In today’s briefing:
- Top 10 Stocks in Korea With Highest Net Cash as Percentage of Market Cap
- Korean FSC’s Official Disclosure of New Treasury Share Regulations & Potential Trading Dynamics
- Samsung SDI (006400): No Catalyst in Sight
Top 10 Stocks in Korea With Highest Net Cash as Percentage of Market Cap
- One of the emerging trends in the Korean equity markets in the past several weeks has been the shift out of high beta, high P/E stocks to deep value stocks.
- In this insight, we will discuss about the top 10 stocks in Korea with highest net cash as percentage of market cap.
- These 10 stocks are up on average 2.9% YTD, outperforming KOSPI which is down 5.9% in the same period.
Korean FSC’s Official Disclosure of New Treasury Share Regulations & Potential Trading Dynamics
- Today, the Financial Services Commission of Korea announced treasury stock rule improvements: (1) No new share allocation to treasury shares during equity spinoffs. (2) Strengthened disclosure requirements.
- No mandatory cancellation may disappoint the market. Nevertheless, the decision not to issue new shares during equity spinoffs amplifies the volume targeted during subsequent tender offers, potentially intensifying price impacts.
- Also, enhanced disclosure for treasury stocks, especially for companies with over 10% holdings, may trigger significant trading events based on pre-information about holdings and disposals.
Samsung SDI (006400): No Catalyst in Sight
- The de facto beneficiary of the EU EV subsidy, and historically, 46% of the sales were generated from Audi and BMW EVs.
- Valuation has hit the trough, but with no positive catalyst in sight, it is difficult to make a bull case for Samsung SDI (006400 KS) .
- If the EU put up higher trade tariff for Chinese EV, it could jolt up SDI’s share price but until then, stay away.
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