Korean Stock Picks (October 2024)
“Trump Trade” hits Korea & MSCI update + Korea Aerospace Industries, Shinhan Financial, Korea Zinc, Hyundai Rotem, Kia Corp, Hyundai Mobis, Woori Financial, Doosan Bobcat, LG Energy Solution, etc.
In recent Korean stock market related news:
📰 South Korea stock market closer to winning MSCI developed status, regulator says (Reuters) November 2024
The vice chairman of South Korea's Financial Services Commission said on Monday he saw a much higher possibility of the domestic stock market winning a developed market status from global index provider Morgan Stanley Capital International (MSCI) next year.
However, Korea needs to be careful what they wish for as developed market status would likely only help a few big Korean stocks at the expense of the smaller ones (that are otherwise included in EM indices). Case in point:
📰 Israel Struggles With Upgrade From Emerging to Developed Market (Bloomberg) August 2013 $ 🗃️
Three years later, the reclassification is looking like a disaster. Before 2010, Israel accounted for 2.7 percent of the now $7 trillion MSCI Emerging Markets Index, giving it an outsized share of investor money allocated toward developing economies. Now, it makes up just 0.2 percent of the MSCI World Index, which has a cumulative market value of more than $33 trillion, according to data compiled by Bloomberg.
The change has forced Israeli companies to compete with those from the U.S., Europe, and Japan for fund managers’ attention and money. Since 2010, trading volume on the TASE is down about 45 percent. Initial public offerings have dried up, and big companies are choosing to delist or list elsewhere.
The other recent news would be how the “Trump Trade” is impacting Korean stocks as detailed in this piece:
📰 Decoupling of U.S. and Korean Stock Markets Deepens (BusinessKorea) November 2024
Financial investment experts diagnose that the so-called "Trump Trade" has led to a clear sectoral differentiation, with semiconductors and secondary batteries weakening while bio, defense, and shipbuilding sectors strengthen.
And:
… Morgan Stanley projected that the memory semiconductor market is entering a downturn phase and that competition for high-bandwidth memory (HBM) will intensify from next year. Additionally, the aggressive stance of Chinese companies is already affecting double data rate 5 (DDR5) prices, creating multiple adverse factors…
… With adverse factors piling up, foreign investors continue to exit. On Nov. 11, foreign investors sold 535.9 billion won worth of spot stocks and 282.5 billion won worth of KOSPI 200 futures in the securities market, while institutions also net sold 236.9 billion won. Although individual investors bought 736.1 billion won worth, it was insufficient to lift the index. Notably, foreign investors have been net sellers of Samsung Electronics (KRX: 005930 / 005935 / LON: BC94 / FRA: SSUN / OTCMKTS: SSNLF) for nine consecutive trading days from Oct. 30 to Nov. 11, selling a total of 1.5358 trillion won during this period.
That does not mean you should completely bail on or ignore all Korean stocks as its mainly semiconductor related plays that have the most exposure to all the noise coming out of Washington and Beijing plus internal industry issues.
Stocks covered in this post (with a short description from our index plus price/book, forward P/E, forward dividend yield, and a long term technical chart):
[Note: On desktop browsers, an autogenerated table of contents will appear on the left side linked to each stock. I will add those links below after publishing/emailing this post…]
Posco International Corp, Hwaseung Enterprise, Hanwha Systems, Daewoo Engineering & Construction Co Ltd, Dear U Co Ltd, Samsung C&T Corp, Jusung Engineering, Samsung SDI, LG H&H, Korea Aerospace Industries, Samsung Electro-Mechanics, Shinhan Financial Group, Vitzrocell Co Ltd, SK Inc, Korea Zinc, Hyundai Rotem, Kia Corp, Shift Up Corp, Hyundai Mobis, HD Hyundai Electric, SK Telecom, Hyundai Motor, LigaChem Biosciences, Samsung E&A, SK Hynix, LS Electric, LG Innotek, Samsung Biologics, Hansae Co Ltd, Woori Financial, Doosan Bobcat / Doosan Enerbility / Doosan Robotics, Classys, Hyundai Engineering & Construction, SM Entertainment, CS Wind Corp, GC Biopharma Corp, KT Corp, LG Uplus, Hanssem Co Ltd, Jin Air, LG Electronics, KB Financial Group, JYP Entertainment Corp, S-Oil Corp, Hugel, T'Way Air, Shinsegae Inc, Hyundai Department Store, Hotel Shilla, GS Retail, BGF Retail, DL E&C Co Ltd, GS Engineering & Construction Corp, F&F Co, LG Energy Solution, Chong Kun Dang Holdings & Samsung SDS
As mentioned before, the Japan, Korea & Taiwan Stock Index has been updated with links to any stock Wikipedia (🇼) entries, preference share availability (🅿️) plus tickers (usually second), our tags (🏷️), etc.
And as always, this post is provided for informational purposes only (and to make your life easier…). It does not constitute investment advice and/or a recommendation…
🔬 Research analysis (including articles/blog posts from fund managers, etc.); 🎥 Video; 🎙️ Podcast; 🎬 Webinar; 📰 Newspaper/magazine article; 📯 Press release; 💻 Substack/blog/website article; ✅ Our own posts; 🗃️ Archived article; ⏰ Upcoming webinar or event; ⚠️ Disclosures or restricted access e.g. based on your location, investor status, etc.; 🇼 Wikipedia page; 🏷️ Tagged links to other posts about the stock.
Posco International Corp
🔬 POSCO International (047050 KS/Buy) - Another earnings surprise (Mirae Asset Securities) 10.31.2024 ⚠️
🌐 Posco International Corp (KRX: 047050) - Largest trading company & a subsidiary of Posco (NYSE: PKX). Energy, steel, agro, component materials, etc. 🇼 🏷️
Price/Book (Most Recent Quarter): 1.27
Trailing P/E: 12.79 (no forward P/E) / Forward Annual Dividend Yield: 2.11% (Yahoo! Finance)
Hwaseung Enterprise
🔬 Hwaseung Enterprise (241590 KS/Buy/Initiate) - Poised to take a leap forward (Mirae Asset Securities) 10.31.2024 ⚠️
🌏 Hwaseung Enterprise (KRX: 241590) - Manufacturer of footwear, apparel, accessories & vertical solutions for leading Global Brands. 🏷️
Price/Book (Most Recent Quarter): 1.17
Trailing P/E: 43.79 (no forward P/E) / Forward Annual Dividend Yield: 0.50% (Yahoo! Finance)
Hanwha Systems
🔬 Hanwha Systems (272210 KS/Buy) - Share of defense exports on the rise (Mirae Asset Securities) 10.31.2024 ⚠️
🌐 Hanwha Systems Co Ltd (KRX: 272210) - Avionics, defense & ICT specialty company of the Hanwha Group possessing 320 or more global business bases. Defense Division & ICT Division. 🇼 🏷️
Price/Book (Most Recent Quarter): 2.30
Trailing P/E: 29.18 (no forward P/E) / Forward Annual Dividend Yield: 1.04% (Yahoo! Finance)
