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>The “Value Up” initiative which kicked off in February 2024 has been intended to bring about corporate governance and market reforms which minority and especially foreign investors have long sought</li>
<li>So far, these voluntary reforms have brought positive albeit limited benefits to South Korean equities; presidential elections, with potential legislative change, should act as a positive valuation driver</li>
<li>We reiterate our positive views on Woori and Hana Financial which are the top banks based on our scorecard; these attributes are due to  attractive valuations and balance sheet credentials</li>
</ul>


The “Value Up” initiative which kicked off in February 2024 has been intended to bring about corporate governance and market reforms which minority and especially foreign investors have long sought
So far, these voluntary reforms have brought positive albeit limited benefits to South Korean equities; presidential elections, with potential legislative change, should act as a positive valuation driver
We reiterate our positive views on Woori and Hana Financial which are the top banks based on our scorecard; these attributes are due to  attractive valuations and balance sheet credentials


Korean Banks; Presidential Election Drives Positive View on Hana (086790 KS) And Woori (316140 KS)

Derivatives and Quantitative Strategist

Gaudenz Schneider

<ul>
<li>The <a href="https://www.smartkarma.com/entities/samsung-fire-marine-insuranc" target="_blank" data-smartkarma-citation="entities:27499:1" rel="noopener">Samsung Fire &amp; Marine Insurance (000815 KS)</a> vs. <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> Price-Ratio has deviated two standard deviations from its one-year average, highlighting a potential tactical opportunity.</li>
<li>Statistical and fundamental arguments are provided for and against a relative value trade in this pair that derives from two different industries.</li>
<li>Trade setup, statistical properties, factor exposure, risk management strategies, and key events are discussed.</li>
</ul>


The Samsung Fire &amp; Marine Insurance (000815 KS) vs. Woori Financial Group (316140 KS) Price-Ratio has deviated two standard deviations from its one-year average, highlighting a potential tactical opportunity.
Statistical and fundamental arguments are provided for and against a relative value trade in this pair that derives from two different industries.
Trade setup, statistical properties, factor exposure, risk management strategies, and key events are discussed.


Samsung Fire & Marine Ins (000815 KS) Vs. Woori Financial (316140 KS): A Pair Trade Investigation

Korea / Special Sits, Pairs, Index Rebalancing, Clepsydra Capital

Sanghyun Park

Korea / Special Sits, Pairs, Index Rebalancing

Clepsydra Capital

Investigate special situations, pairs, and index rebalancing trades in Korea.

Event-Driven

<ul>
<li>The index focuses on qualitative factors like capital efficiency and shareholder returns, but efforts to impose sector balance may have overextended its market benchmark role.</li>
<li>Some companies not fitting the 'value-up' narrative got included, while market favorites were sidelined by sector rankings, which is puzzling given the index's original goal.</li>
<li>Still, with rebalancing cut down to once a year, we should expect the flow impact on the index names to hit harder than initially thought compared to their sector peers.</li>
</ul>


The index focuses on qualitative factors like capital efficiency and shareholder returns, but efforts to impose sector balance may have overextended its market benchmark role.
Some companies not fitting the 'value-up' narrative got included, while market favorites were sidelined by sector rankings, which is puzzling given the index's original goal.
Still, with rebalancing cut down to once a year, we should expect the flow impact on the index names to hit harder than initially thought compared to their sector peers.


All the Scoop on the Korea Value-Up Index

<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)

<ul>
<li>
Context: This Insight follows up on previously highlighted relative value opportunities, using a statistical methodology based on mean-reversion to identify opportunities in paired securities.</li>
<li>
Highlight: Six pair trade opportunities across three markets and three sectors persist. Two </li>
<li>
Why read: Statistical analysis offers a unique perspective on relative value. Gain insights into actionable statistical pair trade opportunities and monitor performance of previously highlighted pairs.</li>
</ul>



Context: This Insight follows up on previously highlighted relative value opportunities, using a statistical methodology based on mean-reversion to identify opportunities in paired securities.

Highlight: Six pair trade opportunities across three markets and three sectors persist. Two 

Why read: Statistical analysis offers a unique perspective on relative value. Gain insights into actionable statistical pair trade opportunities and monitor performance of previously highlighted pairs.


Relative Value Roundup: Performance Recap of Pair Trades in Asia-Pacific

South Korea

Woori Financial Group Inc. provides commercial banking services. The Company offers deposit services, loan services, bill services, settlement services, credit card, international, online banking, and other related services. Woori Financial Group also operates banking and retail banking businesses.

Price Gauge
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Woori Financial Group (316140 KS)

Korean Banks; Presidential Election Drives Positive View on Hana (086790 KS) And Woori (316140 KS)

South Korea's 2024 'Value Up' initiative to bring corporate governance reforms should be given a boost post presidential elections, with potential...

Victor Galliano

Samsung Fire & Marine Ins (000815 KS) Vs. Woori Financial (316140 KS): A Pair Trade Investigation

Statistical analysis highlights potential for a tactical opportunity. Statistical and fundamental arguments in favor and against a relative value...

Gaudenz Schneider

All the Scoop on the Korea Value-Up Index

This post breaks down everything we need to know about the Korea Value-up Index that KRX just unveiled today, especially focusing on those...

Sanghyun Park

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

Relative Value Roundup: Performance Recap of Pair Trades in Asia-Pacific

Statistical methodology identifies pair trade opportunities in various markets and sectors, offering unique insights and pair trade inspiration...

Gaudenz Schneider

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

Korean Banks; Presidential Election Drives Positive View on Hana (086790 KS) And Woori (316140 KS)

​South Korea's 2024 'Value Up' initiative to bring corporate governance reforms should be given a boost post presidential elections, with potential...

Victor Galliano

Samsung Fire & Marine Ins (000815 KS) Vs. Woori Financial (316140 KS): A Pair Trade Investigation

Statistical analysis highlights potential for a tactical opportunity. Statistical and fundamental arguments in favor and against a relative value...

Gaudenz Schneider

All the Scoop on the Korea Value-Up Index

This post breaks down everything we need to know about the Korea Value-up Index that KRX just unveiled today, especially focusing on those...

Sanghyun Park

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

Relative Value Roundup: Performance Recap of Pair Trades in Asia-Pacific

​Statistical methodology identifies pair trade opportunities in various markets and sectors, offering unique insights and pair trade inspiration...

Gaudenz Schneider

South Korea's 2024 'Value Up' initiative to bring corporate governance reforms should be given a boost post presidential elections, with potential...

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...

Statistical methodology identifies pair trade opportunities in various markets and sectors, offering unique insights and pair trade inspiration...