[THE INVESTOR] South Korean mobile social casino game publisher ME2ON seeks to go public in October to raise some 30 billion won (US$26.8 million) for further expansion in the Asian and North American markets.On Aug. 19, the mobile game developer submitted an application to the Financial Services Commission for its listing on the tech-heavy KOSDAQ market. ME2ON will offer a total of 7,160,708 shares of common stock in an expected price range of 3,800 won to 4,300 won. The initial public offering

Last Thursday, amid scorching summer temperatures, Korea’s Ministry of Trade, Infrastructure and Energy (MOTIE) raised the electricity range that households can consume at given progressive rates by 50 kilowatts per hour (kWh) from July to September this year. The adjustment effectively reduces tariffs for Korea Electric Power Corporation (KEPCO, Aa2 stable), which will constrain the company’s operating profit growth and weaken its profit predictability, a credit negative.The higher limits under

[THE INVESTOR] Shares of Hyundai Rotem, South Korea’s leading railway vehicle-maker, are expected to move upward as its export order bookings pick up, according to a local brokerage house on Aug. 19. “Hyundai Rotem has won new orders worth 2.35 trillion won (US$2.1 billion) this year so far,” said Jung Dong-ik, an analyst at Hyundai Securities. Including small projects that were not publicly disclosed, the amount is likely to exceed 2.5 trillion won, he said. The latest deals it clinched include

[THE INVESTOR] Mirae Asset Global Investments is set to launch a 200 billion won (US$179 million) fund investing in office buildings in the US in September.The fund will be open to retail investors and backed by four State Farm office buildings in Dallas, Texas, which the asset manager plans to acquire next month.  State Farm office buildings in Dallas, TexasAccording to sources, Mirae Asset Global Investments recently signed a memorandum of understanding with Dallas-based KDC to buy the 211,200

[THE INVESTOR] Paradise Group, South Korea’s largest casino operator, has acquired Embassy Suites by Hilton Orlando Downtown in the US for US$353.5 million, the company announced Aug. 18. Clearwater-based Paradise America LLC, the group’s US unit, bought the 167-room, all-suite hotel in downtown Orlando, Florida, which opened in 2000.  Embassy Suites by Hilton Orlando DowntownThe purchase marks Korea-based Paradise Group’s first acquisition in the US.Embassy Suites is the only hotel property tha

[THE INVESTOR] NICE Investors Service cut the long-term credit rating of Daewoo Shipbuilding & Marine Engineering, citing the shipbuilder’s deteriorating financial structure and the growing uncertainty of business normalization. The South Korean credit rating agency revised the company’s rating to BB- from BB and put it on the review list for further possible downgrade. “The company’s financial stability indicators have been deeply exacerbated, including the occurrence of impairment in the secon

1) Investment highlights- 2Q16 output and sales narrowly beat our forecasts but lower-than-expected raw material costs combined with an improving product mix (e.g., robust sales of UHPT) drove operating profit much higher than the consensus and our estimates.- The domestic market remains sluggish, but in China, the pace of sales decline is slowing. Growth in European and North American sales are still upbeat. With the growth in demand slowing, price competition will likely continue for a bit lon

Backed by likely high earnings growth at its FuelCell division and reduced operating losses at its DFS business, operating profit at Doosan Corp’s inhouse domain is set to rise in 2H16. Moreover, the firm’s consolidated financial structure and shareholder value should also improve going forward.Currently trading at a 48% discount rate to NAV, we view Doosan Corp’s shares as offering valuation merit. In-house business earnings to be strong in 2H16We estimate that Doosan Corp’s operating profit wi

[THE INVESTOR] South Korean defense company LIG Nex1 plans to tap into Saudi Arabia in its broader expansion plan to the Middle East market. According to a source on Aug. 18, the weapon-maker has received board members’ approval to set up an operation in Saudi Arabia, the world’s largest weapons importer in 2015. This is the first time that the Korean firm establish a unit in the Middle East region. Currently, it has offices in the US, India, Indonesia and some Latin American countries. The deci

Affected by lackluster 2Q16 results, the domestic F&B industry index plunged on Aug 17. Having suffered from rising COGS-to-sales ratios in 1Q16, F&B players faced growing cost burdens in 2Q16 due to fiercer competition. With competition set to heat up further, and with F&B demand likely to remain lackluster, it is difficult to expect sector earnings momentum to pick up over the near term. Also worrisome, the sector’s valuations remain lofty. Finding the sector unappealing for the above reasons,

