Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

Douglas Research Advisory

Index Rebalance

<ul>
<li>Korea Value Up index is up 8.2% from 30 September 2024 to 28 May 2025, outperforming KOSPI 200 (up 3.4%) and KOSDAQ 150 (down 7.9%) in the same period. </li>
<li>More capital is likely to flow into the Korea Value Up index going forward. The government's efforts to continue to push the Korea Value Up index is also positive.</li>
<li>The median market cap of the 27 new additions is 2,310 billion won versus 835 billion won for the 32 deletions. KRX is emphasizing on companies with higher market cap.</li>
</ul>


Korea Value Up index is up 8.2% from 30 September 2024 to 28 May 2025, outperforming KOSPI 200 (up 3.4%) and KOSDAQ 150 (down 7.9%) in the same period. 
More capital is likely to flow into the Korea Value Up index going forward. The government's efforts to continue to push the Korea Value Up index is also positive.
The median market cap of the 27 new additions is 2,310 billion won versus 835 billion won for the 32 deletions. KRX is emphasizing on companies with higher market cap.


Korea Value Up: Outperformance Relative to KOSPI200 & KOSDAQ150 Likely to Attract Greater Capital

Event-Driven

<ul>
<li>On 27 May, HYBE announced that it will sell its 9.4% in S.M.Entertainment (2.21 million shares) for about 243 billion won (US$145 million) to Tencent Music Entertainment.</li>
<li>HYBE's sale of its stake in SM Entertainment is expected to take place on Friday (30 May) after the market close through an after hours block deal trade. </li>
<li>The block deal sale of SM Entertainment by HYBE to Tencent is likely to have a negative impact on SM Entertainment's shares mainly due to large share price discount (15.3%).</li>
</ul>


On 27 May, HYBE announced that it will sell its 9.4% in S.M.Entertainment (2.21 million shares) for about 243 billion won (US$145 million) to Tencent Music Entertainment.
HYBE's sale of its stake in SM Entertainment is expected to take place on Friday (30 May) after the market close through an after hours block deal trade. 
The block deal sale of SM Entertainment by HYBE to Tencent is likely to have a negative impact on SM Entertainment's shares mainly due to large share price discount (15.3%).


HYBE to Sell Its 9.4% Stake in SM Entertainment to Tencent Music in a Block Deal Sale

Equity Bottom-Up

<ul>
<li>In this insight, we discuss 20 Korean stocks that could outperform the market in the next two months amid global tariff war and local political turmoil.</li>
<li>Going forward, we believe these 20 Korean stocks could continue to outperform the market in the next couple of months. </li>
<li>As the market tries to digest further the uncertainties due to tariff war and the local Presidential election, these 20 stocks could provide sound defensive outperformance. </li>
</ul>


In this insight, we discuss 20 Korean stocks that could outperform the market in the next two months amid global tariff war and local political turmoil.
Going forward, we believe these 20 Korean stocks could continue to outperform the market in the next couple of months. 
As the market tries to digest further the uncertainties due to tariff war and the local Presidential election, these 20 stocks could provide sound defensive outperformance. 


20 Korean Stocks That Could Outperform Next 2 Months Amid Tariff War and Local Political Turmoil

<ul>
<li>One of the big thematic events on the Korean stock market has been the expectation that China could lift ban on Korean popular culture (Hallyu) as early as May 2025. </li>
<li>China's President Xi recently stated <em>"Cultural exchanges are a valuable part of our bilateral relations [between China and Korea]. We should avoid any problems occurring in handling such matters.” </em>
</li>
<li>We provide a list of 40 stocks in Korea that could most benefit from the end of lifting ban of Korean popular culture. </li>
</ul>


One of the big thematic events on the Korean stock market has been the expectation that China could lift ban on Korean popular culture (Hallyu) as early as May 2025. 
China's President Xi recently stated "Cultural exchanges are a valuable part of our bilateral relations [between China and Korea]. We should avoid any problems occurring in handling such matters.” 

We provide a list of 40 stocks in Korea that could most benefit from the end of lifting ban of Korean popular culture. 


China Could Lift Ban on Korean Popular Culture (Hallyu) As Early As May 2025

<ul>
<li>The EGM for Korea Zinc (010130 KS) is expected to be held on 23 January 2025. Accordingly, the shareholder registry is expected to be closed around 19 - 23 December. </li>
<li>By better analyzing the timeline of the M&amp;A of SM Entertainment, we may be able to get better clues to Korea Zinc's price movement in the next several weeks. </li>
<li>Notice the double top share price formation of SM Entertainment in 2023 versus the potential double top formation of Korea Zinc in 2024. These trading formations look eerily similar.</li>
</ul>


The EGM for Korea Zinc (010130 KS) is expected to be held on 23 January 2025. Accordingly, the shareholder registry is expected to be closed around 19 - 23 December. 
By better analyzing the timeline of the M&amp;A of SM Entertainment, we may be able to get better clues to Korea Zinc's price movement in the next several weeks. 
Notice the double top share price formation of SM Entertainment in 2023 versus the potential double top formation of Korea Zinc in 2024. These trading formations look eerily similar.


A Comparison of Korea Zinc's M&A in 2024 Vs SM Entertainment's M&A in 2023 in the 9th Inning

South Korea

S.M.Entertainment Co. plans, produces, promotes, and markets Korean rock and roll music in several formats, such as compact discs (CD), concert tours, television productions, and music videos.  The Company also operates artist management business as well as licensing and copyright business from the company's music records.

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S.M.Entertainment Co (041510 KS)

Korea Value Up: Outperformance Relative to KOSPI200 & KOSDAQ150 Likely to Attract Greater Capital

Korea Value Up index is up 8.2% from 30 September 2024 to 28 May 2025, outperforming KOSPI 200 (up 3.4%) and KOSDAQ 150 (down 7.9%) in the same...

Douglas Kim

HYBE to Sell Its 9.4% Stake in SM Entertainment to Tencent Music in a Block Deal Sale

The block deal sale of SM Entertainment by HYBE to Tencent is likely to have a negative impact on SM Entertainment's shares mainly due to large...

Douglas Kim

20 Korean Stocks That Could Outperform Next 2 Months Amid Tariff War and Local Political Turmoil

In this insight, we discuss 20 Korean stocks that could outperform the market in the next two months amid global tariff war and local political...

Douglas Kim

China Could Lift Ban on Korean Popular Culture (Hallyu) As Early As May 2025

One of the big thematic events that have impacted the Korean stock market this week has been the expectation that China could lift ban on Korean...

Douglas Kim

A Comparison of Korea Zinc's M&A in 2024 Vs SM Entertainment's M&A in 2023 in the 9th Inning

December 18th is the last day to secure voting rights for Korea Zinc. MBK claims intrinsic value of Korea Zinc is 14 trillion won (680,000 won per...

Douglas Kim

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