South Korea Archives | Page 21 of 126

May 14

Daily Brief South Korea: Posco Future M, LG Display, Korea Stock Exchange KOSPI 200 and more

By Smartkarma Daily Briefs | Daily Briefs, South Korea

In today’s briefing:

POSCO Future M: A Rights Offering Capital Raise of 1.1 Trillion Won
Unpacking Posco Future M’s Rights Offering Disclosed After Market Close Today
A Pair Trade Between LG Electronics and LG Display
KOSPI 200 Tactical Outlook: Waiting for the June Elections

POSCO Future M: A Rights Offering Capital Raise of 1.1 Trillion Won

By Douglas Kim

Posco Future M (003670 KS) announced today that it plans to complete a rights offering capital raise of 1.1 trillion won.
The capital raise will involve 11.483 million new shares, representing 14.8% of current outstanding shares. The expected rights offering price is 95,800 won, which is 15.8% lower than current price.
We have a Negative view on POSCO Future M and this capital raise, which is likely to have a negative impact on its shares due to the dilution risk.

Unpacking Posco Future M’s Rights Offering Disclosed After Market Close Today

By Sanghyun Park

The pricing’s standard—20% discount, 14.82% dilution. First-round price on June 12, final on July 16. The 20% discount could offer a bigger arb window than Samsung SDI or Hanwha Aero.
Posco Holdings confirmed full participation, taking half of the offering (500B+ KRW). With the ESOP in play, only 40% (400B KRW) remains, limiting potential trading upside despite the 20% discount.
Future M’s down 8% in after-hours, Holdings 3.5%. The sharp drop follows no deal leaks and sector concerns, suggesting more downside tomorrow, with the price gap key for day-night trading.

A Pair Trade Between LG Electronics and LG Display

By Douglas Kim

In this insight, we discuss a pair trade between LG Electronics (066570 KS) (long) and LG Display (034220 KS) (short).
LG Display is likely to face greater margin pressures than LG Electronics this year, which could lead a bigger consensus estimates downward revisions for LG Display than LG Electronics.
Both LG Electronics and LG Display are trading at 0.6x P/B multiples. Given LG Electronics’ much higher ROE vs LG Display, LG Electronics should be trading at higher valuation multiples.

KOSPI 200 Tactical Outlook: Waiting for the June Elections

By Nico Rosti

In just three weeks, on June 3rd, South Korea will hold an early presidential election.
The KOSPI 200 INDEX on Tuesday closed at 347.17, entering deeply overbought territory based on our time and price quantitative models.
Whether the index rallies into the election and then declines, or starts selling off ahead of the vote, our tactical stance is unchanged: we recommend short exposure or appropriate hedging.

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May 13

Daily Brief South Korea: Doosan Corp, ESR Kendall Square REIT, LG Corp, Celltrion Inc and more

By Smartkarma Daily Briefs | Daily Briefs, South Korea

In today’s briefing:

Korean Market Election Setup: Locals’ Low PBR Trading Trends
ESR Kendall REIT’s 150 Billion Won Capital Raise and Continued Outperformance of Korean REITs
Shareholder Returns of Japanese Trading Companies Invested By Buffett Vs Top Korean Trading/Holdcos
Celltrion Inc (068270 KS): Sequentially Weak 1Q25 Result; Momentum to Accelerate in 2H

Korean Market Election Setup: Locals’ Low PBR Trading Trends

By Sanghyun Park

Quick screen shows ₩1T+ names under 0.4x PBR — mostly retail, financials, and holdcos. Locals are keeping an eye on these with the election theme in play.
This isn’t just hopeful chatter — both parties are seriously leaning into value-up policies. With dividend tax reform and solid sector catalysts, locals see real potential in the post-election trade.
Long regional banks, hedge with KB and Shinhan. In retail, long domestic names, short China-dependent ones. For holdcos, long Hanwha and Doosan, short CJ and Kolon.

ESR Kendall REIT’s 150 Billion Won Capital Raise and Continued Outperformance of Korean REITs

By Douglas Kim

On 9 May, ESR Kendall Square REIT (365550 KS) announced that it plans to conduct a rights offering capital increase of approximately 150 billion won.
The Korean REIT sector started to bottom out in 2023, after big underperformance in the previous three years.
The interest rate gap on the company’s expected dividend yield (5.7%) is now nearly 3% higher than the 10 year South Korean government bond yield (2.7%) which is meaningful.

Shareholder Returns of Japanese Trading Companies Invested By Buffett Vs Top Korean Trading/Holdcos

By Douglas Kim

“In the next 50 years… we won’t give a thought to selling those [Japanese trading companies]…. Japan’s record has been extraordinary.” (Warren Buffett)
In this insight, we provide detailed comparisons of the five major Japanese trading companies and five major Korean holdcos/trading companies.
Japanese trading companies have higher points for market cap, ROE, DPS increase, and shares cancellation. Korean holdcos have higher points for dividend yield, deb/equity ratio, ROIC, and valuations.

