Daily Brief South Korea: Samsung Biologics , SK Inc, Samsung C&T and more

In today’s briefing:

Trading Plays on Samsung C&T’s Holding Company Shift and Biologics Share Sell-Off
Potential Sale of SK Specialty and Deleveraging of the SK Group – Impact on SK Inc and NAV Analysis
Samsung C&T: Corporate Value-Up + Reduced Overhang Post Final Lee Family Inheritance Tax in 2025

Trading Plays on Samsung C&T’s Holding Company Shift and Biologics Share Sell-Off

Samsung C&T’s holding company ratio is closing in on 50%, driven by the Biologics rally, which has Samsung on high alert for a forced conversion.
Watch Samsung’s moves to avoid forced holding company status. The old Biologics-for-Electronics swap isn’t viable, so they’ll likely sell Biologics shares to lower the ratio.
Samsung C&T might sell Biologics shares at a ₩80T market cap. They’ve boosted construction to manage assets and the holding ratio, but beyond ₩80T, risks increase.

In this insight, we discuss the potential sale of SK Specialty by SK Inc (034730 KS) which owns 100% stake in the company.
If SK Inc could sell SK Specialty at about 3 trillion won to 4 trillion won, this could reduce significantly reduce debt burden of SK Inc.
Our base case NAV value per share for SK Inc is 203,288 won per share, representing 38% upside from current levels.

We provide an updated NAV analysis of Samsung C&T, discuss the reduced overhang post final Lee family inheritance tax payment, and also provide further details of its Corporate Value-Up announcement.
Given 2025 will be the last year of major inheritance tax payment for the Lee family, there is likely to be reduced overhang associated with inheritance tax issue next year.
Our NAV analysis of Samsung C&T suggests NAV of 39.9 trillion won or NAV per share of 224,249 won which is 45% higher from current levels.

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