South Korea

• 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.

• After the market close on 9 September, it was reported that Hong Ra-hee is selling a 0.11% stake in Samsung Electronics (worth 1.94 trillion won) to her son Lee Jae-yong. 
• Her decision to transfer the shares directly to Chairman Lee rather than selling them on the open market is seen as a move to minimize the impact on the market. 
• After this transaction is completed, Lee Jae-yong’s stake in Samsung Electronics will rise from 1.47% to 1.58%. 

• Two years have passed since the fight for the control of Korea Zinc erupted. Despite having lower stake, Chairman Choi alliance has maintained control over the company. 
• It is estimated that MBK/Young Poong alliance has a combined stake of 42.1% stake in Korea Zinc versus 38.8% for the Chairman Choi alliance.
• Fight for control of Korea Zinc is far from over. MBK/Young Poong alliance is likely to stage a third proxy battle for Korea Zinc against Chairman Choi in March 2027. 

• Profit targets presented in our previous/latest insight on SK Hynix (000660 KS) were updated last Friday and are presented here, they override any previous profit target presented.
• The stock started a strong rally this week, it may continue for 3 weeks, including this week.
• The rally could reach 2,000,000 on the third week, but there is a barrier after 2,100,000 so we do not expect this rally to go higher. 

• SK Hynix (000660 KS) gained 6.5% in September MTD, lifting the 2x Leveraged Index 12.3% and combined ETF AUM 14% to KRW 4.36tn.
• The AUM rebound was driven primarily by performance: KODEX units rose just 1%, TIGER was broadly unchanged and the five smaller products recorded reductions.
• Daily creations, redemptions and value traded remain subdued after collapsing at the end of July, coinciding with regulatory measures aimed at curbing retail activity in leveraged ETFs.

• Big Wave Robotics IPO is expected to start trading on 29 September. The company has lowered the IPO price range to 15,000 won to 18,000 won per share. 
• To satisfy market expectations and regulators, Bigwave Robotics lowered its target offering price band and reduced the total number of shares offered.
• My updated valuation analysis suggests a target price of 27,575 won per share, which is 53% higher than the recently lowered high end of the IPO price range.

• My NAV valuation analysis of Daou Technology suggests NAV per share of 60,059 won which is 56% higher than current share price. 
• The largest portion of Daou Technology’s value is its 42.5% stake in Kiwoom Securities which is worth 3 trillion won (180% of Daou Technology’s market cap). 
• I think Daou Technology could pay DPS of 2,961 won per share in 2026 (up 65% YoY), which would suggest a dividend yield of 7.7%. 

• HB SOLUTION (297890 KS) is a South Korea-based specialist in display automation, precision inkjet printing, and semiconductor nanoscale optical metrology, strategically positioned at the intersection of next-generation OLED (IT OLED, QD-OLED) and advanced packaging.
• The company trades at a deep valuation discount of 0.4x P/B and 2.8x trailing P/E against global metrology peers, supported by a healthy net-cash balance sheet, gross margin expansion to 40.6% in FY2025, and a consistent 1.8% dividend yield.
• While high customer concentration and cyclical panel capex have resulted in quarterly top-line volatility and multi-year revenue contraction (-30.55% 3-year CAGR), commercialization of proprietary light-leakage blocking inkjet equipment and thin-film ellipsometers provides significant medium-term operating leverage.

This content is AI-generated and displayed for general informational purposes only. Please verify independently before use.

• My base case valuation of LG Corp is implied market cap of 26.9 trillion won or NAV per share of 177,595 won, which is 42% higher than current share price.
• LG Corp’s investments in five core publicly listed companies including LG Chem and LG Electronics are now worth 26.5 trillion won which is 99% of its current market cap.
• Legal feud between LG Group Chairman Koo and his mum/sisters have been going on for more than three years. Appellate court has scheduled the next hearing for 27 November.

