South Korea Archives | Page 30 of 126

Jan 28

Daily Brief South Korea: SAMSUNG KODEX KOREA Value-Up ETF, Doosan Enerbility, Korea Stock Exchange KOSPI 200 and more

By Smartkarma Daily Briefs | Daily Briefs, South Korea

In today’s briefing:

Utilize the Killer Dataset Provided by KRX Through the Value-Up Index
Doosan Enerbility: Thoughts on the IPO of Doosan Skoda Power
EQD | Kospi Index Options Weekly (January 20 – 24): Stalled Rally, Flat Implied Vol

Utilize the Killer Dataset Provided by KRX Through the Value-Up Index

By Sanghyun Park

The KRX is going all-in, using data transparency to clean up the Value-Up Index, rebuild trust, and keep it in the spotlight.
This sharpens predictability for June’s rebalancing, enhances market transparency, and attracts foreign investors to GICS-based indices like the KOSPI 200.
This could transform index dynamics, boosting inflows, liquidity, and global interest, creating a potential alpha opportunity.

Doosan Enerbility: Thoughts on the IPO of Doosan Skoda Power

By Douglas Kim

Doosan Skoda Power is getting ready to complete an IPO on the Prague Stock Exchange. The IPO is aiming to gather up to 2.53 billion crowns, or about US$105.5 million.
Post IPO, Doosan Power System plans to maintain a 67% ownership. Doosan Enerbility (034020 KS) owns a 100% stake in Doosan Power Systems.
If Doosan Skoda Power is valued at 8.3 billion crowns and if we annualize the company’s net profit to 473 billion in 2024, this would suggest a P/E of 17.5x.

EQD | Kospi Index Options Weekly (January 20 – 24): Stalled Rally, Flat Implied Vol

By John Ley

Kospi200 has stalled out gaining only 50bps on the week after taking the gain on the month to 5.9%.
Implied vols have flat-lined with spot grinding out gains and historic vols bracketing implied.
We highlight the positive seasonality heading into Lunar New Year.

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Jan 26

Daily Brief South Korea: Dongbang Medical and more

By Smartkarma Daily Briefs | Daily Briefs, South Korea

In today’s briefing:

Dongbang Medical IPO Book Building Results Analysis

Dongbang Medical IPO Book Building Results Analysis

By Douglas Kim

Dongbang Medical reported excellent IPO book building results. The IPO price has been finalized at 10,500 won. The demand ratio from the institutional investors was 910 to 1.
Our base case valuation of Dongbang Medical is target price of 13,609 won per share which is 30% higher than the IPO price of 10,500 won.
Dongbang Medical specializes in the manufacturing and distribution of acupuncture needles, various cosmetic devices, and other medical devices.

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Jan 25

Daily Brief South Korea: Samsung Electronics, Seoul Guarantee Insurance, Samsung Life Insurance and more

By Smartkarma Daily Briefs | Daily Briefs, South Korea

In today’s briefing:

Converting Samsung Life’s Samsung Electronics Stake to Long-Term Holdings: Clearing up the Confusion
Seoul Guarantee IPO: Price Cut, Dividend Focus, But Overhang and Weak Earnings May Hurt
Samsung Life Insurance: Implications of Classifying Samsung Electronics as a Long-Term Holding
Seoul Guarantee Insurance Corp IPO Preview (Significantly Lower IPO Price Range)

Converting Samsung Life’s Samsung Electronics Stake to Long-Term Holdings: Clearing up the Confusion

By Sanghyun Park

Samsung Life needs FSC approval for a 10-year holding plan on its Samsung Electronics stake. Without it, the whole plan could fall apart, so it’s all about regulatory green lights.
If FSC approves Samsung Life’s long-term holding, they can’t sell those shares for at least 5 years—no exit strategy for the next half-decade due to regulatory rules.
Samsung Life will convert part of its stake into long-term holdings, signaling how future buybacks and special dividends will balance in Samsung Electronics’ next shareholder return program.

