Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

Equity Bottom-Up

<p>In this insight, we discuss 10 different mean reversion pair trade ideas among the 6 major banks in Korea. The six major banks have had solid share price performances this year as their share prices are up on average 23.5% YTD, outperforming the market. </p><p>The overall trend among these different Korean banks' share prices (in terms of the % daily difference in the gaps of their share prices) has been consolidating.  Our data sample covers 246 trading days in the past year. </p><p>An example of the pair trade idea is between <a href="https://www.smartkarma.com/entities/kb-financial-group-inc" target="_blank" data-smartkarma-citation="entities:718:1" rel="noopener">KB Financial (105560 KS)</a> and <a href="https://www.smartkarma.com/entities/shinhan-financial-group-ltd" target="_blank" data-smartkarma-citation="entities:6978:1" rel="noopener">Shinhan Financial (055550 KS). </a>In the past year, there were four trading days when the daily change in the difference between two stocks exceeded 15% and three trading days when the daily change in the difference between two stocks exceeded -10%. In the past several weeks, the gap in the difference between two stocks has been consolidating and there does not appear to be noticeable mean reversion trading opportunity on this pair trade right now.</p><p><em>Trading idea: Look to put a mean reversion pair trade (long-short) if and when the daily change in the difference between the two stocks exceed either 15% or -10%. </em></p>

In this insight, we discuss 10 different mean reversion pair trade ideas among the 6 major banks in Korea. The six major banks have had solid share price performances this year as their share prices are up on average 23.5% YTD, outperforming the market. The overall trend among these different Korean banks' share prices (in terms of the % daily difference in the gaps of their share prices) has been consolidating.  Our data sample covers 246 trading days in the past year. An example of the pair trade idea is between KB Financial (105560 KS) and Shinhan Financial (055550 KS). In the past year, there were four trading days when the daily change in the difference between two stocks exceeded 15% and three trading days when the daily change in the difference between two stocks exceeded -10%. In the past several weeks, the gap in the difference between two stocks has been consolidating and there does not appear to be noticeable mean reversion trading opportunity on this pair trade right now.Trading idea: Look to put a mean reversion pair trade (long-short) if and when the daily change in the difference between the two stocks exceed either 15% or -10%. 

Mean Reversion Pair Trade Ideas in the Korean Banking Sector

APAC IPOs & Placements

Zhen Zhou, Toh

IPOs and Placements coverage across Asia Pacific

Aequitas Research

We cover all listing across the Asia Pacific along with follow-up placements. As of Dec 2020, our team had covered 539 IPOs with a hit rate of 73.5% and 685 placements with a hit rate of 66.8%.

We combine fundamental bottom-up views with our proprietary quantitative framework to provide a holistic coverage across new listings and placements. Our coverage includes pre-IPO notes before the deal is launched, follow-up analysis once the deal is live and post-listing trading analysis as well.

Equity Capital Markets

Woori Financial Group  / Equity Capital Markets

<p><a href="https://www.smartkarma.com/entities/tongyang-life-insurance" target="_blank" data-smartkarma-citation="entities:13759:1" rel="noopener">Tongyang Life Insurance (082640 KS)</a> is looking to sell its entire 3.7% stake in <a href="https://www.smartkarma.com/entities/woori-financial-group-inc" target="_blank" data-smartkarma-citation="entities:27995:1" rel="noopener">Woori Financial Group (316140 KS)</a> (WFG). This is a clean-up trade.</p><p>We have covered previous selldown in:</p><ul><li dir="ltr" aria-level="1"><p><a href="https://www.smartkarma.com/insights/woori-finacials-placement-one-overhang-gone-in-a-well-flagged-deal-another-remains" target="_blank" rel="noopener">Woori Financials Placement - One Overhang Gone in a Well Flagged Deal, Another Remains</a></p></li></ul>

Tongyang Life Insurance (082640 KS) is looking to sell its entire 3.7% stake in Woori Financial Group (316140 KS) (WFG). This is a clean-up trade.We have covered previous selldown in:Woori Financials Placement - One Overhang Gone in a Well Flagged Deal, Another Remains

Woori Financials Placement - Tong Yang Cleans up but KDIC Could Sell More

Korea / Special Sits, Pairs, Index Rebalancing, Clepsydra Capital

Sanghyun Park

Korea / Special Sits, Pairs, Index Rebalancing

Clepsydra Capital

Investigate special situations, pairs, and index rebalancing trades in Korea.

