KB Securities Strengthens Japanese Stock Analysis... Research Headquarters Organizational Restructuring

Reorganization of the Shinhung Market Team into the Asia Market Team
Plans to Provide Various Emerging Market Analyses

KB Securities announced on the 4th that it will expand its analysis of Japanese stocks through the reorganization of its Research Division and the redistribution of tasks.

On the 1st, KB Securities' Research Division reorganized the Emerging Markets Team within the Asset Allocation Strategy Department into the Asia Markets Team. Alongside the Global Stocks Team and the Overseas Stocks Portfolio Team, the Asia Markets Team plans to present investment ideas on the Japanese market and stocks, while also increasing the focus on major emerging markets in Asia outside of China.

As overall interest in overseas stock investment rises, the scale of domestic investors' investments in Japanese stocks is expanding. Factors such as the perception of undervaluation due to the weak yen, inflows of funds into the Japanese market from the Chinese market amid US-China tensions, strong performance and shareholder return proposals from Japanese companies, and the continuation of Japan's financial easing policies have driven the Nikkei 225 Index to break its highest level in 33 years this past June.

KB Securities provides forecasts and investment strategies for the Japanese Nikkei Index as part of its asset allocation strategy. Starting with analysis reports on Hitachi, Keyence, and KDDI Corporation, it plans to sequentially publish analytical materials selecting about 20 major promising stocks, focusing on sectors where Japan's competitiveness stands out, such as technology, consumer goods, and trading companies.

Research Fellow Kim Se-hwan of KB Securities analyzed in a report, "Hitachi, a Japanese multinational conglomerate, posted second-quarter sales exceeding market expectations. Considering its high return on equity (ROE) through expanded shareholder returns, growth in the energy business segment, growth in the Astemo (automotive parts) division, and a risk-adjusted return ratio above the market average, it is expected to achieve stable performance from a long-term investment perspective."

Senior Researcher Kang Hyo-joo explained in the Keyence report, "Keyence is an electronics company strong in factory automation (FA) cameras and sensors, holding the number one market share in the machine vision market. Unlike typical FA-related companies, it operates fabless, sells directly without distributors, and employs a same-day shipping strategy, consistently maintaining a gross profit margin (GPM) of 80% and an operating profit margin (OPM) of 50%." She added, "Expansion of overseas market share is expected through high technological capability and service levels."

Senior Researcher Yoo Joong-ho analyzed in the report on KDDI Corporation, a Japanese telecommunications company, "KDDI's return on equity (ROE) exceeds the market, and considering its high dividend yield, market share, and cash flow, solid long-term profit growth is expected." He noted, "Although recent quarterly results fell short of expectations due to the adoption of new accounting standards, the expansion of key growth businesses such as satellite communication services and data centers continues."

KB Securities is also paying attention to the growth potential of major emerging markets in Asia. While the Chinese stock market continues to show sluggish trends, it plans to explore investment opportunities in Asian emerging markets with competitiveness in population, resources, and supply chains, such as Indonesia, Vietnam, and India, and provide mid- to long-term investment guidelines. In particular, for the Indonesian and Vietnamese markets, it expects to offer highly practical research reflecting local perspectives through exchanges and collaboration with local research subsidiaries.

Kim Sang-hoon, head of KB Securities' Research Division, stated, "Amid ongoing uncertainty and volatility in global financial markets, the importance of risk diversification and improving returns through investment diversification is increasingly emphasized." He added, "We plan to provide balanced analysis so that investors can make informed investment decisions based on sufficient information about the Japanese market, where recent investor interest and funds are moving."