Korea Discovery Forum
HSBC’s Sixth Annual Korea Discovery Forum 17 June – Hong Kong 18 June – Singapore 15 leading companies participating HSBC is pleased to invite you to the Sixth Annual Korea Discovery Forum to be held in Hong Kong on Wednesday, 17 June 2015, and Singapore on Thursday, 18 June 2015. During the two days, you will have the opportunity to meet with analysts and portfolio managers from large institutional fund managers and hedge funds. The format of the event will be one-on-one and small group meetings. We look forward to your participation. Equities Korea Korea Discovery Forum 16 June 2015 Brian Cho* Head of Research, Korea The Hongkong and Shanghai Banking Corporation Limited, Seoul Securities Branch +822 3706 8750 briancho@kr.hsbc.com Korea Research Team* View HSBC Global Research at: http://www.research.hsbc.com *Employed by a non-US affiliate of HSBC Securities (USA) Inc, and is not registered/qualified pursuant to FINRA regulations Issuer of report: The Hongkong and Shanghai Banking Corporation Limited, Seoul Securities Branch Disclaimer & Disclosures This report must be read with the disclosures and the analyst certifications in the Disclosure appendix, and with the Disclaimer, which forms part of it 2 Equities Korea 16 June 2015 abc Companies 3 ASTK, 067390 KQ, Not Rated 4 Binex, 053030 KQ, Not Rated 5 CJ Cheil Jedang, 097950 KS, Buy 6 CJ Korea Express, 000120 KS, Not Rated 8 Daelim Industrial, 000210 KS, Buy 9 Duksan Hi-Metal, 077360 KQ, Not Rated 11 Hyundai Development, 012630 KS, Buy 12 KCP, 060250 KQ, Not Rated 14 Korea Fuel-Tech, 123410 KS, Not Rated 15 LabGenomics, 084650 KQ, Not Rated 16 LIG Insurance, 002550 KS, Buy 17 Lutronic, 085370 KQ, Not Rated 19 Medipost, 078160 KQ, Not Rated 20 SFA Engineering, 056190 KQ, Buy 21 SK Networks, 001740 KS, Not Rated 23 Disclosure appendix 24 Disclaimer 27 Contents 3 Equities Korea 16 June 2015 abc Companies 4 Equities Korea 16 June 2015 abcASTK, 067390 KQ, Not Rated Brian Cho* 10-June price (KRW) 26,050 Index KOSDAQAnalyst Reuters code 067390.KQThe Hongkong and Shanghai Banking Corporation Limited, Seoul Securities Branch Market cap (USDm) Free float (%) 32481+822 3706 8750 briancho@kr.hsbc.com Performance (%) 1M3M12M Absolute13.582.2NA Relative 8.166.7NA *Employed by a non-US affiliate of HSBC Securities (USA) Inc, and is not registered/qualified pursuant to FINRA regulations. Source: Thomson Reuters Datastream, Bloomberg, HSBC Business description AeroSpace Technology of Korea (ASTK) makes key sections for commercial airplanes. The company went public at the end of 2014. The company makes and exports bulkheads, mostly for Boeing. It also has plans to expand into producing doors for cargo planes and parts for jet fighters. Key points ASTK is a supplier of airplane parts and fuselage total solutions. ASTK specialises in the production of B737 aircraft fuselage components. B737 is Boeing’s flagship small- and medium-size aircraft. ASTK supplies stringer (exclusive supplier), bulkhead (exclusive supplier), and section 48 (exclusive supplier) for B737 aircraft, which accounted for 70.5% of the company’s total order backlog. ASTK’s sales breakdown as of end-2014: bulkhead – 23.2%, section 48 – 27.8%, U/L Deck – 7.3%, stringer – 9.3% and others (skin, door, APU door, section 48 Aft body) – 32.4%. ASTK is expected to benefit as there has been a significant increase in demand for B737 aircraft due to the growth of low-cost carriers (LCC). ASTK is planning to expand into the military aircraft market, which is growing, according to the company’s IR report. Financial forecasts (KRWbn) YE December 2014a 2015e 2016e 2017eKey ratios 2014a 2015e 2016e2017eRevenue 66.6 85.0 105.6 140.2ROE (%) -21.8 6.6 18.223.5EBITDA 1.7