• Post the conclusion of the second tender offer, One & Partners pivoted from their previous stance and announced that it no longer plans to delist Golfzon Holdings for now.
• The pressure is on for One & Partners to improve corporate governance and share price of Golfzon Holdings further in the coming months.
• Since the announcement of the initial tender offer, Golfzon Holdings’ share price has climbed 89.2% to 8,050 won.

• NFC (265740 KS) is a Korean cosmetics company which has rapidly increased its ODM business sales in the past two years. 
• NFC’s customers include Equalberry, Cellimax, Dr. Althea and Beauty of Joseon, brands whose products are increasingly visible outside Korea.
• Based on consensus net profit estimate of 18.5 billion won (2027E) and a 12x P/E, this would result in a market cap of 222 billion won (91% higher than now). 

• KRX confirmed the 20% Samsung and Hynix caps for Thursday. Hynix alone implies KRW 1.2tn of sell flow, with KODEX expected to fully replicate.
• While TIGER remains uncertain due to replication issues and lack of desk confirmation, it represents only 20% of AUM. Expecting at least 90% total AUM movement for Thursday remains realistic.
• For passive impact, Friday’s combined KRX/NXT DTV is likely the best proxy, given recent volume volatility and improving semiconductor liquidity.

• WEEKLY tactical global macro recap/analysis for several markets and stocks we track, grouped by sector.
• We apply our quantitative models to each instrument’s trend, to determine which stocks/markets are just starting a trend, are in the middle of it, or are about to end it.
• Most overbought: META, Bank of China, USO/Oil, China Construction Bank, Mitsubishi UFJ Financial. Most oversold: NeatEase Cloud Music, CATL, Samsung Electronics, Gold, Shin Etsu Chemical

• Elice Group (ELICE KS) is looking to raise up to US$145m in its upcoming Korean IPO.
• It recently transitioned to being a neocloud in South Korea.
• In this note, we examine the IPO dynamics, and look at the firm’s valuation.

• It has been reported in numerous local media that the Korean government is seriously considering on merging Korea Gas (036460 KS) (KOGAS) with Korea National Oil Corporation (KNOC).
• I have a negative view on this merger since it worsens KOGAS’s balance significantly. As such, the speculation about a potential merger is likely to push KOGAS’s share price lower.
• KNOC already faces meaningful bankruptcy risks. Therefore, if these two companies merge, one of the worst case scenarios is a massive capital raise at the expense of diluting existing shareholders. 

• The proposed merger of KOGAS and Korea National Oil Corporation (KNOC) into a new entity, “Energy Resources Corporation,” announced on September 3, 2026, faces immense balance sheet and legal hurdles. KNOC is in complete capital impairment with liabilities exceeding assets by over 2.5 trillion won and total debt of around 21 trillion won. Meanwhile, KOGAS carries over 40 trillion won in debt of its own. Merging these entities risks balance sheet contagion unless the government successfully partitions KNOC’s toxic exploration assets into a separate liquidation subsidiary.
• The revised Article 382-3 of the Korean Commercial Act, which went into effect in July 2025, has fundamentally changed the legal landscape for state-driven mergers. For the first time, directors owe a statutory fiduciary duty of loyalty directly to shareholders, not just the abstract company entity. KOGAS’s minority shareholders, who own 45% of the company, now have clear legal grounds to file direct civil lawsuits and block the transaction if board members accept an exchange ratio or debt transfer that dilutes or damages minority equity.
• KOGAS’s uncollected receivables (misu-geum) remain stubbornly high at 14.178 trillion won as of the first half of 2026. While higher international LNG prices and currency depreciation have increased procurement costs, the raw material cost pass-through mechanism remains politically suppressed for residential city gas. To fully recover misu-geum and normalize the balance sheet, wholesale tariffs would need a steep adjustment of at least 20% to 30%. However, with a new politically appointed CEO, Hong Eui-rak, taking office in July 2026, the board is highly unlikely to challenge Ministry of Trade, Industry and Energy (MOTIE) directives to prioritize consumer inflation over minority shareholder returns.

