Daily Brief South Korea: Samsung Life Insurance, KT&G Corporation, Hanwha Solutions and more

In today’s briefing:

Clearing up the FSS’s Sudden Call on Samsung Life’s Samsung Elec Stake Accounting Shift
KT&G: Selling 57 Real Estate Properties to Generate 1 Trillion Won in Additional Cash Flow
Increasing Probability of Hanwha Group Selling Its 8% Stake in Korea Zinc

Clearing up the FSS’s Sudden Call on Samsung Life’s Samsung Elec Stake Accounting Shift

Today’s FSS IFRS17 ruling is an accounting fix (equity vs. liability), not the Samsung Life Law, which is a regulatory cap on affiliate stakes based on market value.
The FSS ruling signals Samsung Life doesn’t need to treat its Samsung Electronics stake as a forced-sale liability, lowering near-term sale risk.
This eases the overhang, delays potential stake moves, and reinforces the relative underperformance setup on Samsung C&T highlighted in earlier posts.

KT&G announced that it is selling numerous properties nationwide as well as financial assets, aiming to generate about 1 trillion won in additional cash flow.
KT&G has started to sell off a number of real estate properties in Seoul, Bundang, Daegu, Sejong, Busan, and North Chungcheong, and other parts of Korea through public bidding process.
Four key catalysts with KT&G include an increasing probability of cigarette price hike, asset sales of non-core properties/improving corporate governance, high dividend yields, and profitable growth of core tobacco business.

There has been an increasing probability of the Hanwha Group selling its stake in Korea Zinc (010130 KS) mainly due to increasing burden of its petrochemical affiliates.
For now, the Hanwha Group has denied all news regarding its potential sale of stake in Korea Zinc.
In our view, the timing of this potential sale in Korea Zinc by Hanwha Group is less likely in 2025 but could occur in 2026/2027.

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