Global Materials | Industrials | Commodities

Rahul Jain

Equity Bottom-Up

<ul>
<li>US-Backed US$7.4bn smelter embeds Korea Zinc in US critical-minerals supply chains, lifting long-term strategic relevance and valuation floor.</li>
<li>Shares eased after an initial spike as dilution, low JV ownership, governance litigation risk, and long-dated cash flows weighed on near-term sentiment.</li>
<li>We retain a ₩2.1m TP (~30% upside), supported by TC recovery, rare-metals margins, buybacks, and partial governance-discount compression.</li>
</ul>


US-Backed US$7.4bn smelter embeds Korea Zinc in US critical-minerals supply chains, lifting long-term strategic relevance and valuation floor.
Shares eased after an initial spike as dilution, low JV ownership, governance litigation risk, and long-dated cash flows weighed on near-term sentiment.
We retain a ₩2.1m TP (~30% upside), supported by TC recovery, rare-metals margins, buybacks, and partial governance-discount compression.


Korea Zinc: US-Backed Smelter Lifts Strategic Floor; Dilution & Control Risks Weighed

Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

Douglas Research Advisory

Equity Capital Markets

<ul>
<li>On 15 December, Korea Zinc (010130 KS) announced a large scale third party capital raise of 2.85 trillion won (US$2.2 billion). </li>
<li>Korea Zinc plans to issue 2.21 million new common shares (11.4% of current outstanding shares) at the issue price of 1,291,330 won per share (22.7% lower than current price).</li>
<li><em><strong>Korea Zinc announced a strategic partnership with the U.S. government and U.S.-based defense contractors to invest approximately 11 trillion won (US$7.4 billion) in constructing a critical minerals smelter in Tennessee, U.S. </strong></em></li>
</ul>


On 15 December, Korea Zinc (010130 KS) announced a large scale third party capital raise of 2.85 trillion won (US$2.2 billion). 
Korea Zinc plans to issue 2.21 million new common shares (11.4% of current outstanding shares) at the issue price of 1,291,330 won per share (22.7% lower than current price).
Korea Zinc announced a strategic partnership with the U.S. government and U.S.-based defense contractors to invest approximately 11 trillion won (US$7.4 billion) in constructing a critical minerals smelter in Tennessee, U.S. 


Korea Zinc Announces a Third Party Capital Raise of 2.9 Trillion Won & 11 Trillion Won US Investment

<ul>
<li>US government–linked investment in a planned US smelter JV materially lifts Korea Zinc’s long-term strategic relevance and downside valuation floor, even though project cash flows are long-dated and execution-heavy.</li>
<li>Near–medium term earnings remain supported by zinc TC recovery, structurally higher rare-metals margins (led by antimony and germanium), and treasury-share cancellations, driving improved EPS visibility.</li>
<li>We raise our target price to ₩2.1m, reflecting partial governance-discount compression and a higher strategic multiple, while maintaining conservative assumptions on timing and returns.</li>
</ul>


US government–linked investment in a planned US smelter JV materially lifts Korea Zinc’s long-term strategic relevance and downside valuation floor, even though project cash flows are long-dated and execution-heavy.
Near–medium term earnings remain supported by zinc TC recovery, structurally higher rare-metals margins (led by antimony and germanium), and treasury-share cancellations, driving improved EPS visibility.
We raise our target price to ₩2.1m, reflecting partial governance-discount compression and a higher strategic multiple, while maintaining conservative assumptions on timing and returns.


Korea Zinc: US Government–Linked JV Raises Strategic Valuation Floor; TP to ₩2.1m

<ul>
<li>3Q25 marks a clear earnings inflection, with record revenue, strong EBITDA growth, and underlying net profit above ₩250 bn after adjusting for one-off derivative losses.</li>
<li>TC/RC recovery and rare-metals strength drive upgrades, lifting FY25–27 EBITDA/EPS by 8–20% and establishing a higher structural margin base.</li>
<li>Overnance resolution and treasury cancellations offer re-rating potential, with a target price of ₩1.52 mn implying ~27% upside.</li>
</ul>


3Q25 marks a clear earnings inflection, with record revenue, strong EBITDA growth, and underlying net profit above ₩250 bn after adjusting for one-off derivative losses.
TC/RC recovery and rare-metals strength drive upgrades, lifting FY25–27 EBITDA/EPS by 8–20% and establishing a higher structural margin base.
Overnance resolution and treasury cancellations offer re-rating potential, with a target price of ₩1.52 mn implying ~27% upside.