Celltrion Inc (068270 KS): Sequentially Weak 1Q25 Result; Momentum to Accelerate in 2H

By Tina Banerjee

Celltrion Inc (068270 KS) announced 1Q25 result, with revenue and operating profit decreasing 21% and 24%, QoQ, respectively. Net profit more than halved in 1Q25 compared with 4Q24.
Sequential improvement in gross profit margin is one key positive highlight of 1Q25 result. Higher contribution of new products aided gross profit margin. This trend is expected to continue.
Celltrion reaffirmed 2025 revenue guidance of KRW5T. Revenue is expected to be moderate in 1H25 and strong in the 2H25. Profitability improvement will be slower than expected earlier.

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May 12

Daily Brief South Korea: Hanwha Aerospace and more

By Smartkarma Daily Briefs | Daily Briefs, South Korea

In today’s briefing:

How NXT (ATS) Affects Event Pricing from a Microstructure Perspective

How NXT (ATS) Affects Event Pricing from a Microstructure Perspective

By Sanghyun Park

Next day’s base price uses the 3:30pm close—NXT’s after-hours moves don’t count. That small gap can impact rights offerings, as seen in Samsung SDI’s pricing delta on April 8.
NXT after-hours volumes count toward VWAP. So in uptrends, they can impact pricing—possibly with Samsung SDI’s final reference price on May 16.
No shorting allowed after 3:30pm on NXT, leading to inefficiencies—while not yet fit for latency arb, it’s ripe for tactical day–night spread plays and re-entry timing.

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May 11

Daily Brief South Korea: Shin Young Wacoal and more

By Smartkarma Daily Briefs | Daily Briefs, South Korea

In today’s briefing:

Korea Small Cap Gem #33: Shinyoung Wacoal [Real Estate Value Is More Than 5x Market Cap]

Korea Small Cap Gem #33: Shinyoung Wacoal [Real Estate Value Is More Than 5x Market Cap]

By Douglas Kim

A core investment thesis of Shinyoung Wacoal is that its market cap is 94 billion won but its real estate properties in Seoul/Daejeon account for more than 500 billion won.
Shinyoung Wacoal’s net cash as a percentage of market cap is 99%. If the real estate is revalued to market values, it would be trading at P/B of only 0.1x.
Shin Young Wacoal (005800 KS) is one of the largest companies in Korea that specializes in women’s underwear.

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May 10

Daily Brief South Korea: Korea Zinc, Hyundai Elevator Co and more

By Smartkarma Daily Briefs | Daily Briefs, South Korea

In today’s briefing:

Korea Zinc Announces Cancellation of Its Treasury Shares
Top 10 Korean Stock Picks and Key Catalysts Bi-Weekly (9 to 23 May 2025)

Korea Zinc Announces Cancellation of Its Treasury Shares

By Douglas Kim

Korea Zinc (010130 KS)’s chairman Choi Yoon-Beom announced that the company will cancel all 2.04 million treasury shares that the company acquired through a tender offer last year.
Now the company has finally decided to cancel all of the treasury shares this year, this should have a positive impact on its share price.
Korea Zinc announced better than expected earnings in 1Q25. Korea Zinc achieved more than 3.5-fold increase in sales in the strategic minerals sector, including antimony, indium, and bismuth in 1Q25.

Top 10 Korean Stock Picks and Key Catalysts Bi-Weekly (9 to 23 May 2025)

By Douglas Kim

In this insight, we provide the top 10 stocks picks and key catalysts in the Korean stock market for the two weeks (9 to 23 May 2025).
Our top 10 picks in the past two weeks were up on average 5.0% (from 25 April to 9 May), outperforming KOSPI which was up 1.2% in the same period.
Our top 10 picks in this bi-weekly include HD Hyundai, Hyundai Elevator, KT Corp, Shinsegae, Coway, Hanwha Aerospace, F&F Co, SM Entertainment, and SK Inc.

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May 09

Daily Brief South Korea: Samsung Biologics , D’Alba Global, HK inno.N, F&F and more

By Smartkarma Daily Briefs | Daily Briefs, South Korea

In today’s briefing:

Korea’s FSC Is Rolling Out the Legal Framework for Fractional Share Trading, Starting September 30
D’Alba Global IPO Bookbuilding Results Analysis
HK Inno. N (195940 KS): Promising US Trial Result for K-CAB Raises Hope; Starts 2025 on Strong Note
F&F: A Key Beneficiary of Explosive Popularity of Jung Hoo Lee (Grandson of the Wind) In the MLB

Korea’s FSC Is Rolling Out the Legal Framework for Fractional Share Trading, Starting September 30

By Sanghyun Park

With the Capital Markets Act in place, real-time quotes, intraday fills, and orderbook trading for fractional shares are possible—opening the door for Korea’s Robinhood moment.
Fractional share trading in Korea is still minimal at 0.1% of volume, but real-time infrastructure from brokers could drive significant flow and growth.
It will deepen sentiment-driven flows and cause real-time price discovery shifts, opening up new trading opportunities.

