In today’s briefing:
- Korean Market Election Setup: Locals’ Low PBR Trading Trends
- ESR Kendall REIT’s 150 Billion Won Capital Raise and Continued Outperformance of Korean REITs
- Shareholder Returns of Japanese Trading Companies Invested By Buffett Vs Top Korean Trading/Holdcos
- Celltrion Inc (068270 KS): Sequentially Weak 1Q25 Result; Momentum to Accelerate in 2H
Korean Market Election Setup: Locals’ Low PBR Trading Trends
- Quick screen shows ₩1T+ names under 0.4x PBR — mostly retail, financials, and holdcos. Locals are keeping an eye on these with the election theme in play.
- This isn’t just hopeful chatter — both parties are seriously leaning into value-up policies. With dividend tax reform and solid sector catalysts, locals see real potential in the post-election trade.
- Long regional banks, hedge with KB and Shinhan. In retail, long domestic names, short China-dependent ones. For holdcos, long Hanwha and Doosan, short CJ and Kolon.
ESR Kendall REIT’s 150 Billion Won Capital Raise and Continued Outperformance of Korean REITs
- On 9 May, ESR Kendall Square REIT (365550 KS) announced that it plans to conduct a rights offering capital increase of approximately 150 billion won.
- The Korean REIT sector started to bottom out in 2023, after big underperformance in the previous three years.
- The interest rate gap on the company’s expected dividend yield (5.7%) is now nearly 3% higher than the 10 year South Korean government bond yield (2.7%) which is meaningful.
Shareholder Returns of Japanese Trading Companies Invested By Buffett Vs Top Korean Trading/Holdcos
- “In the next 50 years… we won’t give a thought to selling those [Japanese trading companies]…. Japan’s record has been extraordinary.” (Warren Buffett)
- In this insight, we provide detailed comparisons of the five major Japanese trading companies and five major Korean holdcos/trading companies.
- Japanese trading companies have higher points for market cap, ROE, DPS increase, and shares cancellation. Korean holdcos have higher points for dividend yield, deb/equity ratio, ROIC, and valuations.
Celltrion Inc (068270 KS): Sequentially Weak 1Q25 Result; Momentum to Accelerate in 2H
- Celltrion Inc (068270 KS) announced 1Q25 result, with revenue and operating profit decreasing 21% and 24%, QoQ, respectively. Net profit more than halved in 1Q25 compared with 4Q24.
- Sequential improvement in gross profit margin is one key positive highlight of 1Q25 result. Higher contribution of new products aided gross profit margin. This trend is expected to continue.
- Celltrion reaffirmed 2025 revenue guidance of KRW5T. Revenue is expected to be moderate in 1H25 and strong in the 2H25. Profitability improvement will be slower than expected earlier.
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