Daily Brief South Korea: Samsung Electronics Pref Shares, Orion Holdings, Bukwang Pharmaceutical and more

In today’s briefing:

The Hot Chatter in the Local Market: Tax-Free Dividends – Is Samsung In?

Chosun reports that some Samsung affiliates are exploring tax-free dividends at the operational level, with execs reportedly briefed on the idea.
Surprisingly, regulators and politicians haven’t objected to tax-free dividends, which ironically align with the value-up policy. The delay in Samsung’s value-up announcements may be due to this decision.
It’s unclear if Samsung Electronics and Life will drop tax-free dividends, but if regulators approve, they could introduce it suddenly in their value-up updates, especially with Lee Jae-yong’s cash crunch.

In this insight, we provide the top 10 stocks picks and key catalysts in the Korean stock market for the two weeks starting 31 March.
The top 10 picks in this bi-weekly include Orion Holdings, Hyundai Wia, KEPCO KPS, Samsung Electronics, KT, Emart, CJ Logistics, APR, Doosan Enerbility, and HD Hyundai Marine Solution.
The biggest near-term negative catalyst on the Korean stock market remains tariffs. The final legal outcome on President Yoon Seok-Yeol is expected to be made by the end of April.

On 28 March, Bukwang Pharmaceutical (003000 KS) announced a capital raise of 100 billion won. Its share price fell by 13.3% today.
The company plans to issue 30.2 million new shares (44% of outstanding shares). Expected rights offering price is 3,310 won (15.1% lower than current price).
We are negative on Bukwang Pharm mainly due to excessive shareholding dilution from this rights offering as well as lack of valuation merits.

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