D’Alba Global IPO Bookbuilding Results Analysis

By Douglas Kim

The IPO price of d’Alba Global has been finalized at 66,300 won which is at the high end of the IPO price range.
The demand ratio of the IPO was 1,141 to 1. A 98.4% of the IPO shares applied thought that the value of the company is 66,300 won or more.
Our base case valuation of d’Alba Global is a target price of 101,609 won per share, which represents 53% higher than the IPO price of 66,300 won.

HK Inno. N (195940 KS): Promising US Trial Result for K-CAB Raises Hope; Starts 2025 on Strong Note

By Tina Banerjee

HK inno.N (195940 KS) announced positive topline result from the U.S. Phase 3 trial evaluating K-CAB in gastroesophageal reflux disease. U.S. filing is expected in 4Q25.
HK inno.N has reported strong 1Q25 result, with double-digit growth across all key parameters. Revenue increased 16% YoY, while operating profit grew at a faster pace of 47% YoY.
The U.S. filing and approval are the major catalysts. However, HK inno has other growth engines as well. Innovative pipeline is also progressing, ensuring long-term growth prospect.

F&F: A Key Beneficiary of Explosive Popularity of Jung Hoo Lee (Grandson of the Wind) In the MLB

By Douglas Kim

F&F is one of the key beneficiaries of the exploding popularity of Jung Hoo Lee in the MLB (Major League Baseball) in the United States.
The surging popularity of Jung Hoo Lee could lead to higher demand for F&F’s core products (MLB baseball caps and apparel products), which could lead to higher sales and profits.
F&F recently provided new shareholder return plans including providing at least 25% of net profit as dividends/buybacks/cancellations (including buyback at least 60 billion won from 2025 to 2027).

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May 07

Daily Brief South Korea: Han Kuk Carbon, Studio Dragon, Kolmar Korea , Musinsa and more

By Smartkarma Daily Briefs | Daily Briefs, South Korea

In today’s briefing:

Errors in Local Street’s Projections for the KOSPI 200 Rebalancing
KOSPI200 Index Rebalance Preview: 7 Changes a Side for June
A 100% Tariffs on Films Produced Outside the U.S. – Negative on Korean Film Production Companies
Kolmar Korea: K-Beauty ODMs- Positioned to Ride US Demand Growth While Tiding Over Tariffs
Initial Thoughts on the Musinsa IPO

Errors in Local Street’s Projections for the KOSPI 200 Rebalancing

By Sanghyun Park

One local desk misread the KOSPI 200 rules, thinking one screen was enough — but it’s a strict two-step filter, and that led to three wrong delete calls.
KRX will drop the rebalance list post-close on May 21 or 22, and despite well-telegraphed outcomes, strong next-day price action has followed in past cycles.
Consider a pre-announcement long/short basket trade, as this is the first rebalance post-short-selling resumption. NXT’s rising market share also creates opportunities in overnight-daytime price spreads.

KOSPI200 Index Rebalance Preview: 7 Changes a Side for June

By Brian Freitas

With the review period complete, there could be 7 changes for the Korea Stock Exchange KOSPI 200 (KOSPI2 INDEX) in June.
The impact on the potential inclusions ranges from 1.6-22 days of ADV while the impact on the potential deletions varies from 3.6-16.5 days of ADV.
Han Kuk Carbon (017960 KS) appeared as a forecast add in the week starting 22 March and the stock is up 38% since then.

A 100% Tariffs on Films Produced Outside the U.S. – Negative on Korean Film Production Companies

By Douglas Kim

The Trump administration proposed a new 100% tariffs at movies produced outside the United States. Korean contents account for about 8-9% of total viewing hours on Netflix globally.
Top three listed film/drama production companies in Korea including Studio Dragon, CJ ENM, and ContentreeJoongAng are likely to be negatively impacted by the new major tariffs imposed by the U.S.
Economics of making a movie is much cheaper in South Korea versus the U.S. Producing a film in South Korea can cost 30–70% less than in the United States.

