Daily Brief South Korea: Coupang, LG Energy Solution, Poongsan Corp and more

In today’s briefing:

ESG Analysis of a Korean E-Commerce Giant: Did Coupang’s ESG Performance Really Improve?
Pullback Complete?; Commodities Heading Lower; Buying Growth/Cyclicals & A Few Utilities
Poongsan Corp: Spin-Off of Defense Business Is Negative for Existing Minority Shareholders

ESG Analysis of a Korean E-Commerce Giant: Did Coupang’s ESG Performance Really Improve?

E: In terms of resource management, Coupang was fined the most among companies that failed to fulfill their recycling obligations, and the use of plastic packaging is increasing every year.
S: Coupang was flagged for the largest number of disputes among online platforms. Not only conflicts with consumers and communities, but also the unfair labor practices are key risks.
G: Bom Kim resigned as chairman after the fire at Icheon Logistics Center. These measures were suspected of being intended to avoid punishment under the Serious Accidents Punishment Act.

We are seeing signs that suggest this pullback may have run its course, as several global market indexes and Sectors appear to be making a higher low near logical support.
This includes the S&P 500, Russell 2000, MSCI ACWI (local currency), TOPIX/TOPIX Small/Nikkei 225, MSCI ACWI Technology (IXN-US), Consumer Discretionary (RXI-US), Financials (IXG-US), Industrials and (EXI-US) — add exposure.
While our overall outlook remains neutral, we continue to see a plethora of attractive buying opportunities in the new leaders.

On 7 September, Poongsan Corp announced a physical division spin-off of its defense business unit. This is likely to have a negative impact on the existing shareholders of Poongsan Corp.
Its proposal to spin off the defense business comes at a bad time when investors are very cautious about companies trying to spin off valuable businesses into a separate entity.
Poongsan’s spin-off is excluded from the need to include stock purchase rights.

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