Bottom-Up EquitiesDaily Briefs

Equity Bottom-Up: Krafton Inc, Korea Ratings, Wice Logistics and more

In today’s briefing:

  • Krafton – Breaking Down
  • Korea Small Cap Gem #12: Korea Ratings
  • WICE: Expect Strong Earnings Growth Momentum to Persist in 2022E

Krafton – Breaking Down

By Mio Kato

  • We have been sceptical about Krafton’s valuation and ability to generate new hits since its listing. 
  • After treading water close to its IPO price for five months the new year has seen the stock crater 25%. 
  • In our view the bad news is just getting started and that is despite PUBG: Mobile still doing well in China and India.

Korea Small Cap Gem #12: Korea Ratings

By Douglas Kim

  • Korea Ratings (034950 KS) is the 12th company in our Korea Small Cap Gems series. Korea Ratings is one of the leading players in the credit ratings industry in Korea.
  • Korea Ratings has a combination of excellent business moat, stable 5-8% annual sales growth, 20% ROE, and 35%+ operating margins, and high dividend payout of 65%
  • For the long-term investors (2-3+ years horizon) that seek consistent 20%+ total annual compound returns with low volatility, Korea Ratings is an excellent pick in our view.

WICE: Expect Strong Earnings Growth Momentum to Persist in 2022E

By Research Group at Country Group Securities

  • We maintain WICE with a BUY rating while roll over target price to Bt27.10 (previous TP:16.70) ,derived from 27.4xPE’22E ( +0.5 S.D. five-year average), implies 40% discount to Thai transportation 
  • We expect strong earnings growth momentum to persist in 2022E supported by; 1.) high sea freight rate anticipated to last until mid 2H22 (sea freight contributes 48% of total revenue 
  • We expect WICE to report 4Q21 net profit at Bt167m (+182%YoY and +3%QoQ), the highest level since inception

Related tickers: Korea Ratings (034950.KQ), Wice Logistics (WICE.BK)

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