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 Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
SK Telecom	$15.77 billion	0.97	$2.34 billion	$4.75	5.08
TIM Brasil	$3.21 billion	3.28	$386.64 million	$0.78	27.87

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 MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
SK Telecom	1	3	2	0	2.17
TIM Brasil	0	3	4	0	2.57

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.

Profitability

This table compares SK Telecom and TIM Brasil’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
SK Telecom	16.16%	20.30%	11.13%
TIM Brasil	7.56%	6.90%	3.76%

Dividends

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'

Setting up Electronic Payment Platforms in Brazil

I got another article published at Alternative Emerging Investor. Please find it below. 

You may purchase this article and the full magazine at http://www.aeinvestor.com/ 

PAYMENT PLATFORMS IN BRAZIL

Many providers of international payment services have been seeking to enter the Brazilian market.  The companies, both big and small, operate mainly through websites and focus on the intermediation of payments for merchandise. Several of them also offer direct transference services, especially between individuals.

The Brazilian market is very particular, however, due to its high level of automation and to its very strict regulation.

Brazil has implemented quasi real time retail, interbank and forex payments infrastructures in the form of automated clearing houses, overseen by the Brazilian Central  Bank.

The direct participation in such clearing houses is heavily regulated and demands investments in risk mitigation and technical infrastructure. Brazilian Central Bank will also perform a very detailed authorization process before allowing any company to become a financial institution able to take part in the backbone of the Brazilian payment system.

Smaller companies in Brazil have been able to participate in the market by acting as Point of Sale (POS) operators, intermediating the relationship between a highly dispersed customer base and a relatively concentrated base of retail providers.

The scene for international payment providers, however, remains a little opaque.  A number of companies are starting to do business in Brazil, basing their operations in a proprietary base of clients located in one specific country.  For example, one company may specialize in bank transferences made between a Brazilian community in Portugal and another specific Portuguese community in São Paulo.

These payment solution companies (PSC) might be, in effect, creating a separate, private clearing house for their own payments. This would happen, for example, if the PSC waited for similar order to be transmitted from one country to the other (one person in Brazil who wants to send 100 USD to Portugal and one person in Portugal who wants to send the same value to Brazil), and then compensated the orders within the respective countries (by depositing the 100$ sent from Brazil directly to the bank account of the person who wanted to receive money from Portugal, for example).

This kind of informal clearing of deposits would be absolutely illegal, since it would be made outside of the Brazilian payment system administered by the Central Bank.

To further complicate things, though, one must consider that if the PSC acts exclusively as a point of sale terminal, receiving data from credit cards and transmitting them for clearance before officially endorsed financial institutions in Brazil, its activities would be subject to a much less strict regulation. On the other hand, these PSC should be prepared to aid the Brazilian sellers or consumers to obtain proper tax documentation regarding the transaction, since the receipts of payment generated electronically often do not contain all the details required by Brazilian authorities.

Finally, transactions that use virtual coins, such as Bitcoin, inter alia, are out of the scope of regulation of the Brazilian Central Bank and therefore might theoretically be performed by PSC companies, even if they are not registered as or acting on behalf of financial institutions in Brazil.

The conclusion is that the operation of foreign payment solutions web sites in Brazil might be subject to two or three very different sets of rules, depending on details about how the transactions are conducted. The operations must be carefully planned in order to avoid infringement of public policy regulations. Further regulatory development, especially regarding the use of virtual coins, are expected to take place soon.

This article has originally been published at the sixth installment of - Alternative Emerging Investor.

To subscribe or purchase this issue, please visitwww.aeinvestor.com, or contact Ms. Tiffany Swensonat tiffany@aeinvestor.com.

How much land may a foreigner purchase from the Amazon forest?

See also:

São Paulo Court allows purchase of rural land by foreigners

No to purchase of land by foreigners. Uruguay joins Brazilian sad club

Brazil and Argentina have restricted land acquisition by foreigners

Draft bill allows the purchase of land by foreigners

A smart and intrepid young man plans to purchase a large estate in Brazil, in order to pursue his objectives. Please read my comments on his plans, and on the limitations Brazil might impose on it. 

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Dear Adler,

I read you previous post on the restriction imposed on foreigners regarding rural land acquisition in Brazil

However, foreigners (like me) have long bought rural land in Brazil! 

The primary restriction is on the purchase of extremely large (multi square miles, ) properties. 

Look it up!

Regards, 

Charles Francis Xavier

----------------------------

Hello Charles,  

I most certainly know that foreigners can purchase small properties. But the properties that are interesting for business, usually the very large ones, can't be purchased by foreigners directly, only through the incorporation of a Brazilian company.

Recently, the government has tried to prohibit companies owned by foreigner to purchase 

land. The decision I have shared has ruled such prohibition as unconstitutional.