Event-Driven

<p>Over the past month, the stock performance of the four largest banks in Korea has been interesting. Hana Financial Group and Woori Financial Group outperformed relatively, and in particular, KB Financial Group underperformed by more than 5%p compared to Woori Financial Group.</p><section class="figure"><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/219/154/original/Screen+Shot+2021-07-18+at+6.21.51+PM.png?1626646949" class="editor-image img-responsive" data-smartkarma-image-id="219154"></figure><p></p></section><p>In this interim dividend, there is a possibility that dividends not paid last year will be paid retroactively. However, excluding this possibility and assuming that the total annual dividend for this year is adjusted to the level of 2019, Woori Financial Group and Hana Financial Group have the highest dividend yields.</p><table class="table table-striped">
<colgroup>
<col width="100">
<col width="100">
<col width="100">
<col width="100">
<col width="100">
</colgroup>
<tbody>
<tr>
<td style="width: 380.724px;" data-sheets-value='{"1":2,"2":"Dividend yield"}'>Estimated dividend yield, assuming that the total annual dividend for. this year is adjusted to the level of 2019</td>
<td style="text-align: right; width: 86.8324px;" data-sheets-value='{"1":3,"3":2018}'>2018</td>
<td style="text-align: right; width: 92.5852px;" data-sheets-value='{"1":3,"3":2019}'>2019</td>
<td style="text-align: right; width: 94.7301px;" data-sheets-value='{"1":3,"3":2020}'>2020</td>
<td style="text-align: right; width: 91.1364px;" data-sheets-value='{"1":2,"2":"2021E"}'>2021E</td>
</tr>
<tr>
<td style="width: 380.724px;" data-sheets-value='{"1":2,"2":"Shinhan Financial"}'>Shinhan Financial</td>
<td style="text-align: right; width: 86.8324px;" data-sheets-value='{"1":3,"3":0.0404}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}'>4.04%</td>
<td style="text-align: right; width: 92.5852px;" data-sheets-value='{"1":3,"3":0.0427}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}'>4.27%</td>
<td style="text-align: right; width: 94.7301px;" data-sheets-value='{"1":3,"3":0.0468}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}'>4.68%</td>
<td style="text-align: right; width: 91.1364px;" data-sheets-value='{"1":3,"3":0.050608571468662246}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}' data-sheets-formula='=R[-14]C[0]/googlefinance(R[-42]C[0], "price")'><strong>5.06%</strong></td>
</tr>
<tr>
<td style="width: 380.724px;" data-sheets-value='{"1":2,"2":"KB Financial"}'>KB Financial</td>
<td style="text-align: right; width: 86.8324px;" data-sheets-value='{"1":3,"3":0.0413}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}'>4.13%</td>
<td style="text-align: right; width: 92.5852px;" data-sheets-value='{"1":3,"3":0.0464}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}'>4.64%</td>
<td style="text-align: right; width: 94.7301px;" data-sheets-value='{"1":3,"3":0.0408}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}'>4.08%</td>
<td style="text-align: right; width: 91.1364px;" data-sheets-value='{"1":3,"3":0.05260170044159115}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}' data-sheets-formula='=R[-14]C[0]/googlefinance(R[-42]C[0], "price")'><strong>5.26%</strong></td>
</tr>
<tr>
<td style="width: 380.724px;" data-sheets-value='{"1":2,"2":"Hana Financial"}'>Hana Financial</td>
<td style="text-align: right; width: 86.8324px;" data-sheets-value='{"1":3,"3":0.0524}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}'>5.24%</td>
<td style="text-align: right; width: 92.5852px;" data-sheets-value='{"1":3,"3":0.0569}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}'>5.69%</td>
<td style="text-align: right; width: 94.7301px;" data-sheets-value='{"1":3,"3":0.0536}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}'>5.36%</td>
<td style="text-align: right; width: 91.1364px;" data-sheets-value='{"1":3,"3":0.0619847401646764}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}' data-sheets-formula='=R[-14]C[0]/googlefinance(R[-42]C[0], "price")'><strong>6.20%</strong></td>
</tr>
<tr>
<td style="width: 380.724px;" data-sheets-value='{"1":2,"2":"Woori Financial"}'><div><div>Woori Financial</div></div></td>
