In today’s briefing:
- HD Hyundai: Will It Increase Ownership Stake In HD Korea Shipbuilding & Offshore Engineering?
- FnGuide Top 10 & Equal Weight Index Rebalance Preview: Outperformance Continues
- PBR 0.8x Law — What Is It, and Why Might It Spark a Classic Post-Election Korea Momentum Trade?
- An Update on Samsung Electronics Chairman Lee Jae-Yong and His Family Members’ Inheritance Taxes
- Initial Thoughts on the Karrot (Danggeun) IPO (Largest Used Goods E-Commerce Platform in Korea)
- Classys (214150 KS): Solid Start to 2025; Global Expansion Continues; Stake Sale Overhang to Remain
HD Hyundai: Will It Increase Ownership Stake In HD Korea Shipbuilding & Offshore Engineering?
- There has been an increasing speculation of HD Hyundai increasing its stake in HD Korea Shipbuilding & Offshore Engineering (HD KSOE) in 2025.
- There are two main reasons why HD Hyundai could increase its stake in HD KSOE.
- They include HD KSOE contributing higher percentage of dividend income and continued full-fledged recovery of the operating profits of the HD HHI and HD Hyundai Mipo.
FnGuide Top 10 & Equal Weight Index Rebalance Preview: Outperformance Continues
- There could be 2 changes for the FnGuide Top 10 Index and 1 change for the FnGuide Top 10 Equal Weight Index in June.
- There will be capping inflows for Samsung Electronics (005930 KS), capping outflows for SK Hynix (000660 KS) and funding outflows for the other index constituents.
- A long adds/ short deletes trade has performed well historically for the FnGuide Top 10 Index with positive performance till implementation followed by reversion post implementation in most cases.
PBR 0.8x Law — What Is It, and Why Might It Spark a Classic Post-Election Korea Momentum Trade?
- Listed companies trading below 0.8x P/B may be taxed like unlisted ones—based on book value, with a floor set at 80% of NAV regardless of calculated valuation.
- Momentum is spreading beyond holdcos, with local desks eyeing low-PBR, high treasury share names. Attached is an Excel with Q1 PBRs and Q4 treasury ratios for all listed stocks.
- We could target direct succession names like SK Inc. or go broader, screening by treasury share % and P/B discount—likely the preferred route given Korea’s post-election momentum playbook.
An Update on Samsung Electronics Chairman Lee Jae-Yong and His Family Members’ Inheritance Taxes
- This insight provides an update on the inheritance tax payment requirement by the Samsung Electronics Chairman Lee Jae-Yong and his family members.
- Lee Jae-Yong has a final installment of 480 billion won in inheritance taxes to be paid in April 2026.
- Once Lee makes the final inheritance tax payment next year, he can start to reinvest his dividend income in various Samsung Group affiliates including Samsung C&T.
Initial Thoughts on the Karrot (Danggeun) IPO (Largest Used Goods E-Commerce Platform in Korea)
- Danggeun (Karrot) is the largest used goods e-commerce marketplace in Korea. There have been some local reports that the company could complete its IPO as early as 2025.
- In the private market, some shares of Karrot were put up for sale recently, and the valuation of the company ranged 2.5 trillion won 2.7 trillion won.
- The company has tremendously scaled up its business in the past couple of years, in terms of sales and profits.
Classys (214150 KS): Solid Start to 2025; Global Expansion Continues; Stake Sale Overhang to Remain
- Classys (214150 KS) reported stellar performance for 1Q25, with record-high quarterly sales and operating profit. 1Q25 revenue grew 53% YoY to KRW77B, while operating profit increased 46% YoY to KRW39B.
- Recently, Volnewmer got approval in Europe. Ultraformer MPT is expected to obtain European approval in July. Next-generation new product launch in the domestic market is expected in July.
- Classys reaffirmed 2025 revenue guidance of KRW340–360B, up 39–48% YoY. Bain Capital’s recent stake sales in the company via a discounted block deal raises concern.
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