South Korea

• Korea Value-Up Index closed at 3,274.46 on 19 September 2026, up 82.2% YTD, outperforming KOSPI and KOSPI200 which are up 63.6% and 79.9%, respectively in the same period. 
• Market caps of 12 major ETFs in Korea that track the Korea Value Up index was 3.2 trillion won as of 18 September 2026,  up 154% from 2 January 2026.
• Overall, I believe that this the Korea Value-Up Index could continue to receive significant amounts of capital inflow in the next several years.

• The failed Macquarie tender offer highlights the rising power of minority shareholder activism in South Korea, as Miri Capital (24.2% stake) and Align Partners (14.3% stake) successfully blocked the transaction by refusing to tender their combined 38.5% holding, exposing a significant valuation gap against Macquarie’s 48,000 KRW offer.
• Board neutrality in Korean M&A is shifting structurally due to ongoing debates and legislative momentum around expanding directors’ duty of loyalty under the Commercial Act to include “all shareholders,” making boards increasingly hesitant to endorse deals that disadvantage minority investors.
• Data center power scarcity in the Seoul metropolitan area acts as KINX’s ultimate moat, with KEPCO grid constraints imposing up to a 27-month time-to-power delay on new builds, making KINX’s recently opened Gwacheon IDC (October 2024) an irreplaceable asset that shifts margin bargaining power in their favor.

• The tender offer of Gabia Inc (079940 KS) by Macquarie Asset Management has failed.
• A total of 0.72 million shares of Gabia were tendered by the minority shareholders, representing only 5.4% of outstanding shares, failing to meet minimum target number of shares (3.27 million).
• Failure of this tender offer suggests that many minority shareholders of Gabia believe the intrinsic value of Gabia is much higher. Therefore, this is a long-term positive on the company. 

• The 17,600 KRW tender offer valuation gap is highly deliberate, serving Realty Fine’s long-term goal of low-cost consolidation. The pricing represents a substantial discount to both the 21,000 KRW IPO price and the 27,159 KRW acquisition price paid by the SPC partners (Stonebridge Capital and LS Securities) in 2023. By securing 76.52% of the outstanding shares as of today, Realty Fine has unilaterally crossed the 2/3 (66.7%) special resolution threshold, enabling them to execute any subsequent merger, restructuring, or asset sales without minority approval, while setting the stage for an eventual squeeze-out.
• Refine’s core B2B model faces structural headwinds from South Korea’s aggressive regulatory shifts away from the Jeonse system. Financial Services Commission (FSC) initiatives to curb Jeonse loans for non-resident one-home owners and to expand Debt Service Ratio (DSR) limits, alongside reducing guarantee ratios from 80% to 70%, directly pressure loan volumes. This has triggered a critical strategic pivot toward a 70 to 80 billion KRW B2C Proptech M&A to diversify, using Refine’s massive cash pile.
• The board’s refusal to implement Cha Partners’ requested 91.5 billion KRW share buyback and cancellation reflects a severe governance conflict. Because the board’s decision-making is dominated by directors with overlapping ties to the largest shareholder (Realty Fine SPC), the company has resisted deploying its 190 billion KRW cash reserves (representing 66% of its market capitalization) for shareholder returns. Instead, the cash is being hoarded as a strategic buffer to support the B2C transition and potential Proptech acquisitions under the guise of “long-term growth”.

• Fresh local chatter links Samsung and Hynix accelerating buyback completion to the DRAM price fixing litigation, with September 29 CMC and October 21 MTD as key binary events.
• MTD denial could shift the narrative from supply discipline to coordinated supply discipline, with Micron’s divergent stance and tight Samsung and Hynix inventories adding to legal overhang.
• The key trading window may be Sep 29 to Oct 21, as the CMC could signal discovery scope and trigger front running of the MTD outcome.

• Reuters leaks SK Hynix-Intel talks on U.S. memory production (Ohio lease or hyperscaler JV); SK Hynix’s same-day statement denies specifics, not the underlying talks.
• Chairman Chey (Jul) and CEO Kwak (Aug) already signalled U.S. capacity and a 2030 shortage — this “leak” is management’s own thesis, not new information.
• BULLISH maintained; TP KRW2,700,000, based on 10x FY27E earnings. Ohio plant optionality not yet in the number.

