In today’s briefing:
- Hanwha Ocean: Negative Impact from Chinese Government’s Efforts to Crack Down on U.S. Subsidiaries
- An Update of Our 2025 High Conviction Pick: Samsung Electronics
- Chey Divorce Verdict Tomorrow at 10 AM: SK Inc Poised for Larger-Than-Expected Intraday Moves
- Boryung Pharmaceutical (003850 KS): New Drug Acquisition Fans High Oncology Aspiration
Hanwha Ocean: Negative Impact from Chinese Government’s Efforts to Crack Down on U.S. Subsidiaries
- Chinese government’s efforts to ban Hanwha Ocean’s five U.S. subsidiaries from conducting any transactions with organizations or individuals in China is likely to have material Negative impact on Hanwha Ocean.
- If Hanwha’s U.S. subsidiaries are banned from Chinese suppliers, they’ll need to source alternatives (Japan, Europe, or domestic U.S. firms), that could involve 20–50% higher costs with longer lead times.
- Basically, what’s going on is that the Chinese government wants to slow down the United States’ efforts to rebuild its shipbuilding sector with the help of Korean shipbuilders.
An Update of Our 2025 High Conviction Pick: Samsung Electronics
- Back on 6 November 2024, we published an insight called 2025 High Conviction: Samsung Electronics. In this insight, we provide an update of Samsung Electronics.
- Samsung Electronics reported operating profit of 12.1 trillion won (up 31.8% YoY and 18.7% higher than consensus) in 3Q 2025.
- The final installment of the 12 trillion won+ inheritance tax is due in April 2026.
Chey Divorce Verdict Tomorrow at 10 AM: SK Inc Poised for Larger-Than-Expected Intraday Moves
- Supreme Court divorce ruling for Chairman Chey (17.9% owner) hits tomorrow 10 a.m., likely driving intraday swings.
- Chey’s wealth is mainly SK Inc (17.8%) and SK Siltron (29.6%). With half SK Inc shares tied, only SK Siltron offers liquidity, but it still falls short of his needs.
- If the Supreme Court surprises, Chey may act on SK Inc shares, fueling a management/control narrative. Payments are due immediately, so SK Inc could see bigger intraday swings than expected.
Boryung Pharmaceutical (003850 KS): New Drug Acquisition Fans High Oncology Aspiration
- Boryung Pharmaceutical (003850 KS) is acquiring cytotoxic anti-cancer drug Taxotere (docetaxel) from Sanofi (SAN FP) for €175M (~KRW288B), inclusive of potential milestone payments worth €14M.
- Post acquisition, Boryung aims to enhance the therapeutic value of Taxotere to include formulation improvements, combination strategies, and research into new indications. Currently, oncology contributes 20%+ of total revenue.
- Over the last six months, Boryung shares remained almost flat, reflecting lack of any strong catalyst. Acquisition of Taxotere is not going to change the situation overnight.
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