Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

Cross Asset Strategy

The world will never be the same after COVID-19. We provided an extensive analysis of the on-going developments of COVID-19 in March. This novel coronavirus is a once in a century type of pandemic. As of 31 March, there were more than 0.79 million cases and nearly 38k deaths globally caused by COVID-19. Nearly one-quarter of the world's population is in various types of lockdowns.Our model portfolio was down 3.4% on a net basis in March 2020 (cash was 70% of our model portfolio), outperforming KOSPI which was down 11.4% in the same period. Among the 31 reports we have written so far in March, the three most widely read insights were all related to COVID-19:<ul>
<li>
<a href="https://www.smartkarma.com/insights/active-vs-passive-investing-post-covid-19-coronavirus-world" target="_blank" data-smartkarma-citation="insights:37765" rel="noopener">Active Vs. Passive Investing Post COVID-19 Coronavirus World</a> </li>
<li>
<a href="https://www.smartkarma.com/insights/why-is-the-death-rate-of-covid-19-nearly-6x-higher-in-the-u-s-than-in-south-korea" target="_blank" data-smartkarma-citation="insights:37272" rel="noopener">Why Is the Death Rate of COVID-19 Nearly 6x Higher in the U.S. Than in South Korea?</a> </li>
<li>
<a href="https://www.smartkarma.com/insights/some-encouraging-covid-19-data-from-south-korea" target="_blank" data-smartkarma-citation="insights:37340" rel="noopener">Some Encouraging COVID-19 Data from South Korea</a> </li>
</ul>

The world will never be the same after COVID-19. We provided an extensive analysis of the on-going developments of COVID-19 in March. This novel coronavirus is a once in a century type of pandemic. As of 31 March, there were more than 0.79 million cases and nearly 38k deaths globally caused by COVID-19. Nearly one-quarter of the world's population is in various types of lockdowns.Our model portfolio was down 3.4% on a net basis in March 2020 (cash was 70% of our model portfolio), outperforming KOSPI which was down 11.4% in the same period.   Among the 31 reports we have written so far in March, the three most widely read insights were all related to COVID-19:

Active Vs. Passive Investing Post COVID-19 Coronavirus World 

Why Is the Death Rate of COVID-19 Nearly 6x Higher in the U.S. Than in South Korea? 

Some Encouraging COVID-19 Data from South Korea 


Korea Stock Market Monthly Recap #46 (March 2020)

Korea Event-Driven and Corporate Governance, DewPoint Research

Yeaseul Lim

Korea Event-Driven and Corporate Governance

Independent Equity Research Provider - South Korea

DewPoint Research

At DewPoint, we aim to convey a clear understanding of a company’s approach to capital allocation. As a matter of corporate governance, capital allocation reflects whose interests a company prioritizes when making management decisions. Given the Korean context, it comes down to a question of whether the company undermines the interests of minority shareholders for private benefits of controlling shareholders. This is what we focus on as a fundamental starting point in our research.
 
Capital allocation principles and practices provide the foundation for a company’s sustainable value creation. Thus, investors need to be alert to any possible distortions in capital allocation, especially when they take a long-term perspective. They also want to find safe stocks with committed management, no separation between ownership and control, and robust business models. We seek to fulfill such needs in a disciplined manner.
 
We also work as a representative of foreign investors who are willing to exercise active ownership in their investee companies. Our service may include identifying stocks that are fundamentally strong but vulnerable to activist attacks.

Thematic (Sector/Industry)