Korea Zinc – 3Q25 Review, TC/RC Upcycle, Rare-Metals Leverage & Governance Outlook

Event-Driven

<ul>
<li>MBK Partners acquired an additional 2.7% stake in Korea Zinc raising its total ownership to 39.7%. This is likely to fuel additional positive share price momentum on Korea Zinc.</li>
<li>This is likely to rekindle a potential M&amp;A fight for the management control of the company. </li>
<li>This additional additional purchase of Korea Zinc by MBK Partners is a signal, not noise. Another M&amp;A fight is likely in the next AGM in March 2026. </li>
</ul>


MBK Partners acquired an additional 2.7% stake in Korea Zinc raising its total ownership to 39.7%. This is likely to fuel additional positive share price momentum on Korea Zinc.
This is likely to rekindle a potential M&amp;A fight for the management control of the company. 
This additional additional purchase of Korea Zinc by MBK Partners is a signal, not noise. Another M&amp;A fight is likely in the next AGM in March 2026. 


MBK Partners: Acquires Additional 2.7% Stake in Korea Zinc - Another M&A Fight in March 2026?

South Korea

Korea Zinc Co., Ltd. specializes in non-ferrous metal smelting industry.  The Company manufactures zinc ingots, electrolytic gold, silver, lead, sulfuric acid, and copper.  Korea Zinc provides its products to domestic and overseas markets.

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Korea Zinc (010130 KS)

Korea Zinc: US-Backed Smelter Lifts Strategic Floor; Dilution & Control Risks Weighed

Korea Zinc's US-backed smelter investment boosts strategic importance and valuation, but near-term concerns weigh on sentiment. Analysts maintain...

Rahul Jain

Korea Zinc Announces a Third Party Capital Raise of 2.9 Trillion Won & 11 Trillion Won US Investment

On 15 December, Korea Zinc (010130 KS) announced a large scale third party capital raise of 2.85 trillion won (US$2.2 billion).

Douglas Kim

Korea Zinc: US Government–Linked JV Raises Strategic Valuation Floor; TP to ₩2.1m

US government investment in US smelter JV boosts Korea Zinc's strategic importance and valuation, with near-term earnings supported by zinc TC...

Rahul Jain

Korea Zinc – 3Q25 Review, TC/RC Upcycle, Rare-Metals Leverage & Governance Outlook

3Q25 shows strong earnings growth with record revenue and net profit above ₩250 bn, driven by TC/RC recovery and rare-metals strength, leading to...

Rahul Jain

MBK Partners: Acquires Additional 2.7% Stake in Korea Zinc - Another M&A Fight in March 2026?

MBK Partners acquired an additional 2.7% stake in Korea Zinc raising its total ownership to 39.7%. Another M&A fight is likely in the next AGM in...

Douglas Kim

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

Korea Zinc: US-Backed Smelter Lifts Strategic Floor; Dilution & Control Risks Weighed

​Korea Zinc's US-backed smelter investment boosts strategic importance and valuation, but near-term concerns weigh on sentiment. Analysts maintain...

Rahul Jain

Korea Zinc Announces a Third Party Capital Raise of 2.9 Trillion Won & 11 Trillion Won US Investment

On 15 December, Korea Zinc (010130 KS) announced a large scale third party capital raise of 2.85 trillion won (US$2.2 billion).

Douglas Kim

Korea Zinc: US Government–Linked JV Raises Strategic Valuation Floor; TP to ₩2.1m

​US government investment in US smelter JV boosts Korea Zinc's strategic importance and valuation, with near-term earnings supported by zinc TC...

Rahul Jain

Korea Zinc – 3Q25 Review, TC/RC Upcycle, Rare-Metals Leverage & Governance Outlook

​3Q25 shows strong earnings growth with record revenue and net profit above ₩250 bn, driven by TC/RC recovery and rare-metals strength, leading to...

Rahul Jain

MBK Partners: Acquires Additional 2.7% Stake in Korea Zinc - Another M&A Fight in March 2026?

MBK Partners acquired an additional 2.7% stake in Korea Zinc raising its total ownership to 39.7%. Another M&A fight is likely in the next AGM in...

Douglas Kim

Korea Zinc's US-backed smelter investment boosts strategic importance and valuation, but near-term concerns weigh on sentiment. Analysts maintain...

US government investment in US smelter JV boosts Korea Zinc's strategic importance and valuation, with near-term earnings supported by zinc TC...

3Q25 shows strong earnings growth with record revenue and net profit above ₩250 bn, driven by TC/RC recovery and rare-metals strength, leading to...