• Private Tech Assets Face Delayed Monetization Flow: While Korea Investment Partners (KIP) holds high-profile stakes in Anthropic and SpaceX, their direct flow-through to the parent company, Korea Investment Holdings (KIH), is structurally delayed and discounted. Duplicate listings of subsidiaries are heavily restricted under South Korean regulatory guidelines, making a KIP spin-off highly unlikely and forcing monetization to rely on asset-level exits.
• Capital Adequacy Restrains Shareholder Returns: The 1.5 trillion won rights offering by Korea Investment & Securities (KIS) in June 2026 positions it to cross the threshold for a Comprehensive Investment Account (IMA) license, but highlights the intense capital absorption of the merchant banking model. This massive capital call, combined with lingering real estate project finance (PF) and bridge loan exposures, strains parent-level liquidity.
• Succession Dynamics Stifle Corporate Value-up: The promotion of Chairman Kim Nam-koo’s eldest son, Kim Dong-yoon, to Senior Managing Director on August 18, 2026, marks the official start of the third-generation succession. Despite raising the FY2025 dividend payout ratio to 25.1%, a structural conflict remains between minority shareholders expecting higher payouts and the family’s priority to manage its capital for estate transition and business reinvestment.

• Korea Investment Partners (KIP) has made a home run investment in Anthropic. Korea Investment Holdings Co, Ltd. (071050 KS) owns a 100% stake in Korea Investment Partners
• Assuming a 50% share dilution from its original investment in August 2024 ($10 million), KIP’s stake in Anthropic would reach $555 million (if Anthropic is valued at $2 trillion).
• Korea Investment Holdings Co, Ltd. (071050 KS) has a market cap of 10.4 trillion won, so this would be 7.4% of its market cap. 

• Jeju Semiconductor Corp (080220 KS) is a leading South Korean fabless memory semiconductor company specializing in low-power, low-to-medium density memory solutions, including Low-Power SDRAM (LPDDR), Multi-Chip Packages (MCP), and Pseudo SRAM (pSRAM) tailored for 5G IoT, telecommunications, automotive electronics, and On-Device AI edge hardware.
• The company is undergoing an unprecedented structural earnings inflection, driven by acute supply tightness in legacy low-power memory as Tier-1 memory integrated device manufacturers (IDMs) aggressively shift fabrication capacity to High Bandwidth Memory (HBM) and leading-edge DDR5. This dynamic propelled FY25 revenue up 86.2% YoY to KRW 302.2 billion, followed by an explosive 1H26 run-rate where 2Q26 quarterly revenue reached KRW 289.9 billion and gross margin expanded to 50.16%.
• While long-term growth prospects are bolstered by strategic foundry alliances with SK hynix and Taiwanese wafer foundries alongside rising automotive design wins (AEC-Q100), institutional investors must balance this upside against acute working capital strain, heightened cash conversion cycles (1H26 operating cash flow remained deeply negative due to rapid inventory ramp-up), and cyclical exposure to fabless foundry pricing.

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• Strategic Niche in Display & Semiconductor Consumables: YMC Co., Ltd. (155650 KS) is a specialized South Korean manufacturer of physical vapor deposition (PVD) sputtering targets, backing plates, process chamber components, and precision surface treatments for Flat Panel Displays (OLED/LCD) and semiconductor manufacturing, augmented by display fab relocation engineering services.
• Operational Inflection Point in 1H26: Following a multi-year cyclical contraction driven by the conclusion of major legacy LCD fab migration contracts and customer destocking (2025 revenue of KRW 172.8bn; net income of KRW 1.3bn), quarterly financial performance demonstrated a clear operational rebound through 1H26, with Q2 2026 revenue expanding to KRW 53.4bn and net margin recovering to 4.58%.
• Compelling Valuation Asymmetry with Balance Sheet Resilience: At the current price of KRW 3,205, YMC reflects deep-value characteristics (Smartkarma Value 5/5) supported by a 2.34% dividend yield, robust balance sheet resilience (Resilience 4/5), and significant upside leverage to Gen 8.6 IT OLED commercialization and high-margin SiC focus ring recycling expansion.

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• On 15 September, it was announced that Samsung SDS (018260 KS) has become the first Korean company to achieve “Select Tier” partnership status with Anthropic in the “Claude Partner Network.”
• This partnership is likely to have a positive impact on Samsung SDS’s share price in the coming weeks, as Anthropic IPO is likely to be the largest ever in history.
• Samsung SDS’s valuations have become more attractive. It is trading at EV/EBITDA of 5.6x and P/B of 1.5x based on 2027 consensus earnings estimates. 

• The AI data center cooling pivot is currently a valuation-supportive narrative rather than a near-term commercial reality. DTS’s record backlog of 129.3 billion KRW at the end of 1H 2026 is driven entirely by legacy US LNG infrastructure projects, such as Golden Pass and Venture Global’s Plaquemines Phase 2.
• DTS faces structural technology and unit economic barriers in entering the precision data center cooling market. While legacy players like Vertiv and Modine utilize highly automated mass-production lines for low-pressure, high-efficiency aluminum microchannel dry coolers, DTS’s industrial fabrication setup is geared toward heavy, custom-designed, high-pressure carbon steel or copper-nickel tube-and-fin heat exchangers.
• Parent-subsidiary governance and capital starving represent significant risks post-IPO. The parent company, Dasan Networks, is unprofitable, recording a net loss of -7.17 billion KRW in 2025. With its 32% post-IPO stake in DTS representing 84% of its own market cap, Dasan Networks is structurally incentivized to drain DTS’s cash through high dividends or royalty fees, leaving minimal capital for genuine AI cooling R&D.

