In-Depth Analysis of South Korea’s Retail Trends and Key Company Performances

Date: November 15, 2024

Broker Name: CGS International

Introduction

This comprehensive report delves into the current retail market trends in South Korea, providing an insightful analysis of key companies and their financial performances. The analysis covers Hanwha Ocean Co Ltd, Riverstone Holdings, Luzhou Laojiao, China Sunsine Chemical Holdings, and Thai Oil. Each company is evaluated based on recent financial results, market conditions, and future prospects.

Hanwha Ocean Co Ltd (042660) – A Technical Resurgence

Hanwha Ocean Co Ltd is making waves in the shipbuilding and offshore industry, showing a promising technical buy signal. With a last price of 39,200 KRW, the company has broken out of a weak resistance turned support, signaling a bullish continuation. Key technical indicators suggest a strong upward trend:

• The stock has broken out of a larger symmetrical triangle formation, a key sign of bullish continuation.
• A bullish breakout of the weakened resistance turned support at 35,300 KRW, confirmed by a bullish engulfing rebound.
• Ichimoku indicates a strong bullish signal, with MACD histogram turning positive.
• The stochastic oscillator confirms an oversold crossover, while the 23-period ROC rose above the zero line.
• Volume increased on breakout, confirming bullish pressure.

The target prices are set at 51,400 KRW, 59,600 KRW, 67,000 KRW, and 78,100 KRW. The recommendation by the analyst is a strong buy, expecting further bullish movement.

Riverstone Holdings: Better Prospects on the Horizon

Riverstone Holdings reports a robust 3Q24 net profit of RM72 million, slightly down by 0.5% quarter-on-quarter but up 22% year-on-year. This performance surpassed expectations due to strong volume growth offsetting FX-driven margin pressure. The impending US tariff hike on Chinese gloves is expected to boost Riverstone’s generic gloves sales in FY25F, with dissipating FX risks following the Trump win. The recommendation is upgraded to ‘Add’ with a target price raised to S\$1.10, and a forecasted year-end special dividend yield of 9.3% for FY24F.

Luzhou Laojiao: Awaiting Baijiu Demand Recovery

Luzhou Laojiao is in a holding pattern, awaiting signs of a recovery in baijiu demand. The company has not reported significant changes or updates in this report, focusing on monitoring market dynamics and consumer behavior.

China Sunsine Chemical Holdings: Expecting Firm Profit Spreads

China Sunsine Chemical Holdings is poised for strong profit spreads in 4Q24F. The company is well-positioned to leverage its market strengths, although specific financial details and forecasts are not disclosed in this segment.

Thai Oil: Navigating Unsettled Conditions

Thai Oil is in a state of flux, with the dust not yet settled at its Clean Fuel Project (CFP). The report does not provide detailed financial data but highlights the ongoing challenges and the need for strategic adjustments to navigate current market conditions.

Conclusion

This report provides a detailed snapshot of key South Korean companies and their market positions. Each company offers unique challenges and opportunities, with Hanwha Ocean Co Ltd standing out with a strong technical buy signal. Investors are encouraged to consider these insights and analyze their investment strategies accordingly.