Korean Stock Picks (June-July 2025) - Emerging Market Skeptic

Before we get to some Korean stocks, let’s start with some recent Korean market news (already covered in our Monday posts from the past 2 months) which are good reasons to at least look closer at the Korean stock market:

📰 Crypto-crazy investors make South Korea the best-performing market in Asia (FT) $ 🗃️ 29 Jun 2025

New president’s pledge to allow won-based stablecoins has led to huge gains in related shares this month

Stocks that have been involved in the Bank of Korea’s digital currency project, including Kakao Pay (KRX: 377300) and LG CNS Co Ltd (KRX: 064400), have been on a wild ride. Kakao Pay shares more than doubled this month and LG CNS rose almost 70 per cent, before paring some gains this week on profit-taking.

On the Kosdaq junior market, fintech security company ATON Inc (KOSDAQ: 158430)’s stock jumped 80 per cent, while Me2on Co Ltd (KOSDAQ: 201490), a mobile game producer, tripled, with its subsidiary recently launching a dollar-pegged stablecoin for casino games.

💻 A Sharp Increase in the Lending Balance of Korean Stock Market Suggests A Pull-Back (Douglas Research Insights) $ Jun 23, 2025

In our view, the sharp increase in the lending balance is one of the signs of many investors preparing for a pull-back in the Korean stock market.

The lending balance of the Korean stock market surged from 47.3 trillion won on 2 January 2025 to 90.4 trillion won as of 20 June 2025.

The rising lending balance in the Korean stock market could be construed as a bearish sign.

💻 Emergence of North Korea Reconciliation Related Stocks Starting to Outperform (Douglas Research Insights) $ Jun 13, 2025

In this insight, we discuss the emergence of the North Korea reconciliation related stocks that are starting to outperform. We have seen this playbook before.

With the new President Lee Jae-Myung, there is likely to be an outperformance of some of these stocks once again.

Among the 6 stocks listed above, we believe Hyundai Elevator Co Ltd (KRX: 017800 / OTCMKTS: HYEVF) is one of best stocks to capitalize on the increased reconciliation with North Korea.

💻 K-pop’s global growth depends on fancy geopolitical footwork (FT) $ 🗃️ 8 Jun 2025

Tencent (HKG: 0700 / LON: 0LEA / FRA: NNND / SGX: HTCD / OTCMKTS: TCEHY) deal could mark the start of a China comeback for South Korea’s music industry

💻 Lee Jae-Myung Becomes the New South Korean President – Four Investment Themes That Could Outperform (Douglas Research Insights) $ Jun 04, 2025

Now that Lee Jae-Myung has become new South Korean President, the uncertainty revolving who will lead South Korea in the next five years is now over.

In this insight, we discuss four investment themes (related to Lee Jae-Myung becoming the new South Korean President) that could outperform the market for the remainder of 2025.

The four investment themes include Korean Holdcos/Quasi Holdcos, Korean Cultural Contents, Securities, and SK Group Companies.

💻 Lee Jae-Myung’s 20 Trillion Won+ Supplementary Budget: Free Money, Don’t Worry and Be Happy (Douglas Research Insights) $ Jun 05, 2025

One of the major policies that Lee Jae-Myung’s new administration is likely to push through is the 20 trillion won (US$15 billion)+ supplementary budget.

The aim of this policy is to revive the sluggish domestic economy. It is a classic “spend first, worry later” government policy.

The supplementary budget is basically sacrificing the balance sheet of the entire South Korea at the expense of short term economic stimulus which may have just limited impact.

Korea is also an important shipbuilder which is playing a key role in tariff negotiations with the USA:

💻 Korea Pitches Multibillion-Dollar “Make American Shipbuilding Great Again” As US Tariff Deadline Looms (Zerohedge) Jul 29, 2025 🗃️

A Trump-imposed firm August 1st deadline looms for South Korea to reach a finalized trade agreement with the US, or else a 25% tariff could be imposed on America’s closest regional ally, which hosts major US military bases, and is heavily reliant on US ‘protection’ from North Korea and its nuclear arsenal.

The country’s Deputy Prime Minister Koo Yun-cheol and Foreign Minister Cho Hyun are set to meet with US Treasury Secretary Scott Bessent and Secretary of State Marco Rubio next week, and Seoul appears ready to pull out all the stops. “The government has pledged to devote its full efforts to concluding trade negotiations with Washington before the August 1 deadline,” a recent Korean government statement from the office of the presidency pledged.

The Koreans appear ready to get creative in satisfying Trump, as the weekend statement confirmed Washington’s “strong interest in the shipbuilding sector” and agreed to work towards mutual cooperation on that front. Fresh Monday reports indicate South Korea is ready to go all-in, offering a major proposal to seal a last-minute agreement to avoid a dreaded 25% tariff rate.

And some updates on Korean corporate governance and potential tax law changes:

💻 Potential Change in Taxes on Capital Gains on Stocks & Securities Transactions: Impact on Korean Stocks (Douglas Research Insights) $ Jul 21, 2025

The capital gains tax on stock sale gains and securities transaction taxes could be raised in 2H 2025, which could negatively impact the Korean stock market, especially small caps.

Combination of higher securities transaction tax and capital gains on stock sales could result in local retail investors selling their shares in 4Q 2025, before these changes come into effect.

Although many small caps in Korea have performed well this year, the potential changes on these two important taxes could put some damper on the recent excellent share price performances.

