South Korea Archives | Page 8 of 126 | Smartkarma

• Our base case valuation of the Pinkfong Co is implied market cap of 671.4 billion won or target price of 46,369 won per share (over the next 6-12 months). 
• This represents a 22% upside to the high end of the IPO price range. Given the reasonable upside, we have a Positive view of the Pinkfong Co IPO.
• Pinkfong Co is one of the most sought-after acquisition candidates in the global animation industry and this is one of the major reasons why it should trade at premium valuation. 

• The increased purchase of Mirae Asset Life Insurance shares by the Mirae Asset Group companies could be a PRELUDE to a potential voluntary delisting of Mirae Asset Life Insurance. 
• We believe that there is a relatively reasonable probability of the Mirae Asset Group taking Mirae Asset Life Insurance private in the next 1-2 years.
• Mirae Asset Life Insurance is trading at only 0.4x P/B. Treasury shares represent 26.3% of its total outstanding shares.

• SBI FinTech Solutions is a Japan-based subsidiary of SBI Holdings, operating primarily in the high-growth Japanese payment gateway and back-office SaaS markets. The company is strategically positioned to benefit from Japan’s government-led push towards digitalization and cashless transactions.
• Financial performance is characterized by extreme volatility. While 3-year net income and free cash flow CAGRs are strongly positive (26.7% and 26.3% respectively), this is off a low base and follows years of negative growth. Revenue has been declining, and the dividend was eliminated in 2024, signaling potential capital allocation pressures or a strategic shift towards reinvestment.
• The company’s valuation appears stretched, with a P/E ratio of over 570x. This is significantly higher than key Japanese payment gateway peers. The high valuation, coupled with volatile financial performance and declining revenue, suggests a high-risk investment profile where the market has priced in substantial future growth that is not yet evident in the top-line trend.

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• Samsung Life replaced DB Insurance at 5% vs 4.3% weight on June 13, triggering 0.2x DTV inflow/0.5x outflow; Samsung +1.79%, DB -4.97%, long-short net ~7%.
• For December, DB Insurance likely reclaims Samsung Life’s slot; with higher ETF AUM, expect ~+1.0x DTV inflow for DB, ~-0.6/-0.7x DTV outflow for Samsung.
• Still under the radar locally; expect big ETF rebal day moves. With June’s precedent, consider starting positions a day or two early before desk trades.

• In this insight, we provide the top 10 stock picks and key catalysts in the Korean stock market for the next two weeks (26 September to 10 October 2025).
• Top 10 picks in this bi-weekly include S&T Dynamics, Samsung Electronics, KT&G, Samsung Life Insurance, Hana Financial, Hyundai Elevator, SK Inc, Lotte Tour Development, Naver, and Douzone Bizon. 
• There have been some signs of shipbuilding and shipping services related stocks (such as HMM, SK Oceanplant, and HJ Shipbuilding) experiencing some weakness in the past couple of weeks. 

• Disclosure threshold drops from 5% to 1%, signaling stricter transparency, heavier penalties, and potential acceleration of buyback cancellations; new rules open for comment until November 5, effective Q4.
• Near-Term, high-treasury, solid-ROE stocks could see short-term momentum as mandatory cancels and tighter disclosure mechanically lift EPS, driving flows and setting up potential short-term longs.
• This sparks a new event-driven “disclosure schedule trading” setup, as 1%+ treasury holdings now trigger twice-yearly reports and six-month follow-ups, boosting volatility around announcements.

• On 24 September, Hyundai Elevator Co (017800 KS) announced that it plans to sell 7.8 million shares of Hyundai Movex (319400 KS), representing 7% of its outstanding shares.
• Over the next several weeks, we expect continued outperformance of Hyundai Elevator vs Hyundai Movex. 
• We like the pair trade of going long Hyundai Elevator and going short Hyundai Movex over the next 1-3 months, especially due to concerns about a 7% sale in Movex.

• Muhak is a regional soju leader in South Korea, demonstrating significant innovation in a highly competitive market by pioneering lower-alcohol and flavored soju products.
• The company has shown a remarkable financial turnaround, swinging from a net loss in 2022 to strong profitability in 2023 and 2024, coupled with a substantial increase in dividend payouts, signaling confidence from management.
• Despite its regional strength and innovation, Muhak faces intense competition from dominant national players like HiteJinro and Lotte Chilsung, which presents a significant challenge to its expansion plans, particularly in the key Seoul metropolitan area.

