Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

Douglas Research Advisory

Equity Bottom-Up

<ul>
<li>Chung Mong-Joon is gifting a 3.54% stake in HD Hyundai to his eldest son HD Hyundai Chairman Chung Ki-Sung which will raise his stake in HD Hyundai to 9.67%.</li>
<li>A 3.54% stake is worth 584 billion won. The gift tax payable by Chairman Chung is estimated to be around 350 billion won.</li>
<li>My base case NAV valuation of HD Hyundai is market cap of 22.6 trillion won or target price of 285,557 won per share which represents 37% higher than current price.</li>
</ul>


Chung Mong-Joon is gifting a 3.54% stake in HD Hyundai to his eldest son HD Hyundai Chairman Chung Ki-Sung which will raise his stake in HD Hyundai to 9.67%.
A 3.54% stake is worth 584 billion won. The gift tax payable by Chairman Chung is estimated to be around 350 billion won.
My base case NAV valuation of HD Hyundai is market cap of 22.6 trillion won or target price of 285,557 won per share which represents 37% higher than current price.


HD Hyundai: Chung Ki-Sung To Receive Additional 3.5% Stake from Dad + Updated NAV Valuation Analysis

Cross Asset Strategy

<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

<ul>
<li>Korea Value-Up index is finally expected to be launched in September 2024 which is likely to include at least 100 companies in KOSPI and KOSDAQ.</li>
<li>There are expectations that Korea's Value Up index could resemble JPX Prime 150 index which is a Japanese version of the value up index launched last year.</li>
<li>We provide 70 stocks in Korea that could be included in the Korea Value Up index. These 70 stocks could outperform the market in the next several months.</li>
</ul>


Korea Value-Up index is finally expected to be launched in September 2024 which is likely to include at least 100 companies in KOSPI and KOSDAQ.
There are expectations that Korea's Value Up index could resemble JPX Prime 150 index which is a Japanese version of the value up index launched last year.
We provide 70 stocks in Korea that could be included in the Korea Value Up index. These 70 stocks could outperform the market in the next several months.


Launch of Korea Value Up Index in September

<ul>
<li>On 10 November, it was announced that Ki-Sun Chung was promoted to Vice Chairman which could signal more positive news flow on HD Hyundai in the coming months.</li>
<li>The consensus expects DPS of 4,200 won for HD Hyundai in 2023, which suggests a dividend yield of 7.1%. HD Hyundai has one of the highest dividend yields in KOSPI200.</li>
<li>According to our NAV analysis, it suggests a base case valuation of 71,970 won per share for HD Hyundai, representing a 22% upside from current levels.</li>
</ul>


On 10 November, it was announced that Ki-Sun Chung was promoted to Vice Chairman which could signal more positive news flow on HD Hyundai in the coming months.
The consensus expects DPS of 4,200 won for HD Hyundai in 2023, which suggests a dividend yield of 7.1%. HD Hyundai has one of the highest dividend yields in KOSPI200.
According to our NAV analysis, it suggests a base case valuation of 71,970 won per share for HD Hyundai, representing a 22% upside from current levels.


<ul>
<li>My base case NAV valuation of HD Hyundai is market cap of 30 trillion won or target price of 380,300 won per share which represents 27.4% higher than current price.</li>
<li>HD Hyundai reported sales of 19.6 trillion won (up 14.7% YoY and 4.5% higher than consensus) and OP of 2.8 trillion won (up 120.4% YoY and 57.2% higher than consensus). </li>
<li>Post the company's record breaking results, I expect the consensus to increase earnings estimates in 2026 and 2027 by 10%-20%+.</li>
</ul>


My base case NAV valuation of HD Hyundai is market cap of 30 trillion won or target price of 380,300 won per share which represents 27.4% higher than current price.
HD Hyundai reported sales of 19.6 trillion won (up 14.7% YoY and 4.5% higher than consensus) and OP of 2.8 trillion won (up 120.4% YoY and 57.2% higher than consensus). 
Post the company's record breaking results, I expect the consensus to increase earnings estimates in 2026 and 2027 by 10%-20%+.


HD Hyundai: Updated NAV Analysis and Record Results in 1Q 2026

South Korea

HD Hyundai Co.,Ltd. operates as a oil refining company. The Company provides crude oil refining, petroleum refinery, and other related products. HD Hyundai markets its products worldwide.

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HD Hyundai (267250 KS)

HD Hyundai: Chung Ki-Sung To Receive Additional 3.5% Stake from Dad + Updated NAV Valuation Analysis

Chung Mong-Joon is gifting a 3.54% stake in HD Hyundai to his eldest son HD Hyundai Chairman Chung Ki-Sung which will raise his stake in HD Hyundai...

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

Launch of Korea Value Up Index in September

Korea Value-Up index is finally expected to be launched in September 2024 which is likely to include at least 100 companies in KOSPI and KOSDAQ.

Douglas Kim

Asian Dividend Gems: HD Hyundai

FTC decided to conditionally approve the acquisition of STX Heavy Industries by HD Korea Shipbuilding & Marine Engineering. With this business...

Douglas Kim

HD Hyundai: Updated NAV Analysis and Record Results in 1Q 2026

My base case NAV valuation of HD Hyundai is market cap of 30 trillion won or target price of 380,300 won per share which represents 27.4% higher...

Douglas Kim

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