[ANALYST REPORT] SK Telecom: Commerce investments to lift growth but weigh on earnings

What’s new: 2Q16 earnings mostly in line with estimates 2Q16 earnings at SK Telecom (SKT) were mostly in line with our estimates and consensus. Sales missed our estimate by 1.4% as ARPU fell. OP was 6.7% lower than our estimate on the sluggish sales and losses at subsidiaries, including SK Planet. ARPU fell 0.7% QoQ as the weighting of subscribers opting for rate discounts increased and the number of subscribers with a second device grew to 890,000, up 16.3% QoQ. OP fell 1.3% YoY, but given the

July 29, 2016

[EQUITIES] Samsung SDI unlikely to turn to profit in Q3

[THE INVESTOR] Dongbu Securities on July 29 predicted that Samsung SDI's third-quarter earnings could fall below 1 trillion won (US$890 million) considering the continuing business uncertainties in China, hinting at reducing its target price soon. The stock price closed at 10,600 won, down 3.2 percent from the previous day. Samsung SDI's EV battery.The securities firm said it is unlikely for the battery-making unit of Samsung Group to solve the regulatory issues in China where the local authorit

July 29, 2016

[ANALYST REPORT] Airlines 2Q preview: Profits to disappoint

● We believe Korean Air, Asiana Airlines, and Jeju Air generated combined 2Q sales of KRW4.4t, up 3.4% y-y and meeting the consensus, and an operating profit of KRW109.1b that missed the consensus by 35% even as demand grew and costs declined with oil prices.● We still believe sector profits will turn up in 2H on peak seasonality in 3Q and MERS base effect, and Jeju Air will lead the way.● Jeju Air is our top pick—we expect fleet expansion and route additions to boost its top line, and operating

July 29, 2016

S-OIL to issue W300b bonds

[THE INVESTOR] S-OIL is preparing for a 300 billion won (US$ 267.58 million) bond issuance in September, local media reported on July 29.According to reports citing unnamed financial industry sources, the refiner has selected Shinhan Investment and NH Investment and Securities to oversee the deal. S-OIL, rated “AA+,” is said to be looking to issue bonds with 5-year or longer maturity. The funds raised from the sale will be injected into the company’s plant in Ulsan which is under construction. B

July 29, 2016

LG International reviews issuing bonds to raise capital

[THE INVESTOR] LG International is reviewing plans to issue bonds for raising 100 billion won (US$89.19 million) in August, local media reported on July 29.According to reports, the trading arm of LG Group is considering issuing 3-year and 5-year bonds. The company’s credit rating is “AA-.” LG Group headquarters in Yeouido, western Seoul.LG International said that the funds raised through the bonds would go toward funding its operations, saying that none of the previously issued bonds reach matu

July 29, 2016

FSC urges banks to refrain from competitive debt collection

[THE INVESTOR] South Korea’s top financial regulator on July 29 urged domestic lenders to stop their “indiscriminate” debt collection practices against firms that are sensitive to economic upheavals, saying excessive attempts to do so could heighten their instability.“If lenders competitively mount pressure on firms to repay their debt, it will be difficult for them to maintain financial stability,” Financial Services Commission Chairman Yim Jong-yong said during a meeting with heads of policy a

July 29, 2016

BOK to maintain low rates

[THE INVESTOR] The Bank of Korea said on July 29 that it will maintain the low benchmark rate in light of the slow economic growth rate expected in the near future. The Bank of Korea.In a report submitted to the National Assembly, the central bank said that the current monetary policy will be maintained, citing the low growth rate and projections that inflation will fall short of the target. The central bank said that the country’s monetary policy will be implement with the aim of raising inflat

July 29, 2016