South Korea Daily Briefs | Page 3 of 133

Nov 30

Daily Brief South Korea: LS Marine Solution, LS Materials and more

By Smartkarma Daily Briefs | Daily Briefs, South Korea

In today’s briefing:

Ecopro BM’s KOSPI Move: Trade LS Marine Solution & Green Cross for the Real Play
End of Mandatory Lock-Up Periods for 52 Companies in Korea in December 2024

Ecopro BM’s KOSPI Move: Trade LS Marine Solution & Green Cross for the Real Play

By Sanghyun Park

Ecopro BM’s still hot trading volume might minimize passive impact. The real action is who replaces it in KOSDAQ 150 and which KOSPI 200 stock gets the boot.
LS Marine Solution joins KOSDAQ 150, while Green Cross Holdings gets the boot due to the lowest average daily market cap from May 1 to October 31.
KRX fast-tracks approvals for financially strong companies in 20 trading days. Ecopro BM likely qualifies, meaning approval could come before Christmas—ideal timing for entry.

End of Mandatory Lock-Up Periods for 52 Companies in Korea in December 2024

By Douglas Kim

We discuss the end of the mandatory lock-up periods for 52 stocks in Korea in December 2024, among which two are in KOSPI and 50 are in KOSDAQ.
Hese 52 stocks on average could be subject to further selling pressures in December and could underperform relative to the market.
The top three market cap stocks including those of which at least 1% of outstanding shares could be sold in December are Jeju Air, LS Materials, and Toolgen.

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Nov 29

Daily Brief South Korea: Korea Zinc, KB Financial and more

By Smartkarma Daily Briefs | Daily Briefs, South Korea

In today’s briefing:

A Proxy Fight for Korea Zinc in January 2025
Korea Zinc Saga Turning into a Comedy Show: MBK’s Speculative Move & How It’s Shaping Our Trades
KB Financial – NPLs from KRW2.1tr to KRW3.1tr YoY Vs +6% Loans. Substandard Loans: Big Issue

A Proxy Fight for Korea Zinc in January 2025

By Douglas Kim

There is likely to be a proxy fight for the control of Korea Zinc (010130 KS) between MBK/Young Poong alliance and Chairman Choi/Bain Capital alliance in January 2025.
Young Poong Precision announced that it will acquire 39,254 shares of Korea Zinc. Post this purchase, Young Poong Precision will own a 2.11% stake in Korea Zinc (up from 1.92%).
FSS Governor Lee Bok-Hyun mentioned that the FSS is seriously reviewing a potential accounting issue related to environmental pollution at Young Poong.

Korea Zinc Saga Turning into a Comedy Show: MBK’s Speculative Move & How It’s Shaping Our Trades

By Sanghyun Park

Lee Bok-hyun, head of the Financial Supervisory Service, unexpectedly voiced concerns about MBK winning Korea Zinc’s management battle, catching everyone off guard.
The key question is how Michael ByungJu Kim will handle government pressure, with MBK possibly aligning with the opposition if the Democratic Party pushes for commercial law reform.
Korea Zinc now becomes a proxy war over governance reform. Watch MBK’s political stance, as it could drive the stock higher, especially if Michael teams up with the opposition.

KB Financial – NPLs from KRW2.1tr to KRW3.1tr YoY Vs +6% Loans. Substandard Loans: Big Issue

By Daniel Tabbush

Headline NPL figures at KB Financial (105560 KS) are already of major concern rising by 49% in the past year to 3Q24
Granular loan classification data is of even greater concern, where substandard loans are up from KRW1,153bn to KRW1,715bn over the same period
This more benign bucket of NPLs well overshadows loss loans, can migration can mean a substantial rise in credit costs

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Nov 28

Daily Brief South Korea: Samsung KODEX 200 ETF, Ecopro BM , Kum Yang , Hyundai Motor and more

By Smartkarma Daily Briefs | Daily Briefs, South Korea

In today’s briefing:

Digging into the Year-End Divvy Arbitrage Game in Korea’s Market
Ecopro BM: Transfer of Listing from KOSDAQ to KOSPI Is Likely in 1Q 2025
Main Fact Checks on the Mix-Up Around Kum Yang’s Rights Offering Rollout
Hyundai Motor: Share Buyback of 1 Trillion Won and Trump’s Tariffs

Digging into the Year-End Divvy Arbitrage Game in Korea’s Market

By Sanghyun Park

For March KOSPI 200 futures, expect a 0.95% to 1% yield for spot-futures arbitrage, with contango depending on year-end ex-div trends and passive inflows.
Passive inflows into the value-up index in January and spillover effects into K200 futures, potentially fueling year-end contango due to overlap with KOSPI 200.
Prop trader dynamics are cooling off: Tax-driven buying in December, selling in January likely to ease, reducing the past backwardation. Without it, expect higher volatility in K200 futures.

