Mirae Asset Securities' Korean Stock Picks (January 2024)
Korean Air, Aekyung Industrial, LG Electronics, Korea Aerospace Industries, Hyundai Motor, Kia Corp, Lotte Rental, Shinsegae, Hyundai Department Store, KT Corp, BGF Retail, GS Retail, etc.
Mirae Asset Securities (KRX: 006800 / 520003 / 00680K) is the largest investment banking and stock brokerage company by market capitalization in South Korea. They come out with (and post on their website) a steady stream of free research pieces - namely about Korean stock picks.
Stocks covered by their research during the month of January and (in the order they covered them from the most recent to the earliest in the month) in this post include:
Korean Air; Amorepacific Corp; LG Energy Solution; Daewoo Engineering & Construction Co Ltd; Samsung Engineering; SK Biopharmaceuticals; Lotte Data Communication; Kumho Petrochemical; Hotel Shilla; Hyundai Mobis; LG Innotek; Krafton; Aekyung Industrial; SK Hynix; LG Electronics; Korea Aerospace Industries; Hyundai Glovis; Samsung SDS; Hyundai Motor; Kia Corp; HanAll Biopharma; Lotte Rental; HD Hyundai Electric Co Ltd; Samsung Biologics; Jin Air Co Ltd; Hyundai Engineering & Construction; Hyundai AutoEver; Samsung SDS; NCSoft Corp; Wemade; SOCAR; Neowiz; Dio Corp; Joy City Corp; Hanmi Pharma; Chong Kun Dang Holdings; Cosmax; Shinsegae Inc; Hyundai Department Store Co Ltd; KT Corp; BGF Retail; GS Retail; SK Telecom; LG Uplus; CJ Logistics; OCI Holdings; Lotte Chemical; Hanwha Solutions; DL E&C Co Ltd; Kakao; Shinsegae International; F&F Co; Samsung Electronics; Kolmar Korea; & LX International
That’s actually a good selection of mostly non-tech Korean stocks.
The Korean stock market is also getting renewed foreign attention:
📰 Corporate value-up measures will be released on the 26th..."Promoting voluntary corporate value enhancement" (mk.co.kr) February 2024
Deputy Prime Minister Choi Sang-mok's press conference Tax benefits for companies with increased corporate value Tax audit easing and dividend tax rate cut is expected
The "Corporate Value Up Program," a government measure to alleviate the Korea discount phenomenon, will be unveiled on the 26th.
📰 Foreign buyers up, domestic investors down in Korean stock market (The Korea Times) February 2024
The government's plan to adopt the Corporate Value-up Program, announced on Jan. 24 to bolster the stagnating stock market, is drawing contrasting reactions from foreign investors and domestic retail investors. While foreign investors are amassing shares, retail investors are shifting their investments abroad after obtaining profits from the domestic market.
📰 South Korea Could Be the Next Hot Stock Market (Barron’s) February 2024
South Korea’s government is trying to change that. It’s using Japan’s playbook by introducing the “Corporate Value-Up Program,” which would require companies to disclose financial metrics, such as return on equity or earnings as a percentage of book value. They would also have to disclose their strategies for increasing shareholder value. These changes would give investors greater visibility into companies’ performance—and hopefully encourage them to pay a higher price to own them. Other changes include lower taxes on capital gains and dividends, which would increase the after-tax return on investments.
Peramunetilleke [Jefferies’ global head of quantitative strategy] offered lists of companies that could benefit from these changes, including one that focused on companies with price/book ratios below one and return on equity in the double digits for the past three years. Companies meeting those requirements include Hyundai Motor (KRX: 005380 / FRA: HYU / OTCMKTS: HYMTF) and Korean Air (KRX: 003490). Another screen included the most liquid stocks, including Industrial Bank of Korea (KRX: 024110) and Hankook & Company (KRX: 000240).
