In today’s briefing:
- Unpacking the Backstory of HMM’s Value-Up Disclosure Today: Dividend Arbitrage Still in Focus
- Korea Zinc: Cross Shareholding Limitation System Loophole
- Details of New IPO System Improvement Measures in Korea
- HMM: Material Improvement in Corporate Value Up Plan
- Samsung Biologics (207940 KS): Record High Revenue in 2024; Accelerated Growth Expected in 2025
Unpacking the Backstory of HMM’s Value-Up Disclosure Today: Dividend Arbitrage Still in Focus
- HMM’s aggressive short-term return strategy is driven by KDB’s BIS issue, explaining why they acted earlier and more aggressively than expected.
- HMM’s best move is boosting the 2024 div payout, keeping KDB happy by smoothing over KDB’s PR angle, and aligning with its June value-up index rebalance agenda.
- The 2024 year-end dividend is conservatively expected between KRW 850-1,200 per share, totaling KRW 750 billion to 1 trillion, with the record date likely in late February or early March.
Korea Zinc: Cross Shareholding Limitation System Loophole
- The proxy battle at the EGM for the control of Korea Zinc (010130 KS) is scheduled for 23 January.
- One day prior to the EGM, Korea Zinc’s Chairman Choi is trying to capitalize on the “cross-shareholding limitation system” in order to retain control of the company.
- In our view, it appears that the legal case regarding the cross shareholding limitation system is in favor of MBK/Young Poong alliance.
Details of New IPO System Improvement Measures in Korea
- The FSC announced the details of its new IPO system improvement measures in Korea on 21 January.
- New rules will discourage the rampant first day trading of Korean IPOs. In 74 out of 77 IPOs in 2024, institutional investors were “net sellers” on the listing date.
- Rather, the new rules will encourage the investors to take more longer term approach to investing in Korean IPOs.
HMM: Material Improvement in Corporate Value Up Plan
- On 22 January, HMM Co., Ltd. (011200 KS) announced its new Corporate Value Up plan which included five major items.
- They include higher shareholder returns, achieve average sales growth of 9% and ROE of 4% in the next three years, and improve communication with stakeholders and shareholders.
- The company plans to implement total shareholder returns of at least 2.5 trillion won within one year, which represents 14.8% of its market cap.
Samsung Biologics (207940 KS): Record High Revenue in 2024; Accelerated Growth Expected in 2025
- Samsung Biologics (207940 KS) reported 2024 revenue of KRW4.55T, up 23% YoY, ahead of guidance of 15–20%. Growth was driven by increased contribution from Plant 4 and milestone payment.
- Ramp-Up at Plant 4 is expected to drive further revenue growth, while Plant 5, scheduled to begin operations in April 2025, will expand total production capacity to 784,000 liters.
- Samsung Biologics is well positioned to be resilient to the industry challenges. The company has guided for 20–25% YoY revenue growth to KRW5456–5684B in 2025.
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