Ecopro BM: Transfer of Listing from KOSDAQ to KOSPI Is Likely in 1Q 2025

By Douglas Kim

On 27 November, Ecopro BM (247540 KS) announced that it has filed an application for the transfer of listing from KOSDAQ to KOSPI.
Ecopro BM is currently the second largest company in KOSDAQ. At the current market cap, Ecopro BM will be the 34th largest company in KOSPI (in terms of market cap).
Lofty valuation is one of the main reasons why we continue to be bearish on Ecopro BM which is trading at P/E of 134x and P/B of 9.4x in 2026.

Main Fact Checks on the Mix-Up Around Kum Yang’s Rights Offering Rollout

By Sanghyun Park

The FSS’s correction deadline still starts from October 17, giving Kum Yang until January 16 next year to get everything in order.
We should still be all over this, as the major shareholder likely won’t participate, flooding the market with stock rights and unsubscribed shares, creating a prime 25% discount opportunity.
Kum Yang needs even this 200-300 billion KRW, so cancellation seems unlikely. With the FSS deadline on January 16, they’ll likely submit the revised report mid to late next month.

Hyundai Motor: Share Buyback of 1 Trillion Won and Trump’s Tariffs

By Douglas Kim

On 27 November, Hyundai Motor (005380 KS) announced that it plans to buy back 1 trillion won worth of its shares (700 billion won to be cancelled).
Trump’s aggressive tariff policy has been one of the major factors negatively impacting Hyundai Motor’s share price in the past several months.
Hyundai Motor’s valuation has become more attractive. There are also other investments such as its stakes in Boston Dynamics and Hyundai Motor India that could be valued higher.

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Nov 27

Daily Brief South Korea: Hyundai Motor Securities, Lotte Chilsung Beverage Co, MNC Solution and more

By Smartkarma Daily Briefs | Daily Briefs, South Korea

In today’s briefing:

Hyundai Motor Securities Announces a Rights Offering Involving a 49% Shares Dilution
Lotte Chilsung Beverage – Its Land in Seochogu, Seoul Is More Than 3x Its Market Cap
MNC Solutions Pre-IPO – Thoughts on Valuation – Defensively, Would Ideally like a Further Discount

Hyundai Motor Securities Announces a Rights Offering Involving a 49% Shares Dilution

By Douglas Kim

Hyundai Motors Securities announced a rights offering worth nearly 200 billion won involving a 49% shares dilution.
The amount of shares dilution is excessive which is likely to result in a share price weakness in Hyundai Motor Securities in the coming weeks.
The expected rights offering price for now is 6,640 won per share which is 24.5% discount to the closing price on 26 November.

Lotte Chilsung Beverage – Its Land in Seochogu, Seoul Is More Than 3x Its Market Cap

By Douglas Kim

Lotte Chilsung Beverage’s land in Seochogu, Seoul is estimated to be worth more than 3x its market cap.
In the past several weeks, there have been increasing concerns about the overall debt pressures at the Lotte Group.
Lotte Group may be considering on selling some of its assets including Lotte Rental, Lotte Capital, and Lotte Chilsung Beverage’s Seochogu land.

MNC Solutions Pre-IPO – Thoughts on Valuation – Defensively, Would Ideally like a Further Discount

By Clarence Chu

MNC Solution (MNC KS) is looking to raise US$200m in its Korea IPO.
MNC Solutions (MNC) supplies high-precision control components for maritime and aviation weaponry, and travel devices for stabilization to the defense industry.
In our previous note, we looked at the firm’s past performance and undertook a peer comparison. In this note, we discuss our thoughts on valuation.

