In today’s briefing:
- The Launch of 1st Corporate Value Up ETF on 27 February – Focus on Low PBR and Cash Flow
- FnGuide Semiconductor Top10 Index Rebalance Preview: One Change Likely; Close Among Potential Adds
- FnGuide Top10 Equal Weight Index Rebalance Preview: Celltrion Could Replace Samsung SDI
- South Korean Banks; Woori Financial (316140 KS) Added to Buy List, Joining KB Financial (105560 KS)
- Hyundai Rotem: Passage of Export-Import Bank Act To Support Korean Defense Companies
The Launch of 1st Corporate Value Up ETF on 27 February – Focus on Low PBR and Cash Flow
- Samsung Asset Management announced today that it will be launching the first Corporate Value Up ETF on 27 February. It will focus on low PBR and positive cash flow generators.
- This ETF which will be called KoAct Dividend Growth Active ETF. There are about 45 stocks that are expected to be included in this ETF.
- Among the 92 companies in KOSPI 200 that are trading at less than 1x PBR, those that generate positive free cash flow are outperforming significantly.
FnGuide Semiconductor Top10 Index Rebalance Preview: One Change Likely; Close Among Potential Adds
- ISC Co Ltd (095340 KS) could replace Wonik Ips (240810 KS) in the FnGuide Semiconductor Top10 Index at the April rebalance.
- Jusung Engineering (036930 KS) is ranked just behind ISC Co Ltd (095340 KS) and could be added to the index instead depending on relative price performance.
- Shorts on ISC Co (095340 KS) have been stable over the last few months while there has been big covering on Wonik Ips (240810 KS) and Jusung Engineering (036930 KS).
FnGuide Top10 Equal Weight Index Rebalance Preview: Celltrion Could Replace Samsung SDI
- The Samsung KODEX Fn Top10 Equal Weight ETF (395170 KS) tracks the FnGuide Top 10 Equal Weight Index and has an AUM of US$241m.
- We expect Celltrion Inc (068270 KS) will replace Samsung SDI (006400 KS) in the index at the March rebalance.
- There will be 0.26x ADV to buy in Celltrion Inc (068270 KS) while passives will need to sell 0.17x ADV of Samsung SDI (006400 KS).
South Korean Banks; Woori Financial (316140 KS) Added to Buy List, Joining KB Financial (105560 KS)
- In our latest South Korean banks screener; we add Woori Financial to existing buy KB Financial as our preferred Korean banks picks
- Delinquency ratios continued to worsen QoQ, with only Woori bucking the 4Q23 NPL trend; Woori has lagged in terms of returns, but we expect CoR control to support 2024 returns
- KB has a low PBV ratio relative to its ROE, it delivers rising post-provision returns, it has a high CET1 ratio and it maintains a healthy LDR
Hyundai Rotem: Passage of Export-Import Bank Act To Support Korean Defense Companies
- On 21 February, it was announced that the long awaited amendment to the Export-Import Bank Act was passed by the Korean National Assembly.
- As a result of this passage, the capital limit of the Export-Import Bank of Korea will be raised from the current 10 trillion won to 25 trillion won.
- The revision of this law is expected to benefit major defense companies in Korea including Hyundai Rotem, Hanwha Aerospace, LIG Nex1, and Korea Aerospace Industries.
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