Seoul Guarantee IPO: Price Cut, Dividend Focus, But Overhang and Weak Earnings May Hurt

By Sanghyun Park

Seoul Guarantee Insurance is sticking to the same playbook, focusing on boosting dividend appeal, with a better price and the 100% secondary sell-down and KDIC stake dump still in place.
There’s doubt about market interest, as the performance drop from 2023 to 2024 raises concerns over meeting the 200B KRW minimum dividend promise.
Seoul Guarantee is Korea’s only pure-play surety insurer, tied to the domestic economy. The IPO lacks a growth plan to reduce this reliance, which would’ve been a key win.

Samsung Life Insurance: Implications of Classifying Samsung Electronics as a Long-Term Holding

By Douglas Kim

Samsung Life Insurance (032830 KS) is considering on a special measure of classifying its stake in Samsung Electronics (005930 KS) as a long-term holding stock of up to 10 years.
If Samsung Life Insurance’s stake in Samsung Electronics is classified as a long-term holding, Samsung Life Insurance cannot sell Samsung Electronics stocks for at least 5 years.
There is an increasing probability that if Samsung Life Insurance classifies its stake in Samsung Electronics as a long-term holding, the current ownership stake structure involving Samsung Group remains intact.

Seoul Guarantee Insurance Corp IPO Preview (Significantly Lower IPO Price Range)

By Douglas Kim

Seoul Guarantee Insurance Corp (SGIC) is trying for another attempt at an IPO at much lower IPO price range. The IPO price range is from 26,000 won to 31,800 won.
At the high end of the IPO price range, the IPO offering size is 222 billion won. The IPO price range has been lowered by 34% to 39%.
Despite the company’s consistent record of generating positive operating profit, its lack of sales growth and declining operating margins in 2024 remain key concerns.

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Jan 24

Daily Brief South Korea: SK Hynix, T’Way Holdings, TXR Robotics and more

By Smartkarma Daily Briefs | Daily Briefs, South Korea

In today’s briefing:

SK Hynix Will Derive ~50% of Revenues from AI in 2025. Why Is the Stock Trading at 6x 2025 EPS?
StubWorld: T’Way Air (091810 KS) Takes Off As Key Shareholder Seeks Board Spill
TXR Robotics IPO Preview

SK Hynix Will Derive ~50% of Revenues from AI in 2025. Why Is the Stock Trading at 6x 2025 EPS?

By Nicolas Baratte

SK hynix derived ~25-30% of revenues from AI in 2024 (HBM, LP-DDR, eSSD). AI revenues will double in 2025. SK hynix’s lead, both roadmap, manufacturing, qualifications extends to 2026.
AI high growth also allows SK hynix to lower its exposure to commodity PC, Mobile, consumer segments. Hence, margins likely continue to increase in 2025-26.
Sk hynix’s lead over Samsung is sustainable for at least 2025-26. AI-related ASP / margins aren’t cyclical, unlike commodity memory. The stock trades at a miserable 6x 2025 EPS.

StubWorld: T’Way Air (091810 KS) Takes Off As Key Shareholder Seeks Board Spill

By David Blennerhassett

A double dose of stubs this week! T’Way Air (091810 KS)‘s second-largest shareholder is seeking to spill the board. T’way Air and T’Way Holdings (004870 KS) are up big time.
Preceding my comments on the T’way Group are the current setup/unwind tables for Asia-Pacific Holdcos.
These relationships trade with a minimum liquidity of US$1mn, and a % market capitalisation >20%.

TXR Robotics IPO Preview

By Douglas Kim

TXR Robotics is getting ready to complete its IPO in KOSDAQ in March 2025. TXR Robotics is a robot and logistics automation company in Korea.
The company plans to offer 3.075 million shares in the IPO. The IPO price range is from 11,500 won to 13,500 won.
The bankers used PSR method to value TXR Robotics. The bankers used five companies including Yuil Robotics, Robotis, Neuromeka Co, Kornic Automation, and Hyundai Movex as comps.