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Nov 26

Daily Brief South Korea: Korea Zinc, Eoflow, Binggrae Co Ltd, MNC Solution, SK Biopharmaceuticals and more

By Smartkarma Daily Briefs | Daily Briefs, South Korea

In today’s briefing:

Figuring Out the Right Entry Point to Go Outright Short on Korea Zinc
Eoflow: European Court Dismisses Injunction Filed by Insulet
Binggrae: Split into Two Companies and A Cancellation of 10% of Outstanding Shares
MNC Solutions Pre-IPO Peer Comparison – Tiny Player Outgrowing Peers
SK Biopharmaceuticals (326030 KS): Sequential Profit Decline in 3Q; Long-Term Growth Prospect Intact

Figuring Out the Right Entry Point to Go Outright Short on Korea Zinc

By Sanghyun Park

The 5% voting gap between Choi and MBK leaves NPS and sideline minority players as key swing factors, with NPS’s stake potentially closing the gap for Choi.
If NPS sold half its stake in the tenders, it’s down to 4%, not enough to close the gap, likely giving MBK the win and triggering a post-meeting price drop.
The key to our outright short is NPS’s January 10 disclosure, with market chatter suggesting NPS has likely sold about half its holdings in the two tenders.

Eoflow: European Court Dismisses Injunction Filed by Insulet

By Douglas Kim

A European Court dismissed the injunction application filed by Insulet for overseas intellectual property rights infringement which would allow Eoflow to start selling its EoPatch products in Europe.
Eoflow is trying to complete a rights offering in December 2024. The expected rights offering price is 4,235 won (27% lower than current price).
Although results of the main lawsuit in the US remain undecided, with the UPC’s decision in favor of Eoflow, the legal sentiment on this case is in favor of Eoflow.

Binggrae: Split into Two Companies and A Cancellation of 10% of Outstanding Shares

By Douglas Kim

In the past week, Binggrae (005180 KS) announced that it plans to split into a holding company and an operating company in May 2025.
As part of this company reorganization, Binggrae announced that it plans to cancel all of its treasury shares (1 million common shares, representing 10.2% of total common shares outstanding).
We are positive on Binggrae due to cheap valuations (1.6x EV/EBITDA in 2025), steady growth in sales and profits, and 10% share cancellation.

MNC Solutions Pre-IPO Peer Comparison – Tiny Player Outgrowing Peers

By Clarence Chu

MNC Solution (MNC KS) is looking to raise US$200m in its upcoming Korea IPO.
MNC Solutions (MNC) supplies high-precision control components for maritime and aviation weaponry, and travel devices for stabilization to the defense industry.
In our previous note, we looked at the firm’s past performance. In this note, we undertake a peer comparison.

SK Biopharmaceuticals (326030 KS): Sequential Profit Decline in 3Q; Long-Term Growth Prospect Intact

By Tina Banerjee

SK Biopharmaceuticals (326030 KS) announced 3Q24 result, with record high U.S. revenue and four consecutive quarters of profit. Slower U.S. growth and sequential decline in operating profit remained key negatives.
Xcopri continued its rapid growth in the U.S. SKBP expects to achieve the higher end of 2024 U.S. sales guidance of $300–320M, indicating 4Q24 revenue of $91M, 9% QoQ.
Through operating leverage, the company is on track to achieve first annual profit. We think the reaction to 3Q24 result is overdone, with limited downside expected.

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Nov 23

Daily Brief South Korea: Dongwon Industries, Samsung Electronics Pref Shares, SK Square , LG Corp and more

By Smartkarma Daily Briefs | Daily Briefs, South Korea

In today’s briefing:

KOSPI200 Dec24 Rebal: 4 ADDs, 5 DELs, Big ADV on Small Stocks
Dividend Tax Cut Decision Scheduled for 25th, Next Monday: Watch Sammy Prefs
SK Square: A Solid Corporate Value Up Plan Likely to Lead to Continued Outperformance
LG Corp: Key Highlights from Its Corporate Value-Up Plan and Updated NAV Valuation

KOSPI200 Dec24 Rebal: 4 ADDs, 5 DELs, Big ADV on Small Stocks

By Travis Lundy

The December 2024 index review results for the KOSPI Indices were announced after the close on Thursday 21st November 2024.
There will be four ADDs and five DELs for KOSPI 200 during the December 2024 index rebal event.
We predicted 8 out of 9 changes correctly. We missed one of the DELs and we expected a couple extra changes which did not materialize.

