Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

Douglas Research Advisory

Equity Bottom-Up

<ul>
<li>My base case valuation of LG Corp is implied market cap of 26.9 trillion won or NAV per share of 177,595 won, which is 42% higher than current share price.</li>
<li>LG Corp's investments in five core publicly listed companies including LG Chem and LG Electronics are now worth 26.5 trillion won which is 99% of its current market cap.</li>
<li>Legal feud between LG Group Chairman Koo and his mum/sisters have been going on for more than three years. Appellate court has scheduled the next hearing for 27 November.</li>
</ul>


My base case valuation of LG Corp is implied market cap of 26.9 trillion won or NAV per share of 177,595 won, which is 42% higher than current share price.
LG Corp's investments in five core publicly listed companies including LG Chem and LG Electronics are now worth 26.5 trillion won which is 99% of its current market cap.
Legal feud between LG Group Chairman Koo and his mum/sisters have been going on for more than three years. Appellate court has scheduled the next hearing for 27 November.


LG Corp: Ongoing Legal Feud Between Chairman Koo Vs Mum/Sisters and Updated NAV Analysis

Cross Asset Strategy

<ul>
<li>Korea Exchange plans to announce the first rebalance of the "Korea Value Up Index" next week on 27 May. The actual rebalance is expected to take place on 13 June.</li>
<li>Korea Exchange plans to reduce the constituents to 100 (from 105 currently) and change 30% of the included stocks in this index to better reflect the Value Up program incentives. </li>
<li>In this insight, we provide a list of 20 potential exclusion candidates and 20 inclusion candidates in the Value Up index rebalance. </li>
</ul>


Korea Exchange plans to announce the first rebalance of the "Korea Value Up Index" next week on 27 May. The actual rebalance is expected to take place on 13 June.
Korea Exchange plans to reduce the constituents to 100 (from 105 currently) and change 30% of the included stocks in this index to better reflect the Value Up program incentives. 
In this insight, we provide a list of 20 potential exclusion candidates and 20 inclusion candidates in the Value Up index rebalance. 


Korea Value Up Index Rebalance Announcement Next Week

<ul>
<li>There are some major surprises (both inclusions and exclusions) in the Korea Value Up index. </li>
<li>In particular, the telecom sector (SK Telecom and KT) and large cap holding companies (Samsung C&amp;T and LG Corp) are surprising exclusions in the index.</li>
<li>There are many surprising inclusions in the Korea Value Up Index. We provide 30 companies are surprising inclusions in the Korea Value Up Index (19 KOSDAQ and 11 KOSPI listed).</li>
</ul>


There are some major surprises (both inclusions and exclusions) in the Korea Value Up index. 
In particular, the telecom sector (SK Telecom and KT) and large cap holding companies (Samsung C&amp;T and LG Corp) are surprising exclusions in the index.
There are many surprising inclusions in the Korea Value Up Index. We provide 30 companies are surprising inclusions in the Korea Value Up Index (19 KOSDAQ and 11 KOSPI listed).


Korea Value Up Index - Surprising Inclusions and Exclusions

Korea / Special Situations, Clepsydra Capital

Sanghyun Park

Korea / Special Situations

Korea / Special Sits, Pairs, Index Rebalancing

Clepsydra Capital

Investigate special situations, pairs, and index rebalancing trades in Korea.

Event-Driven

<ul>
<li>A high-ranking official from the local financial regulatory authority has confirmed to several local media outlets that the tax benefits for the value-up program will be unveiled this month.</li>
<li>Corporate tax cuts and separate taxation on dividend income will be included. The short-term impact at the time of the announcement will likely be more significant for corporate tax cuts.</li>
<li>Local market is focused on screening large companies within the KOSPI 200 that have substantial pre-tax profits in anticipation of the corporate tax cut momentum to be announced this month.</li>
</ul>


A high-ranking official from the local financial regulatory authority has confirmed to several local media outlets that the tax benefits for the value-up program will be unveiled this month.
Corporate tax cuts and separate taxation on dividend income will be included. The short-term impact at the time of the announcement will likely be more significant for corporate tax cuts.
Local market is focused on screening large companies within the KOSPI 200 that have substantial pre-tax profits in anticipation of the corporate tax cut momentum to be announced this month.


Value-Up Tax Support Revealed by End of June: Local Market Eyes Corporate Tax Cut Beneficiaries

<ul>
<li>It was reported in numerous local media in Korea that FSS is investigating Kakao Mobility for a potential accounting fraud. </li>
<li>There are suspicions that Kakao Mobility may have artificially inflated its sales from 2020 to 2023 to enhance the value of the company prior to its IPO listing. </li>
<li>Given that the regulators are unlikely to make a final decision on this matter until next year, this is likely to be negative on both Kakao Mobility and Kakao Corp. </li>
</ul>


It was reported in numerous local media in Korea that FSS is investigating Kakao Mobility for a potential accounting fraud. 
There are suspicions that Kakao Mobility may have artificially inflated its sales from 2020 to 2023 to enhance the value of the company prior to its IPO listing. 
Given that the regulators are unlikely to make a final decision on this matter until next year, this is likely to be negative on both Kakao Mobility and Kakao Corp. 


Concerns About A Major Accounting Fraud at Kakao Mobility

South Korea

LG Corp. is a holding company, which operates subsidiaries including LG Electronics, LG Household & Health Care, LG Chem Ltd., and Dacom Corp. The Company's main business areas are electronics, chemicals, and household products manufacturing and telecommunications services.

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LG Corp (003550 KS)

LG Corp: Ongoing Legal Feud Between Chairman Koo Vs Mum/Sisters and Updated NAV Analysis

In this insight, I provide an updated NAV analysis of LG Corp. Appellate court has scheduled the next hearing (legal feud between LG Corp Chairman...

Douglas Kim

Korea Value Up Index Rebalance Announcement Next Week

Korea Exchange plans to announce the first rebalance of the "Korea Value Up Index" next week on 27 May. The actual rebalance is expected to take...

Douglas Kim

Korea Value Up Index - Surprising Inclusions and Exclusions

There are many surprising inclusions and exclusions in the Korea Value Up Index. We provide 30 companies that are surprising inclusions and 10...

Douglas Kim

Value-Up Tax Support Revealed by End of June: Local Market Eyes Corporate Tax Cut Beneficiaries

A high-ranking official confirmed that tax cut incentives for the value-up program will be unveiled by the end of this month. This post...

Sanghyun Park

Concerns About A Major Accounting Fraud at Kakao Mobility

FSS is investigating Kakao Mobility for a potential, major accounting fraud. There are suspicions that Kakao Mobility may have artificially...

Douglas Kim

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