• We remain bullish (as of our 4/21/26 Compass) on the S&P 500 (SPX), and we will stay that way as long as support at 7580-7629 holds.
• At the same time, if SPX breaks below 7580 we would look for a 7-10% peak-to-trough decline, while being mindful of support at 7250-7300.
• A.I. areas were hit hard yesterday following the “pacing the frontier” developments over the weekend, and we believe caution is warranted on semiconductors, memory, neoclouds, and photonics names.

• Local concerns are resurfacing over Hynix and Samsung’s low utilization, with further GMR cuts potentially exposing deliberate production curbs, though KRW strength remains supportive for buybacks.
• Hynix and Samsung’s dollar selling may be slowing as FX driven GMR deterioration risks exposing low utilization, while regulators increasingly flag KRW volatility.
• Hynix ADR funding faces rising regulatory hurdles amid FX volatility, potentially delaying buyback funding and forcing slower dollar selling, creating a near term stock price pivot.

• The Company was established in 2000 and transferred its listing to the KOSDAQ market in 2020.
• It is an online financial information service provider with three main business areas: financial information services, index development and services, and fund evaluation.
• Its major clients include financial institutions such as securities firms, asset managers, and banks, as well as universities and research institutes.

• DTS is getting ready to complete its IPO in October 2026 in KOSDAQ. DTS designs and manufactures air-cooled heat exchangers used in power generation, LNG, and petrochemical plants.
• The IPO price range is from 17,000 won to 18,500 won per share. Based on this range, the expected market capitalization ranges from 252.6 billion to 274.9 billion won.
• DTS is a subsidiary of Dasan Networks (039560 KS). Dasan Networks’ 32% stake in DTS (post IPO) represents 84% of Dasan Networks’ market cap. 

• Infinitt Healthcare (071200 KS) announced a major dividend program of providing 65.4 billion won in dividends to shareholders from 3Q 2026 to 2Q 2027.
• Given the company’s current market cap of 276 billion won, the dividend amount of 65.4 billion won represents 24% of its market cap.
• The company has a strong balance sheet. Net cash was 212 billion won at the end of 2Q 2026, representing 79% of market cap.

• There was one ADD and one DEL for the MV US Semiconductor 25 index and the MV US Semiconductor 10% capped ESG-screened index.
• We expect MVSemi25 to trade US$4.45bn and MVSemi10% to trade US$900mm one-way for September 2026. Some small flows offset. The event is on the 18th at the close (Friday).
• SK Hynix (SKHY US) is expected to see US$4.3bn to buy.

• Following its ADR listing, SK Hynix (SKHY US) will be added to the VanEck Vectors Semiconductor (SMH US) ETF in September. Skyworks Solutions (SWKS US) will be deleted.
• Estimated one-way turnover is 6.4% resulting in a round-trip trade of US$8.8bn. There are 2 stocks with over a yard and a half to trade.
• The largest flows will be in SK Hynix (SKHY US), NVIDIA (NVDA US), Advanced Micro Devices (AMD US), Micron Technology (MU US), KLA-Tencor (KLAC US) and ASML Holding (ASML US). 

• Ducommun will be added to the MarketVector Global Defense Industry Index at the close on 18 September, while DroneShield and Red Cat Holdings will be deleted.
• The constituent changes, float changes and capping changes will result in an estimated one-way turnover of 5% resulting in a round-trip trade of US$695m.
• Float and capping changes result in over 0.5x ADV to trade in some stocks and those could be interesting in the next week.

• KODEX AI Electric Power Core Facilities ETF (487240 KS) had a market cap of 3.2 trillion won as of 11 September 2026, up 104% in the past one year. 
• In this insight, I discuss the impact of rebalance of the iSelect AI Power Core Equipment Index in December 2026 which impacts the KODEX AI Electric Power Core Facilities ETF. 
• Seojin System and GnCEnergy are two potential inclusion candidates. LS Marine Solution, LS Eco Energy, and Cheryong Electric are potential exclusion candidates. 

• In this insight, I provide an early look at the potential additions and deletions to KOSDAQ150 rebalance in December 2026.
• I provide 9 potential deletion candidates including C&C International Corp (352480 KS), Devsisters (194480 KS), and Webzen Inc (069080 KS). 
• QThe 7 potential addition candidates include Mezzion Pharma (140410 KS), Taihan Fiberoptics (010170 KS), and Seers (458870 KS). 

