South Korea

• In this insight, I discuss numerous gap trade opportunities involving Korean preferred and common shares in 4Q 2026.
• Preferred companies’ share price discount (relative to the common shares) on the 27 pairs below was 46.9% as of 1 October 2026, down slightly from 47.2% on 3 July 2026. 
• There has been an increasing number of pairs (such as Samsung Electronics pref) where the preferred shares are starting to outperform their common share counterparts in the past three months. 

• In this insight, I discuss the alpha generation through companies that announced share buybacks in the Korean stock market in August and September 2026.
• This insights provides a list of 43 companies in the Korean stock market that have announced share buyback programs in August and September 2026.
• There were seven companies with more than 300 billion won in market cap that announced share buybacks in the past two months with at least 1% of outstanding shares.

• We forecast 3Q26E OP ₩108.2T, above the consensus range ₩104–107T. Micron’s +30% NAND pricing skews risk upward to ₩117T; the won costs ₩6T. Ignore an FX revenue miss.
• January’s ₩55–75T cash allocation is the real catalyst, not the 3Q26 prelim. Our FCF math points to ₩110T; share cancellation beats dividends for EPS. 
• Our forecasts is FY26E OP ₩373T, EPS ₩44,961; FY27E EPS ₩55,055. TP ₩400,000 held at 7.3x FY27E, the bottom of Samsung’s 10-year band. Maintain BULLISH.

• Founded 2014, KOSDAQ-listed 2025; full-stack mobile ad platform                         
• Korea’s only listed GCPP: Google’s top-tier official partner
• Revenue from new RTB-based platforms up 214% YoY in 1Q2

• Treasury Share Cancellation Mandated by Regulatory Shift: The massive 12.0% treasury share cancellation (valued at KRW 282.8 billion) and subsequent KRW 140 billion buyback-and-cancel program are structurally driven by South Korea’s Commercial Act amendments and the corporate Value-up program, marking a permanent end to Cheil’s decade-long cash-hoarding strategy.
• Captive Spend Squeeze and KFTC Oversight: While Cheil maintains its high-barrier captive moat with Samsung Group (accounting for approximately 70% of gross profit), the Korea Fair Trade Commission (KFTC)’s rigorous transfer-pricing audits and bidding rules prevent arbitrary pricing, forcing Cheil to compete on merit while managing a severe near-term marketing spend cut from Samsung’s Mobile Experience (MX) division.
• GenAI and Structural Margin Pressures: Generative AI has initiated deflationary pressure on Cheil’s traditional cost-plus creative production billing. The company is actively shifting to digital retail and direct-to-consumer (D2C) channels to maintain its target 18.0% to 20.0% operating profit-to-gross profit (OP/GP) ratio, balancing structural cost inflation with a strict 60.0% dividend payout policy.

• POSCO’s pre-market block sale of its entire 2.7% stake (20.28 million shares) at 33,360 won per share on October 1, 2026, successfully unwinds a decade-long strategic cross-shareholding. While it removes a structural overhang, it has triggered immediate downward pressure on the stock, falling over 4% today.
• Woori’s diversification strategy is materially shifting its earnings profile, with non-banking net income contribution climbing from 7% in Q2 2025 to 22% in Q2 2026. This growth is anchored by the dual acquisition of Tongyang Life and ABL Life for a combined 1.54 trillion won, which is slated to culminate in a merged 55 trillion won life insurer in the second half of 2027.
• Tight regulatory constraints are forcing major operational adjustments. Despite the Financial Services Commission (FSC) expanding the annual household loan growth target from 1.5% to 3% in August 2026, Woori Bank has had to implement aggressive self-imposed caps—such as slashing monthly mortgage lending per branch to 1 billion won—to maintain compliance while stabilizing its CET1 ratio at 13.71% as of Q2 2026.

• For memory swing traders, October 7’s MTD reply is the key catalyst, with Hynix potentially front running it by disclosing HBM customer commitments and 2027 capacity allocation.
• Samsung’s HBM capacity messaging strengthens the supply trade off case, while Hynix could go further with customer commitments and allocation data to support an AI driven capacity reallocation narrative.
• For Hynix, hard 2027 HBM capacity numbers or incremental customer commitments would matter far more than another generic capacity update, potentially driving estimates and near term share price volatility higher.

• POSCO Holdings (005490 KS) is looking to raise US$503m in a secondary sale of its shares in Woori Financial Group (316140 KS).
• This is a long-awaited cleanup sale by POSCO Holdings (005490 KS).
• In this note, we will run the deal through our ECM framework.