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• According to numerous local media, Naver Corp (035420 KS) is set to acquire Dunamu, the operator of Upbit which is the largest cryptocurrency exchange in Korea. 
• According to Naver Corp (035420 KS), its subsidiary, Naver Financial, is discussing various collaborations with Dunamu, including stablecoins  and potential stock exchange. However, nothing has been finalized so far. 
• If Dunamu is valued at 15 trillion won, this would suggest a P/E of 18x based on 2025 annualized net profit of 836 billion won (net profit in 1H25 annualized). 

• In this insight, we provide an early look at the potential additions and deletions to KOSPI200 rebalance in December 2025.
• The seven potential additions are up on average 200% YTD. The eight potential deletion candidates are down on average 8.8% YTD. KOSPI is up 44.7% YTD.
• The average market cap of the seven potential additions is 3.5 trillion won. The average market cap of the seven potential deletion candidates is 0.6 trillion won.

• Pref spread looks stretched near 21–22%, likely a pullback soon. Structural re-rate needs a major Samsung narrative shift.
• A surprise Samsung special dividend could pivot the pref discount; H2 FCF, Q3 prelims, and lighter capex are the key swing factors.
• Expect a short-term pullback; but still stay cautious. Watch the memory upcycle and consider a discount-narrowing trade around late September.

• On 24 September, Ecopro Co confirmed that it will be raising 800 billion won through a PRS using its stake in Ecopro BM as the base asset.
• Ecopro BM has a market cap of 11.3 trillion won. A PRS worth 800 billion won represents 7.1% of Ecopro BM’s market cap. 
• All in all, we believe this PRS deal worth 800 billion won is likely to negatively impact both Ecopro Co and Ecopro BM.

• Current gains echo past moves that required lengthy consolidation, suggesting risk management is prudent.
• Volatility trends remain middling, but skew steepness points to cost-effective downside structures.
• Rally momentum slows as Kospi reaches levels where past reversals have occurred versus SPX.

• CJ Corp‘s valuation and growth are increasingly driven by its unlisted subsidiary, CJ Olive Young, which is capitalizing on the global K-beauty trend and showing strong topline growth and margin expansion.
• The holding company’s overall financial performance is mixed, with the stellar results from CJ Olive Young being partially offset by disappointing performance at other major listed subsidiaries in the food, logistics, and media sectors.
• Key forward-looking catalysts include the potential IPO of CJ Olive Young and the return of Chinese tourists to Korea, while significant risks loom from potential US tariffs on cosmetics and the persistent underperformance of its diversified portfolio.

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• Celltrion Inc (068270 KS) is acquiring Eli Lilly’s New Jersey biopharmaceutical production plant for KRW460B. It also plans to expand capacity of the plant, with an additional investment of KRW700B.  
• With this acquisition, Celltrion has completely eliminated U.S. tariff risks and secured a unified local supply chain encompassing production and sales of its flagship products.
• Celltrion has signed a CMO agreement with Eli Lilly, which will secure additional revenue stream for the company and accelerate the return on investment.

• MTD screening results with 5 trading days left point to 2 names going out and 2 names coming in: Gemvax and Wonik IPS replace Dongjin Semichem and Jusung Engineering.
• Unlike last April’s tariff-distorted +1.3% rebalance, this time we expect cleaner, more meaningful price action.
• No pre-positioning seen, so I’ll target ETF rebalance day (Oct 10) and maybe take an anticipatory position a day earlier.

• On 23 September, Hankyung Business Daily reported that Kcc Corp (002380 KS) plans to issue about 430 billion won worth of exchangeable bonds (EB) based on its own treasury shares.
• We believe the overall impact on this EB issue on KCC is likely to be more negative as compared to the EB issue it conducted in July 2025. 
• Our NAV valuation of KCC Corp suggests NAV per share of 508,467 won, which is 22% higher than current price.

• Hanon Systems announced that it has finalized a rights offering capital increase of 900 billion won. This capital raise will involve 347.5 million common shares (51.2% of outstanding shares)
• The expected rights offering price is 2,590 won per share, which is 18.4% lower than current price of 3,175 won. 
• We remain Negative on Hanon Systems (018880 KS). There is a high probability that this rights offering deal will likely be a dilutive deal for the Hanon System shareholders.

• FnGuide holds a dominant position in South Korea’s rapidly expanding sector-themed ETF index market, a key growth driver for the company.
• Despite consistent revenue growth, the company experienced a significant 47.6% drop in net income in FY 2024, raising concerns about profitability and operational efficiency.
• A shareholder dispute in 2024 and subsequent management changes have introduced corporate governance risks and uncertainty regarding the company’s future strategic direction.