<td style="text-align: right; width: 86.8324px;"></td>
<td style="text-align: right; width: 92.5852px;" data-sheets-value='{"1":3,"3":0.0603}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}'>6.03%</td>
<td style="text-align: right; width: 94.7301px;" data-sheets-value='{"1":3,"3":0.037}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}'>3.70%</td>
<td style="text-align: right; width: 91.1364px;" data-sheets-value='{"1":3,"3":0.06629340778032639}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}' data-sheets-formula='=R[-14]C[0]/googlefinance(R[-42]C[0], "price")'><strong>6.63%</strong></td>
</tr>
<tr><td colspan="5" rowspan="1" style="width: 746.008px;" data-sheets-value='{"1":2,"2":"Source: FnGuide &amp; KSD Seibro"}'>Source: FnGuide &amp; KSD Seibro</td></tr>
</tbody>
</table><p>This is similar to the dividend yield calculated based on this year's estimated DPS of local street consensus gathered by FnGuide.</p><table class="table table-striped">
<colgroup>
<col width="100">
<col width="100">
<col width="100">
<col width="100">
<col width="100">
</colgroup>
<tbody>
<tr>
<td style="width: 362.429px;" data-sheets-value='{"1":2,"2":"Dividend yield"}'>Annual dividend yield based on the local street consensus compiled by FnGuide</td>
<td style="text-align: right; width: 95.8381px;" data-sheets-value='{"1":3,"3":2018}'>2018</td>
<td style="text-align: right; width: 95.8381px;" data-sheets-value='{"1":3,"3":2019}'>2019</td>
<td style="text-align: right; width: 95.8381px;" data-sheets-value='{"1":3,"3":2020}'>2020</td>
<td style="text-align: right; width: 96.0653px;" data-sheets-value='{"1":2,"2":"2021E"}'>2021E</td>
</tr>
<tr>
<td style="width: 362.429px;" data-sheets-value='{"1":2,"2":"Shinhan Financial"}'>Shinhan Financial</td>
<td style="text-align: right; width: 95.8381px;" data-sheets-value='{"1":3,"3":0.0404}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}'>4.04%</td>
<td style="text-align: right; width: 95.8381px;" data-sheets-value='{"1":3,"3":0.0427}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}'>4.27%</td>
<td style="text-align: right; width: 95.8381px;" data-sheets-value='{"1":3,"3":0.0468}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}'>4.68%</td>
<td style="text-align: right; width: 96.0653px;" data-sheets-value='{"1":3,"3":0.052}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}' data-sheets-formula='=R[-28]C[0]/googlefinance(R[-35]C[0], "price")'><strong>5.20%</strong></td>
</tr>
<tr>
<td style="width: 362.429px;" data-sheets-value='{"1":2,"2":"KB Financial"}'>KB Financial</td>
<td style="text-align: right; width: 95.8381px;" data-sheets-value='{"1":3,"3":0.0413}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}'>4.13%</td>
<td style="text-align: right; width: 95.8381px;" data-sheets-value='{"1":3,"3":0.0464}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}'>4.64%</td>
<td style="text-align: right; width: 95.8381px;" data-sheets-value='{"1":3,"3":0.0408}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}'>4.08%</td>
<td style="text-align: right; width: 96.0653px;" data-sheets-value='{"1":3,"3":0.05146666666666667}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}' data-sheets-formula='=R[-28]C[0]/googlefinance(R[-35]C[0], "price")'><strong>5.15%</strong></td>
</tr>
<tr>
<td style="width: 362.429px;" data-sheets-value='{"1":2,"2":"Hana Financial"}'>Hana Financial</td>
<td style="text-align: right; width: 95.8381px;" data-sheets-value='{"1":3,"3":0.0524}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}'>5.24%</td>
<td style="text-align: right; width: 95.8381px;" data-sheets-value='{"1":3,"3":0.0569}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}'>5.69%</td>
<td style="text-align: right; width: 95.8381px;" data-sheets-value='{"1":3,"3":0.0536}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}'>5.36%</td>
<td style="text-align: right; width: 96.0653px;" data-sheets-value='{"1":3,"3":0.06045662100456621}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}' data-sheets-formula='=R[-28]C[0]/googlefinance(R[-35]C[0], "price")'><strong>6.05%</strong></td>
</tr>
<tr>
<td style="width: 362.429px;" data-sheets-value='{"1":2,"2":"Woori Financial"}'><div><div>Woori Financial</div></div></td>