Kolmar Korea: K-Beauty ODMs- Positioned to Ride US Demand Growth While Tiding Over Tariffs

By Devi Subhakesan

K-Beauty ODM segment appears positioned both to ride the secular growth of Korean skincare in the U.S. and to tide over tariff turbulence given their US based manufacturing facilities.
By contrast to OEM/ODM players, major legacy consumer beauty brands like AmorePacific, LG Household & Health Care have been slower to localise production leaving them exposed to reciprocal tariffs.
With American cosmetic imports from Korea hitting all-time highs, Korean ODMs with local facilities could see demand growth and profit recovery as clients onshore production to avoid tariffs.

Initial Thoughts on the Musinsa IPO

By Douglas Kim

Musinsa is getting ready to complete its IPO in 2H 2025. Musinsa is the top fashion online/mobile platform in Korea.
The market value of Musinsa is expected to be about 5 trillion won which could be one of the largest IPOs in Korea this year.
Musinsa had its best ever results in 2024 with sales of 1.2 trillion won (up 25.1% YoY), operating profit of 102.8 billion won, and net profit of 69.8 billion won.

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May 06

Daily Brief South Korea: Hanwha Ocean and more

By Smartkarma Daily Briefs | Daily Briefs, South Korea

In today’s briefing:

Rare Arb Opportunity from ATS Breakout in Korea: Day-Night Spread
A Pair Trade of Hanwha Aerospace and Hanwha Ocean

Rare Arb Opportunity from ATS Breakout in Korea: Day-Night Spread

By Sanghyun Park

Local traders are targeting the spread between day and NXT’s after-hours, a classic arb play similar to what Japanese instos used when ATS first launched, now emerging in Korea.
The gap persists because institutional flow on NXT is still minimal, with recent data showing instos accounting for just 1-2% of total turnover.
NXT’s night session is seeing heavy retail flow, providing instos with the liquidity to trade. This creates a rare opportunity to capitalize on early inefficiencies before others catch on.

A Pair Trade of Hanwha Aerospace and Hanwha Ocean

By Douglas Kim

In this insight, we discuss a pair trade between Hanwha Aerospace (012450 KS) (go long) and Hanwha Ocean (042660 KS) (go short).
Hanwha Ocean faces bigger overhang risk of KDB continuing to sell additional shares of the company as compared to Hanwha Aerospace’s rights offering shares dilution risk.
Hanwha Aerospace/Hanwha Ocean price ratio (5 year period) is near the 2 standard deviation (STD) mark which could suggest a reversion to the mean.

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May 03

Daily Brief South Korea: SK Telecom and more

By Smartkarma Daily Briefs | Daily Briefs, South Korea

In today’s briefing:

Biggest Cyberattack in SK Telecom’s History – Likely to Lead to Major Management Changes

Biggest Cyberattack in SK Telecom’s History – Likely to Lead to Major Management Changes

By Douglas Kim

SK Telecom experienced the biggest cyberattack in its history in April which is likely to result in a major shakeup of its management team.
We estimate SK Telecom could lose 1 million+ mobile service customers. Given its ARPU of 29,355 won per month, this would represent lost annual revenue of nearly 352 billion won.
This massive cyberattack could cost SK Telecom more than 1 trillion won in a combination of lost revenue and additional commission/advertising necessary to attract new customers.

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May 02

Daily Brief South Korea: Celltrion Inc, Shinsegae and more

By Smartkarma Daily Briefs | Daily Briefs, South Korea

In today’s briefing:

Alpha Generation Through Share Buybacks in Korea: Bi-Monthly (March and April 2025)
Lee Myung-Hee Transfers All of Her 10.2% Stake In Shinsegae to Her Daughter Chung Yoo-Kyung

Alpha Generation Through Share Buybacks in Korea: Bi-Monthly (March and April 2025)

By Douglas Kim

In this insight, we discuss the alpha generation through companies that announced share buybacks in the Korean stock market in March and April 2025.
There were 40 companies in the Korean stock market that announced share buybacks in the past two months. On average, the share buyback announcements represented 1.7% of outstanding shares.
Astute traders should put alert signals on share buyback announcements in Korea with more than 3% outstanding shares.

Lee Myung-Hee Transfers All of Her 10.2% Stake In Shinsegae to Her Daughter Chung Yoo-Kyung

By Douglas Kim

On 30 April, Lee Myung-Hee (Chairwoman of Shinsegae Group) decided to transfer all of her 10.2% stake in Shinsegae (004170 KS) as a gift to her daughter Chung Yoo-Kyung.
After this gift, Chung Yoo-Kyung’s ownership in Shinsegae will rise from 18.95% to 29.16%.
We are positive on this share transfer of 10.2% stake in Shinsegae from mother (Lee Myung-Hee) to her daughter Chung Yoo-Kyung on the share price impact on Shinsegae.

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South Korea Archives | Page 21 of 126 | Smartkarma

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