• On 30 September, Cheil Worldwide (030000 KS) announced that it is cancelling its entire treasury shares, representing 12% of outstanding shares. 
• Cheil Worldwide also plans to buy back an additional 40 billion won worth of shares on the open market between October 1 and December 30, representing 1.9% of outstanding shares.
• The bigger concerns are the company’s relatively flat growth in sales and profits which has partly been due to the negative impact of the greater use of generative AI services.

• In this insight, I highlight the recent pricing gap divergences of the major Korean holdcos and opcos which could provide trading opportunities in 4Q 2026.
• I provide five holdco/opco pairs that have experienced noticeable divergence in the past three months and closing of their gaps could occur in the next several weeks.
• Of the 38 pairs, six of them are near or more than 2 standard deviations (in terms of their changing share price movements in the past three months).

• SK hynix reported record second-quarter 2026 results, supported by strong artificial intelligence infrastructure demand and tight memory supply.
• Consolidated revenue reached KRW 79.3 trillion, up 51% sequentially and 257% year-over-year.
• Growth reflected higher pricing across DRAM and NAND, particularly AI server DRAM and enterprise SSD products.

• Hanwha Group’s acquisition of a 15.89% stake in KAI—which was cleared by the Korea Fair Trade Commission on August 31, 2026—is the initial phase of a calculated, multi-year vertical integration strategy. However, a full privatization remains blocked by political resistance from the Lee Jae-myung administration, strong labor union opposition, and the strict capital adequacy constraints of KEXIM, which cannot exit its 26.41% stake below a steep premium.
• KAI’s financial performance remains bifurcated: domestic DAPA cost-plus procurement contracts structurally limit operating margins to 5% to 7% and are subject to aggressive retroactive audits. Conversely, fixed-price international export contracts yield lucrative 10% to 15% operating margins but expose KAI to massive foreign exchange volatility and supplier cost inflation, as evidenced by the severe earnings miss in Q2 2026 with operating profit plunging 43.1% to 48.4 billion won.
• KAI continues to suffer from a state-dominated “parachute appointment” leadership culture, causing major strategic friction and project delays. The recent appointment of CEO Kim Jong-chool in March 2026, following an eight-month leadership vacuum after Kang Goo-young’s abrupt resignation in June 2025, highlights how political transitions and misaligned executive compensation KPIs—which reward gross export signings over return on capital—undermine long-term capital discipline.

• KRX says the new KRICS framework should stay fairly close to GICS, so using GICS as the base case is the best way to forecast sector mapping at this point.
• KRX simulations show the KRICS switch should not materially change the size of December KOSPI 200 adds and deletes, with existing market cap buffer rules absorbing most sector driven changes.
• Nonetheless, sector uncertainty makes cutoff calls harder, likely delaying KOSPI 200 pre positioning and flow signals until late October, when the new mapping is released.

• In the past several months, Hanwha Group companies purchased additional shares in Korea Aerospace Industries (KAI) so their combined stake is now 15.89%.
• Hanwha Aerospace owns 9.9% stake in KAI, followed by Hanwha Systems (4.98%), and Hanwha Aerospace USA (1.01%). 
• I provide four main scenarios of the potential next moves by the Hanwha Group companies regarding Korea Aerospace Industries. 

• FnGuide Inc (064850 KS) announced a significant improvement in its new Corporate Value-Up program. The changes are meaningful and likely to have positive impact on share price.
• FnGuide also plans on share buyback and cancellation of 15 billion won over the next three years (2026 – 2028).
• FnGuide raised total shareholder returns to 40% or higher from 2026 to 2028. Previously, FnGuide did not explicitly mention the total shareholder returns, other than the 25%+ dividend payout ratio.

• Samsung SDI (006400 KS) returned to profitability earlier than expected, thanks to the pivot to AI data center back up system and key EV partnerships. 
• Contrary to popular belief, the AMPC (credit for being green in the US), is still active and contributed to SDI’s bottom meaningfully. 
• As the valuation is relatively depressed right now, we should expect some sort of the Value Up program to kick in and the share price should re-rate. 

• Boditech Med Inc. (206640 KS) is a leading South Korea-based in vitro diagnostics (IVD) company specializing in Point-of-Care Testing (POCT) analyzers (ichroma™ and AFIAS platforms) and consumable diagnostic reagent cartridges across more than 120 global markets.
• Following post-pandemic normalization, the company has delivered strong organic revenue expansion, reaching KRW 162.1bn in 2025 (+17.3% YoY) with sustained gross profit margins above 56% and EBITDA margins in the 23-26% range, powered by non-COVID test menus across cardiovascular, latent tuberculosis (IGRA-TB), therapeutic drug monitoring (TDM), and diabetes.
• Trading at attractive valuation multiples relative to global IVD peers (~7.5-8.5x trailing P/E and ~1.1x P/B), Boditech Med combines robust balance sheet resilience (net cash position), consistent dividend distributions (1.6% yield), and multiple regulatory commercial catalysts in North America and Europe.

