Financials & FinTech research, Galliano’s Financials Research

Victor Galliano

Financials & FinTech research

Financials & FinTech, EM & Developed Markets

Galliano’s Financials Research

Galliano's Financials Research provides fundamental research in Emerging Markets financials, including FinTech, as well as financials in select Developed Markets.

The investment style applied is generally value oriented, although Growth At Reasonable Price (GARP) strategies can also be used where appropriate. 

Our investment research approach aim is often contrarian, looking to capitalise on overly sceptical or optimistic consensus views. In terms of valuation techniques, the focus is on PBV ratio to ROE, PE multiples and dividend yield, as well as the application of PEG ratios and, where appropriate, Sum of the Parts (SOTP) valuations.

Equity Bottom-Up

<ul>
<li>Delinquency ratios continued to worsen into 2Q24, with a couple of the South Korean banks seeing accelerating growth in NPL ratios; despite this, there are buy opportunities</li>
<li>Our bigger cap pick is Hana Financial for its very attractive valuations, PEG and equity risk premia, as well as its solid core capital ratio and strong credit quality credentials</li>
<li>Among the smaller caps, Woori stands out in terms of valuation, PEG ratio, credit quality and it has registered improving post-provision returns</li>
</ul>


Delinquency ratios continued to worsen into 2Q24, with a couple of the South Korean banks seeing accelerating growth in NPL ratios; despite this, there are buy opportunities
Our bigger cap pick is Hana Financial for its very attractive valuations, PEG and equity risk premia, as well as its solid core capital ratio and strong credit quality credentials
Among the smaller caps, Woori stands out in terms of valuation, PEG ratio, credit quality and it has registered improving post-provision returns


South Korean Banks; Hana Financial (086790 KS) And Woori (316140 KS) Are Our Positive Picks

Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

Event-Driven

<ul>
<li>After the market close on 26 March, it was announced that BNP Paribas plans to sell its 3.6% stake in Shinhan Financial in a block deal sale 18.7 million shares). </li>
<li>The block deal sale is estimated to be about 900 billion won, which would represent one of the largest block deal sales in Korea in the past several years.</li>
<li>We have a Negative view on the Shinhan Financial Group block deal and we would not subscribe to it due to three major reasons. </li>
</ul>


After the market close on 26 March, it was announced that BNP Paribas plans to sell its 3.6% stake in Shinhan Financial in a block deal sale 18.7 million shares). 
The block deal sale is estimated to be about 900 billion won, which would represent one of the largest block deal sales in Korea in the past several years.
We have a Negative view on the Shinhan Financial Group block deal and we would not subscribe to it due to three major reasons. 


Block Deal Sale of 3.6% Stake in Shinhan Financial by BNP Paribas

<ul>
<li>It was reported today in numerous local media that there will be an inclusion of 'shareholder value improvement' management evaluation criteria for listed government enterprises.</li>
<li>Some of these listed government enterprises rallied strongly today (KEPCO - up 10%; KOGAS - up 12.7%; Korea District Heating - Up 30%). </li>
<li>The detailed evaluation criteria for management evaluation of government enterprises will include the appropriateness of dividend levels, protection of minority shareholders, and compliance with best practices for ESG improvement.</li>
</ul>


It was reported today in numerous local media that there will be an inclusion of 'shareholder value improvement' management evaluation criteria for listed government enterprises.
Some of these listed government enterprises rallied strongly today (KEPCO - up 10%; KOGAS - up 12.7%; Korea District Heating - Up 30%). 
The detailed evaluation criteria for management evaluation of government enterprises will include the appropriateness of dividend levels, protection of minority shareholders, and compliance with best practices for ESG improvement.


Inclusion of 'Shareholder Value Improvement' Mgmt Evaluation Reforms for Listed Govt Enterprises

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.

<ul>
<li>The Korean government has introduced policies ahead of April's elections, with a recent notable announcement addressing the "Korea Discount" by enhancing low PBR stock valuations.</li>
<li>A leading proposal involves creating an index of low PBR companies. There are hints of listing ETFs tracking this index, with potential directives compelling pension funds to invest.</li>
<li>Identifying early inclusions is vital. High-likelihood candidates are low PBR large caps with maintained earnings, dividends/share buyback potential, including Hyundai Dept, E-Mart, Hyundai Steel, IBK, Korean Re, &amp; DL E&amp;C.</li>
</ul>


The Korean government has introduced policies ahead of April's elections, with a recent notable announcement addressing the "Korea Discount" by enhancing low PBR stock valuations.
A leading proposal involves creating an index of low PBR companies. There are hints of listing ETFs tracking this index, with potential directives compelling pension funds to invest.
Identifying early inclusions is vital. High-likelihood candidates are low PBR large caps with maintained earnings, dividends/share buyback potential, including Hyundai Dept, E-Mart, Hyundai Steel, IBK, Korean Re, &amp; DL E&amp;C.


