Buy ― Shinsegae

Shinsegae’s sales will rise for the fourth consecutive year as the nation’s largest department store chain added new shops in premium locations, said a report from Korea Investment & Securities.

The report raised its target price by 32 percent, to 410,000 won from 310,000 won. Friday’s closing price was353,500 won.

There are three new stores under construction in Uijeongbu, Hanam and Daegu. The consumer demography of these towns is similar to that of Busan Centum City store, which has become one of the most profitable sites for Shinsegae, the report said.

The analyst of Korea Investment & Securities predicts that the operating profit rate will improve from 5.9 percent in 2011, 6.7 percent in 2012 to 8.1 percent in 2014.

Shinsegae shares began trading as a separate entity on the KOSPI market from June 10 after the spinoff of discount store chain E-Mart. The initial valuation was 266,800 won per share for Shinsegae.

Buy ― Daum

Daum Communications is the second largest internet services company, far smaller than the market leader NHN. Hanwha Securities maintains its buy recommendation as well as a target price of 145,000 won. Friday’s closing price was 122,500 won.

Daum’s share price has almost doubled since August 2010. Sales were 11 percent larger in the second quarter of this year than the same period of last year, though its operating profit was down 6.6 percent. The report from Hanwha says that investors’ optimism is derived partly from the U.S., where some Internet firms received high valuations in their initial public offerings recently.

Another reason they like Daum is its service on mobile phones. Daum says some 10 million people have downloaded its MyPeople application. MyPeople is a text-messaging service but is also capable of free voice and video calls.

Foreign investors own 43 percent of Daum and 67 percent of NHN.

Sell ­― OCI

There was a belated call from Hyundai Securities to sell OCI, a chemicals manufacturer, after its shares lost almost 40 percent since May. Hyundai said the “don’t buy” call — which means “sell” in the polite culture of Korean analysts’ society — is to prevent further losses of its customers. Thanks, but not very helpful.

OCI makes polysilicon, the primary raw material of the solar power generation panels. On the back of the renewable energy hype, many brokerage houses had recommended OCI stocks this year to domestic and foreign investors alike. Currently foreign investors own 24.95 percent of its shares.

Friday’s price of 390,500 is far from its peak of 657,000 won recorded in April. The fall partly reflects the firm’s financial performance in the second quarter, which was announced on Thursday.

Operating profit increased 66 percent from the same quarter of last year, but was 10 percent short from the analysts’ previous forecast, according to a survey by FNguide, a market research firm. The reason for the less-than-expected profit is the decline of global polysilicon prices.

OCI is better known as Oriental Chemical Industries, and has produced chemical additives for steel production since the 1960s. It has diversified its business portfolio and launched polysilicon production in 2008.

The firm says that its sales will expand once solar panels reach “grid parity,” the point at which solar energy becomes as cheap as electricity made at conventional power plants. Probably, but no one knows when it will be.