Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

Thematic (Sector/Industry)

Korea has two visa policies for Chinese visitors to Korea – one for mainland Korea and one for Jeju island. Chinese visitors must get visa when visiting mainland Korea while visa is not required to visit Jeju island. We believe that the tremendous success of attracting Chinese visitors to Jeju island may also lead to relaxed visa policies for Chinese visiting mainland Korea. Timing of potential change of Chinese visa policy to Korea - Although it may not be discussed much openly, we think that there are increasing talks behind the doors to relax the visa policy for Chinese visitors to Korea (ex. 3 months no visa policy) in order to attract more Chinese visitors and help to attract foreign capital. In terms of time-frame, we believe it could over the next two years, especially as the incumbent Presidential regime is pro-FTA with China and open to attracting more Chinese capital. The potential change to existing visa policy such as 3 months no visa could be both ways (Chinese visitors to Korea and Korean visitors to China).

Korea has two visa policies for Chinese visitors to Korea – one for mainland Korea and one for Jeju island. Chinese visitors must get visa when visiting mainland Korea while visa is not required to visit Jeju island. We believe that the tremendous success of attracting Chinese visitors to Jeju island may also lead to relaxed visa policies for Chinese visiting mainland Korea. Timing of potential change of Chinese visa policy to Korea - Although it may not be discussed much openly, we think that there are increasing talks behind the doors to relax the visa policy for Chinese visitors to Korea (ex. 3 months no visa policy) in order to attract more Chinese visitors and help to attract foreign capital. In terms of time-frame, we believe it could over the next two years, especially as the incumbent Presidential regime is pro-FTA with China and open to attracting more Chinese capital. The potential change to existing visa policy such as 3 months no visa could be both ways (Chinese visitors to Korea and Korean visitors to China). 

Potential Change of Chinese Visa Policy to Korea

Leading Independent Investment Research, Morningstar, Inc.

Morningstar

Leading Independent Investment Research

Morningstar, Inc.

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Equity Bottom-Up

No-moat, 4-star-rated Fiat Chrysler's stock has 55% upside to our EUR 20 fair value estimate from its current trading level.Since the markets began to sell off on China concerns in July, Fiat Chrysler's shares have been beaten down nearly 15%. We think the stock has been overly punished as the market myopically focuses on high debt leverage, cash needed for aggressive expansion, and press coverage of CEO Sergio Marchionne's pursuit of "cataclysmic" industry change.Slower China automobile demand growth will have insufficient impact on Fiat Chrysler to warrant a change in our EUR 20 fair value estimate. Out of a global total of 4.6 million vehicles shipped last year, Fiat Chrysler delivered 182,000 in China.Granted, some were high-profit units from Ferrari and even more so from Maserati. However, Fiat Chrysler has been late to the mainstream, high-volume China market. Jeep models should start penetrating the market in a more meaningful way later next year. Healthy demand in North America and a nascent but solid recovery in Europe enable at least partial offsets to a drop in Brazilian demand and weaker growth in China.In our opinion, the market does not have a full grasp of the potential profitability and returns that can be generated by the complete integration of Fiat Chrysler.Neither does the market fully appreciate the value of the underlying assets of Fiat Chrysler.We expect the Ferrari separation to be completed in the first quarter of 2016, unlocking an undervalued asset for shareholders.With a 4-star rating and the stock currently trading at a 35% discount to our EUR 20 fair value estimate, we think investors can own Ferrari through Fiat Chrysler at a compelling valuation.Analyst: Richard J. HilgertFull Report below the fold....

No-moat, 4-star-rated Fiat Chrysler's stock has 55% upside to our EUR 20 fair value estimate from its current trading level.Since the markets began to sell off on China concerns in July, Fiat Chrysler's shares have been beaten down nearly 15%. We think the stock has been overly punished as the market myopically focuses on high debt leverage, cash needed for aggressive expansion, and press coverage of CEO Sergio Marchionne's pursuit of "cataclysmic" industry change.Slower China automobile demand growth will have insufficient impact on Fiat Chrysler to warrant a change in our EUR 20 fair value estimate. Out of a global total of 4.6 million vehicles shipped last year, Fiat Chrysler delivered 182,000 in China.Granted, some were high-profit units from Ferrari and even more so from Maserati. However, Fiat Chrysler has been late to the mainstream, high-volume China market. Jeep models should start penetrating the market in a more meaningful way later next year. Healthy demand in North America and a nascent but solid recovery in Europe enable at least partial offsets to a drop in Brazilian demand and weaker growth in China.In our opinion, the market does not have a full grasp of the potential profitability and returns that can be generated by the complete integration of Fiat Chrysler.Neither does the market fully appreciate the value of the underlying assets of Fiat Chrysler.We expect the Ferrari separation to be completed in the first quarter of 2016, unlocking an undervalued asset for shareholders.With a 4-star rating and the stock currently trading at a 35% discount to our EUR 20 fair value estimate, we think investors can own Ferrari through Fiat Chrysler at a compelling valuation.Analyst: Richard J. HilgertFull Report below the fold....

Distracted by the Distractions: Focus on Fiat Chrysler's attractive stock valuation

South Korea

Hyundai Motor Company manufactures, sells, and exports passenger cars, trucks, and commercial vehicles. The Company also sells various auto parts and operates auto repair service centers throughout South Korea. Hyundai Motor provides financial services through its subsidiaries.

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Hyundai Motor (005380 KS)

Potential Change of Chinese Visa Policy to Korea

Korea has two visa policies for Chinese visitors to Korea – one for mainland Korea and one for Jeju island. Chinese visitors must get visa when...

Douglas Kim

Distracted by the Distractions: Focus on Fiat Chrysler's attractive stock valuation

No-moat, 4-star-rated Fiat Chrysler's stock has 55% upside to our EUR 20 fair value estimate from its current trading level.Since the markets began...

Morningstar, Inc.

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