Daily Brief South Korea: SAMSUNG KODEX 200 Target Weekly Covered Call ETF, Dreamtech Co Ltd, Samsung Electronics, KT&G Corporation, Sejong Industrial and more

• Covered call ETF market has been one of the fastest growing ETF sector in Korea in the past three years.
• It is estimated that the covered call ETF net assets in Korea surged to about 28.5 trillion won at the end of June 2026, up 84x from end of 2024.
• While the Korean stock market is trading sideways/gradually turning higher since early August, there may be a greater interest in these covered call ETFs.

• Founded in 1998 and KOSPI-listed in 2019, Dreamtech is an EMS(Electronics Manufacturing Services) and ODM specialist.
• Its business has two axes: OEM work, sourcing parts to customer specs and supplying them as modules; and ODM work, partnering with owners of core technology to productize and mass-produce it.
• Its edge rests on three capabilities: tracking technology trends and sourcing to customer needs; customized mass-production development; and reliable large-volume supply.

• Samsung Electronics (005930 KS) currently in its third week up, the rally is short-term overbought but could continue this week and the next.
• Our model has identified profit targets for the current rally, for the next 2 weeks.
• We also discuss support price zones, in case the stock starts to pullback this week, all the details are discussed below.

• On 22 September, KT&G Corporation (033780 KS) announced that it plans to buyback and cancel 2.07 million shares (about 2% of outstanding shares) worth 360 billion won. 
• The Kazakhstan market is a prime example. KT&G began commercial production in Kazakhstan in March 2025. Its local market share expanded from 5.1% in 2022 to 9.6% in 2025.
• KT&G launched the “Lil Tonino Lamborghini” on 15 September in Korea. This product reduces the preheating time to 3 seconds versus competing products that typically take 10 to 20 seconds.

• Dominant Tier-1 Exhaust & Mobility Supplier with Accelerating Profitability: SJG Sejong (formerly Sejong Industrial, 033530 KS) maintains a market-leading Tier-1 position supplying exhaust systems, catalytic converters, and eco-friendly mobility components primarily to Hyundai Motor Group (HMG). Operating performance has demonstrated significant operational leverage, with net income surging from KRW 4.02B in 2023 to KRW 68.74B in 2025, driven by structural gross margin expansion from 9.64% to 13.58% and high-margin product mix enhancements.
• Strategic Product Portfolio Transition Toward Clean Mobility: To mitigate long-term terminal value risks associated with internal combustion engine (ICE) phase-outs, Sejong is aggressively scaling its portfolio into hybrid vehicle exhaust solutions, hydrogen fuel-cell components (metal bipolar plates, hydrogen sensors, water traps), and next-generation electronic vehicle systems (wheel speed sensors, SBW actuators, ICCUs). This dual-track approach provides near-term cash flow generation from high-margin hybrid/ICE architectures while de-risking the powertrain transition.
• Compelling Value Disconnect with Strong Total Shareholder Returns: Trading at a deep valuation discount of ~3.0x forward P/E and below 0.5x P/B, the stock offers institutional investors an asymmetric risk-reward profile backed by a 5/5 Smartkarma Value Smartscore and a 2.98% dividend yield. Robust balance sheet fundamentals and a 3-year EPS CAGR of 241.96% underscore the undervaluation relative to global and domestic automotive Tier-1 peers.

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