South Korea Daily Briefs | Page 3 of 136

Dec 29

Daily Brief South Korea: SK Hynix and more

By Smartkarma Daily Briefs | Daily Briefs, South Korea

In today’s briefing:

SK Hynix(000660.KS): Insisting on HBM Technology and Continuing to Surpass Samsung in Net Earnings

SK Hynix(000660.KS): Insisting on HBM Technology and Continuing to Surpass Samsung in Net Earnings

By Patrick Liao

SK Hynix (000660 KS)‘s key turning point is its dedication to developing High Bandwidth Memory (HBM) technology, which has finally paid off.
In the third quarter of 2024, SK Hynix (000660 KS) continued to surpass Samsung Electronics (005930 KS) net earnings based on their financial results.
Samsung Electronics (005930 KS) is reportedly exploring partnership opportunities with Taiwan Semiconductor (TSMC) – ADR (TSM US) in the realm of HBM, aiming to strengthen its ties with NVIDIA.

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Dec 28

Daily Brief South Korea: Samsung Electronics Pref Shares, HD Hyundai , Daesang Corporation and more

By Smartkarma Daily Briefs | Daily Briefs, South Korea

In today’s briefing:

What We’ve Got on Samsung Electronics’ Value-Up Disclosure
Dividend Procedure Improvement Plan in Compliance with Global Standards Is Passed into Law
Korea Small Cap Gem #31: Daesang – A Consistently Profitable F&B Company Run by the Lim Sisters

What We’ve Got on Samsung Electronics’ Value-Up Disclosure

By Sanghyun Park

Yesterday, the FSC pushed for value-up policies, but the real buzz was about Samsung Electronics hinting at rolling out its own value-up plan soon.
Samsung may raise its dividend payout from 50% to 60% and could issue a special dividend if semiconductor results improve or FCF exceeds expectations.
Samsung’s value-up disclosure may not cause short-term price action but could strengthen downside support. It may focus on dividends over buybacks, potentially boosting preferred stock.

Dividend Procedure Improvement Plan in Compliance with Global Standards Is Passed into Law

By Douglas Kim

Amid chaos in Korean politics (including impeachment of the Acting President Han Duck Soo), the FSC announced that the change in the procedure for quarterly dividends was passed into law.
The main change that has been made is that the the investors will know in advance how much they will receive in quarterly dividends.
Amid market turmoil, numerous high dividend paying stocks such as Hankook & Company, HD Hyundai, and KT Corp have been outperforming the market this year.

Korea Small Cap Gem #31: Daesang – A Consistently Profitable F&B Company Run by the Lim Sisters

By Douglas Kim

Daesang is one of the leading F&B companies in Korea. It is especially well known for its sauces, kimchi, and miwon (MSG) food ingredients.
Daesang has relatively attractive valuation multiples. It is trading at P/E of 5.6x, P/B of 0.46x, and EV/EBIT of 6.4x in 2025. Daesang consistently generates positive net profit.
Daesang Holdings (084690 KS) is the largest shareholder of Daesang Corp with a 39.3% stake. Two sisters (Lim Sang-Min and Lim Se-Ryeong) are the two largest shareholders of Daesang Holdings.

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Dec 27

Daily Brief South Korea: E Mart Inc and more

By Smartkarma Daily Briefs | Daily Briefs, South Korea

In today’s briefing:

A Potential JV Between E Mart and Alibaba’s Korean Operations Could Value the JV at About $4 Billion

A Potential JV Between E Mart and Alibaba’s Korean Operations Could Value the JV at About $4 Billion

By Douglas Kim

On 26 December, Reuters mentioned that E Mart could announce a major JV announcement with Alibaba Group Holding’s Korean operations that could value the JV at about $4 billion.
The official launch of the JV is expected to take place sometime in 1H 2025. Gmarket and AliExpress Korea will become subsidiaries of this JV.
Although this is not a done deal, this potential JV between Gmarket and AliExpress Korea is likely to have a positive impact on E Mart Inc (139480 KS).

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Dec 26

Daily Brief South Korea: Samsung Engineering and more

By Smartkarma Daily Briefs | Daily Briefs, South Korea

In today’s briefing:

Korea: Potential Relegations from K League 1

Korea: Potential Relegations from K League 1

By Brian Freitas

There are quite a few stocks in Korea that have underperformed their peers and could be deleted from global passive portfolios in February.
There are still 3 weeks left for the stocks to redeem themselves and avoid relegation from the K League, so watch out for big price moves.
Based on our estimate of passive assets, trackers will need to trade between US$45m to US$114m of the stocks. Impact will vary between 2.6x-30x of ADV to trade.

