In today’s briefing:
- Samsung Electronics: A Massive 10 Trillion Won Share Buyback Program
- Sammy’s Massive Buyback: Play the Pref Compression, Not Outright Long
- EQD | The “Landing Area” For The KOSPI 200 Is In Sight
- Negative Trump Trade: Korean Rechargeable Battery Sector
Samsung Electronics: A Massive 10 Trillion Won Share Buyback Program
- Samsung Electronics (005930 KS) announced a massive share buyback program worth 10 trillion won which represents 3.1% of its market cap.
- Of this total amount, about 3 trillion won will be purchased and cancelled in the next three months. This will include 50,144,628 common shares and 6,912,036 preferred shares.
- We believe that this massive share buyback and cancellation is likely to boost Samsung Electronics’ share price resulting in a strong outperformance relative to KOSPI in the next 6-12 months.
Sammy’s Massive Buyback: Play the Pref Compression, Not Outright Long
- The stock’s still below 1x PBR. But with Samsung’s tech gaps and slowdowns, going all-in on an outright long here off the back of this buyback feels way too early
- The key is whether pref discounts tighten like 2015, but with a more balanced buyback this time and narrowing pref discounts, making a pref rally harder to predict short-term.
- The goal’s the same as 2015—boosting the family’s control. If the remaining buyback leans pref-heavy, it could further tighten pref discounts, creating a potential opportunity to play the compression.
EQD | The “Landing Area” For The KOSPI 200 Is In Sight
- In a previous insight, on Oct 26th, we theorized 2 possible scenarios: a rally or a mini-crash for the KOSPI 200 INDEX, from the following week.
- It looks like we are more in the mini-crash scenario (see chart below), at the moment, but the index is already very oversold according to our WEEKLY model.
- Keep reading to find out where to buy based on our MRM WEEKLY models for the KOSPI 200.
Negative Trump Trade: Korean Rechargeable Battery Sector
- With Trump becoming the next President of the United States, we explain why the rechargeable battery sector in Korea is likely to get further battered in the coming months.
- Trump administration could eliminate or significantly slash the $7,500 consumer tax credit for electric vehicle (EV) purchases, which is one of the key provisions of the Inflation Reduction Act (IRA).
- We expect the sell-side to further cut their earnings estimates on the key key names in the Korean rechargeable battery sector in the coming months.
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