Daily Brief South Korea: Hanwha Machinery & Service Holdings, Coway Co Ltd, SK Hynix, Coupang , DTS and more

• Kim Dong-seon (third son of Hanwha Group Chairman Kim Seung-youn) has launched a tender offer of a 19% stake in Hanwha Machinery & Service Holdings (0220W0 KS) (HMSH).
• The tender offer is for 16.06 million common shares at 8,000 won per share, running from 12 October to 2 November. 
• I have a positive view on this tender offer and on HMSH whose share price fell excessively post split and Kim Dong-seon is trying to capitalize on this price decline.

• Coway Co Ltd (021240 KS) counts around 35% of its revenue from Southeast Asia particularly Malaysia and Thailand, where it recorded high growth, offsetting the mature domestic Korean market. 
• Due to the current haze season that may last until November, Coway’s revenues are supposed to be carried up and its share price may see multiple expansion as well. 
• At <2x PBV, 11x PER and 8x EV/EBITDA, a defensive stock that is committed to Value Up program, including cancellations of treasury and maintaining dividends, it sounds like a bargin. 

• Solidigm IPO rumours have hurt: ₩129tn of MCAP erased since 26 Sep. Investors clearly dislike it; and management adding no value by stating “nothing decided yet.”
• Our math: a US$100bn IPO moves value −1.7% to +1.1%; even a fire-sale costs 6.2%. Abandonment recovers ~₩176,000 per share.
• Maintain BULLISH, FV ₩2,700,000 (+60%). At 6.2x FY27E P/E, average down. Cyclicals are bought when the bad news is out.

• In the book Free Capital, the private investor Vernon talks about his strategy of buying growth stocks when they encounter “glitches” – temporary market overreactions to negative events.
• I try to catch that company when nobody wants it, while it is still working through its problems” – VernonSouth Korean e-commerce operator Coupang (CPNG US – US$26 billion) is a test of that idea.
• The stock sold off after its cybersecurity breach in November 2025.

• DTS finalized its IPO price at 18,500 won (high end of IPO price range). A total of 2,381 institutions participated in the demand forecasting. Demand ratio was 983.98 to 1. 
• Based on the finalized offering price, the total proceeds from the IPO amount to approximately 41.2 billion won, and the company’s expected market capitalization post-listing is around 275.3 billion won.
• My base case valuation of DTS is a target price 29,360 won per share, which is 59% higher than the IPO price (18,500 won). 

• DTS is South Korea’s sole thermal engineering specialist manufacturing both Air-Cooled Heat Exchangers (AFC) and Air-Cooled Condensers (ACC), holding established vendor qualifications across 15 of the top 20 global EPC contractors and an operating track record of over 284 international installations in 30+ countries.
• The company has demonstrated rapid earnings compounding, with revenues expanding from KRW 75.8bn in FY23 to KRW 142.7bn in FY25 (a 37.3% CAGR) and operating profit reaching KRW 25.1bn (17.6% operating margin), accelerating in 1H26 with 26.2% YoY revenue growth, a 19.0% operating margin, and an order backlog near KRW 130bn.
• Key strategic catalysts include entry into high-density AI data center liquid-cooling dry coolers, commercialization of Organic Rankine Cycle (ORC) waste-heat recovery systems, and a binding regulatory commitment to distribute a 30% dividend payout ratio through 2029 following its landmark KOSDAQ dual-listing clearance.

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