Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

Equity Bottom-Up

<ul>
<li>We are starting a new series called "Asian Dividend Gems." We plan to write about outstanding companies in Asia with high dividend yields (5% to 20%).</li>
<li>The first company in this series is Koentec. From 2018 to 2022, its dividend yield averaged 5.2% and its dividend payout averaged 80.8%. The current dividend yield is 7%.</li>
<li>Koentec is a leading Korean company that provides industrial waste incineration, steam production (utility), and waste landfill services. </li>
</ul>


We are starting a new series called "Asian Dividend Gems." We plan to write about outstanding companies in Asia with high dividend yields (5% to 20%).
The first company in this series is Koentec. From 2018 to 2022, its dividend yield averaged 5.2% and its dividend payout averaged 80.8%. The current dividend yield is 7%.
Koentec is a leading Korean company that provides industrial waste incineration, steam production (utility), and waste landfill services. 


We are starting a new series of insights at Smartkarma called "Korean Small Cap Gems." KG Inicis is the first company to be included in this series of insights. The purpose of the Korean Small Cap Gems insights is to provide investment analysis of attractive small caps in Korea (market caps of below $1 billion). We plan to write one or two reports (or more) on the Korean Small Cap Gems per month.
<a href="https://www.smartkarma.com/entities/kginicis-co-ltd" target="_blank" data-smartkarma-citation="entities:5234:1" rel="noopener">Kginicis Co Ltd (035600 KS)</a> is a leading payment company and one of the first fintech companies in Korea. KG Inicis is also involved in other businesses including restaurants (KFC Korea) and education. Payments (E-commerce &amp; others) remains the company's core business, representing 72.9% of its sales and 91% of its operating profit in 2019. KG Inicis is one of the biggest players in online/mobile payments in Korea.
According to our SoTP analysis, we think KG Inicis has a 29% upside with a target price of 33,000 over a 6-12 month period. We used the average EBIT of the main businesses in 2018 and 2019 to value the company. For example, we used 69.2 bn EBIT for the payment business and applied a 15x EBIT multiple, valuing the payment business at just more than 1 trillion won in value. The PG industry has been growing at 20%+ in the past several years and as one of the top 3 players in the PG industry with a steady 8-9% operating margins, we think a 15x EBIT multiple valuation is conservative.

We are starting a new series of insights at Smartkarma called "Korean Small Cap Gems." KG Inicis is the first company to be included in this series of insights. The purpose of the Korean Small Cap Gems insights is to provide investment analysis of attractive small caps in Korea (market caps of below $1 billion). We plan to write one or two reports (or more) on the Korean Small Cap Gems per month.
Kginicis Co Ltd (035600 KS) is a leading payment company and one of the first fintech companies in Korea. KG Inicis is also involved in other businesses including restaurants (KFC Korea) and education. Payments (E-commerce &amp; others) remains the company's core business, representing 72.9% of its sales and 91% of its operating profit in 2019. KG Inicis is one of the biggest players in online/mobile payments in Korea.
According to our SoTP analysis, we think KG Inicis has a 29% upside with a target price of 33,000 over a 6-12 month period. We used the average EBIT of the main businesses in 2018 and 2019 to value the company. For example, we used 69.2 bn EBIT for the payment business and applied a 15x EBIT multiple, valuing the payment business at just more than 1 trillion won in value. The PG industry has been growing at 20%+ in the past several years and as one of the top 3 players in the PG industry with a steady 8-9% operating margins, we think a 15x EBIT multiple valuation is conservative. 

South Korea

KG Eco Technology Service Co Ltd produces energy from waste. The Company operates a waste system to treat wastes from various industrial areas, including chemicals, pharmaceuticals electronics, automotive and public organizations.

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Kg Eco Technology Service Co (151860 KS)

Asian Dividend Gems: Koentec

We are starting a new series called "Asian Dividend Gems." The first company in this series is Koentec which provides industrial waste...

Douglas Kim

Korea Small Cap Gem #1: KG Inicis

We are starting a new series of insights at Smartkarma called "Korean Small Cap Gems." KG Inicis is the first company to be included in this series...

Douglas Kim

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