Smartkarma Daily Briefs

• Seoul Guarantee Insurance is sticking to the same playbook, focusing on boosting dividend appeal, with a better price and the 100% secondary sell-down and KDIC stake dump still in place.
• There’s doubt about market interest, as the performance drop from 2023 to 2024 raises concerns over meeting the 200B KRW minimum dividend promise.
• Seoul Guarantee is Korea’s only pure-play surety insurer, tied to the domestic economy. The IPO lacks a growth plan to reduce this reliance, which would’ve been a key win.

• Samsung Life Insurance (032830 KS) is considering on a special measure of classifying its stake in Samsung Electronics (005930 KS) as a long-term holding stock of up to 10 years.
• If Samsung Life Insurance’s stake in Samsung Electronics is classified as a long-term holding, Samsung Life Insurance cannot sell Samsung Electronics stocks for at least 5 years.
• There is an increasing probability that if Samsung Life Insurance classifies its stake in Samsung Electronics as a long-term holding, the current ownership stake structure involving Samsung Group remains intact.

• Seoul Guarantee Insurance Corp (SGIC) is trying for another attempt at an IPO at much lower IPO price range. The IPO price range is from 26,000 won to 31,800 won.
• At the high end of the IPO price range, the IPO offering size is 222 billion won. The IPO price range has been lowered by 34% to 39%. 
• Despite the company’s consistent record of generating positive operating profit, its lack of sales growth and declining operating margins in 2024 remain key concerns.

• Proposed Deal Details: BMPS launched a €13.3B all-share offer for Mediobanca, offering a 5% premium per share. Post-merger, BMPS shareholders would own 40% of the combined entity.
• Strategic Rationale: The merger aims to create a diversified financial powerhouse, achieving €700M in annual synergies and accelerating BMPS’s €2.9B deferred tax asset utilization for shareholder value creation.
• Challenges and Risks: Insufficient premium, integration complexities, and shareholder dilution concerns cast doubt on deal success, alongside Mediobanca’s superior growth prospects and market positioning.

• BoJ raised rates to 0.5% at its January policy meeting and BoJ Governor Kazuo Ueda hinted at more rate hikes; BoJ’s new Outlook Report forecasts higher core inflation in 2025
• We reiterate our core recommendations Resona and Mizuho for their leverage to higher interest rates, their low LDRs, their high levels of cash at the BoJ and their modest valuation
• We also keep our buys on Concordia and Shizuoka, for their leverage to higher interest rates and LDRs below 90%, along with their attractive valuations highlighted by low PEGs

• Goldman Sachs’ GCI enters partnership with Asia Pacific Land in Japan for data center venture, expanding its reach in Asia.
• CPPIB and MGRV collaborate on $350M venture in Korean rental housing, aiming to capture opportunities in the real estate market.
• S&P forecasts rebound in China’s property market, driven by increase in secondary sales, indicating positive growth.

• The GEO Group is a potential investment opportunity with an asymmetric Trump trade, with a price target of $77 in a 2-year time horizon and a blue sky upside target of $103
• The company’s market cap is $2.1 billion with an enterprise value of $3.9 billion
• The thesis is based on the potential increase in funding for ICE monitoring under the next administration, potentially leading to the eventual spin-off of the monitoring business, resulting in GEO’s EBITDA potentially more than doubling from the current $500 million through various growth opportunities

This content is sourced through publicly available sources and has been machine generated. Information displayed is for general informational purposes only. This article was originally published 3 months ago on Value Investors Club.