Regards,

 Adler

------------------------

Adler,

Few companies or individuals- other than huge agrobiz and/or land speculators (sometimes the same thing)- would be interested in the many hundred thousand hectare properties (10000 m2/hectare) foreign purchase of which the law is designed to regulate and (possibly, but not necessarily) restrict.

 Surely 99% of all foreign rural land purchases never had nor now have the slightest restriction. Except, perhaps, those promoted by somewhat over  eager lawyers. 

Regards,

Charles

------------------------

Dear Charles,

Being very clear: the law allows for the purchase of up to 3 "modules of land" by a foreigner. 

Such modules vary in size from city to city. In some cities in the São Paulo State, 3 modules would be about 15 hectares. Not too small, but no so big.  

In other cities in the extreme North of Brazil, 3 modules would be as much as 210 hectares. 

Undoubtedly big, but still a much smaller than the large properties used for soy or sugar cane, which can easily reach 10 thousand hectares.

The biggest farms in Brazil have more than 200 thousand hectares.  

There is no comprehensive and reliable data comparing the purchase of land by foreign individuals x the purchase of land by Brazilian companies with foreign capital. However, since  the size of the properties that may be freely purchased is not so big, I would not bet on the 99% figure you have presented.   

15 hectares might be sufficient for an individual looking for retirement, or planning to grow a  small crop. But is not a suitable size for many kinds of large scale plantations: eucalyptus, for  instance.  

Regards, 

 Adler

No to purchase of land by foreigners. Uruguay joins Brazilian sad club

Sometimes, you only need to observe the supporters of an idea to know whether or not it is a good one.

Take restrictions on land purchase by foreigners. It is ardently supported by the noble group of Venezuela, Argentina and Brazil.

Uruguay, which, otherwise, seemed a nice place, now joins this sad sad camarilla.

I hate such restrictions. I have written about it on many occasions:

Brazil and Argentina have restricted land acquisition by foreigners

Unconstitutional regulation in Brazil

To think I was contemplating buying a second home in Uruguay....

Mr. Mujica, I have a steeled soul, hardened by all the government injustice I must bear, being a lawyer in the 3rd world.

Still, you broke my heart. 

What is the quality of Brazilian legal services like in comparison to more developed countries?

I'm taking this post from Investment Services Brazil, a website specialized in Brazilian real estate. 

Their answer to the question at the title is: in general, not good (their original post may be read at the end of this one)

I'd love to criticize them and say that this is a superficial opinion, a biased remark from some condescending and patronizing yankee. 

But I understand their point of view. With the exception of some very professional law firms in major cities and of some very well educated professionals, most of Brazilian lawyers will not fulfill foreigner's expectations. 

That is not because they are bad professionals, but because most of them are not ready to adapt to European and American business culture.  

For example, most lawyers in Brazil (actually, most people in Brazil) will not answer their emails within two hours, keep a British punctuality or offer periodic and detailed reports. All of these are expected behaviors in  many developed countries, for all I know. But they simply aren't an essential part of Brazilian business culture (I feel I will be criticized for saying that out loud, but I have had enough foreign clients to know precisely what they complain about, and those 3 are on the top of the list).

Now, I'm not saying that you should trust your Brazilian lawyer blindfolded. My first order of business is "trust no one" (the second one is: "don't trust anyone, specially the Brazilian government"). 

I'm just saying that, among a lot of good Brazilian lawyers, you will be able to find only a few who speak, act and work like Europeans. If you can pick these one, good for you. If not, then you will have to adapt yourself. 


The original article:
______________________________________
Posted on November 6, 2012 by admin

This is a common question and most certainly a very valid one.  Many individuals buying real estate in Brazil focus solely on the merits of the real estate purchase and neglect carry out any due diligence process on the legal professional that will ultimately supervise the transaction.  Investment Services Brazil is often called upon to assist  foreigners to recover their capital from deals that have not been subject to correct due diligence by a less than thorough Brazilian lawyers.  With the increase in volume of foreign buyers within Brazil, legal  services are in demand and speaking from experience it is obvious that several local lawyers simply spend less time on each transaction in order to accommodate more clients.

Under Brazil law the due diligence process that a Brazilian lawyer must carry out on behalf of the client is regrettably subject.  This results in a lack of accountability in the event of incompetence or neglect.  Furthermore the Brazilian Courts are notoriously inefficient and corruption is not uncommon.  With this in mind it is essential when purchasing real estate in Brazil to have a high level of confidence in your Brazilian lawyer and to not use them simply because they speak English.  Your lawyer in Brazil should willingly share with you the exact steps and checks they will carry out in order to fulfill the due diligence on your property.

At Investment Services Brazil due diligence is carried out with the knowledge that the Brazilian legal system has numerous flaws and that due diligence, thorough due diligence is the only true protection for the real estate investor.  With this objective of the real estate investor or can proceed with confidence knowing that the investment is truly protected by a firm whose intention has been showering secure a real estate transaction and not to maximize billing hours.

Source: http://investmentservicesbrazil.com/blog/?p=29