In today’s briefing:
- The Straight-Up Timelines on Three Big Econ Policy Bills Rattling Korea’s Local Market Right Now
- Samsung Insider’s Flawed Premise on the Samsung C&T Forced Holdco Conversion Issue
- NAV of Hanmi Science, Amorepacific Holdings, Youngone Holdings, OCI Holdings, & Orion Holdings
- Preferred Shares of Five Major Korean Holdcos – Likely to Close the Gap Further With Common Shares
The Straight-Up Timelines on Three Big Econ Policy Bills Rattling Korea’s Local Market Right Now
- The Commercial Act passed committee but the floor vote set for the 12th was postponed unexpectedly today; inheritance tax and Samsung Life bills remain stuck at proposal stage.
- Presidential Office is pushing the Commercial Act reform hard; vote likely after new floor leader’s election. Passage is almost guaranteed, with enactment expected by early to late August.
- Inheritance tax bills face heavy backlog, delaying progress; the Samsung Life Law, proposed by another party, is pushed further back as the new government prioritizes easier wins.
Samsung Insider’s Flawed Premise on the Samsung C&T Forced Holdco Conversion Issue
- The FTC uses acquisition cost, not market value, so Samsung C&T’s existing 5.05% Samsung Elec stake is booked at KRW 400B
- Samsung Life only needs to sell ~5.5% of Samsung Elec, not the full 8.51%, leaving Samsung C&T with a ~KRW 10T buffer before hitting the 50% holdco threshold.
- The holdco risk is overblown—unlikely without rule changes. The Bio spin-off looks like prep for Samsung C&T to buy Samsung Elec stake, driving re-rating upside for C&T and Life.
NAV of Hanmi Science, Amorepacific Holdings, Youngone Holdings, OCI Holdings, & Orion Holdings
- In this insight, we provide updated NAV valuations of Hanmi Science (008930 KS), Amorepacific Holdings (002790 KS), Youngone Holdings (009970 KS), OCI Holdings (010060 KS), and Orion Holdings (001800 KS).
- These five smaller holding companies have also outperformed the market this year (up 43% on average versus KOSPI which is up 20% in the same period).
- These holdcos’ outperformance has been driven by investors’ perception that the new Lee Jae-Myung administration will make real changes to improve corporate governance policies.
Preferred Shares of Five Major Korean Holdcos – Likely to Close the Gap Further With Common Shares
- In this insight, we discuss the preferred shares of five major holding companies and how the share price gap relative to their common counterparts could decrease.
- There is a relatively easy way to improve shareholder value of these holding companies which is to cancel the entire preferred shares that trade at discount to their common counterparts.
- The common shares of these five companies have experienced an average share price appreciation of 33.2% YTD versus 28.7% appreciation for their preferred shares counterparts.
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