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• Market Leader with Strong Financials: Samsung Fire & Marine Insurance (SFMI) is the leading non-life insurer in South Korea with a market share of approximately 22%. The company exhibits a robust capital position, reflected by the highest solvency ratio among domestic peers (280% as of March 2024), and has a strong track record of profitability and shareholder returns.
• Strategic Shift Towards Profitability and Shareholder Value: In response to regulatory changes (IFRS 17/K-ICS) and a maturing domestic market, SFMI is focusing on high-margin, protection-type long-term insurance products and enhancing shareholder returns. The company announced a comprehensive ‘value-up’ plan, targeting a 50% total shareholder return by 2028 and a significant reduction in treasury shares.
• Stable Outlook Amidst Industry Headwinds: While the South Korean non-life insurance industry faces challenges from slowing auto insurance growth and capital pressures from new regulations, SFMI is well-positioned to navigate these headwinds. Its strong brand, extensive distribution network, digital leadership, and prudent risk management provide a stable foundation for moderate, profitability-focused growth.

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• Seoul Credit Rating & Info (SCI) is a diversified credit information services provider in South Korea, with operations spanning credit ratings, debt collection, and credit reporting. This diversification provides multiple revenue streams, though the company holds a minor position in the main bond rating market.
• The South Korean credit rating industry is a highly regulated oligopoly dominated by three major players. While this creates high barriers to entry, SCI’s market share in the core ratings business is significantly smaller than its main competitors, positioning it as a niche player.
• Financial performance has shown significant volatility, with recent quarterly results indicating a strong recovery in revenue and profitability after a challenging period in 2023. Future growth will likely depend on the health of the South Korean bond market and the company’s ability to expand its ancillary credit information services.

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• Kakao Corp. stands as a dominant force in South Korea’s digital landscape, built upon the ubiquitous KakaoTalk messaging app. Its integrated ecosystem, spanning fintech, mobility, and content, creates a powerful network effect and a wide economic moat.
• Significant corporate governance risk clouds the company’s outlook. The founder, Brian Kim, faces serious legal charges of stock price manipulation, which has led to stock volatility and could have long-term implications for the company’s financial subsidiaries and investor confidence.
• Future growth is contingent on strategic initiatives in artificial intelligence, including the launch of an AI agent, and a major redesign of the core KakaoTalk application. Success in these areas is crucial for enhancing user engagement and unlocking new revenue streams to counter slowing growth and increasing competition.

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• Strong Post-Pandemic Recovery: Korea Airport Service (KAS) has demonstrated a robust recovery following the COVID-19 pandemic, with significant year-over-year growth in revenue and a return to profitability, driven by the resurgence in domestic and international air travel.
• Dominant Market Position with Diversified Services: As a subsidiary of Korean Air, KAS holds a commanding position in the South Korean airport ground handling market. The company’s services extend beyond core aviation support to include a diversified portfolio of businesses such as mineral water production and livestock farming, which provides some revenue stability.
• Attractive Valuation with Reinstated Dividends: The company trades at a low valuation relative to its earnings and book value. The reinstatement of dividends in 2023 signals improving financial health and a renewed commitment to shareholder returns, though the negative free cash flow trend warrants monitoring.

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• LG CNS is a major player in South Korea’s rapidly growing IT services market, capitalizing on the national push for digital and AI transformation. Its strategic focus on high-growth areas like cloud, AI, smart factories, and logistics, coupled with a strong relationship with the LG Group, positions it for sustained growth.
• The company’s recent foray into emerging technologies, particularly its potential involvement in the stablecoin platform market, has generated significant investor interest and stock price momentum. However, this opportunity is accompanied by high regulatory uncertainty.
• A key overhang risk is the potential sale of a significant stake by Macquarie Group. While the company’s fundamentals are solid, this technical factor could lead to share price volatility in the near term. The company’s valuation appears reasonable compared to peers, but the market is pricing in high expectations for future growth.

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• Meritz Financial Group has demonstrated exceptional growth in profitability and market capitalization, driven by a strong performance from its core insurance and securities subsidiaries and a highly effective shareholder return policy.
• The company is strategically positioned to benefit from the evolving South Korean insurance landscape under the new IFRS 17 and K-ICS regulatory frameworks, focusing on high-margin protection-type products.
• Led by Chairman Cho Jung-ho, the management team has a proven track record of value creation, emphasizing a performance-based culture and shareholder value, though potential corporate governance risks related to insider trading allegations warrant monitoring.

