Daily Brief South Korea: SK Square , LG Chem Ltd, SK Innovation, SK D&D Co Ltd, JNTC and more

• KOFIA says Hynix hit 10.89% weight in October vs 8.37% in September, lifting the 10% fund cap — now local funds can size up like Samsung Electronics.
• SK Square might have been dumped today as locals unwound proxy trades; with Hynix freed from the 10% cap, funds rotated directly into Hynix, front‑running the shift.
• Key now is rotation size; SK Square’s beta‑plus trade to Hynix is fading, and near term we should expect relative underperformance as flows migrate.

• LG Chem is considering on paying higher dividends using sale proceeds from LG Energy Solution. 
• This breaks the company’s principle of using only ordinary income from operating activities as a source for dividends.
• If indeed LG Chem goes ahead with this plan, this would be as a result of heightened demands from major activist investors including Palliser Capital.

• There is an end of a lock-up period for 55.3 million shares (33% of outstanding shares) for SK Innovation (096770 KS) starting 20 November 2025.
• This could potentially result in additional selling by insiders which could negatively impact its share price in the coming weeks.
• SK Innovation is currently trading at relatively high valuation multiples. We remain Bearish on SK Innovation.

• SK D&D announced the results of the delisting tender offer by Hahn & Co. SK &D mentioned that the subscription reached only 40% of the planned tender offer amount.
• Post failed tender offer for SK D&D by Hahn & Co, we expect this to have a positive impact on SK D&D’s share price.
• The major reason for this is that there are still many investors that believe that SK D&D’s shares are significantly undervalued at P/B of only 0.4x.

• JNTC is a technology leader in specialized glass processing, transitioning from a volatile mobile component supplier to a high-growth solutions provider for next-generation industries, including foldable displays, automotive, and AI semiconductor packaging.
• The company’s strategic pivot to Ultra-Thin Glass (UTG) for foldables and Through Glass Via (TGV) substrates for AI chips offers a significant runway for growth, with revenue expected to double in the coming years. This expansion into high-margin sectors is a key catalyst for re-rating.
• Despite the promising outlook, investors must consider the high degree of operational and financial risk, evidenced by historically volatile revenue and profitability, significant customer concentration, and weak gross margins in its legacy businesses.

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