holdings, HD Hyundai, Doosan Bobcat, BNK Financial, Hyundai Mobis, HMM, Hyundai Glovis, and Korean Reinsurance.</li>
</ul>


We are starting a new series of insights called "Top 10 Korean Stock Picks Bi-Weekly."

The main purpose of these insights is to pick top 10 stocks in Korea that could outperform KOSPI in the following two week period.
The top 10 stock picks include Kia Corp, Kangwon Land, OCI Holdings, HD Hyundai, Doosan Bobcat, BNK Financial, Hyundai Mobis, HMM, Hyundai Glovis, and Korean Reinsurance.


Top 10 Korean Stock Picks Bi-Weekly (Starting 20 January 2025)

<ul>
<li>Woori Financial remains our value pick with its low PEG ratio and high dividend yield; we believe it is the most asset sensitive bank of the peer group</li>
<li>Woori is trading at a 36% PBV discount to peer KB Financial which is well below the three year mean a close to one standard deviation from the mean</li>
<li>We downgrade Hana Financial to a neutral despite attractive valuations due to its relatively more challenged credit quality which could drive a higher cost of risk going forward</li>
</ul>


Woori Financial remains our value pick with its low PEG ratio and high dividend yield; we believe it is the most asset sensitive bank of the peer group
Woori is trading at a 36% PBV discount to peer KB Financial which is well below the three year mean a close to one standard deviation from the mean
We downgrade Hana Financial to a neutral despite attractive valuations due to its relatively more challenged credit quality which could drive a higher cost of risk going forward


Korean Banks; Woori (316140 KS) Is Our Sole Buy, Hana (086790 KS) Downgraded to a Neutral

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)

Align Partners Proposes A Merger Between JB Financial and BNK Financial

On 14 July, Align Partners sent open letters to the BODs of Jb Financial Group and Bnk Financial Group proposing a merger of the two companies.

Douglas Kim

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

Top 10 Korean Stock Picks Bi-Weekly (Starting 20 January 2025)

We are starting a new series of insights called "Top 10 Korean Stock Picks Bi-Weekly." Main purpose of them is to pick top 10 stocks in Korea that...

Douglas Kim

Korean Banks; Woori (316140 KS) Is Our Sole Buy, Hana (086790 KS) Downgraded to a Neutral

Woori is our sole buy in Korean banks, Hana downgraded to neutral; we believe Woori is the most asset sensitive bank of the peer group, and it...

Victor Galliano

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

Align Partners Proposes A Merger Between JB Financial and BNK Financial

On 14 July, Align Partners sent open letters to the BODs of Jb Financial Group and Bnk Financial Group proposing a merger of the two companies.

Douglas Kim

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

Top 10 Korean Stock Picks Bi-Weekly (Starting 20 January 2025)

We are starting a new series of insights called "Top 10 Korean Stock Picks Bi-Weekly." Main purpose of them is to pick top 10 stocks in Korea that...

Douglas Kim

Korean Banks; Woori (316140 KS) Is Our Sole Buy, Hana (086790 KS) Downgraded to a Neutral

Woori is our sole buy in Korean banks, Hana downgraded to neutral; we believe Woori is the most asset sensitive bank of the peer group, and it...

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...