In today’s briefing:
- LG Corp: Updated NAV Analysis Amid Ongoing Corporate Value Up Program in Korea
- Exploring Trading Setups Utilizing NPS’s ESG Fund Flows After July
- Korea Small Cap Gem #27: Wins Co.
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LG Corp: Updated NAV Analysis Amid Ongoing Corporate Value Up Program in Korea
- Our NAV analysis of LG Corp suggests an implied market cap of 16.3 trillion won or 103,781 won per share which is 16% higher than current share price.
- For holdco discount, we used a 50% holdco discount. If investors perceive improvement in value (such as through corporate governance improvements), the holdco discount on LG Corp would decline.
- LG Corp’s shares are up 5.9% in the past six months, outperforming all the major LG Group related companies including LG Chem, LG H&H, LG Electronics, and LG Energy Solution.
Exploring Trading Setups Utilizing NPS’s ESG Fund Flows After July
- From July, Korea’s listed firms will disclose value enhancement plans. Korea’s NPS may exclude non-compliant firms, pending official response, though internal review suggests likely implementation.
- It’s crucial to know portfolio stocks for proactive positioning. A setup targeting potential exclusion from NPS’s ESG funds due to post-July compliance must be designed.
- Managers often use KRX ESG Leaders 150, aligning portfolios with it. Thus, it’s crucial to use this list for post-July compliance monitoring and to adapt setups for NPS’s flow impacts.
Korea Small Cap Gem #27: Wins Co.
- Wins Co. is engaged in the business of developing and supplying information security solutions and developing software related to network security to protect networks from cyber threats and viruses.
- The company has a consistent growth in sales and profits. It also has a strong balance sheet. At the end of 2023, it had a debt ratio of 15.4%.
- Wins Co is trading at EV/EBITDA of 1.7x, P/E of 7.8x, and P/B of 0.9x in 2024 which are 75%, 26%, and 25% lower than the historical valuation multiples.