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South Korea Archives | Page 24 of 126 | Smartkarma

Mar 31
0

Daily Brief South Korea: KOSDAQ 150 Index, Korea Stock Exchange KOSPI 200 and more

By | Daily Briefs, South Korea

In today’s briefing:

  • Korea Short Selling: Off to the Races
  • Kospi Index Options Weekly (Mar 24 – 28): Volatility Dynamics and Tariff Uncertainty Support Hedging

Korea Short Selling: Off to the Races

By Brian Freitas

  • Short selling in Korea resumes in a couple of hours. Expect heightened volatility for a few days before things settle down.
  • Foreign investors have increased their holdings over the last five weeks and there could be further buying in select stocks on stock price drops.
  • The KOSPI 200 INDEX has outperformed the KOSDAQ 150 Index, and the forecast index deletes have underperformed the indices indicating that there will be positioning for the short-sell resumption.

Kospi Index Options Weekly (Mar 24 – 28): Volatility Dynamics and Tariff Uncertainty Support Hedging

By John Ley

  • A weekly recap of volatility and price metrics, including option volumes, volatility trends, the spot/implied relationship, and open interest statistics.
  • Implied vol held firm despite price swings, with the spread between 1M implied and historic vol continuing to widen.
  • We suggest a tactical hedge given implied vol dynamics and uncertain political environment.

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Mar 29
0

Daily Brief South Korea: Samsung Electronics Pref Shares, Orion Holdings, Bukwang Pharmaceutical and more

By | Daily Briefs, South Korea

In today’s briefing:

  • The Hot Chatter in the Local Market: Tax-Free Dividends – Is Samsung In?
  • Top 10 Korean Stock Picks and Key Catalysts Bi-Weekly (Starting 31 March 2025)
  • Bukwang Pharm Announces A Capital Raise of 100 Billion Won

The Hot Chatter in the Local Market: Tax-Free Dividends – Is Samsung In?

By Sanghyun Park

  • Chosun reports that some Samsung affiliates are exploring tax-free dividends at the operational level, with execs reportedly briefed on the idea.
  • Surprisingly, regulators and politicians haven’t objected to tax-free dividends, which ironically align with the value-up policy. The delay in Samsung’s value-up announcements may be due to this decision.
  • It’s unclear if Samsung Electronics and Life will drop tax-free dividends, but if regulators approve, they could introduce it suddenly in their value-up updates, especially with Lee Jae-yong’s cash crunch.

Top 10 Korean Stock Picks and Key Catalysts Bi-Weekly (Starting 31 March 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 starting 31 March.
  • The top 10 picks in this bi-weekly include Orion Holdings, Hyundai Wia, KEPCO KPS, Samsung Electronics, KT, Emart, CJ Logistics, APR, Doosan Enerbility, and HD Hyundai Marine Solution.
  • The biggest near-term negative catalyst on the Korean stock market remains tariffs. The final legal outcome on President Yoon Seok-Yeol is expected to be made by the end of April.

Bukwang Pharm Announces A Capital Raise of 100 Billion Won

By Douglas Kim

  • On 28 March, Bukwang Pharmaceutical (003000 KS) announced a capital raise of 100 billion won. Its share price fell by 13.3% today. 
  • The company plans to issue 30.2 million new shares (44% of outstanding shares). Expected rights offering price is 3,310 won (15.1% lower than current price). 
  • We are negative on Bukwang Pharm mainly due to excessive shareholding dilution from this rights offering as well as lack of valuation merits. 

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Mar 28
0

Daily Brief South Korea: Hanwha Aerospace, Hanwha Corporation, D’Alba Global, Samsung Electronics and more

By | Daily Briefs, South Korea

In today’s briefing:

  • FSS Surprisingly Halts Hanwha Aerospace’s Rights Offering Capital Raise Temporarily
  • The Hidden Play in Hanwha’s Noisy Stake Reshuffling: Hanwha Corp’s Rights Issue
  • D’Alba Global IPO Valuation Analysis
  • Samsung India Electronics: The Biggest Consumer Company in India. Financials & Valuation

FSS Surprisingly Halts Hanwha Aerospace’s Rights Offering Capital Raise Temporarily

