2Q16 standalone operating profit of W33.8bn (+29.8% YoY) misses expectationsHyundai Home Shopping Network posted 2Q16 operating profit of W33.8bn, falling short of our estimate (W36.5bn) and the consensus (W35.1bn). Gross profit went up 8.2% YoY. Gross sales of the TV channel grew 7.5% YoY, the highest in the sector.Profits were weak due to one-off costs and conservative accounting treatment. Costs increased by about W2bn with events celebrating the company’s 15th anniversary. Transmission fees

On Aug 8, Standard & Poor’s (S&P) upgraded Korea’s sovereign credit rating by one notch from AA- to AA.We believe that this credit rating upgrade will positively impact the domestic bond market over the mid- to long run as it should help sustain foreign capital inflows and make it easier for Korea to adjust its monetary policy. Over the near term, however, due to the price burden, the bond market should remain range bound before gradually regaining strength. ▶Overview of credit rating upgradeS&P

[THE INVESTOR] Mergers and acquisitions in South Korea picked up this year, spurred by restructuring of industries and the government’s move to ease regulation. A total of 18 M&A deals worth 7.06 trillion won (US$6.45 billion) were struck by the country’s top 30 conglomerates this year as of July 31, up 66 percent from last year’s outstanding transaction amount of 4.27 trillion won, data showed on Aug. 10.After years in the doldrums, Asia’s fourth-largest economy’s M&A market reignited in 2014 a

[THE INVESTOR] Lotte Group, the country’s fifth-largest conglomerate, was the most aggressive in acqusitions in terms of transaction value over the past six years, data showed Aug. 10. The group signed a total of 28 acquisition deals worth 9.75 trillion won (US$8.87 billion) between 2010 and end-July, according to research firm CEO Score.The amount accounted for 20.8 percent of 46 trillion won, the outstanding transaction value reported by the nation’s top 30 business groups during the period. C

[THE INVESTOR] South Korean mobile payment provider Danal is set to boost its partnership with Bango, a US-based mobile payments firm, in a bid to strengthen their foothold in the global markets, the Seoul-based company said Aug. 9. Bango CEO and founder Ray AndersonRay Anderson, chief executive officer of Bango which provides tech to enable consumers to charge app store purchases directly to their phone bill, and other key officials will hold a meeting with counterparts at Danal on Aug. 11 duri

2Q16 OR reached KRW197.7bn (up 33.3%YoY) and OP KRW18.2bn (up 31.4%YoY, OP margin of 9.2%), which surpassed our OP estimate (KRW17.9bn).Domestic sales up 29.5%, China sales up 32.4%2Q16 domestic sales climbed 29.5%YoY, driven by: 1) increased new clients, such as Clio and Memebox and 2) growth in exports to global brands. Export margins are poised to ascend over the mid/long term, considering that: 1) the production of the same products for two to three years will likely lead to steady productio

[THE INVESTOR] Anbang Insurance Group’s plan to buy German insurer Allianz’s South Korean businesses is suffering a setback as China’s regulator put the brakes on aggressive overseas investment activities of one of the biggest corporate buyers in China.Beijing-based Anbang Insurance hasn’t sought an eligibility review from Korean financial authorities to become the largest shareholder of Allianz Life Insurance Korea since it signed the acquisition deal four month ago. Speculations are rampant th

[THE INVESTOR] S&P Global Ratings said on Aug. 9 it has raised the credit ratings for two state-run policy lenders, Korea Development Bank and Export-Import Bank of Korea, to “AA” from “AA-”. The global credit rating agency also upped its ratings on four financial public companies and five commercial banks by one notch. The upgrades reflects South Korea’s sovereign rating, which was upgraded from “AA-” to “AA” with a stable outlook on Aug. 8, the US-based agency said in a press release. Korea De

[THE INVESTOR] South Korean stocks rose to hit fresh yearly highs on Aug. 8 as foreigners and institutional investors increased their net buying.The benchmark KOSPI gained 0.65 percent to close at 2031.12 points, the highest since November in 2015 when the market ended at 2030.68. Foreign investors were net buyers of stocks worth 79.6 billion won (US$71.77 million).Naver's LINE IPO in New YorkNaver, the country’s biggest portal site operator, was the most popular option for offshore investors on

[THE INVESTOR] The momentum of South Korea’s benchmark KOSPI has decelerated after touching the psychologically important 2,000-point level last month but it has sufficient potential to move further up, a local brokerage firm said on Aug. 8. “The upward momentum slowed as expectations for monetary policy have weakened,” said Kim Young-hwan, an analyst at Shinhan Investment. The price movements on KOSPI have been stagnant with its daily volatility averaged at 2.14 percent, or 41 points, during th

[THE INVESTOR] LG Innotek, the components-making affiliate of South Korea’s LG Group, is likely to achieve improved earnings in the third quarter on brisk demand for dual cameras, a local securities firm said on Aug. 8. “Dual cameras will contribute the most to earnings improvement in the third quarter,” said Lee Soon-hak, an analyst at Hanwha Investment & Securities. LG Innotek will start to supply dual cameras to major smartphone camera module clients in Northern America during the July-Septem

Last Tuesday, Korea’s Financial Services Commission announced a plan to encourage the development of mega investment banks, defined as those with equity capital above KRW10 trillion, and expand the business scope of eligible securities companies. The plan is credit negative for securities companies because it will push them to deploy more capital into new businesses in which they have little or no previous experience, thereby jeopardizing their asset quality, liquidity and capital adequacy. The

[THE INVESTOR] Samsung Electronics Preferred shares of Samsung Electronics touched a new high on Aug. 8, propelled by improved earnings and treasury stock buyback. The shares retreated to 1,298,000 won (US$1,164.55) as of 10:30 a.m. after reaching an all-time high of 1,305,000 won, up 0.62 percent from the earlier session.  Samsung Galaxy Note 7.The share price has been moving up since the company reported an operating profit of 8.14 trillion won, up 18 percent on-year in the second quarter. The