Dividend Tax Cut Decision Scheduled for 25th, Next Monday: Watch Sammy Prefs

By Sanghyun Park

The opposition’s pushing a Commercial Act amendment, and to gain ruling party support, they might strategically ease up on the dividend tax issue—classic quid pro quo.
The Samsung family’s collateral risk eased with a 10 trillion won buyback, but local markets are still cautious. Local traders now eye another 10 trillion won shareholder return.
The timing of the special dividend and tax deadlines may cause mismatches, but we should watch for earlier price moves in Samsung Electronics preferred shares.

SK Square: A Solid Corporate Value Up Plan Likely to Lead to Continued Outperformance

By Douglas Kim

SK Square (402340 KS) announced a solid corporate value up plan pushing up its share price by 8.8% to 87,500 won on 22 November.
Major highlights of the corporate value up plan included cancellation of 200 billion won of treasury shares, higher ROE target, and achieve 1x PBR ratio (nearly double the current ratio).
Our NAV analysis of SK Square suggests NAV of 15.2 trillion won or 112,822 won per share, representing 29% higher than current share price.

LG Corp: Key Highlights from Its Corporate Value-Up Plan and Updated NAV Valuation

By Douglas Kim

In this insight, we provide the major highlights of the solid Corporate Value Up plan announced by LG Corp on 22 November.
The key highlights include about 500 billion won worth of share cancellation by 2026, improved dividend policy, and higher ROE target.
Our base case NAV valuation analysis of LG Corp suggests implied NAV of 16.1 trillion won or NAV per share of 102,426 won, which is 33.4% higher than current price.

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Nov 22

Daily Brief South Korea: Shinsung Delta Tech, Hyosung Heavy Industries Corp, Sunic System Ltd., LG Energy Solution and more

By Smartkarma Daily Briefs | Daily Briefs, South Korea

In today’s briefing:

KOSPI 200 & KOSDAQ 150 December Rejig Lineup
KOSPI200 Index Rebalance: Adds in Line; Couple of Deletes Are Surprises
KOSDAQ150 Index Rebalance: 8 Changes a Side; Fadu Appears to Be a 4 Letter Word
LG Chem’s Tax Alarm: Pillar Two Tax Could Soar Next Year + LGES Block Deal on the Horizon

KOSPI 200 & KOSDAQ 150 December Rejig Lineup

By Sanghyun Park

KOSPI 200 & KOSDAQ 150 Dec reshuffle looks set—official lineup drops post-close today.
Passive flows for KOSPI 200 and KOSDAQ 150 are estimated at 40T KRW and 3.5T KRW, based on typical flow sizes until the effective date.
These predictions combine my sim results with reliable local intel. The accuracy’s solid enough to start pulling the trigger on trades.

KOSPI200 Index Rebalance: Adds in Line; Couple of Deletes Are Surprises

By Brian Freitas

There will be 4 additions and 5 deletions for the Korea Stock Exchange KOSPI 200 (KOSPI2 INDEX) at the next rebalance to be implemented at the close on 12 December.
The 4 adds are exactly in line with our forecast but a couple of the deletions are surprises. Those two names were close deletes though.
The are some large shorts on a few deletes and there could be covering over the next few weeks as borrows are recalled and as the stocks drop.

KOSDAQ150 Index Rebalance: 8 Changes a Side; Fadu Appears to Be a 4 Letter Word

By Brian Freitas

There will be 8 additions and 8 deletions for the KOSDAQ 150 Index (KOSDQ150 INDEX) at the next rebalance to be implemented at the close on 12 December.
Most of the inclusions were forecast but there is a lot of variance among the list of deletions… index committee knows best!
Fadu (440110 KS) was ignored for yet another rebalance, while Snh Inc (051980 KS) has also not been included in the index.

LG Chem’s Tax Alarm: Pillar Two Tax Could Soar Next Year + LGES Block Deal on the Horizon

By Sanghyun Park

The local market’s buzzing that LG Chem could face a 200-300 billion KRW tax hit from Pillar Two next year, with LGES ramping up U.S. production.
LG Chem may be reconsidering its plan to sell 2% of its LGES stake, dropping ownership below 80%, shifting the tax burden to LGES instead of itself.
Flagging this now—LG Chem’s tax burden looms. Consider shorting LGES or a long-short with LG Chem, plus prep for the 2T KRW block deal with the pre-disclosure process.