<td style="text-align: right; width: 95.8381px;">-</td>
<td style="text-align: right; width: 95.8381px;" data-sheets-value='{"1":3,"3":0.0603}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}'>6.03%</td>
<td style="text-align: right; width: 95.8381px;" data-sheets-value='{"1":3,"3":0.037}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}'>3.70%</td>
<td style="text-align: right; width: 96.0653px;" data-sheets-value='{"1":3,"3":0.06334801762114538}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}' data-sheets-formula='=R[-28]C[0]/googlefinance(R[-35]C[0], "price")'><strong>6.33%</strong></td>
</tr>
<tr><td colspan="5" rowspan="1" style="width: 746.008px;" data-sheets-value='{"1":2,"2":"Source: FnGuide &amp; KSD Seibro"}'>Source: FnGuide &amp; KSD Seibro</td></tr>
</tbody>
</table><p>As shown in the downward trend of 12M forward PER below, the market is taking a conservative approach to the recent slowdown in bank stocks' earnings growth, which is believed to have led to growing interest in dividends.</p><p>Interestingly, the difference in P/E decline between Hana Financial Group and KB Financial Group was the largest. This seems to have been influenced by the fact that Hana Financial Group has a higher probability of paying expected dividends than Woori Financial Group.</p><table class="table table-striped">
<colgroup>
<col width="100">
<col width="100">
<col width="100">
<col width="100">
</colgroup>
<tbody>
<tr>
<td data-sheets-value='{"1":2,"2":"12-month forward PER"}'>12-month forward PER</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":44393}' data-sheets-numberformat='{"1":5,"2":"yyyy. m. d","3":1}'>2021. 7. 16</td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"3 months ago"}'>3 months ago</td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"3-month Δ"}'>3-month Δ</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Shinhan Financial"}'>Shinhan Financial</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":5.03}' data-sheets-numberformat='{"1":2,"2":"0.00x","3":1}'>5.03x</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":5.12}' data-sheets-numberformat='{"1":2,"2":"0.00x","3":1}'>5.12x</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":-0.017578124999999972}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}' data-sheets-formula="=(R[0]C[-2]-R[0]C[-1])/R[0]C[-1]">-1.76%</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"KB Financial"}'><strong>KB Financial</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":5.17}' data-sheets-numberformat='{"1":2,"2":"0.00x","3":1}'><strong>5.17x</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":5.65}' data-sheets-numberformat='{"1":2,"2":"0.00x","3":1}'><strong>5.65x</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":-0.08495575221238945}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}' data-sheets-formula="=(R[0]C[-2]-R[0]C[-1])/R[0]C[-1]"><strong>-8.50%</strong></td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Hana Financial"}'><strong>Hana Financial</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":4.21}' data-sheets-numberformat='{"1":2,"2":"0.00x","3":1}'><strong>4.21x</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":4.35}' data-sheets-numberformat='{"1":2,"2":"0.00x","3":1}'><strong>4.35x</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":-0.03218390804597694}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}' data-sheets-formula="=(R[0]C[-2]-R[0]C[-1])/R[0]C[-1]"><strong>-3.22%</strong></td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Woori Financial"}'>Woori Financial</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":3.99}' data-sheets-numberformat='{"1":2,"2":"0.00x","3":1}'>3.99x</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":4.16}' data-sheets-numberformat='{"1":2,"2":"0.00x","3":1}'>4.16x</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":-0.040865384615384595}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}' data-sheets-formula="=(R[0]C[-2]-R[0]C[-1])/R[0]C[-1]">-4.09%</td>
</tr>
<tr><td colspan="4" rowspan="1" data-sheets-value='{"1":2,"2":"Source: FnGuide &amp; KSD Seibro"}'>Source: FnGuide &amp; KSD Seibro</td></tr>
</tbody>
</table>