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Jan 23

Daily Brief South Korea: HMM Co., Ltd., Korea Zinc, LG CNS, Samsung Biologics and more

By Smartkarma Daily Briefs | Daily Briefs, South Korea

In today’s briefing:

Unpacking the Backstory of HMM’s Value-Up Disclosure Today: Dividend Arbitrage Still in Focus
Korea Zinc: Cross Shareholding Limitation System Loophole
Details of New IPO System Improvement Measures in Korea
HMM: Material Improvement in Corporate Value Up Plan
Samsung Biologics (207940 KS): Record High Revenue in 2024; Accelerated Growth Expected in 2025

Unpacking the Backstory of HMM’s Value-Up Disclosure Today: Dividend Arbitrage Still in Focus

By Sanghyun Park

HMM’s aggressive short-term return strategy is driven by KDB’s BIS issue, explaining why they acted earlier and more aggressively than expected.
HMM’s best move is boosting the 2024 div payout, keeping KDB happy by smoothing over KDB’s PR angle, and aligning with its June value-up index rebalance agenda.
The 2024 year-end dividend is conservatively expected between KRW 850-1,200 per share, totaling KRW 750 billion to 1 trillion, with the record date likely in late February or early March.

Korea Zinc: Cross Shareholding Limitation System Loophole

By Douglas Kim

The proxy battle at the EGM for the control of Korea Zinc (010130 KS) is scheduled for 23 January.
One day prior to the EGM, Korea Zinc’s Chairman Choi is trying to capitalize on the “cross-shareholding limitation system” in order to retain control of the company.
In our view, it appears that the legal case regarding the cross shareholding limitation system is in favor of MBK/Young Poong alliance.

Details of New IPO System Improvement Measures in Korea

By Douglas Kim

The FSC announced the details of its new IPO system improvement measures in Korea on 21 January.
New rules will discourage the rampant first day trading of Korean IPOs. In 74 out of 77 IPOs in 2024, institutional investors were “net sellers” on the listing date.
Rather, the new rules will encourage the investors to take more longer term approach to investing in Korean IPOs.

HMM: Material Improvement in Corporate Value Up Plan

By Douglas Kim

On 22 January, HMM Co., Ltd. (011200 KS) announced its new Corporate Value Up plan which included five major items.
They include higher shareholder returns, achieve average sales growth of 9% and ROE of 4% in the next three years, and improve communication with stakeholders and shareholders.
The company plans to implement total shareholder returns of at least 2.5 trillion won within one year, which represents 14.8% of its market cap.

Samsung Biologics (207940 KS): Record High Revenue in 2024; Accelerated Growth Expected in 2025

By Tina Banerjee

Samsung Biologics (207940 KS) reported 2024 revenue of KRW4.55T, up 23% YoY, ahead of guidance of 15–20%. Growth was driven by increased contribution from Plant 4 and milestone payment.
Ramp-Up at Plant 4 is expected to drive further revenue growth, while Plant 5, scheduled to begin operations in April 2025, will expand total production capacity to 784,000 liters.
Samsung Biologics is well positioned to be resilient to the industry challenges. The company has guided for 20–25% YoY revenue growth to KRW5456–5684B in 2025.

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Jan 22

Daily Brief South Korea: Seoul Guarantee Insurance, Korea Zinc, Sanil Electric and more

By Smartkarma Daily Briefs | Daily Briefs, South Korea

In today’s briefing:

Korea’s Financial Regs Drop New IPO Allocation and Delisting Rules: What It Means and What to Expect
Korea Zinc: An Important Legal Decision to Disallow Appointment of Directors Using Cumulative Voting
Sanil Electric US$1.1bn Lockup Expiry – Tempting to Book 2x Gains in Six Months

Korea’s Financial Regs Drop New IPO Allocation and Delisting Rules: What It Means and What to Expect

By Sanghyun Park

We might see a liquidity crunch post-listing, with tighter regulations and mandatory holding drying up liquidity, causing more volatile price swings.
Big local players with heavy lock-ups will take a large allocation, creating significant overhang risk at the six-month mark. Stronger IPO eligibility boosts costs, pushing funds toward riskier trades.
Overall, this feels like a quick fix. Rather than focusing on long-term market improvements, we should focus on the new pricing patterns likely to emerge in the short term.

