In today’s briefing:
- Korea Dems’ Surprise Proposal: Separate Tax for Dividends Over 35% Payout
- Kakao Corp Placement – Momentum Isn’t Great but It Is a Small Deal
- [Quiddity Index Apr25] KOSPI 200 Leaderboard Jun25: 6 ADDs and 6 DELETEs
- LS Cable Plans to Purchase Up To 70 Billion Won of Gaon Cable – Will It Take It Private?
- SK Hynix Earnings Highlights Strong AI Dependence and Tariff Concerns
- Samsung Biologics (207940 KS): 1Q25 Operating and Net Profits Doubled; 2025 Guidance Maintained
- SK Hynix: Record-High Profits, the Stock Gets Cheaper.
Korea Dems’ Surprise Proposal: Separate Tax for Dividends Over 35% Payout
- The bill submitted by the Democratic Party today highlights that separate taxation on dividend income applies only to dividends from companies with a 35% payout ratio or higher.
- We might see re-rating on dividend stocks with solid cash flow but below 35%, especially banks over telcos. Holdcos like Samsung C&T, LG, and Hyundai Glovis could attract attention too.
- Dark horses like NAVER, with earnings potential, and Samsung Electronics, currently at 25%, could attract attention if they increase payouts to 35%.
Kakao Corp Placement – Momentum Isn’t Great but It Is a Small Deal
- SK Telecom (017670 KS) plans to raise around US$280m via selling its 2%+ stake in Kakao Corp (035720 KS).
- Kakao’s recent performance hasn’t been particularly great and the stock has been suffering even since the Kakao Pay management scandal in 2021.
- In this note, we will run the deal through our ECM framework and talk about the recent updates.
[Quiddity Index Apr25] KOSPI 200 Leaderboard Jun25: 6 ADDs and 6 DELETEs
- KOSPI 200 is a Korean blue-chip index that tracks the 200 largest and most-liquid names listed in the KOSPI section of the Korea Exchange (KRX).
- In this insight, we have presented our final expectations for ADDs and DELs for the upcoming semiannual review in June 2025.
- We expect six ADDs and six DELs for the KOSPI 200 index during this index rebal event based on the latest available data.
LS Cable Plans to Purchase Up To 70 Billion Won of Gaon Cable – Will It Take It Private?
- On 22 April, LS Cable & System announced that it plans to acquire up to 70 billion won worth of Gaon Cable.
- If LS Cable purchases 70 billion won worth of Gaon Cable’s shares (7.4% stake at current price), its stake in the company would rise to 89%.
- There are numerous options for Gaon Cable going forward including privatization or a merger with LS Cable.
SK Hynix Earnings Highlights Strong AI Dependence and Tariff Concerns
- SK hynix announced their second-highest revenue and operating profit for the first quarter of 2025
- Much of the company’s performance is the result of its first-mover advantage and excellent execution in the HBM market
- Two issues threaten the company: AI growth may stall, and tariff changes could interfere with the company’s global supply chain
Samsung Biologics (207940 KS): 1Q25 Operating and Net Profits Doubled; 2025 Guidance Maintained
- Samsung Biologics (207940 KS) recorded 120% YoY increase in operating profit to KRW487B, while net profit increased 109% YoY to KRW376B in 1Q25. Revenue increased 37% YoY to KRW1,298B.
- Stable ramp-up of Plant 4 while maintaining the full utilization of Plants 1 through 3, alongside favorable impact of foreign exchange rates drove 1Q25 performance.
- 1Q25 order intake amounted to approximately 40% of the total annual contract volume in 2024. Despite ongoing tariff threat, Samsung Biologics has maintained full-year guidance of 20–25% revenue growth.
SK Hynix: Record-High Profits, the Stock Gets Cheaper.
- Same as last quarter: very strong AI / Server demand, capacity sold out for 12 months, HBM3E 12Hi becomes majority in 2Q25. HBM is the only driver.
- Everything else remains weak. The conundrum remains: there is only 1 driver: AI / HBM. SK Hynix is the leading vendor, 12-18 months ahead of competitors. Is it sustainable?
- The market thinks not sustainable and the stock is very cheap at 5x 2025 4x 2026 EPS. SK Hynix still trades like a cyclical stock – is it?
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