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• The Pinkfong company (creator of the Baby Shark brand) is getting ready to complete its IPO in KOSDAQ in 4Q 2025. 
• The company plans to issue 2 million shares in this listing. The IPO price range is from 32,000 won to 38,000 won per share.
• At this price range, the expected expected market cap of the Pinkfong company ranges from 463 billion won (US$331 million) to 550 billion won ($393 million).

• FDA has cleared Merck’s Keytruda subcutaneous injection, which has been developed using Alteogen Inc (196170 KS)’s human hyaluronidase ALT-B4. EMA’s CHMP also recommended approval of subcutaneous Keytruda.
• Merck expects 30–40% of Keytruda IV sales to be converted to SC by 2028. Accordingly, Alteogen is expected to secure over KRW1T in annual royalties in the long term.
• Keytruda SC launch in the U.S. and EU, additional deals for ALT-B4, and Enhertu SC Phase 1 trial update are the key upcoming catalysts for Alteogen.

• Genic is a turnaround story. Genic is one of the largest ODM companies that make beauty face masks in Korea. 
• Genic is one of the biggest suppliers of hydrogel based face masks of the Biodance brand which has been experiencing an excellent demand in global markets, including the United States. 
• Despite surging growth in sales and profits, valuation multiples remain reasonable. It is trading at EV/EBITDA of 12.7x and P/E of 14.2x, based on recent prices and LTM financials. 

• Korea’s structural value gap favors low-PBR, improving-ROE small/mid-caps; traders front-run early movers into the Oct 23 MPC, then rotate into these smaller names as the rate cut nears.
• BOK’s key MPC meetings are Oct 23 and Nov 27, with markets pricing in a 25bps cut on Oct 23 to close the policy rate gap with the Fed.
• Locals are screening for low-PBR (<0.8), ROE >8%, mid-small caps (KRW 300B–1T); 28 names fit, primed to ride the early rate-cut rally pre-MPC.

• HHI–Mipo merger overlaps Dec review: Mipo dropped Nov 26, desk holds cash, rebal Dec 12, new HHI shares list Dec 15 but capped at 10%.
• No ad-hoc replacement for Mipo Nov 26; Dec review will add a new name, likely Sejin Heavy (075580 KS), with no other significant flows flagged.
• Sejin Heavy’s recent post-rally volume cools; passive inflow ~1.5x DTV may trigger visible price action, with potential front-running 1–2 days ahead of Dec 12 ETF rebal.

• New futures launched on KRX Semis, PLUS K-Defense, and SOL Shipbuilding ETFs — the first sector-focused ETFs over 1T KRW to get futures.
• All three sectors dominate Korea’s market, already absorbing liquidity, and ETF futures could trigger delta-hedge arb flows, pushing liquidity even higher.
• All three indices are top-heavy, so flows in big-weight names can create spot-futures dislocations and alpha on individual spreads—especially during early MM liquidity and aggressive basis plays.

• Hanwha Aerospace has scaled into Asia’s top defense prime, with Land Systems (K9, Chunmoo, Redback) driving >30% OP margins and consolidated revenues compounding ~30% annually.
• A ₩31.7 tn orderbook (~4x sales) anchored in Poland, Australia, and Romania underpins multi-year growth visibility, with Ocean adding LNG/naval scale and Systems providing electronics integration.
• Hanwha trades in line with peers (~19× P/E, ~16× EV/EBITDA); upside hinges on backlog execution, while governance and ESG risks cap multiples.

• PLUS High Dividend ETF (161510 KS) reshuffle is now a key flow catalyst: June saw GS E&C and HD Hyundai out, Hyundai Motor in, with sharp one-day moves.
• December review shaping up as 2-in/2-out: Seoul Guarantee (031210) and LG Corp (003550) in, Shinhan (055550) and KB (105560) out.
• Passive flows: Shinhan/KB ~0.3–0.4x DTV, LG ~3x, Seoul Guarantee 5–6x. With AUM up 30% since June, upcoming adds face outsized passive impact.

• It was reported in Seoul Economic Daily today that EQT Partners is close to acquiring a controlling stake (31.4%) in Douzone Bizon (012510 KS).
• A 31.4% stake of Douzone is now worth  0.91 trillion won (with no premium or discount). 
• Douzone’s chairman Kim has demanded up to twice the market cap of the company for the management rights premium.