20171103-三星证券-Morning_Meeting_Daily_16页_3mb

Document Summary

Core Content Overview

This document provides a comprehensive analysis of the Korean financial markets and specific company updates from Samsung Securities, dated 2017.11.2 and 2017.11.3. It includes market indicators, economic forecasts, trading data, and insights into various industries and firms, such as Hyundai Mobis, KT, and Meritz Securities.

Market Indicators

Global Indices

• Dow Jones: 23,435 (up 0.2% in 1 day, up 0.5% in 1 week)
• Nasdaq: 6,717 (down 0.2% in 1 day, up 2.3% in 1 week)
• S&P 500: 2,579 (up 0.2% in 1 day, up 0.9% in 1 week)
• Nikkei 225: 22,539 (up 0.5% in 1 day, up 3.7% in 1 week)
• Hong Kong Hang Seng: 28,548 (down 0.2% in 1 day, up 1.2% in 1 week)
• Hong Kong H: 11,619 (down 0.1% in 1 day, up 1.5% in 1 week)
• UK FTSE 100: 7,488 (down 0.1% in 1 day, up 0.5% in 1 week)
• Germany DAX: 13,466 (up 1.8% in 1 day, up 4.0% in 1 week)
• France CAC 40: 5,514 (up 0.2% in 1 day, up 2.6% in 1 week)

KRX Indices

• Kospi: 2,546 (down 0.4% in 1 day, up 2.6% in 1 week)
• Kospi 200: 338 (down 0.4% in 1 day, up 3.2% in 1 week)
• Kosdaq: 695 (down 0.1% in 1 day, up 2.1% in 1 week)
• Chemicals: 6,077 (up 0.4% in 1 day, up 0.8% in 1 week)
• Iron & Metal Products: 5,272 (flat in 1 day, flat in 1 week)
• Distribution: 461 (down 0.9% in 1 day, up 0.2% in 1 week)
• Food & Beverage: 4,310 (down 1.4% in 1 day, down 1.3% in 1 week)
• Transport Equipment: 1,785 (down 0.2% in 1 day, up 2.2% in 1 week)
• Transport & Storage: 1,510 (up 0.2% in 1 day, up 0.3% in 1 week)
• Electrical & Electronic Equip: 20,585 (down 0.6% in 1 day, up 7.8% in 1 week)
• Banks: 323 (down 1.2% in 1 day, down 2.8% in 1 week)
• Securities: 2,000 (down 2.0% in 1 day, up 1.3% in 1 week)
• Communication: 370 (up 0.8% in 1 day, up 0.5% in 1 week)
• Electricity & Gas: 1,163 (down 0.2% in 1 day, down 1.9% in 1 week)

Interest Rates

• 3-month CD: 1.40% (flat in 1 day, up 1.38% in 1 week)
• 3-year corporate bond: 2.69% (down 0.02% in 1 day, down 0.04% in 1 week)
• Call: 1.24% (down 0.02% in 1 day, flat in 1 week)
• KRW/USD: 1,117 (down 0.4% in 1 day, down 1.3% in 1 week)
• Yen/USD: 114 (flat in 1 day, flat in 1 week)
• Korea CDS Spread: 70 bps (down 2 bps in 1 day, down 1 bps in 1 week)

Fund Flow

• Kospi:
  • Foreign: (1) (down 0.4% in 1 day, up 419 in 1 week)
  • Domestic: (195) (down 114 in 1 day, down 396 in 1 week)
  • Retail: 155 (up 230 in 1 day, down 25 in 1 week)
• Kosdaq:
  • Foreign: (15) (up 41 in 1 day, up 40 in 1 week)
  • Domestic: (36) (down 6 in 1 day, up 11 in 1 week)
  • Retail: 55 (up 47 in 1 day, up 16 in 1 week)

Economic Forecasts (Korea)

• GDP Growth:
  • 2015: 2.6%
  • 2016E: 2.7%
  • 2017E: 2.6%
• Unemployment Rate:
  • 2015: 3.6%
  • 2016E: 3.8%
  • 2017E: 3.9%
• CPI Growth:
  • 2015: 0.7%
  • 2016E: 1%
  • 2017E: 2%
• KRW/USD Year-End Rate: 1,172 (2015), 1,170 (2016E), 1,250 (2017E)
• 3-year KTB Yield:
  • 2015: 1.7%
  • 2016E: 1.3%
  • 2017E: 1.5%

Trading Data

• KOSPI:
  • Trading Value: 6.3 KRWt
  • Market Cap: 1,658.4 KRWt
  • Customer Deposits: 252.2 KRWb (as of Nov 1)
  • Long Arbitrage Balance: 0.0 KRWb
  • Trading Volume: 527.7 mil shares
• KOSDAQ:
  • Trading Value: 4.3 KRWt
  • Market Cap: 240.3 KRWt
  • Trading Volume: 608.9 mil shares

Key Industry & Company Updates

Autos (NEUTRAL)

• Hyundai Motor (005380 KS):
  • Global shipments in October fell 4.3% y-y to 394,000 vehicles.
  • Domestic sales rose 12.3% y-y to 53,000 vehicles.
  • US retail sales dropped 15.2% y-y to 53,000 vehicles.
  • Sales of Grandeur IG, Kona, and G70 helped offset market contraction.
  • Expectations for sustained domestic sales recovery in 1Q18.

