South Korea Archives | Page 10 of 126 | Smartkarma

• Korean equities are stalled; macro catalysts are absent. Street focus shifts from treasury share cancellations to next year’s mandatory tender offers, now seen as the top policy driver.
• Pre-MTO trades focus on holding companies with wide NAV discounts or low controlling stakes, front-running policy-driven re-ratings before minority shareholders capture control premiums.
• Focus on 32 Korean holding companies >KRW 500B; those with wide NAV discounts and lighter controlling stakes—SK’s holding companies, Samsung C&T, Hanwha, LG, LS—are prime re-rating plays.

• Alipay (second largest shareholder of Kakaopay (377300 KS)) is issuing an overseas exchangeable bonds (EB) worth 627 billion won (backed by its shares in Kakao Pay).
• The exchange price of the EB is 54,744 won (4.5% discount to current price).  Total amount of EB issue is 627 billion won ($450 million). 
• This deal is basically a quasi-block deal. Alipay is trying to unload some of its stake in Kakao Pay to improve its finances.

• In this insight, we discuss the alpha generation through companies that announced share buybacks in the Korean stock market in July and August 2025.
• We provide a list of 29 companies in the Korean stock market that have announced share buyback programs in July and August 2025.
• There were three companies with more than 1 trillion won in market cap that announced share buybacks in the past two months with at least 1% of outstanding shares.

• 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. 

• Short-Term, pinpointing exact tickers off this NPS/cumulative voting narrative is tough—activism risk is real, but predicting moves in governance-sensitive names is still premature.
• NPS may go aggressive, potentially sparking a market-wide narrative. If limited activism unwinds, Korean stocks could see a broad re-rate, beyond just individual governance names.
• Tactically, consider enhanced setups in these names under a passive framework, while closely monitoring governance developments and NPS-driven activism for actionable alpha in individual tickers.

• In this insight, we provide the top 10 stock picks and key catalysts in the Korean stock market for the two weeks (29 August to 12 September 2025).
• Shipbuilding remained the best performing sector in the past two weeks. Rechargeable battery was the worst performing sector. 
• Top 10 picks in this bi-weekly include KCC Corp, KT&G, LG Uplus, Samsung Life Insurance, Paradise, Nongshim, LG Chem, HD Hyundai Mipo, SK Inc, and CJ Corp. 

• On 29 August, Gemvax & Kael (082270 KS) (Gemvax) announced a rights offering capital raise of 249 billion won.
• Gemvax will issue 6.7 million new shares in this rights offering, representing 16% of its outstanding shares. 
• The expected rights offering price is 37,100 won which is 13.4% lower than current price. We are negative on this rights offering. 

• Brian Kim’s 15-year sentence request looks set to hit Kakao and affiliates — founder risk has always sparked volatility on Kakao, so the sharp market reaction is no surprise.
• But locals see odds of lighter or suspended time — if Kakao dumps on headline risk, it could be more entry window than pure downside.
• Event-Driven setup: short Kakao vs long Naver for relative value, but into sentencing, odds of lighter time suggest fading any overdone Kakao dump could be the cleaner trade.

Key points (machine generated)

• Global Tax Free Co (GTF) holds a 70% market share in South Korea and 25% in Singapore for VAT refund services.
• The company is recovering from a failed acquisition due to fraud and aims to expand into Japan and Thailand in the next 18 months.
• Founded in 2005 and acquired by a SPAC in 2017, Chairman Mr. Moon Yang-Geun owns an 18.7% stake in GTF.

This article is sourced from an online content aggregator through publicly available sources and is displayed below for general informational purposes only. This article was originally published 3 months ago on Value Investors Club.

• A major critical reason Hyundai Glovis has been outperforming this year has been due to the potential passage of the cumulative voting system under second amendment to the Commercial Act.
• In addition, Hyundai Glovis’ profits have been improving. Hyundai Glovis is also expected to benefit from the continued higher use of robotics in its operations.
• The value of its Boston Dynamics is also becoming more highlighted. Hyundai Glovis currently has a 10.9% stake in Boston Dynamics. 

• LG plans to cancel its remaining 3.02M treasury shares by next year, effectively wiping out all treasury stock—a clear preemptive move ahead of mandatory cancellation rules.
• Local pension funds are betting SK Inc will do a partial treasury burn before Q4, front-running the 3rd Commercial Act and sending a pro-policy signal.
• The SK treasury burn story offers multiple plays: holdco rerate, SK Inc momentum, and subsidiary rollover as NAV discounts tighten—definitely a multi-layered setup worth active monitoring.

• On 28 August, Robotis (108490 KS) announced a rights offering capital increase of 100 billion won.
• Rights offering plan is to allocate 1,349,528 new shares (10% of outstanding shares) to existing shareholders, and then conduct a public offering for general investors once forfeited shares are issued. 
• The expected rights offering price is 74,100 won per share (12.8% lower than current price). We are Negative on this rights offering.