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Dec 25

Daily Brief South Korea: Hyundai Motor , Samsung C&T and more

By Smartkarma Daily Briefs | Daily Briefs, South Korea

In today’s briefing:

Korea FSC Official: New Rule to Block “Treasury Stock Magic” Takes Effect on 31st
Change in Regulation of Treasury Shares Allocation Post Spinoffs Starting January 2025

Korea FSC Official: New Rule to Block “Treasury Stock Magic” Takes Effect on 31st

By Sanghyun Park

Korea FSC announced on the 24th that the updated Capital Markets Act rules, approved by the Cabinet, will take effect on the 31st.
Banning new shares to treasury stocks during spin-offs could shift board focus in Korea, reducing big shareholder influence and prioritizing the broader shareholder base.
The capital markets law change could shift shareholder returns from buybacks to dividends, marking a key inflection point for traders, especially in Korea’s preferred stock market.

Change in Regulation of Treasury Shares Allocation Post Spinoffs Starting January 2025

By Douglas Kim

Starting January 2025, there will be a major change in the regulation regarding the use of treasury shares during a company spinoff process.
The main change involves the practice of allocating newly issued shares to existing treasury shares held by companies during corporate spinoffs.
This practice will now be banned which should help to reduce the wrongful use of treasury shares and improve minority shareholders’ rights.

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Dec 24

Daily Brief South Korea: Korea Stock Exchange KOSPI 200, LG CNS, Korea Zinc, SAMSUNG KODEX KOREA Value-Up ETF, Posco International Corporation and more

By Smartkarma Daily Briefs | Daily Briefs, South Korea

In today’s briefing:

EQD | Kospi Index Options Weekly – December 16 – 20
LG CNS IPO: Limited Float Pushes Back Passive Buying
Korea Zinc: Cumulative Voting System and 10 to 1 Stock Split
Behind the Scenes of KRX Value-Up Index Special Rebalancing: What It Means for Flow Dynamics
New Corporate Value Up Plans of POSCO Holdings and POSCO International

EQD | Kospi Index Options Weekly – December 16 – 20

By John Ley

Kospi is now off 20% from its 52-week highs. Historic vols are picking up and implieds looking like good value given market dynamics.
Hedging increased with broad based positioning in Puts across out-of-the-money strikes.
Heavier volume in Puts with 53.2% of added open interest being Puts.

LG CNS IPO: Limited Float Pushes Back Passive Buying

By Brian Freitas

LG CNS (LGCNSZ KS) is looking to raise up to KRW 1,199bn (US$830m), valuing the company at KRW 6 trillion (US$4.15bn) at the top end of the IPO price range.
As a member of the IT sector, inclusion in the KOSPI200 Index will only take place via Fast Entry (near impossible) or as a large-scale company.
Inclusion in global indices could commence in September 2025 and will be easier if the identity of the pre-IPO minority shareholders is disclosed or if the strategic investors sell.

Korea Zinc: Cumulative Voting System and 10 to 1 Stock Split

By Douglas Kim

Chairman Choi has proposed a cumulative voting system which is one of the agenda items to be discussed and voted upon at the EGM on 23 January.
There is likely to be continued uncertainty about proxy voting, including whether or not Korea Zinc could use cumulative voting system for Chairman Choi to retain control of the company.
On 23 December, Korea Zinc (010130 KS) announced that it will propose a 10 to 1 stock split on the next EGM scheduled for 23 January 2025.

Behind the Scenes of KRX Value-Up Index Special Rebalancing: What It Means for Flow Dynamics

By Sanghyun Park

They ditched the rulebook, used a market cap filter to pick the top 5, and watered down PBR and ROE, making them irrelevant. Market cap was the real deciding factor.
KRX hasn’t confirmed it, but local sources say the special rebalancing was based on the top 50 KOSPI market caps as of the December 13th close.
The shift was driven by local pension funds, especially NPS, which pushed for more big-cap exposure to trigger Value-Up investments, signaling a potential ramp-up in their involvement.

New Corporate Value Up Plans of POSCO Holdings and POSCO International

By Douglas Kim

Both POSCO Holdings (005490 KS) and Posco International Corporation (047050 KS) provided solid, new Corporate Value Up reports.
However, POSCO International’s plan is much better. POSCO International plans to provide total shareholder returns of 50% which is more than double of its previous total shareholder return plan.
This sharp increase in shareholder returns is likely to lead to share outperformance of POSCO International relative to the market in the next several months.

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Dec 23

Daily Brief South Korea: Hanwha Corporation, Posco DX and more

By Smartkarma Daily Briefs | Daily Briefs, South Korea

In today’s briefing:

Korea’s Dem Leader: PBR Under 0.3x Should Be Hostile M&A Targets – Names That Could Feel the Heat
KOSPI Size Indices: Overlap Between Global Passive Selling & Downward Migrations

Korea’s Dem Leader: PBR Under 0.3x Should Be Hostile M&A Targets – Names That Could Feel the Heat

By Sanghyun Park

During the public hearing, Lee Jae-myung asked Simpac’s CFO about their 0.3x PBR, then remarked, “That’s prime territory for a hostile M&A.”
With PBRs under 0.3x, these companies may roll out shareholder returns to manage political pressure—definitely worth tracking from a value-up trading perspective.
Hanwha is interesting due to its room for shareholder returns and potential merger with Hanwha Energy. With the new Commercial Act, a public tender offer is likely. Worth watching closely.