Over the past month, the stock performance of the four largest banks in Korea has been interesting. Hana Financial Group and Woori Financial Group outperformed relatively, and in particular, KB Financial Group underperformed by more than 5%p compared to Woori Financial Group.In this interim dividend, there is a possibility that dividends not paid last year will be paid retroactively. However, excluding this possibility and assuming that the total annual dividend for this year is adjusted to the level of 2019, Woori Financial Group and Hana Financial Group have the highest dividend yields.









Estimated dividend yield, assuming that the total annual dividend for. this year is adjusted to the level of 2019
2018
2019
2020
2021E


Shinhan Financial
4.04%
4.27%
4.68%
5.06%


KB Financial
4.13%
4.64%
4.08%
5.26%


Hana Financial
5.24%
5.69%
5.36%
6.20%


Woori Financial

6.03%
3.70%
6.63%

Source: FnGuide &amp; KSD Seibro

This is similar to the dividend yield calculated based on this year's estimated DPS of local street consensus gathered by FnGuide.









Annual dividend yield based on the local street consensus compiled by FnGuide
2018
2019
2020
2021E


Shinhan Financial
4.04%
4.27%
4.68%
5.20%


KB Financial
4.13%
4.64%
4.08%
5.15%


Hana Financial
5.24%
5.69%
5.36%
6.05%


Woori Financial
-
6.03%
3.70%
6.33%

Source: FnGuide &amp; KSD Seibro

As shown in the downward trend of 12M forward PER below, the market is taking a conservative approach to the recent slowdown in bank stocks' earnings growth, which is believed to have led to growing interest in dividends.Interestingly, the difference in P/E decline between Hana Financial Group and KB Financial Group was the largest. This seems to have been influenced by the fact that Hana Financial Group has a higher probability of paying expected dividends than Woori Financial Group.








12-month forward PER
2021. 7. 16
3 months ago
3-month Δ


Shinhan Financial
5.03x
5.12x
-1.76%


KB Financial
5.17x
5.65x
-8.50%


Hana Financial
4.21x
4.35x
-3.22%


Woori Financial
3.99x
4.16x
-4.09%

Source: FnGuide &amp; KSD Seibro



Korean Local Banks Trading Dynamics: Dividend Yield Difference & Kakao Bank Listing