• Japan Airlines (JAL) has made a strategic entry as a “white knight” for Hanjin KAL Chairman Walter Cho, acquiring a sub-5% stake in the holding company. This transaction, finalized alongside a comprehensive codeshare expansion, serves to bolster Cho’s position as the creeping hostile stake of second-largest shareholder Hoban Group reached 20.15% in July 2026, narrowing the gap with Cho’s insider group to just 0.42 percentage points.
• The looming December 17, 2026 integration of Korean Air and Asiana Airlines faces critical execution risks due to the financial fragility of its regulatory remedy takers. T’way Air, the designated passenger remedy taker, is severely overleveraged with a 2,312% debt-to-equity ratio as of June 2026, forcing it to indefinitely suspend its newly acquired Frankfurt route and downscale other European flights, which may trigger antitrust reviews by the European Commission.
• Hanjin KAL preferred shares (Hanjin KAL P) trade at a severe 76.8% discount to common shares as of late July 2026, reflecting the systemic governance and “tunneling” risks inherent in the South Korean market. Under Korean corporate law, preferred shares lack cumulative dividend guarantees, real liquidation priority, and voting rights, leaving them exposed to value extraction by controlling shareholders during active control disputes.

• On 4 September, numerous local media accounts mentioned that Japan Airlines has acquired a stake in Hanjin KAL Corp (180640 KS), the holding company of Korean Air Lines.
• There is an increasing speculation that Japan Airlines could act as a “white knight” for Hanjin Kal.
• Hoban Group recently increased its stake in Hanjin KAL to 20.15%, narrowing the gap with Chairman Cho to just 0.41 percentage points.

• One of the minority investors in Refine Co (377450 KS) called Cha Partners is heavily opposed this deal and has demanded higher shareholder returns. 
• The tender offer price is approximately 35% lower than the 27,159 won per share paid by Realty Fine when acquiring the stake from the existing largest shareholder.
• At this point, it appears that the tender offer completion rate could be about 50-70% of total shares up for tender offer (5.2 million).

• Sanghyun Park posted recently about stocks added/removed to KRX Semis (091160 KS) at September’s rebalance, this insight will look at support zones to buy during the current correction and profit targets.
• The ETF sits at price that offers a tactical LONG entry – this insight leverages our model data to evaluate if this is a good point to enter the trade.
• Market sentiment on KODEX Semicon remains cautiously bullish with high tactical volatility, possibly an opportunity to buy at discounted price, with a long-term profit target view.

• August’s muted rally was accompanied by rapidly falling implied volatility.
• Kospi’s relative weakness versus SPX may attract bargain hunters and raise the possibility that renewed market momentum could recharge volatility.
• The history of vol premium in prior Septembers offers a cautionary backdrop as implied vols emerge from a steep decline.

• Elice Group (ELICE KS) aims to raise up to US$147m in its Korean listing.
• It offers an integrated AI ecosystem providing i) AI-driven digital transformation (AX) education services, ii) cloud-based GPU virtualization services, and iii) custom AI infrastructure solutions.
• In this note, we look at its past performance and other deal dynamics that might impact the listing.

• FnGuide confirms October’s TIGER Semiconductor Top 10 rebalance is on schedule, with HPSP already moving into the top 10, ahead of DB HiTek by over KRW 0.2tn in market cap.
• With top three accounting for 75%, the remaining 25% is still a sizeable passive pool, with HPSP seeing 5.7% of SO, 7.3% of float and 4x DTV in rebalance flow.
• Local semis sentiment is weak, but local institutions, especially hedgies, are building HPSP exposure, driving outperformance and supporting an early long entry with sector beta hedged short.