Hyundai Mobis (012330)

• Recommendation: BUY
• Target Price: KRW300,000 (13.2%)
• 3Q Results:
  • Sales: KRW8.77t (down 0.1% y-y, up 5.9% q-q)
  • Operating Profit: KRW544.4b (down 24.6% y-y, up 10.6% q-q)
  • Margin: 6.2%
• Module Division:
  • Sales: KRW6.98t (up 4.9% q-q, down 2.1% y-y)
  • Operating Profit: KRW93.2b (up 11.2% q-q, down 73% y-y)
  • Margin: 1.3%
• Aftermarket Parts Division:
  • Sales: KRW1.78t (up 10.1% q-q, up 9% y-y)
  • Operating Profit: KRW451.2b (up 10.4% q-q, up 19.9% y-y)
  • Margin: 25.2%
• Valuation:
  • P/E: 10.4 (2017E), 8.8 (2018E)
  • EV/EBITDA: 5.9 (2017E), 4.9 (2018E)
  • EPS Growth: -18.2% (2017E), 18.3% (2018E)
  • ROE: 8.4% (2017E), 9.2% (2018E)

KT (030200)

• Recommendation: BUY
• Target Price: KRW38,000 (29.5%)
• 3Q Results:
  • Sales: KRW5,827b (up 5.4% y-y, up 1.2% q-q)
  • Operating Profit: KRW377b (down 6.1% y-y, down 15.7% q-q)
  • Net Profit: KRW203b (down 13.6% y-y, down 21.5% q-q)
• Dividend Policy:
  • 2017 DPS: KRW1,000
  • Dividend Yield: 3.4% (2017E), 3.7% (2018E)
• Valuation:
  • P/E: 11.0 (2017E), 9.4 (2018E)
  • EV/EBITDA: 2.6 (2017E), 2.5 (2018E)
  • EPS Growth: -1.6% (2017E), 16.7% (2018E)
  • ROE: 6.0% (2017E), 6.7% (2018E)

Meritz Securities (008560)

• Recommendation: BUY
• Target Price: KRW6,300 (41.4%)
• 3Q Results:
  • Operating Profit: KRW114.3b (down 8.6% q-q, down 8.5% y-y)
  • Net Profit: KRW88.4b (down 8.5% q-q, down 15% y-y)
• Valuation:
  • P/E: 7.7 (2017E), 6.4 (2018E)
  • EPS Growth: -8.0% (2017E), 0.1% (2018E)
  • ROE: 6.0% (2017E), 6.7% (2018E)

Kosdaq 150 Reconstitution

• Date: Dec 15, 2017
• Stocks to be Replaced: ~13 stocks
• Market Cap Impact:
  • Additions: KRW16.5t (includes large caps like Celltrion Healthcare)
  • Deletions: KRW2.5t
• Healthcare Sector:
  • Number of stocks: 43
  • Market Cap Share: 52%
• Liquidity and Volatility:
  • Passive funds tracking the index: ~KRW800b
  • ~11% of funds' portfolios will be rebalanced
  • Illiquid stocks may see significant price volatility

Upcoming Events

Conferences

• Samsung Group Co-Day: Nov 1-3
• Mini Co-Day (Isu Abxis & Mezzion): Nov 6-7 (Hong Kong)
• ING Life Insurance - US: Oct 30-Nov 3
• SK Chemicals - Asia (Singapore/Hong Kong): Nov 27-Nov 30
• SKC Kolon PI - Asia (Singapore/Hong Kong): Nov 27-Dec 1

Summary of Key Points

• Market Performance:

  • Global and Korean indices show mixed performance with some up and some down.
  • Export growth remains strong, despite a slower pace in October due to fewer business days.

• Economic Outlook:

  • CPI growth is expected to reach 2.0% in 2017 and 2018.
  • The Bank of Korea is expected to raise policy rates in November and twice in 2018.

• Company Highlights:

  • Hyundai Mobis is recommended as a BUY with strong aftermarket performance.
  • KT is also a BUY, with potential for long-term growth despite slight misses in Q3.
  • Meritz Securities remains a BUY due to its strong shareholder returns and valuation.

• Kosdaq 150 Reconstitution:

  • Expected to increase the index's free-floating market cap by ~10%.
  • Healthcare sector will see increased weight in the index.

• Investor Sentiment:

  • Fund flows indicate mixed activity across sectors.
  • Volatility may increase around the reconstitution date.

• Future Outlook:

  • Continued export momentum and manufacturing recovery are expected.
  • Regulatory and market risks are monitored, especially for KT and Meritz Securities.