[ANALYST REPORT] Refining/Chemicals: Review of share valuations

Korean refineries and chemicals are trading sharply lower on unexpected events such as the Brexit issue and the resulting increase in global macroeconomic uncertainties. However, we believe risks of a possible down-adjustment of earnings consensus are fully priced in at current share valuations. Relative valuation attractiveness could dip on a global view, but further downsides in share prices remain limited with key factors determining earnings, such as the spreads and refining margins of major

June 29, 2016

Jeju Air’s earnings to improve from Q3

[THE INVESTOR] Jeju Air, Korea’s largest low-cost carrier, will see faster growth in earnings from the third quarter of the year, Korea Investment & Securities said. In the second quarter, Jeju Air is expected to post 162.4 billion won (US$138.7 million) in revenue, up 14.1 percent from a year earlier and 44.6 percent drop in operating income to log 5 billion won, said Yoon Hee-do, an analyst at Korea Investment & Securities said. The parliamentary election, which was held in April, slowed air t

June 29, 2016

Only 17% of KOSDAQ firms held IR events in 2015

[THE INVESTOR] More than 80 percent of companies listed on the tech-heavy KOSDAQ did not hold a single investor relations event last year, Korea Exchange said on June 29. According to Korea Exchange’s analysis, 948 of the 1,151 KOSDAQ companies did not hold any investor relations events in 2015. The figures are based on regulatory filings posted on the Financial Supervisory Service’s Data Analysis, Retrieval and Transfer System.Such neglect of communication with investors was displayed regardles

June 29, 2016

Hyundai Steel stock price target cut due to weak momentum

[THE INVESTOR] Hyundai Steel stock price target has been reduced to 62,000 won (US$52.41) from 67,000 won by Eugene Investment & Securities, citing the steelmaker’s limited earnings momentum in the second half of this year. “Hyundai Steel’s sales (excluding affiliates) for the second quarter are expected to grow 0.3 percent to 3.71 trillion won and its operating profit will fall 16.6 percent to 354.1 billion won which is in line with analysts’ estimates,” Bang Min-jin, an analyst at Eugene said.

June 28, 2016

Deutsche Seoul becomes preliminary primary dealer of gov’t bonds

[THE INVESTOR] German lender Deutsche Bank’s Seoul branch has been selected to join the list of preliminary primary dealers, giving the branch authority to underwrite government bonds starting July 1, said the Ministry of Strategy and Finance on June 27. The new addition will increase the number of second-tier bond dealers in South Korea to four. The other three include the Seoul branches of BNP Paribas and Yuanta Securities and Korean insurance company Meritz. There will continue to be 19 first

June 28, 2016