• As of 1 September, SK Hynix and Samsung Electronics have repurchased 13.5 trillion won, representing 24.5% of total planned buyback amount.
• At the current pace, SK Hynix is expected to complete its buyback by October 2026. Samsung Electronics is also expected to complete its buyback earlier (in late September or October). 
• I continue to maintain the view that Samsung Electronics will announce a much bigger buyback/cancellation program in January 2027.

• After losing nearly 60% of its value from its peak at the end of June, SK Hynix (000660 KS) appears may have started resuming its uptrend.
• In our latest insight we made a tactical call for a possible restart of the rally, target at 1.7-1.9M (the stock peaked at 1,792,000 on August 18, then pulled back).
• This insight leverages our model to present support price zones where to buy SK Hynix’s current pullback, to enter a tactical, asymmetric risk LONG trade to ride the trend long-term.

• Mezoo, which provides wearable medical devices and software, is experiencing exploding sales and profit growth. 
• Mejoo generated sales of 9.6 billion won (up 216% YoY) in 1H 2026. Operating margin improved materially from -47.5% in 1H 2025 to 19.1% in 1H 2026.
• Despite surging sales and profits, valuations are dirt cheap. It is trading at P/E of 5.4x based on 2027 consensus earnings estimates.

• The acquisition of near-complete control of SCOTT Sports (reaching a 97% stake) was catalyzed by an aggressive liquidity squeeze and the January 2026 ICC arbitration ruling, which forced founder Beat Zaugg to sell his remaining 47% stake for a provisional 20 million Swiss francs ($25 million)—a massive haircut from its historical valuation.
• Youngone’s recent “Value-up” shareholder return expansion (raising the dividend target to 30% and executing a 50 billion won buyback) is strategically aligned with the controlling family’s succession plans. The payout is funded through complex “capital reduction dividends” from Youngone Holdings to provide non-taxable cash to Vice Chairman Sung Rae-eun to cover inheritance taxes on her 170 billion won equity transfer.
• The regulatory risks surrounding the group have intensified following the February 2026 KFTC prosecution referral of Chairman Sung Ki-hak for omitting 82 affiliated companies and 3.24 trillion won in assets. This omission was an intentional effort to delay “large corporate group” designation and evade strict rules against internal tunneling to family-owned entities like YMSA.

• Mezoo Co., Ltd. (0088M0 KS) is a premier South Korean digital healthcare innovator specializing in ambulatory remote patient monitoring (aRPM) and mobile cardiac telemetry (MCT), achieving penetration across more than 53% of South Korea’s tertiary general hospitals with over 10,000 cumulative installed hospital beds.
• The company has reached an operational inflection point, marked by explosive top-line growth (H1 2026 revenue up 215.7% YoY; Q2 2026 revenue up 104.2% YoY to KRW 5.7bn) and sustained operating profitability driven by high-margin Smart Patch hardware sales and recurring LiveStudio central monitoring SaaS subscription revenue.
• Supported by an exclusive commercial distribution partnership with Dong-A ST and accelerating international expansion initiatives (US FDA clearance, Latin America/Brazil rollouts, and CE mark pathways), Mezoo presents an asymmetric risk-reward profile, trading at an attractive 5.4x 2027 consensus P/E.

This content is AI-generated and displayed for general informational purposes only. Please verify independently before use.

• There is an increasing likelihood of a proxy battle for Youngone Corp (111770 KS) involving several corporate activist investors versus Chairman Sung Ki-hak/family. 
• An intense battle appears inevitable at the 2027 regular AGM, which is less than a year away, especially if multiple institutional investors form a shareholder coalition.
• There could be least five institutional investors (including Quad Asset Mgmt and VIP Asset Mgmt) that may try to raise corporate activism on Youngone Corp. 

• DoubleU Games plans to increase capital returns post-privatization of DoubleDown Interactive, with significant net cash reserves.
• Watches of Switzerland has received credible takeover offers, with fundamentals providing downside protection and potential double-digit bid expectations.
• Currency Exchange International’s high-margin FX Payments business contributes to a 106% return, with potential uplisting to the US by 2027.