Korea Zinc: An Important Legal Decision to Disallow Appointment of Directors Using Cumulative Voting

By Douglas Kim

On 21 January, there was an important legal court decision to disallow the appointment of directors using the cumulative voting system at the Korea Zinc’s EGM on 23 January.
This legal decision is likely to favor MBK/Young Poong alliance in the control of Korea Zinc. The market increasingly favors the likelihood of MBK/Young Poong alliance winning this proxy battle.
Therefore, the chance of a further M&A battle has been reduced which is likely to further decline in the share price of Korea Zinc.

Sanil Electric US$1.1bn Lockup Expiry – Tempting to Book 2x Gains in Six Months

By Clarence Chu

Sanil Electric (062040 KS) listed in Korea on 29th July 2024 after raising US$193m. Its six-month lockup will expire on 29th Jan 2025.
Sanil Electric is a specialized company that manufactures and sells reactors, transformers, railway vehicle parts, and switchboards. As an industrial transformer manufacturer, the company mainly manufactures power and distribution transformers.
In this note, we will talk about the lock-up dynamics and updates since our last note.

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Jan 21

Daily Brief South Korea: SK Inc, Posco DX, T’Way Air, Hana Micron Inc, Korea Stock Exchange Kospi Index and more

By Smartkarma Daily Briefs | Daily Briefs, South Korea

In today’s briefing:

SK Stocks’ Main Narrative: SK Telecom Exit & SK Inc Eyeing SK Square
KOSPI Size Indices: When Active Met Passive
A Hostile M&A Fight for T’Way Air
Hana Micron: Split into Hana Semiconductor Holdings and Hana Micron
EQD | Kospi Index Options Weekly (January 13 – 17): Heavy Call Volume on Thursday’s Gain.

SK Stocks’ Main Narrative: SK Telecom Exit & SK Inc Eyeing SK Square

By Sanghyun Park

SK Inc plans to use SK Hynix as a dividend machine, boosting payouts to ₩3 trillion, and if it absorbs SK Square, it could pocket ₩600 billion—doubling SK Telecom’s dividends.
SK Inc will likely use ₩5 trillion from the SK Telecom deal for a tender offer, boosting its stake in SK Square to 60-70% before merging to minimize dilution.
The SK Telecom deal and potential SK Square tender offer could be the main narrative driving SK Group stocks this year, making SK Square a key momentum play.

KOSPI Size Indices: When Active Met Passive

By Brian Freitas

The review period for the March rebalance of the KOSPI Size Indices commenced on 1 December and will end on 28 February.
Over halfway through the review period, we forecast 39 migrating stocks. Among new listings, 1 stock could be added to LargeCap, 3 to MidCap and 2 to SmallCap.
Three potential downward migrations were deleted from a global index in November. Now, four more potential downward migrations could be deleted from the same global index in February.

A Hostile M&A Fight for T’Way Air

By Douglas Kim

An M&A fight for T’Way Air has officially erupted as Daemyung Sono Group sent a letter to the current management requesting several management improvement measures including resignation of existing management.
Currently, T’Way Air’s largest shareholders are T’Way Holdings and Yelimdang which combined have 30.07% stake in T’Way Air. Daemyung Sono is the second largest shareholder with a 26.77% stake.
From Daemyung Sono Chairman Seo Jun-Hyeok perspective, entering the aviation industry is attractive because it can create synergy with existing hotels and resort businesses.

Hana Micron: Split into Hana Semiconductor Holdings and Hana Micron

By Douglas Kim

Hana Micron Inc (067310 KS) announced its plan to split into Hana Semiconductor Holdings and Hana Micron (a newly established company).
Existing shareholders will receive shares of the two companies in equal proportions according to the split ratio which is 32.5% for Hana Semiconductor Holdings and 67.5% for Hana Micron.
We remain negative on Hana Micron. The valuation of the company remains stretched. In addition, there are increasing concerns about the company’s new plan to split into two different companies.

EQD | Kospi Index Options Weekly (January 13 – 17): Heavy Call Volume on Thursday’s Gain.

By John Ley

Kospi rebounds from weak performance at the start the week to finish essentially unchanged.
1M implied vol came off 2.3 points and is now at the 22nd percentile over the past year.
Thursday’s 1.44% gain saw overwhelming Call activity with 3.6 Calls trading for every Put.

