Daily Brief South Korea: Korea Stock Exchange Kospi Index, SK Innovation, KT Corp and more

In today’s briefing:

No Foreigner ID/Trade Report Obligation Starting Dec 14: Impact on Event Trading in Korea
Higher Private Market Valuation of SK On: Positive Impact on SK Innovation
KT CORPORATION: Fines, Favoritism, and ESG Risks

No Foreigner ID/Trade Report Obligation Starting Dec 14: Impact on Event Trading in Korea

The abolition of the foreign investor registration system was approved in a Cabinet meeting. They will be promulgated on June 13th and implemented starting December 14th of this year.
This change is not just about reducing administrative tasks, as it also eliminates the reporting obligations of foreign investors, thereby reducing their position exposure risk.
This could improve event outcome and price prediction accuracy. Therefore, it is crucial to keep a close eye on event trading when this measure takes effect in December.

It has been reported that SK On received 1.2 trillion won investment from a consortium led by MBK Partners and SNB Capital, valuing SK On at about 25 trillion won.
Our SoTP valuation of SK Innovation suggests a target price of 274,738 won per share, which represents a 38% higher levels than current price.
SK Innovation’s 96.5% stake in SK On (24.1 trillion won in value) is 130% higher than SK Innovation’s current market cap.

Domestic telecom company faced significant fines for false advertising of 5G, the second-largest penalty ever imposed.
Investigations into the telecom market, dominated by a long-term duopoly, are expanding.
Within KT Group’s subcontracting process, allegations of favoritism and manipulation in project allocation are currently under investigation by the prosecution.

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