<p>In this insight, we provide a deeper, competitive analysis of the Korean fintech industry and the major competitors. Once Kakao Pay completes its IPO, it will be the largest pure-play fintech company in Korea. In addition, we compare Kakao Pay's valuation against the recent $7.5 billion valuation received by Viva Republica in Korea. </p><p>The table below provides the main fintech services that are offered in South Korea along with the number of players competing in each of these segments. </p><table class="table table-striped">
<colgroup>
<col>
<col>
<col>
</colgroup>
<tbody>
<tr>
<td colspan="2" style="width: 463.91px;"><strong>Fintech Services in Korea (Major Services &amp; Number of Players)</strong></td>
<td style="text-align: center; width: 150.45px;"></td>
</tr>
<tr>
<td style="text-align: left; width: 172.63px;"><strong>Major Services</strong></td>
<td style="text-align: left; width: 291.28px;"><strong>Key Details</strong></td>
<td style="text-align: center; width: 150.45px;"><strong>Number of firms (% of Total)</strong></td>
</tr>
<tr>
<td style="width: 172.63px;">Payment/Money Transfer</td>
<td style="width: 291.28px;">Provision of payment/remittance service through simple self-authentication on mobile devices with payment information registered in advance</td>
<td style="text-align: center; width: 150.45px;">83 (24.1%)</td>
</tr>
<tr>
<td style="width: 172.63px;">Crowd Funding/P2P finance</td>
<td style="width: 291.28px;">A service that receives business funds, etc. from an unspecified number of investors through an online intermediary</td>
<td style="text-align: center; width: 150.45px;">45 (13.0%)</td>
</tr>
<tr>
<td style="width: 172.63px;">Authentification/security</td>
<td style="width: 291.28px;">Prevent crime by detecting abnormal transactions or provide identity authentication service through fingerprint, iris, and facial recognition</td>
<td style="text-align: center; width: 150.45px;">43 (12.5%)</td>
</tr>
<tr>
<td style="width: 172.63px;">Personal financial management</td>
<td style="width: 291.28px;">Provides services such as expenditure management, integrated financial product management, credit score management, and customized financial product recommendation</td>
<td style="text-align: center; width: 150.45px;">33 (9.6%)</td>
</tr>
<tr>
<td style="width: 172.63px;">Insurance</td>
<td style="width: 291.28px;">Provides efficient and innovative services by converging the latest technologies in each insurance field</td>
<td style="text-align: center; width: 150.45px;">23 (6.7%)</td>
</tr>
<tr>
<td style="width: 172.63px;">Investment</td>
<td style="width: 291.28px;">Manage assets mainly based on AI algorithms or provide advice to investors</td>
<td style="text-align: center; width: 150.45px;">18 (5.2%)</td>
</tr>
<tr>
<td style="width: 172.63px;">Fintech System Integrator</td>
<td style="width: 291.28px;">Fintech infrastructure services such as financial data and risk management</td>
<td style="text-align: center; width: 150.45px;">18 (5.2%)</td>
</tr>
<tr>
<td style="width: 172.63px;">Overseas money transfer</td>
<td style="width: 291.28px;">Low fees and fast overseas remittance service</td>
<td style="text-align: center; width: 150.45px;">14 (4.1%)</td>
</tr>
<tr>
<td style="width: 172.63px;">Cryptocurrency</td>
<td style="width: 291.28px;">Provision of crypto currency distribution service</td>
<td style="text-align: center; width: 150.45px;">6 (1.7%)</td>
</tr>
<tr>
<td style="width: 172.63px;">Others</td>
<td style="width: 291.28px;"><div></div></td>
<td style="text-align: center; width: 150.45px;">62 (18.0%)</td>
</tr>
<tr>
<td style="width: 172.63px;"><strong>Total</strong></td>
<td style="width: 291.28px;">
<div>
<div></div>
<div><div></div></div>
</div>
<div><div></div></div>
</td>
<td style="text-align: center; width: 150.45px;"><strong>345</strong></td>
</tr>
<tr>
<td colspan="2" style="width: 463.91px;">Source: Korea Fintech Association, 2019</td>
<td style="text-align: center; width: 150.45px;"></td>
</tr>
</tbody>
</table>

In this insight, we provide a deeper, competitive analysis of the Korean fintech industry and the major competitors. Once Kakao Pay completes its IPO, it will be the largest pure-play fintech company in Korea. In addition, we compare Kakao Pay's valuation against the recent $7.5 billion valuation received by Viva Republica in Korea. The table below provides the main fintech services that are offered in South Korea along with the number of players competing in each of these segments. 







