Daily Brief South Korea: Hanssem Co Ltd, Hyundai Elevator Co, Muhak Co Ltd, Naver Corp and more

• Disclosure threshold drops from 5% to 1%, signaling stricter transparency, heavier penalties, and potential acceleration of buyback cancellations; new rules open for comment until November 5, effective Q4.
• Near-Term, high-treasury, solid-ROE stocks could see short-term momentum as mandatory cancels and tighter disclosure mechanically lift EPS, driving flows and setting up potential short-term longs.
• This sparks a new event-driven “disclosure schedule trading” setup, as 1%+ treasury holdings now trigger twice-yearly reports and six-month follow-ups, boosting volatility around announcements.

• On 24 September, Hyundai Elevator Co (017800 KS) announced that it plans to sell 7.8 million shares of Hyundai Movex (319400 KS), representing 7% of its outstanding shares.
• Over the next several weeks, we expect continued outperformance of Hyundai Elevator vs Hyundai Movex. 
• We like the pair trade of going long Hyundai Elevator and going short Hyundai Movex over the next 1-3 months, especially due to concerns about a 7% sale in Movex.

• Muhak is a regional soju leader in South Korea, demonstrating significant innovation in a highly competitive market by pioneering lower-alcohol and flavored soju products.
• The company has shown a remarkable financial turnaround, swinging from a net loss in 2022 to strong profitability in 2023 and 2024, coupled with a substantial increase in dividend payouts, signaling confidence from management.
• Despite its regional strength and innovation, Muhak faces intense competition from dominant national players like HiteJinro and Lotte Chilsung, which presents a significant challenge to its expansion plans, particularly in the key Seoul metropolitan area.

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• According to numerous local media, Naver Corp (035420 KS) is set to acquire Dunamu, the operator of Upbit which is the largest cryptocurrency exchange in Korea. 
• According to Naver Corp (035420 KS), its subsidiary, Naver Financial, is discussing various collaborations with Dunamu, including stablecoins  and potential stock exchange. However, nothing has been finalized so far. 
• If Dunamu is valued at 15 trillion won, this would suggest a P/E of 18x based on 2025 annualized net profit of 836 billion won (net profit in 1H25 annualized).