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Nov 21

Daily Brief South Korea: KT&G Corporation and more

By Smartkarma Daily Briefs | Daily Briefs, South Korea

In today’s briefing:

₩200B Gov-Run Value-Up Fund Starts Buying Tomorrow, with Another ₩300B Set for Year-End

₩200B Gov-Run Value-Up Fund Starts Buying Tomorrow, with Another ₩300B Set for Year-End

By Sanghyun Park

The larger-than-expected Value-Up fund will drive passive flows surpassing the KRX 300 in both size and speed.
Value-Up ETFs’ AUM is ₩636.5B, with retail dominating. Major institutions, like pensions, are on standby, but passive flows could hit ₩1.5T post-Dec 20 rebalancing.
Single-Stock setups may not fit, but for alpha-seeking Value-Up strategies, focus on names with higher passive impact from the boosted AUM.

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Nov 20

Daily Brief South Korea: Samsung Electronics, CJ Cheiljedang and more

By Smartkarma Daily Briefs | Daily Briefs, South Korea

In today’s briefing:

A Step Closer to Samsung Life Insurance Finally Selling Its Shares in Samsung Electronics?
CJ Cheiljedang: Considering a Potential Sale of Its Bio Business

A Step Closer to Samsung Life Insurance Finally Selling Its Shares in Samsung Electronics?

By Douglas Kim

Amid Samsung Electronics announcing a huge buyback of 10 trillion won, one of the issues that has resurfaced is the potential sale of Samsung Electronics by Samsung Life Insurance.
The total amount of Samsung Electronics that could be sold by Samsung Life Insurance and Samsung F&M Insurance is 25.6 trillion won (at current prices).
We remain Positive on Samsung Electronics. The 10 trillion won buyback program is a positive sign on the company’s willingness to provide higher shareholder returns.

CJ Cheiljedang: Considering a Potential Sale of Its Bio Business

By Douglas Kim

CJ Cheiljedang announced that it is considering on potentially selling its bio business for about 5-6 trillion won which could be more than its market cap.
CJ Cheiljedang’s bio business is expected to have more than 4 trillion won in sales and about 700 billion won in EBITDA in 2024.
We are positive on the company’s efforts to sell its Bio Business and reinvest it in its food business.

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Nov 19

Daily Brief South Korea: Samsung Electronics, Jb Financial Group, SK Telecom and more

By Smartkarma Daily Briefs | Daily Briefs, South Korea

In today’s briefing:

My Take on the Three Scenarios that Sammy Buyback Stirred up in the Market Today
KRX Value-Up Special Rebalance in December: Playbook & Screening Rundown
Korea Value Up Index Rebalance on 20 December

My Take on the Three Scenarios that Sammy Buyback Stirred up in the Market Today

By Sanghyun Park

The market’s reaction to Samsung Fire’s stake sale seems overhyped. Given past share sales, Life may outperform Fire as this momentum unfolds.
I don’t see SDS merging with Samsung Electronics. It lacks synergy and could stir up PR issues. If Sammy’s stock stalls, Lee Jae-yong might sell more of his SDS stake.
I’m still bullish on Sammy prefs. If the tax reform passes, a special dividend, not a buyback, will be the cleanest way for Samsung to address inheritance tax.

KRX Value-Up Special Rebalance in December: Playbook & Screening Rundown

By Sanghyun Park

Since Sep 24, 32 companies made Value-Up disclosures. After filtering, 17 remain, but KRX will keep inclusions tight. They’ll likely use PBR and ROE rankings for final selection.
We have 6 names—3 financials, 2 healthcare, 1 industrial. New Value-Up disclosures through Dec 6 could add more, but these 6 are the frontrunners for now.
KRX is likely to announce results by Dec 10-11. Start eyeing entry points 10 days prior, and if price action heats up early, consider pulling the trigger sooner.

Korea Value Up Index Rebalance on 20 December

By Douglas Kim

Korea Exchange (KRX) plans to make special changes to the Korea Value-Up Index constituents on 20 December.
We believe that following five stocks are likely inclusions in the Korea Value Up index rebalance on 20 December (KB Financial, Hana Financial, SK Telecom, KT Corp, and LG Electronics).
The new companies that will be included in the Korea Value-Up Index include companies that provide detailed corporate value up plans by 6 December.

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