Fintech Services in Korea (Major Services &amp; Number of Players)



Major Services
Key Details
Number of firms (% of Total)


Payment/Money Transfer
Provision of payment/remittance service through simple self-authentication on mobile devices with payment information registered in advance
83 (24.1%)


Crowd Funding/P2P finance
A service that receives business funds, etc. from an unspecified number of investors through an online intermediary
45 (13.0%)


Authentification/security
Prevent crime by detecting abnormal transactions or provide identity authentication service through fingerprint, iris, and facial recognition
43 (12.5%)


Personal financial management
Provides services such as expenditure management, integrated financial product management, credit score management, and customized financial product recommendation
33 (9.6%)


Insurance
Provides efficient and innovative services by converging the latest technologies in each insurance field
23 (6.7%)


Investment
Manage assets mainly based on AI algorithms or provide advice to investors
18 (5.2%)


Fintech System Integrator
Fintech infrastructure services such as financial data and risk management
18 (5.2%)


Overseas money transfer
Low fees and fast overseas remittance service
14 (4.1%)


Cryptocurrency
Provision of crypto currency distribution service
6 (1.7%)


Others

62 (18.0%)


Total







345


Source: Korea Fintech Association, 2019





Kakao Pay: An Overview of Korean Fintech Competitors & A Comparison to Viva Republica's Valuation

<p>This weekend, several local media published articles stating that all major domestic financial holding companies are positively reviewing interim dividends this year. These media said that they had heard so from insiders in the local financial sector.</p><p>Hana Financial Group has paid interim dividends every year. Although the other financial holding companies are able to pay interim dividends under the articles of incorporation, they have never done so.</p><div class="content-highlight"><p>The FSC conducted a stress test on banks and financial holding companies this month, and as all of them passed, the recommendation to limit dividends came to an end at the end of this month.</p></div><p>Therefore, it is highly likely that each financial holding company will hold a board meeting to determine an interim dividend after the 2Q earnings release. As dividends were limited at the beginning of this year by the financial authorities, all of them will likely pay interim dividends.</p>

This weekend, several local media published articles stating that all major domestic financial holding companies are positively reviewing interim dividends this year. These media said that they had heard so from insiders in the local financial sector.Hana Financial Group has paid interim dividends every year. Although the other financial holding companies are able to pay interim dividends under the articles of incorporation, they have never done so.The FSC conducted a stress test on banks and financial holding companies this month, and as all of them passed, the recommendation to limit dividends came to an end at the end of this month.Therefore, it is highly likely that each financial holding company will hold a board meeting to determine an interim dividend after the 2Q earnings release. As dividends were limited at the beginning of this year by the financial authorities, all of them will likely pay interim dividends.

Interim Div Yield Projections of Korean Financial Holdcos Ahead of June 29 Ex-Div Date

South Korea

Woori Financial Group Inc. provides commercial banking services. The Company offers deposit services, loan services, bill services, settlement services, credit card, international, online banking, and other related services. Woori Financial Group also operates banking and retail banking businesses.

Price Gauge
52-week Range	0.00 - 0.00
Market Cap (USDm)	0.00
P/E	0.00
Dividend (Yield)	0.00

Woori Financial Group (316140 KS)

Mean Reversion Pair Trade Ideas in the Korean Banking Sector

In this insight, we discuss 10 different mean reversion pair trade ideas among the 6 major banks in Korea.Our data sample covers 246 trading days...

Douglas Kim

Woori Financials Placement - Tong Yang Cleans up but KDIC Could Sell More

Tongyang Life Insurance (082640 KS) is looking to sell its entire 3.7% stake in Woori Financial Group (316140 KS) (WFG). This is a clean-up trade.

Zhen Zhou, Toh

Korean Local Banks Trading Dynamics: Dividend Yield Difference & Kakao Bank Listing

It seems unlikely that the recent relative stock price correction will further deepen. With Kakao Bank's listing, we need to consider a trading...

Sanghyun Park

Kakao Pay: An Overview of Korean Fintech Competitors & A Comparison to Viva Republica's Valuation

In this insight, we provide a deeper, competitive analysis of the Korean fintech industry and the major competitors. In addition, we compare Kakao...

Douglas Kim

Interim Div Yield Projections of Korean Financial Holdcos Ahead of June 29 Ex-Div Date

This post projects the interim dividend yields of the four major Korean financial holding companies ahead of the June 29 ex-dividend date.

Sanghyun Park

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)