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• Panic set in on Monday as SK Hynix (000660 KS) fell -5.05%. The stock has been decelerating in the last few weeks, as discussed here, so this is not surprising. 
• Bypassing narrative commentary on the sell-off, we focus strictly on tactical execution and portfolio positioning.
• Our model’s support price zones have been updated since our latest SK Hynix insight so here is a fresh view: how much can SK Hynix fall and where to buy?

• Reuters: Solidigm weighs IPO up to $150bn, ~$15bn raise, 2027 listing — 4x the KRW50T figure our August stub-value thesis modeled, but single-sourced and unfiled.
• Re-Run SOTP: Solidigm optionality lifts Fair Value by ₩324,000/share to ₩3,024,000, up 12% from our current TP of ₩2,700,000.
• We keep our  Fair Value unchanged. This confirms our 40%-probability base case rather than surprising it. The SKHY rose by ~3% on Friday, a good sign it will rise today. 

• Samsung Electronics (005930 KS) gained 9.8% in September MTD and its 2x Leveraged Index rose 18.3%, but redemptions limited AUM growth to 15%.
• Units declined across every long-leveraged ETF, while the inverse product added 10% more units despite losing 20.2%.
• Annualised 21-day volatility fell from approximately 135% to 42%, coinciding with regulatory restrictions and a collapse in leveraged ETF flows and turnover.

• In this insight, I discuss the impact of the potential inclusion of SK Hynix (SKHY US) ADR in the NASDAQ 100 rebalance in December 2026. 
• There are 17 other companies in the NASDAQ 100 Index which have lower market cap than SK Hynix’s ADR capitalization. 
• I believe there is a high probability (80-90%+) of SK Hynix (SKHY US) ADR inclusion in the NASDAQ 100 Index in December 2026.

• SK hynix (000660 KS) gained 11.2% in September MTD and its 2x Leveraged Index rose 20.9%, but combined AUM increased only 10% as redemptions offset performance.
• Units outstanding fell across all seven long leveraged ETFs. In contrast, units in the inverse product more than doubled and its market capitalisation rose 56%, despite negative performance.
• Annualised 21-day volatility more than halved from its late-July peak of 179% to 55%. The decline coincided with the collapse in ETF trading activity and fund flows following regulatory changes.

• KOSPI 200 is a Korean blue-chip index that tracks the 200 largest and most-liquid names listed in the KOSPI section of the Korea Exchange (KRX). 
• In this insight, we have presented our expectations for ADDs and DELs for the upcoming semiannual review in December 2026.
• 79% of the reference period for the December 2026 rebal is complete. We see up to 5 ADDs and 6 DELs. 

• Sept. 22 Opposition largely recycles the CAC, but its January 2026 customer vetting logic strengthens MTD survival odds, keeping Hynix as the key litigation focus.
• The January 2026 customer vetting point makes Hynix’s need to double down on its HBM transition narrative even more critical, potentially strengthening the case for ADR expansion.
• Regulatory approval remains key, but political and strategic incentives increasingly support ADR expansion, potentially making Hynix ADR arb a key trade setup from mid October.

• Bosung Power Technology is a Korean power-equipment manufacturer of transmission towers, steel structures for power plants and substations, gas-insulated switchgear, pole-mounted transformers and other electrical equipment.
• The company’s operations have remarkably improved in the past three years as it has been one of the beneficiaries of Korea’s aggressive investments in the high-voltage direct-current (HVDC) transmission infrastructure. 
• The company’s sales and profits worsened in 1H 2026 after record breaking results in 2025. Bosung Powertech looks fairly valued now at P/E of 20x and P/B of 3.1x. 

• In this insight, I provide an investment thesis on Doosan Enerbility (034020 KS) which is a Korean nuclear powerhouse. 
• In addition, I highlight the likely pre-IPO investment in Westinghouse Electric (US) which is likely to occur in 4Q 2026/1Q 2027. 
• Despite the long-term higher demand for nuclear and SMRs made by Doosan Enerbility, I remain wary of the company’s high valuation multiples and worsening balance sheet.