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Jan 20

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

By Smartkarma Daily Briefs | Daily Briefs, South Korea

In today’s briefing:

FSS’s Short Selling Guidelines: Breaking Down the Key Violation Cases and What They Mean

FSS’s Short Selling Guidelines: Breaking Down the Key Violation Cases and What They Mean

By Sanghyun Park

The issue with borrowing agreements is that contracts with conditions set later or changeable terms don’t count, creating uncertainty on how this will play out in practice.
Many borrowing agreements depend on recall timing for ownership recognition, even within the same day, creating confusion in practice.
Repayment period limits don’t apply to internal desk-to-desk trades within the same firm. Other than those, no new updates today on reporting requirements, T+2 reporting window, or lending limits.

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Jan 19

Daily Brief South Korea: LS Electric and more

By Smartkarma Daily Briefs | Daily Briefs, South Korea

In today’s briefing:

LS Electric: Increasing Supplies for Distribution Board Components to Elon Musk’s XAI Data Centers

LS Electric: Increasing Supplies for Distribution Board Components to Elon Musk’s XAI Data Centers

By Douglas Kim

LS Electric, one of the major power equipment providers in Korea, became a new supplier of distribution board components to Elon Musk’s xAI data centers in Memphis, Tennessee.
Some of the major electric utilities and other companies in the US have been reluctant to use electrical equipment products from China due to quality and security concerns.
Therefore, leading Korean companies such as LS Electric have been beneficiary of receiving more orders from the major US electrical utilities and other major companies in the US.

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Jan 18

Daily Brief South Korea: LG CNS, Samsung Electronics, Hanwha Ocean and more

By Smartkarma Daily Briefs | Daily Briefs, South Korea

In today’s briefing:

LG CNS IPO Book Building Results Analysis
EQD | Samsung Electronics – How to Position Amid a Plethora of Catalysts
Flagging the Hanwha Ocean CB Conversion Risk (20% of Shares Out)
Samsung Electronics: Revamping Executive Compensation to Include Stocks – Benchmarking TSMC

LG CNS IPO Book Building Results Analysis

By Douglas Kim

LG CNS reported a successful IPO book building results analysis. The IPO price has been finalized at 61,900 won per share (high end of the IPO price range).
The demand ratio from the institutional investors was 114 to 1. At the IPO price of 61,900 won, the expected market cap will be 6 trillion won.
According to our valuation analysis, it suggests a base case target price of 76,383 won per share, which represents a 23% upside from the IPO price of 61,900 won.

EQD | Samsung Electronics – How to Position Amid a Plethora of Catalysts

By John Ley

Samsung Electronics stock has been an underperformer outright and also relative to Kospi200 as an overhang of catalysts has weighed on performance.
Implied vols are at the 88th percentile over the last 3 years and are at the top of their range relative to Kospi200.
We recommend 4 different ways to position in front of these catalysts and the large stock buy-back that was announced in November.

Flagging the Hanwha Ocean CB Conversion Risk (20% of Shares Out)

By Sanghyun Park

KEXIM ignoring this premium could be a breach of duty, making Hanwha Ocean a prime short play. With 20% of shares, past cases suggest a 5-10% pullback.
This play’s tougher than HMM’s. Without step-ups, timing the conversion is tricky. Early redemption’s unlikely, so the focus is on when KEXIM pulls the trigger on the conversion.
No hints from KEXIM on the CB conversion yet, so loading up aggressively could be risky. We’ll likely need to wait for a signal from KEXIM before jumping in.

Samsung Electronics: Revamping Executive Compensation to Include Stocks – Benchmarking TSMC

By Douglas Kim

Samsung Electronics announced that it will revamp its executive compensation system to include treasury shares as incentives. Samsung has benchmarked TSMC in terms of paying treasury shares to its employees.
Samsung Electronics’ decision to revamp its executive compensation system to include treasury shares as incentives aligns the interests of the shareholders along with the company’s management.
Now that Samsung Electronics has incorporated stock based incentive system, it is likely that other Korean companies that could follow suit.

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South Korea Archives | Page 30 of 126 | Smartkarma

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