[THE INVESTOR] Chinese toy-maker Heng Sheng Holding Group ’s stock slumped on its first day of trading on South Korea’s secondary KOSDAQ market as a public company. The stock closed at 2,690 won (US$2.40) on Aug. 18, down nearly 17 percent from its opening price, which was already below the initial public offering price of 3,600 won.  Heng Sheng Holding Group’s Chairman Hui Man-Kit (third from left) poses with Korea Exchange officials. KRXSluggish demand from investors is a disappointing result

[THE INVESTOR] Hanwha Investment & Securities, South Korea’s mid-sized brokerage house, is considering an acquisition of a bigger peer, the CEO of the firm said Aug. 17. “Hanwha Investment is a small company which ranked No. 14 among local securities firms, but I think we can soon become a mega-sized brokerage,” Yeo Seung-Joo, who took office as CEO in February, said during a press conference held in Seoul. Hanwha Investment & Securities CEO Yeo Seung-Joo speaks during a press conference.He said

Declining production and weak profitability will reduce earnings. Our view that Asian steelmakers’ aggregate earnings will be lower in the next 12 months keeps the outlook negative. A continued decline in demand, driven by China, and increasing trade barriers around the world, which limit exports, will reduce steel production. And persistent overcapacity will keep steel prices and companies’ average profitability low.China drives demand weakness. We expect Asian steel demand will continue to dec

[THE INVESTOR] Six listed companies in South Korea have received disclaimers of opinion from external auditors in their semiannual report. The independent external auditor of STX Heavy Industries gave the alarming opinion of financially trouble as its balance sheet and income statement in the January-June period include uncertainties as the company has gone into court receivership. Two other KOSPI-listed firms -- Hyundai Paint and Korea Steel Shapes -- were issued the same audit report as their

[THE INVESTOR] Shares in Orion, South Korea’s leading confectionery firm, dropped to its lowest level in three years on Aug. 17, as the company’s latest results missed market estimates by a large margin. Second-quarter sales and profit fell far short of estimates as the company has struggled in the Chinese market due to soaring marketing costs in the face of growing competition from local rivals.Orion shares traded at 763,000 won (US$693.20), down 15.6 percent as of 11:30 a.m.“Sales in both Kore

[THE INVESTOR] Jeju Air, South Korea‘s largest low-cost carrier, plans to enter the hotel business and buy its own aircrafts in a search of a new revenue stream amid fierce competition among local budget airlines. The carrier will commit 60 billion won (US$54.9 million) to build a 17-story hotel near Hongik University in Seoul, a popular destination among young people and tourists, the company said in a regulatory filing. Marking a foray into the new business aims at attracting more inbound tour

2Q16 review: Earnings well above expectationsFor 2Q16, NCSOFT reported earnings well above our estimates and the market consensus. The latest results once again confirmed the stable earnings potential of the company’s existing titles, including Lineage I and Blade & Soul. 2Q16 revenue and operating profit expanded 10.6% and 28.4% YoY to W240.5bn and W86.1bn, respectively.By title, revenue from Lineage I grew to W94.4bn (+10.5% YoY, 19.8% QoQ) thanks to a microtransaction event. Despite concerns,

We expect the BOK to cut the base rate again in October, given: 1) the likelihood of continued won strengthening (attributable to global monetary easing); and 2) significant economic downward risk. Under the circumstances (and until the next rate cut), we recommend expanding duration upon yield hikes. ▶BOK leaves base rate frozen for second consecutive monthAt the August Monetary Policy Committee (MPC) meeting, members unanimously decided to leave the base rate unchanged. We believe that the Ban

[THE INVESTOR] Korea Gas Corporation, the nation’s public natural gas company, is liable to pay over 100 billion won (US$91.6 million) in extra taxes following extensive investigation by the tax agency.The National Tax Service charged 124.9 billion won to the state-run energy company in the form of corporate and individual consumption taxes due to failed tax payments on some of its gas product sales.  Kogas headquarters.Tax authorities began investigating Korea Gas Corporation‘s accounting pract

[THE INVESTOR] Doosan Bobcat, the South Korean firm that controls U.S. construction machinery-maker Bobcat, received preliminary exchange approval to float its shares on the main KOSPI market, Korea Exchange announced Aug. 16. With the bourse operator’s green light, the company will proceed with one of this year’s largest initial public offerings, along with those of Samsung BioLogics and Netmarble Games, which are also seeking KOSPI listings in the second half of 2016. Doosan Infracore and Doos