By Douglas Kim

  • After the market close on 27 March, the Financial Supervisory Service (FSS) surprisingly announced a temporary halt to the 3.6 trillion won rights offering capital raise of Hanwha Aerospace. 
  • The FSS has requested a correction report to the massive paid-in capital increase securities report submitted by Hanwha Aerospace on 20 March.
  • While there could be a short term pop to Hanwha Aerospace’s stock tomorrow, we continue remain negative on Hanwha Aerospace over next 1 year mainly due to its stretched valuations

The Hidden Play in Hanwha’s Noisy Stake Reshuffling: Hanwha Corp’s Rights Issue

By Sanghyun Park

  • Hanwha Corp’s chances of raising 1T KRW without a capital call are slim, likely channeling Hanwha Energy’s 1.3T KRW into Hanwha Corp intead of Hanwha Aero.
  • A shareholder-allotted rights issue from Hanwha Corp looks likely, and with short-selling resumption, it sets up a clean arbitrage play with low risk before the official announcement.
  • Timing is key—Hanwha’s using debt for now, but likely won’t delay long. Expect Hanwha Corp’s rights issue to follow Hanwha Aero’s, probably between June and July.

D’Alba Global IPO Valuation Analysis

By Douglas Kim

  • Our base case valuation is based on a P/E of 21.9x (40% premium to the comps) our estimated net profit of 58.9 billion won in 2025. 
  • We believe d’Alba Global should trade at a premium valuation to the comps due to higher sales and operating profit growth, higher ROE and operating margins than the comps. 
  • Our base case valuation of d’Alba Global target price of 101,609 won per share, which represents 53% higher than the high end of the IPO valuation range. 

Samsung India Electronics: The Biggest Consumer Company in India. Financials & Valuation

By Devi Subhakesan

  • Samsung India Electronics, a 100% subsidiary of Samsung Electronics (005930 KS), reported a 2024 turnover of USD 12 bn, ranking it among India’s largest consumer sector companies.
  • It is a leading player in smartphones, smart TVs, and home appliances, with FY2024 revenues 4.5X that of LG Electronics India (123D IN).
  • Estimated valuations of Samsung India Electronics could represent nearly 20% to 25% of its parent’s EV, when valued using India peer group multiples.

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Mar 27
0

Daily Brief South Korea: EcoPro Materials, Kum Yang , DN Solutions, Hyundai Motor and more

By | Daily Briefs, South Korea

In today’s briefing:

  • Ecopro Materials: Announces A Capital Raise Worth 389 Billion Won
  • Korea Exchange Highlights 38 Companies That Could Be Delisted in 2025
  • DN Solutions IPO: Valuation Insights
  • Hyundai Motor Group – $21 Billion Investment in the US [Where Will the Money Come From?]

Ecopro Materials: Announces A Capital Raise Worth 389 Billion Won

By Douglas Kim

  • EcoPro Materials announced a capital raise worth 389 billion won. The company plans to issue 5.12 million new shares, representing 7.3% of its current outstanding shares (69.74 million).
  • This capital raise is in the form of redeemable convertible preferred shares (RCPS). Conversion price of this RCPS is 75,974 won which is 9.9% higher than current price. 
  • Ecopro Materials’ share price is down 27% from 27 February 2025. We continue to remain negative on Ecopro Materials. 

Korea Exchange Highlights 38 Companies That Could Be Delisted in 2025

By Douglas Kim

  • On 26 March, Korea Exchange provided a list of 38 companies in KOSPI and KOSDAQ that are subject to delisting this year.
  • These 38 companies have a combined market cap of 3.4 trillion won.
  • Many of these companies have received ‘refusals of opinion’ from auditors in the audit report. Some of them also face charges of embezzlement and breach of trust. 

DN Solutions IPO: Valuation Insights

By Arun George

Hyundai Motor Group – $21 Billion Investment in the US [Where Will the Money Come From?]

By Douglas Kim

  • In the past week, one of the biggest stories in Korea has been the Hyundai Motor Group’s mega $21 billion investment in the United States.
  • There is a real concern that Hyundai Motor may need to raise external capital to fund its US investments/share buybacks/dividends in 2027/2028.
  • Hyundai Motor (005380 KS) remains one of the most undervalued global auto companies. It is trading at P/E of 4.7x in 2025 and 4.5x in 20026. 