KOSPI Size Indices: Overlap Between Global Passive Selling & Downward Migrations

By Brian Freitas

The review period for the March rebalance of the KOSPI Size Indices commenced on 1 December and will end on 28 February.
A quarter of the way through the review period, we forecast 37 migrating stocks. Among new listings, 1 could be added to LargeCap, 3 to MidCap and 2 to SmallCap.
Four downward migrations were deleted from a global index in November. Now, three more downward migrations could be deleted from the same global index in February.

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Dec 22

Daily Brief South Korea: Hyundai Motor, Korea Stock Exchange KOSPI 200 and more

By Smartkarma Daily Briefs | Daily Briefs, South Korea

In today’s briefing:

A Potential Merger Between Honda and Nissan – Impact on Hyundai Motor and Kia Corp
HSI, Nikkei 225, NIFTY 50, Kospi 200, ASX 200, CSI 300: Year-End Trends and Holiday Market Moves!

A Potential Merger Between Honda and Nissan – Impact on Hyundai Motor and Kia Corp

By Douglas Kim

A potential merger between Nissan Motor and Honda Motor would create the third largest auto group in the world.
If this merger is successful, it could have a short term positive impact on Hyundai Motor since it could result in a reduction of overlapping sales/marketing and production of Nissan.
However, a merger of Honda and Nissan could negatively impact Hyundai Motor over the long term because the merged entity could produce more high quality, price competitive vehicles.

HSI, Nikkei 225, NIFTY 50, Kospi 200, ASX 200, CSI 300: Year-End Trends and Holiday Market Moves!

By Nico Rosti

As the year comes to its end, the trading calendar is impacted by two shortened weeks, with the Christmas holiday and New Year’s Day both falling midweek.
Holidays market trends can be affected by various non-market factors but it’s always good to check the indexes probability of trend reversals, to avoid surprises.
In this insight, we’ll take a quick look at the major Asia-Pacific market indices—a ‘Christmas Carousel of Odds‘ for Asian markets, if you will.

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Dec 21

Daily Brief South Korea: Chabiotech and more

By Smartkarma Daily Briefs | Daily Briefs, South Korea

In today’s briefing:

CHA Biotech Announces A Capital Raise of 41% of Outstanding Shares

CHA Biotech Announces A Capital Raise of 41% of Outstanding Shares

By Douglas Kim

On 20 December, Chabiotech (085660 KS) announced that it plans to conduct a rights offering capital raise of 250 billion won.
The expected rights offering price is 10,800 won (27.3% lower than current price of 14,860 won). A total of 23.148 million new shares (41% of outstanding shares) will be issued.
This capital raise by CHA Biotech is likely to further negatively impact the company’s share price in the next several weeks as many investors are concerned about excessive shares dilution.

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Dec 20

Daily Brief South Korea: SAMSUNG KODEX KOREA Value-Up ETF, LG CNS, Samyang Foods and more

By Smartkarma Daily Briefs | Daily Briefs, South Korea

In today’s briefing:

Korea FSC’s Stabilization Fund: Breaking Down the Buzz and Flow Impact
LG CNS Pre-IPO – Thoughts on Valuation – Retail Demand Appears Hot, Digestible Val at Bottom End
LS Electric, Then Hyundai Rotem, Now Samyang Foods and Hyundai Mipo: Same Proactive Flow?

Korea FSC’s Stabilization Fund: Breaking Down the Buzz and Flow Impact

By Sanghyun Park

With the Fed shock pushing the won past 1,450 and the KOSPI down, it’s time to dig into the stabilization fund—its size, timing, and which stocks will catch the flow.
With ₩10T in play, even spread over 10 stages, it could drive significant price impact. NPS’s ₩1.5T injection in December shows how even smaller flows move the market.
The FSC plans to focus on KOSPI 200 and broad market ETFs, with new ETFs like the Value-Up Index likely getting more flow—target stocks in both for bigger impact.

LG CNS Pre-IPO – Thoughts on Valuation – Retail Demand Appears Hot, Digestible Val at Bottom End

By Clarence Chu

LG CNS (LGCNSZ KS) is looking to raise around US$850m in its upcoming Korea IPO.
LG CNS is a South Korean information technology company. The firm primarily provides comprehensive digital transformation services and solutions backed AI, big data, and cloud.
In our previous notes, we looked at the firm’s past performance and undertook a peer comparison. In this note, we discuss our thoughts on valuation.

LS Electric, Then Hyundai Rotem, Now Samyang Foods and Hyundai Mipo: Same Proactive Flow?

By Sanghyun Park

Local hedge funds, mainly prop traders and PEs, drove the price action in LS Electric and Hyundai Rotem, and are now leading net buying in Samyang Foods and Hyundai Mipo.
Given the setup, it’s likely Samyang Foods and HD Hyundai Mipo will follow a similar move until mid-January when screening starts, so we should stay aware of this backdrop.
This gives us a chance to capture upside. Plus, since Samyang Foods and Hyundai Mipo may pull back 30-40% post-screening, there’s also a solid opportunity during that dip.

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