sexta-feira, 30 de março de 2018

Share evaluation - Reviewing SK Telecom (SKM) & TIM Brasil (TSU) - Week Herald

Week Herald has published an interesting analysis comparing the shares of TIM Brazil, a telecom company in Brazil, and SK Telecom. 

I`m reproducing it here, along with the link to the original text.

Link: Reviewing SK Telecom (SKM) & TIM Brasil (TSU) - Week Herald:

Reviewing SK Telecom (SKM) & TIM Brasil (TSU)

SK Telecom (NYSE: SKM) and TIM Brasil (NYSE:TSU) are both large-cap computer and technology companies, but which is the better stock? We will compare the two businesses based on the strength of their dividends, analyst recommendations, valuation, earnings, risk, institutional ownership and profitability.
Institutional and Insider Ownership

11.2% of SK Telecom shares are owned by institutional investors. Comparatively, 15.0% of TIM Brasil shares are owned by institutional investors. 1.0% of SK Telecom shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.
Volatility and Risk
SK Telecom has a beta of 0.45, suggesting that its share price is 55% less volatile than the S&P 500. Comparatively, TIM Brasil has a beta of 1.39, suggesting that its share price is 39% more volatile than the S&P 500.
Earnings and Valuation
This table compares SK Telecom and TIM Brasil’s gross revenue, earnings per share and valuation.
Gross RevenuePrice/Sales RatioNet IncomeEarnings Per SharePrice/Earnings Ratio
SK Telecom$15.77 billion0.97$2.34 billion$4.755.08
TIM Brasil$3.21 billion3.28$386.64 million$0.7827.87
SK Telecom has higher revenue and earnings than TIM Brasil. SK Telecom is trading at a lower price-to-earnings ratio than TIM Brasil, indicating that it is currently the more affordable of the two stocks.
Analyst Recommendations
This is a breakdown of recent ratings and recommmendations for SK Telecom and TIM Brasil, as reported by
Sell RatingsHold RatingsBuy RatingsStrong Buy RatingsRating Score
SK Telecom13202.17
TIM Brasil03402.57
TIM Brasil has a consensus target price of $21.20, indicating a potential downside of 2.48%. Given TIM Brasil’s stronger consensus rating and higher possible upside, analysts clearly believe TIM Brasil is more favorable than SK Telecom.
This table compares SK Telecom and TIM Brasil’s net margins, return on equity and return on assets.
Net MarginsReturn on EquityReturn on Assets
SK Telecom16.16%20.30%11.13%
TIM Brasil7.56%6.90%3.76%
SK Telecom pays an annual dividend of $0.06 per share and has a dividend yield of 0.2%. TIM Brasil pays an annual dividend of $0.16 per share and has a dividend yield of 0.7%. SK Telecom pays out 1.3% of its earnings in the form of a dividend. TIM Brasil pays out 20.5% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years.
About SK Telecom
SK Telecom Co., Ltd. provides wireless telecommunications in Korea. The Company is engaged in the commercial development and implementation of wireless and fixed-line technologies and services, as well as develop its platforms, including Internet of things (IoT) solutions, lifestyle enhancement and advanced media. It operates through three segments: cellular services, which include wireless voice and data transmission services, sales of wireless devices, IoT solutions platform services and lifestyle enhancement platform services; fixed-line telecommunication services, which include fixed-line telephone services, broadband Internet services, advanced media platform services (including Internet Protocol television (IPTV)) and business communications services, and other businesses, which include its commerce business, its hardware business and other operations. Its brands include SK Telecom, T-Roaming, 7Mobile, B phone, 00700, B tv, Syrup, UO Smart Beam Laser, Astell&Kern and Nate.
About TIM Brasil
TIM Participacoes S.A. (TIM) is a provider of mobile telecommunication services in Brazil. The Company, through its subsidiaries in various telecommunications markets, operates mobile, fixed and long distance telephony, data transmission and ultra-broadband services. Its direct subsidiaries include TIM Celular S.A., which provides landline telephone services (commuted fixed telephonic service (STFC))-domestic long distance and international long distance voice services, personal mobile service (SMP) and multimedia communication service (multimedia service of communication (SCM)) in all Brazilian states and in the Federal District, and Intelig Telecomunicacoes Ltda., which provides STFC-local voices services and SCM services in all Brazilian states and in the Federal District. Its consumer plans include prepaid plans, post-paid plans and controle plans. It offers value-added services, including short message services or text messaging, multimedia messaging services and push-mail.

'via Blog this'

Land Border Duty Free stores now regulated in Brazil

As you can see in this link, Brazil has just published regulations allowing for the operation of Duty Free stores in the twin cities located in its dry borders. 

I have prepared this post to give you the inital pointers on the matter. 


In Brazil, duty free shops are set up as usual import/export companies. The  status of a "duty free shop' is attained after the company wins a call for bids organized by a port/airport. 

There is also a second kind of duty free shops, which has just been regulated, that can be located only at dry borders in cities bordering other countries. They are commonly located in the South of Brazil, near the Argentinian border, since there is a greater number of cities  and inhabitants there (the map shows it very clearly) . This kind of duty free shop depends on city regulations to be installed. 

In order to become an import/export company, the business must first incorporate in Brazil as a regular company. 

After incorporation, the company will obtain an import/export license (known as "Radar"). Any company can obtain an import license for small amounts of operation. i.e. 150,000.00 USD per year. 

For larger businesses, the company must upgrade to an unlimited import license. This depends on the company financial capability but usually demands a minimum equity of 400,000.00 USD. 


The new rule (INSTRUÇÃO NORMATIVA RFB Nº 1799, DE 16 DE MARÇO DE 2018) requires that border shops, among other things: 

a) should be installed in a municipality that already has city regulations allowing border stores;
a.1) should be installed in a municipality that has a unit of the Federal Revenue Service (this may exclude very small towns, specially in the North);
b) must have a minimum net worth of 2 million BRL (about 650K USD);
c) must have an electronic system controlling sales, and the system must be synchronized with the Federal Revenue Service;
d) must have camera surveillance in the store;

The company must incorporate in Brazil and fulfill the requirements first. Only after all requirements are fulfilled will the company be able to request the special regime of "duty free shop". 

I would suggest the following steps:

a) perform an initial survey of municipalities that have, or are about to issue, regulations allowing for border stores;
b) incorporate a company in Brazil with minimum equity of 2,5 millions BRL (800K USD);
c) remit the equity to Brazil;
d) obtain an import export license;
e) set up the systems required by the IRS (surveillance, electronic stock control, etc.)
f) finally, obtain the special tax regime for duty free stores and start operating. 

It all starts with an initial survey of cities, as  you can see. 

Companies must act fast in surveying the potential locations. The quickest ones will certainly have an advantage.