<ul class="">
<li>
The Amendments to the so-called "Three Data Privacy Laws" were finally approved by the National Assembly of Korea on January 9, 2020. Two months before that, the so-called "P2P Act" was enacted. Both take effect in August 2020. As a final step, the regulators are working on drafting proposed amendments to the Electronic Financial Transactions Act. </li>
<li>The new laws commonly aim to serve better individuals and smaller firms that have been denied access to safe and affordable borrowing due to a lack of credit history (e.g. credit card and mortgage payments) or no possession of real estate to use as collateral. The ultimate goal is to enable those to access credit scores and mid-range-interest-rate loans.  </li>
<li>To achieve this goal, the new laws (i) promote the use and sharing of alternative data (e.g. cable and utility payment history) and anonymous data, (ii) encourage new players (P2P lenders and "My Data" Providers) to enter the market, and (iii) ease legal barriers to entry into the credit bureau industry.</li>
<li>As the new laws are expected to drive further expansion of the credit reporting market, <a href="https://www.smartkarma.com/entities/nice-information-service-co" target="_blank" data-smartkarma-citation="entities:20236:1" rel="noopener">Nice Information Service Co (030190 KS)</a> has seen a rapid rise in stock prices with higher PE ratios. The stock prices of <a href="https://www.smartkarma.com/entities/nice-d-b-co-ltd" target="_blank" data-smartkarma-citation="entities:17976:1" rel="noopener">Nice D&amp;B Co Ltd (130580 KS)</a> and <a href="https://www.smartkarma.com/entities/e-credible-co-ltd" target="_blank" data-smartkarma-citation="entities:8282:1" rel="noopener">E Credible (092130 KS)</a> have not shown dramatic changes because the new laws would mainly affect credit "reporting" agencies, not credit "authentication" agencies. Meanwhile, <a href="https://www.smartkarma.com/entities/duzonbizon-co-ltd" target="_blank" data-smartkarma-citation="entities:20161:1" rel="noopener">Duzonbizon (012510 KS)</a> has garnered attention due to the expectation that it may expand into corporate credit reporting businesses. </li>
<li>We see that credit reporting agencies such as <a href="https://www.smartkarma.com/entities/nice-information-service-co" target="_blank" data-smartkarma-citation="entities:20236:1" rel="noopener">Nice Information Service Co (030190 KS)</a> would face both risks and opportunities. Considering the potential threats of new entrants, we have some reservations about the recent re-rating of the stock. We will elaborate on that in the latter part. </li>
</ul>



The Amendments to the so-called "Three Data Privacy Laws" were finally approved by the National Assembly of Korea on January 9, 2020. Two months before that, the so-called "P2P Act" was enacted. Both take effect in August 2020. As a final step, the regulators are working on drafting proposed amendments to the Electronic Financial Transactions Act. 
The new laws commonly aim to serve better individuals and smaller firms that have been denied access to safe and affordable borrowing due to a lack of credit history (e.g. credit card and mortgage payments) or no possession of real estate to use as collateral. The ultimate goal is to enable those to access credit scores and mid-range-interest-rate loans.  
To achieve this goal, the new laws (i) promote the use and sharing of alternative data (e.g. cable and utility payment history) and anonymous data, (ii) encourage new players (P2P lenders and "My Data" Providers) to enter the market, and (iii) ease legal barriers to entry into the credit bureau industry.
As the new laws are expected to drive further expansion of the credit reporting market, Nice Information Service Co (030190 KS) has seen a rapid rise in stock prices with higher PE ratios. The stock prices of Nice D&amp;B Co Ltd (130580 KS) and E Credible (092130 KS) have not shown dramatic changes because the new laws would mainly affect credit "reporting" agencies, not credit "authentication" agencies. Meanwhile, Duzonbizon (012510 KS) has garnered attention due to the expectation that it may expand into corporate credit reporting businesses. 
We see that credit reporting agencies such as Nice Information Service Co (030190 KS) would face both risks and opportunities. Considering the potential threats of new entrants, we have some reservations about the recent re-rating of the stock. We will elaborate on that in the latter part. 


Digital Finance in Korea: New Laws Coming in 2020 & Credit Bureau Industry

South Korea

e-Credible Co., Ltd. provides an electronic credit evaluation system to help checking business partners' financial status.  The company also develops an enterprise resource supply system to activate e-commerce within the companies network.

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E Credible (092130 KS)

Korea Stock Market Monthly Recap #46 (March 2020)

The world will never be the same after COVID-19. We provided an extensive analysis of the on-going developments of COVID-19 in March. This novel...

Douglas Kim

Digital Finance in Korea: New Laws Coming in 2020 & Credit Bureau Industry

The Amendments to the so-called "Three Data Privacy Laws" were finally approved by the National Assembly of Korea on January 9, 2020. Two months...

DewPoint Research

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52-week Range

Market Cap (USDm)

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