Identifying Specific Implementation Plans for Korea's Low-PBR Improvement Policy

<ul>
<li>In our latest South Korean banks screener; we switch from Hana Financial to KB Financial as our preferred Korean banks pick</li>
<li>NPLs and precautionary quality credits continue on a rising trend, whilst KB has controlled its NPL ratio and precautionary ratio better than most to 3Q23</li>
<li>KB has a low PBV ratio relative to its ROE, rising post-provision returns, a healthy CET1 ratio and a healthy LDR; Kakaobank is one for the watchlist</li>
</ul>


In our latest South Korean banks screener; we switch from Hana Financial to KB Financial as our preferred Korean banks pick
NPLs and precautionary quality credits continue on a rising trend, whilst KB has controlled its NPL ratio and precautionary ratio better than most to 3Q23
KB has a low PBV ratio relative to its ROE, rising post-provision returns, a healthy CET1 ratio and a healthy LDR; Kakaobank is one for the watchlist


S Korean Banks Screen; KB Financial (105560 KS) Most Compelling on Valuations, Return Trends & PEG

South Korea

Industrial Bank of Korea(IBK) is a policy bank providing development finance and related banking services to support small and medium-sized enterprises in Korea. The Bank provides loans, discount bills, trade finance, deposits, foreign exchange, and payment guarantees. The company also offers services such as credit cards, insurance and smart-phone banking.

Price Gauge
52-week Range	0.00 - 0.00
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P/E	0.00
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Industrial Bank of Korea (IBK LX)

South Korean Banks; Hana Financial (086790 KS) And Woori (316140 KS) Are Our Positive Picks

South Korean banks' NPL ratios worsened in 2Q24, but there are buy opportunities. Hana and Woori are our picks for attractive valuations,...

Victor Galliano

Block Deal Sale of 3.6% Stake in Shinhan Financial by BNP Paribas

After the market close on 26 March, it was announced that BNP Paribas plans to sell its 3.6% stake in Shinhan Financial in a block deal sale 18.7...

Douglas Kim

Inclusion of 'Shareholder Value Improvement' Mgmt Evaluation Reforms for Listed Govt Enterprises

It was reported today in numerous local media that there will be an inclusion of 'shareholder value improvement' management evaluation criteria for...

Douglas Kim

Identifying Specific Implementation Plans for Korea's Low-PBR Improvement Policy

You'll find the Excel file with targeted names related to low PBR attached below in the DISCUSSION Section. I screened based on estimated consensus...

Sanghyun Park

S Korean Banks Screen; KB Financial (105560 KS) Most Compelling on Valuations, Return Trends & PEG

KB Financial is our preferred pick for S Korean banks due to good control of NPL & precautionary ratios, low PBV ratio, rising returns, and strong...

Victor Galliano

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

South Korean Banks; Hana Financial (086790 KS) And Woori (316140 KS) Are Our Positive Picks

​South Korean banks' NPL ratios worsened in 2Q24, but there are buy opportunities. Hana and Woori are our picks for attractive valuations,...

Victor Galliano

Block Deal Sale of 3.6% Stake in Shinhan Financial by BNP Paribas

After the market close on 26 March, it was announced that BNP Paribas plans to sell its 3.6% stake in Shinhan Financial in a block deal sale 18.7...

Douglas Kim

Inclusion of 'Shareholder Value Improvement' Mgmt Evaluation Reforms for Listed Govt Enterprises

It was reported today in numerous local media that there will be an inclusion of 'shareholder value improvement' management evaluation criteria for...

Douglas Kim

Identifying Specific Implementation Plans for Korea's Low-PBR Improvement Policy

You'll find the Excel file with targeted names related to low PBR attached below in the DISCUSSION Section. I screened based on estimated consensus...

Sanghyun Park

S Korean Banks Screen; KB Financial (105560 KS) Most Compelling on Valuations, Return Trends & PEG

​KB Financial is our preferred pick for S Korean banks due to good control of NPL & precautionary ratios, low PBV ratio, rising returns, and strong...

Victor Galliano

South Korean banks' NPL ratios worsened in 2Q24, but there are buy opportunities. Hana and Woori are our picks for attractive valuations,...

KB Financial is our preferred pick for S Korean banks due to good control of NPL & precautionary ratios, low PBV ratio, rising returns, and strong...