Global TMT, Consumer, Korea, Deep Fundamental

Julian Yoon

Equity Bottom-Up

Hankook Tire & Technology / Equity Bottom-Up

Hankook Tire (“HKT”) is one of the few truly “global champion” companies in Korea, alongside Samsung Electronics and Hyundai Motors with strong brand positioning and market shares across the major developed markets.  Barriers to entry in the tire sector are brand, distribution, and technology. Over the past two decades, HKT has made significant progress across all three parameters, resulting in continuous market share gains.  HKT is currently #6/#7 (on par with Sumitomo Rubber), after Michelin, Bridgestone, Continental, Bridgestone and Pirelli and expects to increase its market share to #5 globally within the next few years. The company is positioned for solid growth with supportive industry demand backdrop along with a number of company specific catalysts.  Despite having industry leading margins, the company is trading at a P/B of just 1.4x, a 35% discount to its global peers and trades at 16% discount on a forward P/E basis.  The insight will be divided into the following sections:<ul><li>Why is it interesting?</li><li>Catalysts</li><li>Valuation and risks</li><li>Hankook Tire Worldwide (KRX: 000240), a better play into Hankook Tire?</li></ul>

Hankook Tire (“HKT”) is one of the few truly “global champion” companies in Korea, alongside Samsung Electronics and Hyundai Motors with strong brand positioning and market shares across the major developed markets.  Barriers to entry in the tire sector are brand, distribution, and technology. Over the past two decades, HKT has made significant progress across all three parameters, resulting in continuous market share gains.  HKT is currently #6/#7 (on par with Sumitomo Rubber), after Michelin, Bridgestone, Continental, Bridgestone and Pirelli and expects to increase its market share to #5 globally within the next few years. The company is positioned for solid growth with supportive industry demand backdrop along with a number of company specific catalysts.  Despite having industry leading margins, the company is trading at a P/B of just 1.4x, a 35% discount to its global peers and trades at 16% discount on a forward P/E basis.  The insight will be divided into the following sections:Why is it interesting?CatalystsValuation and risksHankook Tire Worldwide (KRX: 000240), a better play into Hankook Tire?

Hankook Tire: The Cheapest and Most Profitable Global Tire Company with Multiple Catalysts (Part 1)

Finland

Nokian Renkaat Oyj develops and manufactures premium tires for passenger cars and heavy machineries. The company primarily operates in the tire replacement market, and its products are sold in more than 60 countries worldwide. The Group also includes the Vianor chain, specialising in vehicle maintenance and tire services.

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Nokian Renkaat Oyj (TYRES FH)

Hankook Tire: The Cheapest and Most Profitable Global Tire Company with Multiple Catalysts (Part 1)

Hankook Tire (“HKT”) is one of the few truly “global champion” companies in Korea, alongside Samsung Electronics and Hyundai Motors with strong...

Julian Yoon

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)