Mirae Asset Securities' Korean Stock Picks (May 2023)
PI Advanced Materials, SK Hynix, Hanon Systems, KEPCO, KT, LG Uplus, InBody, Vatech, Nexon Games, Pan Ocean, Lotte Chemical, Classys, Dentium, SK Telecom, NAVER, Korean Air, Kumho Petrochemical 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 Korean stock picks (see our front page for a full list of TAGS, including South Korea tags, for our EM Stock Pick Tear Sheets).
Stocks covered by their research during the month of May and (in the order they covered them from the most recent to the earliest in the month) in this post include:
HMM; PI Advanced Materials; Chong Kun Dang Holdings; SK Hynix; i-SENS; SOCAR; Hanon Systems; Ray Co; Seegene; NCsoft; KEPCO; KT Corp; LG Uplus; InBody; Vatech; Nexon Games; Pan Ocean; Lotte Chemical; Wemade; Krafton; Classys; Dentium; SK Telecom; Contentree JoongAng; NAVER; SK Innovation; Kakao; CJ Logistics; Vieworks; Studio Dragon; Kakao Games; Korean Air; Kumho Petrochemical; ST Pharm; & LX International
If you are looking at pulling money out of Chinese stocks or limiting your direct exposure to the country, South Korea offers:
Plenty of tech stocks along with EV battery and green transition hyped stocks.
Indirect exposure to China as (for better or for worst…) many Korean stocks have operations there while others will benefit from the US shift away from China.
Exposure to other emerging markets where Korean stocks have factories or other investments.
A number of idiocentric stock picks e.g. including (a number of which are covered in this post) a surprising number of dentistry related stocks, online gaming or entertainment producers, etc.. The country is also frequently called the "plastic surgery capital of the world" (Wikipedia: Cosmetic surgery in South Korea) and this post has at-least one stock pick involved in that sector.
The catch? Many Korean stocks are only listed in Korea and it can be difficult finding information or filings/financials in English (like financial reports).
However, that is starting to change as there are plans to make it easier for foreigners to invest in the Korean stock market e.g. larger listed companies will soon be required to publish their important disclosure information in English next year.
The Korea Times recently noted (Korea makes it easier for foreigners to invest in local stock market):
By contrast, in Korea as of 2022, 140 companies listed on the main benchmark KOSPI released a total of 2,453 disclosures in English, which is only 13.8 percent of the number of Korean-language disclosures. Given that the percentage was 9.2 percent in 2021, there has been some improvement, but it still has a long way to go.
Currently, Korean corporations' public disclosures in English still rely heavily either on each company's voluntary submission or automatic translations of the Korean disclosures, thereby leading to complaints by foreign investors over both quality and quantity.
Such changes might also help the overall performance of the iShares MSCI South Korea ETF (NYSEArca: EWY) which contains 103 holdings as of last week:
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.
Keeping their disclaimers in mind, you might want to open the Research Report section of their website and select Company Analysis on your phone or in another tab or browser to look over the short titles of their research pieces (summarizing their thoughts and linked to a couple paragraph summaries on their website) and their advice about the stock picks.
However, their 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 linked to the short summary brief on the Mirae Asset Securities website.
A quick description of the stock pick plus links to the IR page and the stock quote from Yahoo! Finance.
A link to any Wikipedia page (for what it might be worth…)
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 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.
HMM
HMM (KRX: 011200), formerly known as Hyundai Merchant Marine, is a South Korean container transportation and shipping company. The Company provides customized services for different cargo including container cargo (dry, reefer and special cargo) and bulk cargo for raw materials, oil and plants. Equipped with over a hundred various vessels, including small ships, mega containerships and VLCCs* and global seaway networks linking logistics facilities of each country and the globe, HMM has the foundation for stable shipping services anytime and anywhere.
Link to latest Mirae Asset Securities report (PDF file):
Trailing P/E: 2.77 (no forward P/E) / Forward Annual Dividend Yield: 6.28% (Yahoo! Finance)
PI Advanced Materials
PI Advanced Materials (KRX: 178920) is the world’s largest producer of Polyimide-based materials which are found in essential components for diverse applications ranging from smart devices and electric vehicles to displays and semiconductors. The Company is expanding it’s business scope from PI film to varnish and powder, and evolving into a global leader in advanced materials.
Link to latest Mirae Asset Securities report (PDF file):
Trailing P/E: 38.83 (no forward P/E) / Forward Annual Dividend Yield: 2.28% (Yahoo! Finance)
Chong Kun Dang Holdings
In November 2013, Chong Kun Dang Holdings (KRX: 001630) was established as a holding company in a Chong Kun Dang group for the first steps to be a global pharmaceutical company. When Korean pharmaceutical companies relied entirely on imports of medicine supplies, Chong Kun Dang was able to localize medicine supplies by establishing the largest compose and fermentation factories in Korea. Also, Chong Kun Dang was the first domestic company to obtain the U.S FDA approval - which marked the beginning of Korea’s medicine supplies export.
Link to latest Mirae Asset Securities report (PDF file):
Trailing P/E: 23.07 (no forward P/E) / Forward Annual Dividend Yield: 2.85% (Yahoo! Finance)
SK Hynix
SK Hynix (KRX: 000660) manufactures, distributes, and sells semiconductor products in Korea, China, rest of Asia, the United States, and Europe. The company offers DRAM, NAND storage products, SSD, MCP, and CMOS image sensors for server, networking, mobile, personal computer, consumer, and automotive applications.
Link to latest Mirae Asset Securities report (PDF file)
Trailing P/E: 6.44 (no forward P/E) / Forward Annual Dividend Yield: 1.11% (Yahoo! Finance)
