Daily Brief South Korea: Samsung Electronics Pref Shares, Samsung Electronics, Coupang , Korea Zinc, Hyundai Engineering , Classys, ABLBio and more

• Samsung Elec 1P discount hinges on tech selloff cooling retail’s semi chase; setup ripe, odds high for reversion early next week.
• Dividend tax hearings may cut threshold to 35%; ~20 large‑caps (₩10T+ mkt cap) screen in FY25, Samsung included, fresh catalyst not yet priced into 1P discount.
• If tech selloff extends next week and dividend tax headlines hit, retail cools, driving Samsung Elec 1P discount to snap tighter quickly.

• AI-Driven KOSPI concentration necessitates a balanced, diversified portfolio (AI/Tech + Defensives) with a tactical hedge.
• KOSPI’s 84% YTD gain is narrowly led by Samsung and SK Hynix (45% of gains), raising concentration risk tied to the volatile global AI capex cycle.
• The strategy is built by blending high-beta AI-linked technology exposure with lower-beta insurance and industrial stocks for ballast and stability.

• Coupang faces a fast-emerging risk: a potential ban on early dawn deliveries (midnight–5 AM), driven by the powerful 1.1 million-member Korean Confederation of Trade Unions (KCTU). 
• The Coupang Union and most drivers strongly oppose the ban, warning of layoffs and slower deliveries. Consumers also prefer the current system. 
• If enacted, the ban could severely hurt Coupang and Korea’s economy. Probability of passage has risen sharply. I would be cautious on Coupang until this risk factor is fully resolved. 

• 3Q25 marks a clear earnings inflection, with record revenue, strong EBITDA growth, and underlying net profit above ₩250 bn after adjusting for one-off derivative losses.
• TC/RC recovery and rare-metals strength drive upgrades, lifting FY25–27 EBITDA/EPS by 8–20% and establishing a higher structural margin base.
• Overnance resolution and treasury cancellations offer re-rating potential, with a target price of ₩1.52 mn implying ~27% upside.

• Hyundai Engineering is well-positioned to capitalize on the global energy transition, with a strategic focus on nuclear power, including small modular reactors (SMRs), and renewable energy projects. This positions the company for long-term growth in high-demand sectors.
• The company has a strong track record of securing large-scale international projects, particularly in the Middle East and Asia, which provides a robust order backlog and revenue visibility. Diversification into new markets in Europe and the Americas is expected to further enhance its global footprint.
• Despite a challenging operating environment with rising material costs and labor shortages, the company is focused on improving profitability through smart construction technologies, cost optimization, and a selective bidding strategy for high-margin projects.

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• Classys (214150 KS) has reported revenue and operating profit of KRW83B and KRW38B for 3Q25, up 40% and 30%, YoY, respectively. Despite controlled sales in Brazil, export grew 32% YoY.
• 4Q25 revenue is projected to grow 15% QoQ and 30% YoY.  With this, 2025 annual revenue is expected to be KRW338–340B, matching the lower end of the guidance range.
• Brazil sales are expected to recover starting in 4Q25. Classys is well-positioned for accelerating market expansion through direct operations in South America via acquisition of the region’s largest aesthetics distributor.

• On 14 November, ABLBio (298380 KS) announced that it has signed an equity investment agreement with Eli Lilly & Co (LLY US) worth 22 billion won (US$15 million).
• ABL Bio will issue 175,079 new shares at 125,900 won per share (27% lower than current price). Despite the high valuation multiples, we maintain a Positive view on ABL Bio.
• Its recent major technology agreement with Eli Lilly serves as strong validation from a leading global pharmaceutical company, confirming the significant market potential of ABL’s unique platform technology.