Shinyoung Korea Pre-Market Highlights 2008 04 28

[don4158]

** 1Q08 EARNINGS TODAY: Cheil Ind (001300), CJ Internet (037150), Doosan C&E
(011160), Hanaro Telecom (033630), Hyundai Dev (012630), Hyundai Stl
(004020), LG Life Sciences (068870)

OVERNIGHT NEWSFLOW

* HANWHA GROUP: Hanwha Chem & Hanwha Corp fell ~15% on Friday due to Hanwha Chem's W452.5bn rights issue shock. The co saying purpose is for
miscellaneous funding need.
Market speculating M&A purpose (DSME etc).
* LGE (066570) To supply 30k flat-screen monitors to BMW, its largest BtoB
deal in LCDs. Also became 4th largest handset maker during Q1 and aims to
supplant Motorola for #3 in 2H.
* SK TEL (017670) Will spend add'l W230bn on Hanarotel's BcN network
enhancement targeting rural areas. SKT to spend W80bn/yr from '08~'12.
* SK ENERGY (096770) Plans to shut 2 crude processing units in Incheon in
June for routine maintenance.
* HYUNDAI E&C (000720) Already secured 40% of its 2008 o'seas order target
($4.7bn, which is 16% higher than last year's amt). Hyundai is focussing on
the Middle East and oil/gas-related industries.
Also led Grand C**** Consortium (made up of top 5 construction cos) to
delay submitting feasibility/business plan to June from initially planned
May (due to skepticism as the plan is losing popularity)
* CJCJ (097950) To raise the price of flour by 15~26% from today due to the
rising cost of wheat. This is CJ's 2nd price hike in 4 months.
* FIRST FIRE MARINE (000610) Hanjin Group Chairman Cho Yang-Ho said he would not get involved in the M&A struggle b/t his younger brother's group
(Meritz) and First Fire.)
* EAGON IND (008250): Merging w/ sub Eagon Living (unlisted). 1.94 shrs of
Eagon Ind for every 1 shr of Living. Merger date: July 14, 2008.
* KEONGNAM ENT (000800) $120mn contract to build nickel process mill at
Ambatobi Nickel Mine in Madacasgar. To process 60k ton/yr (nickel) and 5k
ton/yr (cobalt) by 2010.
* HYUNDAI MOBIS (012330) Won a new order worth US$40m to a Chinese Car
Seller (Chyang Sya Jung Taigicha).
* DONGBU STEEL (016380) Announced yet another price hike of
W30,000-170,000/ton from May 1 shipment.
* FUNDS FLOW: Equity funds W138.3tn -W57.1bn, Customer deposit W11.2tn
+W121.8bn, Margin balance W3.6tn +W45.6bn.

LATEST RESEARCH

Mirae Asset (037620 KS): Raise TP to W190K on solid business model
- Mirae Asset has established overseas asset management arms at key
locations such as Singapore, India, London, Vietnam and Hong Kong, and plans
to open ones in Brazil and the US. We expect Mirae Asset Securities to accompany the asset manager's overseas expansion, enjoying capitve commision income.
- The company will likely retain its competitive edge in fund sales,
capitalizing its captive relationship (Mirae Asset's market share was 17.4%
as of Mar 2008). Given the steady growth in Korean fund market, it should continue to register solid growth.

Retail: Domestic demand to slow in 2H, present HDS as top pick
- We expect 2H08 domestic consumption to slow down slightly due to
inflationary pressure. We believe Dept stores will likely be least affected
by such negative turns in domestic demand.
- Hyundai Department Store (HDS) is likely to post 3% and 13% YoY growth in
1Q08F net sales and OP. It is relatively well protected from macro variables
as a high-end retailer. Recently finished store revamp should also help. Top pick with W140,000 TP.
- Lotte Department Store posted a strong 11% and 12% YoY growth in 1Q08 net sales and OP, driven by sales improvements in Lotte Mart.
But uncertain outlook for the later half of 2008 and prospect of earnings
growth slowdown on new branch launches bring us to maintain Neutral on the
stock.