This South Korean bank is a powerhouse, but its shares are trading at just a bit more than 11 times earnings.
Shinhan Financial Group (SHG)
from Capitalist Times
Shinhan Financial Group (SHG) became one of South Korea’s four largest financial institutions after acquiring Choheung Bank in 2003 and LG Card in 2007.
With a foothold in every important product category and long track record of effective risk management, Shinhan Financial Group should be able to take advantage of increasing loan demand from corporate and retail customers.
Five of the 12 directors on Shinhan Financial Group’s board represent the shareholder base. The company has a long history of investor-friendly policies—especially relative to other South Korean companies.
The financial institution expects to deliver a return on equity of about 8% each year, compared to between 5 and 6% for its rivals.
For these reasons, Shinhan Financial Group’s stock trades at about 0.8 times its estimated book value, compared to an industry average of about 0.5 times.
Shares of Shinhan Financial Group could enjoy further multiple expansion as South Korea’s economy continues to recover; the company’s ADR rates a buy up to US$50.00.
Elliott Gue & Roger Conrad, Capitalist Times, www.capitalisttimes.com, 888-960-2759, July 2, 2014