• The dispute between SK Hynix (000660 KS) management and the labor union has been resolved; thus, production halt risks have been avoided at a critical time.
• Paying 50% of the bonus pool in treasury shares allows SK Hynix to retain billions in cash compared to paying 100% in cash. 
• The investment thesis remains intact with major hyperscalers locked into multi-year contracts with Sk Hynix while PER remains at 6x. 

• My base case valuation of Elice Group is target price of 62,353 won per share. This is 11.4% lower than the low end of the IPO price range. 
• Given the lack of upside, I have a Negative View of this IPO. The bankers used eight overseas companies as comps for Elice Group. I disagree. 
• My base case valuation of Elice Group is based on a P/E of 34.7x my estimated net profit of 20.1 billion in 2026. 

• Benchmark Anchor for South Korean Growth Capital: The KOSDAQ 150 Index serves as the premier liquid equity benchmark representing the top 150 technology, biotechnology, and high-growth industrial companies listed on the KOSDAQ market of the Korea Exchange (KRX), capturing over 70% of total market capitalization while filtering out illiquid small-cap tail risk.
• High-Beta Thematic Concentration: The index offers concentrated fundamental exposure to structural secular trends—notably advanced biopharmaceuticals, artificial intelligence semiconductor equipment, high-purity battery materials, and robotics—generating elevated upside participation during liquidity expansions and tech capex cycles.
• Institutional Utility and Structural Churn: While serving as the definitive underlying benchmark for KRX-listed index futures, options, and exchange-traded funds (ETFs), the index faces recurring structural graduation risk as mature mega-cap constituents periodically migrate to the KOSPI main board, maintaining a high-volatility, mid-to-large cap growth profile.

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• Dominant Market Position in Financial Intelligence & Thematic Indices: FnGuide Inc. (064850 KS) is South Korea’s preeminent independent financial data, investment analytics, and index benchmark provider, functioning as an essential market infrastructure player levered directly to the secular expansion of the Korean exchange-traded fund (ETF) market (AUM exceeding KRW 512tn).
• Inflection in Operating Leverage & Profitability: The business model is undergoing a structural shift toward high-margin index licensing fees (~47.3% of top-line revenue in 1Q 2026), driving record financial performance in 2Q 2026 with quarterly revenue reaching KRW 14.92bn (+85.5% YoY) and EBITDA margins expanding to 54.87%.
• Robust Balance Sheet with Attractive Cash Generation: FnGuide maintains a high-quality financial profile characterized by a 3-year Free Cash Flow CAGR of 18.01%, zero net debt (KRW 14.07bn net cash), and high returns on invested capital, though geographic concentration in Korea and recent corporate governance transitions warrant institutional monitoring.

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• Activists are losing legal leverage, but the defensive cost is rising: The Daejeon District Court’s August 12, 2026 ruling, which rejected Flashlight Capital Partners’ (FCP) derivative lawsuit against former directors, has temporarily shielded KT&G’s board. However, defending against the October 2024 hostile bid of 1.9 trillion won for Korea Ginseng Corp (KGC) has forced the company to commit to an unprecedented 360 billion won share buyback starting today (September 23, 2026), and to completely retire 1.8 trillion won in treasury shares.
• Regulatory arbitrage is closing rapidly: South Korea’s April 24, 2026 amendment to the Tobacco Business Act closed the synthetic nicotine excise tax loophole, instantly leveling the playing field for the “Lil” Heat-Not-Burn (HNB) portfolio against low-cost independent vape competitors. Simultaneously, the Ministry of Health and Welfare’s Sixth National Health Promotion Plan (2026–2030) outlines a transition toward a domestic retail price of 10,000 won per pack—representing a potential margin reset.
• The Kazakhstan “Eurasian Supply Hub” is a geopolitical hedge: The newly completed Almaty facility (April 2025), with its 4.5 billion stick capacity, successfully mitigates Russia-Ukraine war-related logistics disruptions and provides tariff-free access inside the Eurasian Economic Union (EAEU). However, regional EAEU excise harmonization agreements (targeting 35 EUR per 1,000 sticks) are placing downward margin pressure on combustible volumes, speeding up the transition to the higher-margin Lil platform.

• Covered call ETF market has been one of the fastest growing ETF sector in Korea in the past three years.
• It is estimated that the covered call ETF net assets in Korea surged to about 28.5 trillion won at the end of June 2026, up 84x from end of 2024.
• While the Korean stock market is trading sideways/gradually turning higher since early August, there may be a greater interest in these covered call ETFs.

