Daily Brief South Korea: SK Hynix, Big Wave Robotics, Daou Technology, HB SOLUTION and more

• SK Hynix (000660 KS) gained 6.5% in September MTD, lifting the 2x Leveraged Index 12.3% and combined ETF AUM 14% to KRW 4.36tn.
• The AUM rebound was driven primarily by performance: KODEX units rose just 1%, TIGER was broadly unchanged and the five smaller products recorded reductions.
• Daily creations, redemptions and value traded remain subdued after collapsing at the end of July, coinciding with regulatory measures aimed at curbing retail activity in leveraged ETFs.

• Big Wave Robotics IPO is expected to start trading on 29 September. The company has lowered the IPO price range to 15,000 won to 18,000 won per share. 
• To satisfy market expectations and regulators, Bigwave Robotics lowered its target offering price band and reduced the total number of shares offered.
• My updated valuation analysis suggests a target price of 27,575 won per share, which is 53% higher than the recently lowered high end of the IPO price range.

• My NAV valuation analysis of Daou Technology suggests NAV per share of 60,059 won which is 56% higher than current share price. 
• The largest portion of Daou Technology’s value is its 42.5% stake in Kiwoom Securities which is worth 3 trillion won (180% of Daou Technology’s market cap). 
• I think Daou Technology could pay DPS of 2,961 won per share in 2026 (up 65% YoY), which would suggest a dividend yield of 7.7%. 

• HB SOLUTION (297890 KS) is a South Korea-based specialist in display automation, precision inkjet printing, and semiconductor nanoscale optical metrology, strategically positioned at the intersection of next-generation OLED (IT OLED, QD-OLED) and advanced packaging.
• The company trades at a deep valuation discount of 0.4x P/B and 2.8x trailing P/E against global metrology peers, supported by a healthy net-cash balance sheet, gross margin expansion to 40.6% in FY2025, and a consistent 1.8% dividend yield.
• While high customer concentration and cyclical panel capex have resulted in quarterly top-line volatility and multi-year revenue contraction (-30.55% 3-year CAGR), commercialization of proprietary light-leakage blocking inkjet equipment and thin-film ellipsometers provides significant medium-term operating leverage.

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