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Mar 26
0

Daily Brief South Korea: LS Electric, D’Alba Global, DN Solutions, HLB Life Science and more

By | Daily Briefs, South Korea

In today’s briefing:

  • How to Clean Up Korea’s Borrowing Balance Stats
  • D’Alba Global IPO Preview
  • DN Solutions IPO – Thoughts on Valuations – Probably Needs a Price Cut
  • HLB Life Science (067630 KS): FDA Rejects Oncology Drug AGAIN; What Lies Ahead

How to Clean Up Korea’s Borrowing Balance Stats

By Sanghyun Park

  • Local traders size up borrowing balances by comparing them to free-float shares, using KRX data for consistency. While not always exact, it’s the go-to reference for most traders.
  • They usually watch for borrowing balances crossing 3% of float, triggering price action. With short selling back, many are now bumping that threshold to 4%.
  • Borrowing balance structures differ between large and small/mid-caps. Traders use a 1 trillion KRW market cap threshold to split them, aligning with TMI indices for long/short setups.

D’Alba Global IPO Preview

By Douglas Kim

  • D’Alba Global is getting ready to complete its IPO in KOSPI in May 2025. IPO price range is from 54,500 won to 66,300 won per share. 
  • According to the bankers’ valuation, the expected market cap of the company will be 692 billion won to 842 billion won post IPO. 
  • D’Alba Global has one of the best growth rates for sales and operating profits among Korean cosmetic companies in the past four years.

DN Solutions IPO – Thoughts on Valuations – Probably Needs a Price Cut

By Sumeet Singh

  • DN Solutions (298440 KS) (DNS) aims to raise around US$1.1bn in its Korea IPO via selling a mix of primary and secondary shares.
  • DNS is engaged in the manufacture and sale of machine tools and the business of automation solutions and services related thereto.
  • We have looked at its past performance in our earlier notes. In this note, we will talk about valuations.

HLB Life Science (067630 KS): FDA Rejects Oncology Drug AGAIN; What Lies Ahead

By Tina Banerjee

  • HLB Life Science (067630 KS) shares lost ~20% since March 20 to trade near five-year lows after a group company, Elevar Therapeutics faced setback regarding a new cancer drug application.
  • FDA has rejected Elevar’s new drug application of its lead proprietary drug candidate, rivoceranib in combination with camrelizumab as a therapy for advanced or metastatic hepatocellular carcinoma.
  • This is the second time that the FDA declined to approve the drug combo. Elevar plans to promptly supplement the trial result and apply for reapproval to the FDA.

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Mar 25
0

Daily Brief South Korea: Samsung SDI, Posco Future M, Lotte Global Logistics, DN Solutions and more

By | Daily Briefs, South Korea

In today’s briefing:

  • Revisiting Korea’s Local Rights Issue Arb Setup
  • Short Selling Resuming on 31 March in Korea – Stocks With Highest Short Selling Lending Balance
  • Lotte Global Logistics IPO Preview
  • DN Solutions IPO: The Bear Case
  • DN Solutions Pre-IPO – Peer Comparison

Revisiting Korea’s Local Rights Issue Arb Setup

By Sanghyun Park

  • Korea’s rights issues offer a clean arb setup—track stock rights vs. spot price, with first price as a cap, and lock in predictable entry vs. exit costs.
  • Aggressive locals skip hedging, betting the discount holds between final pricing and listing. History backs it, but it’s a case-by-case call—not a blanket recommendation.
  • Samsung SDI and Hanwha Aerospace’s KRW 5.5T raise is massive, likely flooding stock rights into the market—prime setup for arb plays.

Short Selling Resuming on 31 March in Korea – Stocks With Highest Short Selling Lending Balance

By Douglas Kim

  • Short selling balance in the Korean stock market was 62.4 trillion won as of 21 March 2025, up significantly from 47.2 trillion won three months ago.
  • Among the stocks in KOSPI with high short selling balance and high lending balance ratios include Posco Future M, Yuhan Corp, LG Energy Solution, and Hanwha Aerospace. 
  • Among the stocks in KOSDAQ with high short selling balance and high lending balance ratios include Ecopro BM, Ecopro Co, HLB, and Eo Technics. 

Lotte Global Logistics IPO Preview

By Douglas Kim

  • Lotte Global Logistics is getting ready to complete its IPO in KOSPI in May 2025. IPO price range is from 11,500 won and 13,500 won.
  • At the high end of the IPO price range, the expected public offering amount is 202 billion won.
  • According to the bankers’ valuation, the expected market cap after the IPO is 479 billion won to 562 billion won. 

