20160504-三星证券-Consumer_finance__New_businesses_to_dictate_growth_26页_1mb

报告摘要

Sector Update Summary

Core Content

This document provides an analysis of the financial performance and market trends of three consumer finance companies—KB Capital, Aju Capital, and Nice Information Service—in the context of the Korean financial sector, with a particular focus on the auto financing market and new growth opportunities in durable goods and big data-driven services.

Main Points

2015 Earnings Growth: All three companies experienced significant earnings improvements in 2015, with an average increase of 56.7% year-over-year. KB Capital's net profit rose 93.3% to KRW63.1b, Aju Capital's increased by 40% to KRW51b, and Nice's by 24.8% to KRW22.3b.
Auto Financing Market: The auto financing market is growing rapidly, but only captive or semi-captive finance firms of automotive groups are expected to benefit. This is due to the aggressive expansion strategies of large captive firms, which are sacrificing margins to gain market share. Hyundai Capital, a leading captive firm, controls 65–70% of new car financing for Hyundai Motor and Kia Motors, which together dominate the domestic new car market.
Non-Captive Firms: Non-captive players are losing ground in the auto financing market. They are not able to compete effectively with the captive firms, which have advantages in terms of support and compensation from automakers.
New Growth Engines: Companies are exploring new areas for growth, such as services for costly durable goods and the use of big data on existing customers. Strategic partnerships are helping finance firms expand into these markets.
Mid-Rate Lending Market: The mid-rate lending market is seen as a potential blue ocean for Korean lenders. Financial institutions are entering this market to address the polarization between commercial banks and non-banking institutions. The government is also pushing for more balanced lending practices.
Structural Changes: The analysis suggests that investors should focus on medium- to long-term structural changes rather than short-term earnings momentum. The domestic economy is slowly recovering, and the launch of Internet-primary banks is delayed, which affects the short-term outlook.

Key Information

KB Capital

Net Profit: Rose 93.3% to KRW63.1b in 2015.
ROA and ROE: Increased to 1.3% and 12.5%, respectively.
Asset Growth: Assets grew by 38.1% in 2015, driven by synergies with KB Financial Group.
Strategic Partnerships: Collaborated with SK Planet to expand its durable goods financing business, leveraging Syrup wallet users.
Market Share: Increased from 7.5% in 1Q15 to 9.6% in 4Q15 in auto financing.

Aju Capital

Net Profit: Grew by 40% to KRW51b in 2015.
ROA and ROE: Increased to 1.3% and 12.5%, respectively.
Asset Growth: Assets totaled KRW7t at the end of 2015, up 10% year-over-year.
Credit Costs: Stabilized at 1.97% in 2015, down from 2.91% in 2014.
G&A Costs: Remained stable at around 2%.

Nice Information Service

Net Profit: Rose by 24.8% to KRW22.3b in 2015.
ROA and ROE: Increased to 12.4% and 17.7%, respectively.
CB Business Growth: The credit bureau business was a key driver of growth, with sales increasing by 24.9% to KRW224.5b.
SG&A Costs: Increased sharply, but most of the increase was attributed to fee costs for growth.
Market Position: Better positioned to leverage structural changes in the industry.

Strategic Insights

Focus on Structural Changes: The report advises investors to focus on structural changes in the industry rather than short-term earnings.
Big Data and Durable Goods: The use of big data and expansion into services for costly durable goods are highlighted as potential new growth engines.
Internet-Primary Banks: The delayed launch of these banks is expected to impact the short-term outlook for the sector.
Market Concentration: The auto financing market is highly concentrated, with captive and semi-captive firms gaining the most from growth.

Summary of Market Trends

Auto Financing: The market continues to grow, but only captive or semi-captive firms benefit.
Used Car Market: Stagnant due to low consumer confidence and dominance by existing players.
Mid-Rate Lending: A growing opportunity for financial institutions, with government support and the introduction of guarantee insurance.
Strategic Partnerships: Essential for expanding into new markets and leveraging customer data for growth.

Key Recommendations

Invest in KB Capital and Nice: These firms are better positioned to leverage structural changes in the industry.
Monitor Earnings Trends: While short-term earnings momentum is important, long-term structural shifts should be the focus.
Watch for New Growth Areas: Durable goods financing and mid-rate lending are potential growth areas for consumer finance companies.

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