Leading Independent Investment Research, Morningstar, Inc.

Morningstar

Leading Independent Investment Research

Morningstar, Inc.

Morningstar, Inc. is a leading provider of independent investment research in North America, Europe, Australia, and Asia. We offer an extensive line of products and services for individual investors, financial advisors, asset managers, and retirement plan providers and sponsors. 

Morningstar provides data on more than 500,000 investment offerings, including stocks, mutual funds, and similar vehicles, along with real-time global market data on more than 16 million equities, indexes, futures, options, commodities, and precious metals, in addition to foreign exchange and Treasury markets. Morningstar also offers investment management services through its investment advisory subsidiaries, with more than $180 billion in assets under advisement or management as of June 30, 2015. We have operations in 27 countries.

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Equity Bottom-Up

Loen, the operator of the largest music streaming platform, MelOn, in South Korea, has been benefiting from the music industry shift to digital music distribution. Leveraging its strategic partnership with <a href="https://www.smartkarma.com/entities/395" target="_blank" data-smartkarma-citation="entities:395:1">SK Telecom (017670 KS)</a>, the largest telecom carrier, MelOn, has seen steady growth of paying users by about 15% per year from 2012 to 2016. We believe that its subscribers will continue to increase with <a href="https://www.smartkarma.com/entities/15002" target="_blank" data-smartkarma-citation="entities:15002:1">Kakao Corp (035720 KS)</a> becoming its largest shareholder in 2016, while SK Telecom has maintained its partnership. Kakao is the operator of Kakao Talk, the largest mobile messaging platform in South Korea. Through connecting with Kakao’s platforms, Kakao/MelOn users can enjoy more social networking experiences, and the chance of cross-selling can be increased at both platforms.We are initiating coverage of Loen with a fair value estimate of KRW 89,000 per share and a high uncertainty rating. We assign narrow moat and stable moat trend ratings to this firm, mainly owing to intangible assets and network effect. We believe that it will further expand its user base and strengthen its social networking features after Kakao’s acquisition in Mar 2016. However, we think that investors should wait for a better margin of safety to invest in this stock, and the price hike impact of its MelOn services in 2017 has been embedded in the current market price.Analyst: Marie Sun

Loen, the operator of the largest music streaming platform, MelOn, in South Korea, has been benefiting from the music industry shift to digital music distribution. Leveraging its strategic partnership with SK Telecom (017670 KS), the largest telecom carrier, MelOn, has seen steady growth of paying users by about 15% per year from 2012 to 2016. We believe that its subscribers will continue to increase with Kakao Corp (035720 KS) becoming its largest shareholder in 2016, while SK Telecom has maintained its partnership. Kakao is the operator of Kakao Talk, the largest mobile messaging platform in South Korea. Through connecting with Kakao’s platforms, Kakao/MelOn users can enjoy more social networking experiences, and the chance of cross-selling can be increased at both platforms.We are initiating coverage of Loen with a fair value estimate of KRW 89,000 per share and a high uncertainty rating. We assign narrow moat and stable moat trend ratings to this firm, mainly owing to intangible assets and network effect. We believe that it will further expand its user base and strengthen its social networking features after Kakao’s acquisition in Mar 2016. However, we think that investors should wait for a better margin of safety to invest in this stock, and the price hike impact of its MelOn services in 2017 has been embedded in the current market price.Analyst: Marie Sun

Narrow-Moat Loen's 2017 Earnings Will Benefit from Significant Price Hike, but Shares Fairly Valued

Loen Entertainment

Narrow-Moat Loen's 2017 Earnings Will Benefit from Significant Price Hike, but Shares Fairly Valued