• On 10 September, Mirae Asset’s Global X Japan launched Japan’s first exchange-traded fund called Global X Korea Semiconductor TOP10 ETF focusing directly on South Korean semiconductor companies.
• This ETF tracks the yen-denominated index of the ‘FnGuide Semiconductor TOP10 Index,’ which comprises ten South Korean semiconductor firms.
• Given strong demand for Samsung Electronics and SK Hynix along with the need to enhance diversification, this Global X Korea Semiconductor TOP10 ETF could gain much higher demand in Japan. 

• Mirae Asset TIGER Semiconductor TOP 10 ETF’s AUM has now surpassed 10 trillion won, up more than 200% since the beginning of the year. 
• In this insight, I discuss the impact of this change on FnGuide Semiconductor Top10 Index Rebalance on ETFs such as Mirae Asset TIGER Semiconductor TOP10 ETF in October 2026.
• HPSP (403870 KS) is a potential inclusion candidate in the FnGuide Top 10 Semiconductor index rebalance in October. Leeno is a potential exclusion candidate. 

• FnGuide Top 10 rebalancing is today, with TIGER likely splitting the flow between 11am noon and the close based on recent trading patterns.
• I just confirmed that, despite the recent concerns, FnGuide is sticking with the 25% cap for the Top 2 names in today’s rebalance.
• Samsung Electro Mechanics and Samsung C&T are adds, Naver and Celltrion deletes. Watch Samsung C&T for an intraday spike.

• SK Hynix fell 31% from our initiation despite a record 76% Q2 operating margin. Six structural, Korea-specific forces drove the selloff; none touch the investment thesis.
• Every pillar confirmed: Q2 OPM 76% (fifth consecutive record), ~10 LTAs signed, Nvidia US$500bn LOI secured, and CEO Kwak commits US$64bn to new capacity — calling shortage “through 2030.”
• BULLISH maintained; TP revised to ₩2,700,000 on 10× FY2027E EPS ₩270,000. The multiple cut — from 13× — reflects AI sustainability fears and Korea’s volatility premium, not earnings deterioration.

• At the close of its reloaded ₩6,700/Share Tender Offer for Golfzon Holdings (121440 KS), SJ Investment received zero shares. With no margin seller at ₩6,700, it seemed illogical to reload.  
• And for now, they won’t, opting not to proceed with a follow-on delisting transaction.
• ₩6,700/Share was low-balled. It’s probably worth (at least) double this. If you have the bandwidth to wait this out, stay in. Or buy and hold. Load up on weakness.

• Samsung has fallen 18% since initiation despite record DS profits and a ₩90–110T shareholder return programme — widening the gap between fundamentals and valuation.
• HBM4E NVIDIA qualification remains delayed but intact for Q4 2026, while October’s ₩30T dividend could provide the first near-term catalyst for re-rating.
• We remain BULLISH with FV of ₩400,000, based on 7.7× FY2027E EPS of ₩52,000, implying 48.7% upside.

• Woori Financial remains our value pick with its low PEG ratio and high dividend yield; we believe it is the most asset sensitive bank of the peer group
• Woori is trading at a 36% PBV discount to peer KB Financial which is well below the three year mean a close to one standard deviation from the mean
• We downgrade Hana Financial to a neutral despite attractive valuations due to its relatively more challenged credit quality which could drive a higher cost of risk going forward

• Choi Yun-beom’s camp secured a crucial tactical victory in the September 9, 2026 extraordinary general meeting (EGM), with independent audit nominee Baek In-kyoo receiving 81.8% of the vote. This success was heavily driven by Korea’s “3% rule,” which capped the voting power of the dominant MBK-Young Poong alliance (42.1% overall stake) and allowed retail and foreign institutional investors to swing the outcome.
• Korea Zinc’s balance sheet has undergone a structural transformation, with total debt reaching $4.28 billion as of March 2026 and consolidated net debt standing at KRW 4.384 trillion in Q1 2026. The treasury team has successfully migrated high-cost short-term acquisition debt into longer-term, lower-yield domestic corporate bonds, drawing KRW 1.16 trillion in orders for an oversubscribed KRW 400 billion issuance in April 2025.
• Smelting margin pressure from record-low treatment charges (TCs) of $80 per ton in 2025 and $85 per ton in 2026 has been entirely offset by premium by-product credits. Korea Zinc’s high-margin silver and gold recoveries, alongside critical metals like germanium and antimony, have driven record operating profits (e.g., KRW 746 billion in Q1 2026), widening the competitive moat against pure-play competitors like Young Poong.