DN Solutions IPO: The Bear Case

By Arun George

  • DN Solutions (298440 KS), the third-largest machining centre/turning centre machine tool manufacturer, seeks to raise US$1.1 billion in a KRX IPO.
  • In DN Solutions IPO: The Bull Case, we highlighted the key elements of the bull case. In this note, we outline the bear case.
  • The bear case rests on tepid growth due to volume declines, early indications of margin pressure, rising cash conversion cycle, and mid-tier FCF margin.

DN Solutions Pre-IPO – Peer Comparison

By Sumeet Singh

  • DN Solutions (298440 KS) (DNS) aims to raise around US$1.1bn in its Korea IPO via selling a mix of primary and secondary shares.
  • DNS is engaged in the manufacture and sale of machine tools and the business of automation solutions and services related thereto.
  • We have looked at its past performance in our earlier notes. In this note, we will undertake a peer comparison.

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Mar 24
0

Daily Brief South Korea: VIOL , Korea Stock Exchange KOSPI 200 and more

By | Daily Briefs, South Korea

In today’s briefing:

  • Detailing KRX Market Alerts & Passive Flow Plays
  • Kospi Index Options Weekly (Mar 17 – 21): Extending Gains and Outperformance

Detailing KRX Market Alerts & Passive Flow Plays

By Sanghyun Park

  • HLB Life Science faces delisting if it stays in ATTENTION for four years or gets a disclaimer in an audit—barring surprises, there’s still runway before it’s a real threat.
  • HLB Inc getting ATTENTION in May looks likely, as KRX factors in frequent correction disclosures—HLB’s history with Rivoceranib filings and the failed FDA bid add to the risk.
  • If HLB Inc. gets ATTENTION in May and drops from KOSDAQ 150, VIOL (335890 KS) steps in—worth positioning ahead of late April.

Kospi Index Options Weekly (Mar 17 – 21): Extending Gains and Outperformance

By John Ley

  • A weekly recap of volatility and price metrics, including option volumes, volatility trends, the spot/implied relationship, and open interest statistics.
  • Kospi extended its gains after a strong start, maintaining its position as a relative outperformer.
  • We examine Kospi’s recent outperformance against comparable indices as well as SP500.

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Mar 23
0

Daily Brief South Korea: DN Solutions, Samsung Electronics, Kum Yang and more

By | Daily Briefs, South Korea

In today’s briefing:

  • DN Solutions IPO: The Bull Case
  • Samsung Electronics(005930): Shareholders’ Meeting Results
  • Kum Yang: A Potential Delisting? [Murphy’s Law in Progress]

DN Solutions IPO: The Bull Case

By Arun George

  • DN Solutions (298440 KS), the third-largest machining centre/turning centre machine tool manufacturer, seeks to raise US$1.1 billion in a KRX IPO.   
  • DN Automotive (007340 KS) is the largest shareholder, representing 84.8% of outstanding shares. The primary/secondary split is 43%/57%.
  • The bull case rests on the market share gains, high barriers to entry, healthy forward revenue indicators, a return to growth, and top-tier EBIT margin.

Samsung Electronics(005930): Shareholders’ Meeting Results

By SUSTINVEST

  • All proposals at Samsung Electronics’ March 19 shareholders’ meeting were approved, despite opposition recommendations from Sustinvest, a Korean proxy advisory firm.
  • Sustinvest had recommended voting against outside director candidate Kim Jun-sung (Agenda 2-1-1) and inside director candidate Jeon Young-hyun (Agenda 2-2-1).
  • The approval of all agenda items indicates strong shareholder support for Samsung’s current management direction despite some governance concerns raised by proxy advisors.

Kum Yang: A Potential Delisting? [Murphy’s Law in Progress]

By Douglas Kim

  • Murphy’s law is at progress for Kum Yang (001570 KS).
  • On 21 March, Kum Yang’s external auditor gave a disclaimer of opinion on the on its audit report.
  • Korea Exchange is becoming more serious about delisting shady companies, especially one that receives inappropriate audit opinions for two consecutive years.

