In today’s briefing:
- Examining a Proactive Flow Trading Setup Targeting Korean Value-Up Disclosures
- Why Is Proportionate Shareholder Protection Key to Korea’s Value-Up, and What Is Its Status?
- Potential Big Changes at the Korean Chaebols – The Age Factor of Chairman/Honorary Chairman
- Shinhan Financial: Shareholder Return Ratio of 50% to Boost Corporate Value
- SK Hynix (000660-KR): Positive Technical Analysis Signals
Examining a Proactive Flow Trading Setup Targeting Korean Value-Up Disclosures
- Value-Up plan announcements had a significant immediate price impact, especially for Woori Financial and Shinhan Financial, amplified by recent dividend tax reductions.
- We should target companies likely to announce value-up disclosures soon, focusing on those with prior notices. Notably, KB Financial and DB HiTek have issued prior notices.
- Both companies hold many treasury shares. KB Financial is a dividend stock, with value-up disclosures likely during their Q3 and Q4 earnings announcements.
Why Is Proportionate Shareholder Protection Key to Korea’s Value-Up, and What Is Its Status?
- A new tax support framework for Korea’s value-up policy was introduced, but local markets argue that proportionate protection for minority shareholders is crucial for a significant market value increase.
- Korean political leaders are united in supporting this amendment to the Commercial Act, with recent events increasing the likelihood of bipartisan support for this crucial change.
- Given the administration’s commitment to the value-up and recent negative sentiment towards recent restructurings at Doosan and SK, there’s growing potential for minority shareholder protection to take root in Korea.
Potential Big Changes at the Korean Chaebols – The Age Factor of Chairman/Honorary Chairman
- One of the important factors of big changes at the Korean chaebols is the age factor of the chairman/honorary chairman of each of these conglomerates.
- In this insight, we provide the shareholding ownerships and ages of the top 10 Korean conglomerates where age could become a major factor in impacting big changes that could occur.
- Among the 10 conglomerates listed below, Hyundai Motor Group, Celltrion Group, and SK Group have shown greater willingness to improve their shareholder return policies.
Shinhan Financial: Shareholder Return Ratio of 50% to Boost Corporate Value
- Shinhan Financial announced that it plans to increase shareholder return ratio to 50%, improve ROE to 10%, and reduce outstanding shares by 50 million+ by 2027.
- Shinhan Financial Group’s new, outstanding shareholder return policy has been one of the most impressive since the roll-out of the Corporate Value Up program in Korea a few weeks ago.
- The improved corporate governance policy is likely to lead to Shinhan Financial Group outperforming other financial stocks in Korea and KOSPI overall in the next 6-12 months.
SK Hynix (000660-KR): Positive Technical Analysis Signals
- Despite a negative share price reaction, following its 2Q2024 earnings report, SK Hynix (000660 KS) remains firmly amid an earnings upgrade cycle.
- With SK Hynix entering oversold territory, near-term momentum indicators are displaying bullish signals.
- SK Hynix trades at nearly one standard deviation below its 5-year historic average EV/EBITDA ratio and a discount to global peers.
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