• Tovis is one of the key beneficiaries of continued opening of new casinos in Asia/globally. The company provides specialty monitors for slot machines, casino gaming cabinets, and arcade/gaming machines.
• The growth of the automotive/other displays unit has been driven mostly by domestic sales which increased from 36.6 billion won in 2022 to 239.2 billion won in 2024.
• Tovis is trading at EV/EBITDA of 4.5x based on LTM financials and recent prices. This is much lower than average EV/EBITDA multiple of 12.4x from 2020 to 2024.

• HHI–Mipo merger spread looks minimal, but today’s MASGA-driven pop signals momentum flows—likely to mean-revert toward appraisal rights once the theme dissipates.
• Froth lifted prices past fundamentals—once it unwinds, HHI–Mipo could diverge from swap ratio, creating the spread window where traders can get paid.
• This isn’t classic merger arb—it’s about fading a policy-fueled pop, riding the snapback toward appraisal baseline, with flow-driven swings creating short-term tactical arb setups.

• It was announced today that HD Hyundai Heavy Industries will merge with HD Hyundai Mipo. The merger ratio between HD Hyundai Heavy Industries and HD Hyundai Mipo is 1:0.4059146. 
• HD Korea Shipbuilding & Offshore Engineering (009540 KS) will own a 66.29% stake in the merged entity.
• HD KSOE is proceeding with this merger of its two major subsidiaries ahead of the full-scale launch of the MASGA (“Make America Shipbuilding Great Again”) project.

• We believe a major rights offering capital raise is likely for Korean Air Lines (003490 KS) in the next 1-2 years.
• On 25 August, Korean Air announced a 70 trillion won investment plan in the United States. This plan is likely to have been pressured heavily by the Korean government. 
• A big problem with this plan is Korean Air does not produce enough cash flow and its balance sheet is not strong enough to invest such huge amounts of capital. 

• SKT foreign room rising ahead of PIPC sanction decision today; fine confirmation could trigger ESG fund exits.
• Large ESG money still in SKT; post-sanction exits could push foreign room past 25% sooner than expected — a key factor for trading setup.
• Nov review momentum could hit early; post-fine, a foreign room surge toward 25% signals our entry, with the pullback setting up the SKT Nov inclusion trade.

• HD Hyundai Robotics will raise 200 billion won ($144 million) valuing the company at 1.8 trillion won.
• Korea Development Bank and KY PE will be investing 200 billion won in HD Hyundai Robotics through a redeemable convertible preference shares in September.
• Our NAV valuation analysis of HD Hyundai suggests target price of 168,561 won per share, which represents a 27% upside from current levels.

• Our base case valuation of Nota suggests target price of 11,948 won per share, which represents 31% higher than the high end of the IPO price range (9,100 won).
• Nota’s technology enables efficient operation of high-performance AI models. It has been able to develop one of the first commercially available generative AI-based intelligent video surveillance solution in Korea.
• We estimate Nota to generate revenue of 13.8 billion won (up 65% YoY) in 2025 and 21.7 billion won (up 57% YoY) in 2026. 

• Major governance shake-up: >KRW 2T companies face mandatory cumulative voting, giving minorities real board influence, while audit committee split votes expand from 1 to 2+, boosting independence.
• Trade sweet spot is holdcos and brokers with high treasury stock and retail float. Bloated buybacks may drive cancellations, sparking quick momentum trades in messy-governance names.
• Today, holdcos and brokers with 10%+ treasury stock and >₩500bn market cap are leading pops, driving action and attracting fast-money flows.

• Dems likely to push 3rd package in Q4; near-term flows chasing treasury stock cancellation theme, with locals screening >₩1tn mkt cap, >10% treasury shares of float.
• Little pushback on mandatory treasury cancellations; debate focused on timeline — grace period vs. immediate rollout — highlighting how much leeway government may grant differing governance structures.
• Too early for governance plays; near-term momentum flows likely in names with highest treasury stock relative to float, where cancellation is expected to hit flows hardest.

• It was reported today that SoftBank sold 2.3 trillion won ($1.7 billion) worth of Coupang (CPNG US) shares this year.
• The total number of Coupang shares sold in three rounds this year by SoftBank is 60 million, worth $1.66 billion (2.3 trillion won).
• We believe that this partial stake sale of SoftBank by Coupang is likely to have a moderately negative impact on Coupang.

• Minister Jin, Busan’s sole ruling-party lawmaker, gives his out-of-the-blue remarks significant political weight, making the local-government HMM stake plan materially more likely than mere weekend chatter.
• Fresh newsflow shifts the tender hedge narrative: Jin’s remark likely nudges KOBC toward skipping, while KDB is locked in.
• KOBC’s tender decision and Jin’s remarks could flip post-tender bias, raising hedge difficulty; a cautious approach is needed, monitoring price action and exposure risk before stepping in.

• A cigarette price hike has been long overdue in Korea. The last time there was cigarette price hike in Korea was more than 10 years ago.
• We believe that the Korean government could raise cigarette prices to about 7,000 won to 8,000 won per pack from current price of 4,500 won in the next 6-12 months.
• Raising cigarette prices could improve the sharp shortfall in government tax revenues.