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Mar 22
0

Daily Brief South Korea: Korea Stock Exchange KOSPI 200, Korea Stock Exchange Kospi Index, Binex Co Ltd and more

By | Daily Briefs, South Korea

In today’s briefing:

  • Short Selling Resumes in Korea Just as the KOSPI 200 Braces for Pullback (Perfect Timing!)
  • Korea’s FSC Just Dropped the Final Playbook on the Full Restart of Short Selling.
  • KOSDAQ150 Index Adhoc Rebalance: Binex (053030 KS) To Replace HLB Life Science (067630 KS)

Short Selling Resumes in Korea Just as the KOSPI 200 Braces for Pullback (Perfect Timing!)

By Nico Rosti

  • Short selling in all stocks in South Korea will resume from 31 March 2025. The KOSPI 200 (KOSPI2 INDEX EQUITY) is approaching the overboughtarea according to our models.
  • If the KOSPI 200 can rise for another week, it would be perfectly ripe for a large, high probability SHORT trade.
  • The probability of WEEKLY reversal in the range between the last Close (355) and the 363 resistance limit is between 50% and 75%, pretty high.

Korea’s FSC Just Dropped the Final Playbook on the Full Restart of Short Selling.

By Sanghyun Park

  • Today’s update clarifies which brokers are fully linked to NSDS, giving them an edge in short-selling speed and flexibility, while others face more execution constraints.
  • This leads to a clear execution risk gap, requiring traders to factor in trade efficiency differences based on their broker.
  • With lower short-selling restriction triggers, liquidity and short-covering dynamics will shift, requiring traders to reassess market impact and adjust strategies accordingly.

KOSDAQ150 Index Adhoc Rebalance: Binex (053030 KS) To Replace HLB Life Science (067630 KS)

By Brian Freitas

  • HLB Life Science (067630 KS) was added to the Investment Attention Issue list on 21 March and traded limit down. Then came the announcement of the KOSDAQ 150 Index deletion.
  • As the highest ranked non-constituent from the Healthcare sector at the December rebalance, Binex (053030 KS) will be added to the KOSDAQ 150 Index at the close on 25 March.
  • Historically, intra-review inclusions have moved higher between announcement and implementation and there has been reversion post the index inclusion.

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Mar 21
0

Daily Brief South Korea: Hanwha Aerospace, Kolmar Korea Holdings and more

By | Daily Briefs, South Korea

In today’s briefing:

  • Hanwha Aerospace’s Monster Raise: Checking Key Angles
  • Hanwha Aerospace: Rights Offering of 3.6 Trillion Won (Negative on Entire Korean Defense Sector)
  • Dalton Investments Going Activist on Kolmar Holdings and NAV Valuation

Hanwha Aerospace’s Monster Raise: Checking Key Angles

By Sanghyun Park

  • Market sees this as an M&A play, not just de-leveraging. Sentiment’s split, and despite a tight discount, uncertainty on take-up could spark major dislocations in stock and rights.
  • Hanwha’s ₩3.6T raise drops just a week after Samsung SDI’s ₩2T—₩5.5T back-to-back. Absorption looks brutal, setting up serious volatility and prime trading opps if liquidity tightens.
  • The FSC fast-tracked this, flagging it instantly but also hinting approval. With regulator risk off, any cash market snapback tomorrow should stay in check.

Hanwha Aerospace: Rights Offering of 3.6 Trillion Won (Negative on Entire Korean Defense Sector)

By Douglas Kim

  • Hanwha Aerospace (012450 KS) announced a rights offering capital raise of 3.6 trillion won (US$2.5 billion), which is the largest ever rights offering capital raise in Korea.
  • We believe this capital raise is likely to result in higher concerns about shares dilution at Hanwha Aerospace and negatively impact its share price.
  • It is also likely to have a significant negative impact on the entire Korean defense stocks, as it signals a top on this sector. 

Dalton Investments Going Activist on Kolmar Holdings and NAV Valuation

By Douglas Kim

  • In this insight, we discuss Dalton Investments which recently started to go activist on Kolmar Korea Holdings (024720 KS) and NAV valuation of this company.
  • Our base case valuation of Kolmar Holdings is NAV of 475 billion won or NAV per share of 13,836 won, representing a 46% upside from current levels.
  • Dalton Investments is likely to pressure Kolmar Holdings to increase share buyback and cancellations.

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