20170329-三星证券-Samsung_Model_Portfolio__Tailored_to_ongoing_bull_market_35页_1mb

Samsung Model Portfolio Summary

Core Content

The Samsung Model Portfolio is designed to perform well in an ongoing bull market. The report outlines the portfolio's performance against the Kospi index and provides an April outlook, portfolio changes, and sector-specific details.

Main Points

Performance Review (March 2017)

• Samsung Model Portfolio gained 2.92% in the last month, 10.70% in the last three months, 7.91% in the last six months, and 14.53% over the last twelve months.
• Kospi gained 2.64% in the last month, 9.07% in the last three months, 6.44% in the last six months, and 12.87% over the last twelve months.
• The Relative Performance of the Samsung Model Portfolio compared to the Kospi was 0.28% in the last month, 1.63% in the last three months, 1.47% in the last six months, and 1.66% over the last twelve months.

April Outlook

• Consensus forecasts predict a 20.5% year-over-year increase in MSCI Korea's operating profit for 1Q17, which is higher than the initial estimate of 16%.
• The pace of earnings improvements has accelerated compared to the previous quarters.
• The Kospi's P/E ratio is undemanding, trading near the 10-year average, and its P/B ratio is within one standard deviation of the mean.
• A near-term technical correction is expected, but the medium-term trend is upward.
• Investors are advised to increase exposure to IT, materials, industrial goods, and financials sectors during any correction.
• The Kospi target range for April is set at 2,120-2,250.

Key Portfolio Changes

• Portfolio Overview: The portfolio remains largely unchanged, with a slight reduction in beta to 1.07 from 1.09 in March.
• Sector Adjustments:
  • Increased Exposure: IT (from 30% to 31%), materials (from 9% to 11%), and utilities (from 3% to 4%).
  • Decreased Exposure: Consumer discretionary (from 16% to 15%), consumer staples (from 6% to 5%), and industrial goods (from 16% to 14%).
• Added Companies: LG Corp, CJ O Shopping, Samsung Life, KCC, and GS E&C.
• Removed Companies: KAI, Hyundai Dev Co, SK Corp, Pan Ocean, Emerson Pacific, Lotte Shopping, and Samsung F&M.

Portfolio Weightings by Sector

Active Risk and Sector Performance

• The active risk of the portfolio in April is outlined in the provided chart (not included here).
• The IT, materials, and utilities sectors are highlighted for increased exposure.
• Consumer discretionary, consumer staples, and industrial goods are reduced in exposure.

Portfolio Changes Table

Key Sectors and Companies

• IT: Samsung Electronics (SEC) is a key player with a weighting of 22%, and the sector is slightly underweighted in the portfolio.
• Materials: LG Chem and KCC are added, with LG Chem having a 5% weighting and KCC a 2% weighting.
• Utilities: Kepco is included with a 4% weighting.
• Financials: Samsung Life Insurance is added with a 3% weighting.
• Consumer Discretionary: Hyundai Motor is included with a 5% weighting.
• Consumer Staples: Cosmax is reduced to 2% weighting.
• Industrial Goods: Hyundai Heavy Industries is included with a 5% weighting.
• Healthcare: The sector is weighted at 3%, with no significant changes.
• Energy: SK Innovation is included with a 3% weighting.

Conclusion

The Samsung Model Portfolio is positioned for continued growth in the ongoing bull market, with a focus on cyclicals and a slight reduction in beta to account for potential near-term corrections. The portfolio emphasizes IT, materials, and utilities while reducing exposure to consumer discretionary, consumer staples, and industrial goods. The overall strategy is to capitalize on earnings improvements and sector rotation, with a recommendation to increase exposure to high-beta stocks and traditional defensive stocks during any market correction.