Daily Brief South Korea: Netmarble , SK Telecom, Dong A St and more

In today’s briefing:

Netmarble Is Considering on Issuing EB Worth 250 Billion Won Backed by Its Stake in HYBE
Div Tax Intel Drop: Street Pivoting to Forward Yield Plays (Consensus Data Excel Attached)
Dong A St (170900 KS): Five Reasons Why Performance Improvement Is Expected

Netmarble Is Considering on Issuing EB Worth 250 Billion Won Backed by Its Stake in HYBE

According to the local media, Netmarble is considering on issuing exchangeable bonds (EB) worth about 250 billion won backed by its stake in HYBE.
The potential EB issue is likely to be slightly positive on Netmarble and slightly negative on HYBE (mainly due to additional shares that could be sold in the market).
We are Negative on BOTH Netmarble and HYBE. Their valuations are not attractive. Plus, HYBE could face a major negative issue of its founder Bang Si-hyuk who could be jailed.

This is MoEF’s first gov-led tax reform—not lawmaker-initiated—and unlike April’s DP bill, it carries broader scope and priority fast-track status, boosting passage odds.
Local chatter says MoEF is eyeing end-July to table its tax reform bill — that’s the base case making the rounds on the tape today.
Gov may go full-scope: 9–25% div tax on all firms plus tax credits. Traders are now rotating into high forward-yield names ahead of MoEF’s late-July package.

Dong A St (170900 KS) 1Q25 revenue rose 21% YoY, which is a significant improvement as the company recorded just 6% YoY growth in revenue in 2024.
Existing operation of Dong A St is showing strength. Stelara biosimilar to generate sales royalties from this year. Cenobamate launch is expected by next year.
Pipeline is promising, with upcoming data readouts expected through 2026. Obesity drug candidate has best-in-class potential.

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