• Founded in 1998 and KOSPI-listed in 2019, Dreamtech is an EMS(Electronics Manufacturing Services) and ODM specialist.
• Its business has two axes: OEM work, sourcing parts to customer specs and supplying them as modules; and ODM work, partnering with owners of core technology to productize and mass-produce it.
• Its edge rests on three capabilities: tracking technology trends and sourcing to customer needs; customized mass-production development; and reliable large-volume supply.

• Samsung Electronics (005930 KS) currently in its third week up, the rally is short-term overbought but could continue this week and the next.
• Our model has identified profit targets for the current rally, for the next 2 weeks.
• We also discuss support price zones, in case the stock starts to pullback this week, all the details are discussed below.

• On 22 September, KT&G Corporation (033780 KS) announced that it plans to buyback and cancel 2.07 million shares (about 2% of outstanding shares) worth 360 billion won. 
• The Kazakhstan market is a prime example. KT&G began commercial production in Kazakhstan in March 2025. Its local market share expanded from 5.1% in 2022 to 9.6% in 2025.
• KT&G launched the “Lil Tonino Lamborghini” on 15 September in Korea. This product reduces the preheating time to 3 seconds versus competing products that typically take 10 to 20 seconds.

• Dominant Tier-1 Exhaust & Mobility Supplier with Accelerating Profitability: SJG Sejong (formerly Sejong Industrial, 033530 KS) maintains a market-leading Tier-1 position supplying exhaust systems, catalytic converters, and eco-friendly mobility components primarily to Hyundai Motor Group (HMG). Operating performance has demonstrated significant operational leverage, with net income surging from KRW 4.02B in 2023 to KRW 68.74B in 2025, driven by structural gross margin expansion from 9.64% to 13.58% and high-margin product mix enhancements.
• Strategic Product Portfolio Transition Toward Clean Mobility: To mitigate long-term terminal value risks associated with internal combustion engine (ICE) phase-outs, Sejong is aggressively scaling its portfolio into hybrid vehicle exhaust solutions, hydrogen fuel-cell components (metal bipolar plates, hydrogen sensors, water traps), and next-generation electronic vehicle systems (wheel speed sensors, SBW actuators, ICCUs). This dual-track approach provides near-term cash flow generation from high-margin hybrid/ICE architectures while de-risking the powertrain transition.
• Compelling Value Disconnect with Strong Total Shareholder Returns: Trading at a deep valuation discount of ~3.0x forward P/E and below 0.5x P/B, the stock offers institutional investors an asymmetric risk-reward profile backed by a 5/5 Smartkarma Value Smartscore and a 2.98% dividend yield. Robust balance sheet fundamentals and a 3-year EPS CAGR of 241.96% underscore the undervaluation relative to global and domestic automotive Tier-1 peers.

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• There are several notable ETFs (SMH ETF, VanEck Semiconductor UCITS ETF, and KODEX US Semiconductor ETF) that will include SK Hynix (SKHY US) ADRs in their upcoming rebalances.
• The expected capital inflow from the passive funds is expected to be significant at about $3.8 billion (5.2 trillion won). 
• A $3.8 billion inflow represents 11.3% of the total ADR market cap. ADTV is $4.3 billion. Flow/ADTV (no of days) is 0.88. 

• On Tuesday, Meera Kapoor wrote about how GLP-1 drugs cause people’s skin to become saggy – the effect that’s now popularly known as “Ozempic face”.
• Two solutions are botulinum neurotoxin (“Botox”) and dermal fillers.
• Botox is injected into the skin to reduce wrinkles. Such wrinkles include frown lines, forehead lines and so-called “crow’s feet.

• Sanghyun Park has explained in detail what happens on Sep 22 (Plaintiffs’ MTD Opposition Filing Deadline) for SK Hynix (000660 KS) . Effects could be visible from Sep 23.
• Our previous insight updated the stock’s profit targets for this rally (“the rally could reach 2,000,000 on the third week”). This is the third week and it’s still below target.
• SK Hynix rallied less than expected and seems to be at  an inflection point: has cleared P50 resistance but P75/1,996,000 is far. Sep 22 could be a turning point.

• Won Tech’s exports increased by 59.8% YoY in 2025 and by 21.5% YoY in 1H 2026. The company’s export sales to the U.S. increased sharply in 1H 2026. 
• Won Tech is currently trading at P/E of 9.8x and P/B of 2.2x based on 2026 consensus earnings estimates (50% to 60% discount to its historical valuation multiples). 
• Won Tech provides medical aesthetics and surgical devices. The company’s products specializes in the laser and energy based medical solutions used for skin rejuvenation and face lifting procedures.