📰 South Korea’s Vow to End Stock Discount Sparks Rally in Banks, Undervalued Firms (Bloomberg) January 2024 $ 🗃️
Fundamental solutions needed to end Korea Discount: FM Choi
Banks, autos, holding firms with low price-to-book ratio rally
Mirae Asset Securities publishes their Korean stock pick research in English. Note that when I click on their website, I receive NO pop-up asking what sort of investor I am or my location; but there is this disclaimer at the end of each of the research report PDF files:
This post will NOT be quoting directly from the website or research documents themselves (beyond giving the title of the report - please keep the above disclosures in mind).
However, the summaries and the more detailed research contained in the PDF files do NOT include good long term technical charts, descriptions of what the company does or links to the stock pick’s IR page, current quote, or most recent statistics - all pet peeves of mine when not made available.
To make your life easier, this post includes:
A heading with the stock name.
A quick description of the stock pick with links to the IR page and stock quote(s) on Yahoo! Finance.
A link to any Wikipedia page (for what it might be worth…)
The title of the report linked to the short summary brief on the Mirae Asset Securities website.
The link to the Mirae Asset Securities research report PDF file about the stock pick.
Forward or trailing P/E and dividend yields linked back to the Yahoo! Finance statistics page.
The latest long term technical chart linked back to Yahoo! Finance.
And as always, this post is provided for informational purposes only (and again, to make your life easier…). It does not constitute investment advice and/or a recommendation…
Keep in mind that Mirae Asset Securities would more or less be doing sell side research (with all the usual conflicts of interest that can arise from doing that) and you probably will never or rarely see a sell recommendation from them - just like you almost never see a sell recommendation coming from Wall Street…
But their equity research comes with good stock financials and it’s in English (as again, many Korean stocks still do not have IR pages or financial reports in English) - meaning its a good starting point for anyone interested in investing directly in Korean stocks.
Korean Air
Korean Air (KRX: 003490) is the flag carrier of South Korea and its largest airline based on fleet size, international destinations, and international flights.
Korean Air (003490 KS/Buy) - Renewed focus on attractive valuation
Trailing P/E: 6.29 (no forward P/E) / Forward Annual Dividend Yield: 3.20% (Yahoo! Finance)
Amorepacific Corp
Amorepacific Corp (KRX: 090430) is a South Korean beauty and cosmetics chaebol, operating more than 30 beauty, personal care, and health brands including Sulwhasoo, Laneige, Mamonde, Etude House, AMOREPACIFIC and Innisfree. The firm was founded in 1945 by Suh Sung-whan and currently managed by Suh Kyung-bae, the son of the founder. It is the second-largest cosmetics company in South Korea and one of the 10 largest cosmetics companies in the world.
Amorepacific (090430 KS/Buy) - China business to pick up in 1Q24
Forward P/E: 53.32 / Forward Annual Dividend Yield: 0.73% (Yahoo! Finance)
LG Energy Solution
LG Energy Solution (KRX: 373220) is the world’s #1 EV battery manufacturer outside of China with strong pricing power and a diversified global customer base that includes Tesla. The Company also has the largest number of battery manufacturing facilities being constructed or operating in the U.S and benefits directly from the Inflation Reduction Act.
LG Energy Solution or LGES manufactures and supplies a range of automotive batteries, which include pouch-type battery cells, modules/packs, and battery management system products for use in electric vehicle batteries; mobility and IT batteries for various applications in IT devices, such as smartphones and laptops, as well as light electric vehicles, electric bicycles, power tools, and wireless earphones; and energy storage systems (ESS) that are used in power grids, UPS, and commercial and residential applications. It also offers facility management and cleaning; and ESS installation services, as well as invests in ventures
The Company is a subsidiary of LG Chem (KRX: 051910) (See: LG Energy Solution (KRX: 373220): World's Biggest Non-Chinese EV Battery Stock).
LG Energy Solution (373220 KS/Buy) - Tesla resumes battery purchases
Forward P/E: 69.44 / Forward Annual Dividend Yield: N/A (Yahoo! Finance)