💻 Two New Tax Tweaks Set to Shake Up Korea’s Local Stock Market: Trading Tax & CGT Threshold (Smartkarma) $ 21 Jul 2025

Trading tax gradually dropped from 0.25% in 2020 to 0.15% in 2025, boosting volatility and short-term trades; a hike to 0.25% could cool momentum but widen arbitrage and basis spreads.

If the major shareholder tax threshold drops to ₩1B, year-end retail dumps and Jan buybacks will return—but with less wild swings and more measured short-term fade and momentum trades.

If the tax revamp drops end-July, expect a September Assembly push. Usually effective next January, but like 2023’s cap gains hike, changes might apply immediately in 2025.

💻 Significance of The “3% Rule” In the Revision of the Commercial Act in Korea (Douglas Research Insights) $ Jul 09, 2025

One of the most important changes in the revisions of the Commercial Act in Korea that was passed in the Parliament last week was the “3% rule.”

In this insight, we provide details of this 3% rule and how it is likely to significantly impact the Korean equity markets.

Major impact of the 3% rule is it is likely to shake up the BODs at many Korean companies. Many global activist investors will likely be more active in Korea.

💻 Cancellation of Existing Treasury Shares in Korea – Government Likely to Provide a GRACE PERIOD (Douglas Research Insights) $ Jun 19, 2025

The Korean government may not force the listed companies to suddenly cancel all their treasury shares all at once.

Rather, a GRACE PERIOD is likely to be given for companies with existing treasury shares by which they need to cancel them.

Going forward, the Korean government is likely to decide to allow acquisition new of treasury stocks only when the purpose is to cancel them, excluding bonus payments or stock compensation.

Korean stocks from a couple of research providers covered in the rest of this post for June-July (but with up-to-date charts and key data):

[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…]

July 2025 – Kiwoom Securities, SK Inc, Doosan Fuel Cell, Yuhan, Hanwha Solutions, People & Technology, Samwha Capacitor, Haesung DS, Samsung C&T, GS Engineering & Construction Corp, Samsung Electronics, Soop Co Ltd, Daewoo Engineering & Construction Co Ltd, Hyundai Livart Furniture, Korea Aerospace Industries, Krafton, iM Financial Group, LG Energy Solution, Hanmi Pharmaceutical, HL Mando, Kia Corp, Hyundai Mobis, Shinhan Financial Group, Hana Financial Group, Samsung Heavy Industries, ST Pharm, LS Electric, OCI Holdings, Hyundai Motor, Industrial Bank of Korea, KB Financial Group, Dong-A ST, LX Hausys, CS Wind Corp, Hyundai Steel, Samsung E&A, Hyundai Glovis, Samsung Biologics, LG Innotek, PharmaResearch, Pan Ocean, HD Hyundai Electric, GC Biopharma, Hugel, Korean Reinsurance Company, Hyundai Marine & Fire Insurance, DB Insurance, Samsung Fire & Marine, Meritz Financial Group, Samsung Life Insurance, GS Retail, BGF Retail, Hyundai Engineering & Construction, Orion Corp, Samsung SDI, S-Oil, SK Hynix, Woori Financial Group, BNK Financial Group, Korean Air, DL E&C, Hyosung Heavy Industries, CJ Logistics, POSCO Holdings, Cosmecca Korea, Korea Investment Holdings, Samsung Securities, NH Investment & Securities, LX International, KEPCO, Hyundai Rotem & Tomocube

June 2025 (Without July Research) – Jusung Engineering, CJ ENM, Studio Dragon, JYP Entertainment, LG Electronics, SM Entertainment, HYBE, Hyundai Department Store, APR, Cosmax, F&F, Wemade, Shift Up, Cafe24, NAVER, Netmarble, HMM & DB HiTek

Note that our 🇰🇷 Korea index now has 285 Korean stocks with more covered in our Monday posts not yet added to the index.

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…

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Japan, Korea & Taiwan Stock Index

Frontier & Emerging Market Stock Index

July 2025

Kiwoom Securities

🔬 Kiwoom Securities (039490 KS/Hold) – 2Q25 results meet our estimates on solid IB fee income (Mirae Asset Securities) 07.31.2025 ⚠️

🔬 Kiwoom Securities (039490 KS/Hold) – Further upside to hinge on continuation of market rally (Mirae Asset Securities) 07.08.2025 ⚠️

🇰🇷 Kiwoom Securities (KRX: 039490) – Broker for both foreign & domestic stock exchanges & futures exchanges. Investment, risk management, asset management & investment strategy research. 🇼 🏷️
Price/Book (Current): 0.96
Trailing P/E: 7.58 (no trailing P/E) / Forward Annual Dividend Yield: 3.48% (Yahoo! Finance)

SK Inc

🔬 SK Inc. (034730 KS/Buy) – Responsible investment approach to ease valuation discount (Mirae Asset Securities) 07.31.2025 ⚠️

🔬 SK Inc. (034730 KS/Buy) – Financials improving rapidly (Mirae Asset Securities) 06.30.2025 ⚠️

🌐🅿️ SK Inc (KRX: 034730 / 03473K) – Advanced materials, energy, life sciences & biopharmaceuticals & digital businesses. 🇼 🏷️
Price/Book (Current): 0.41
Trailing P/E: 3.11 (no forward P/E) / Forward Annual Dividend Yield: 3.45% (Yahoo! Finance)

Doosan Fuel Cell

🔬 Doosan Fuel Cell (336260 KS/Hold) – Profitability recovery will take time (Mirae Asset Securities) 07.31.2025 ⚠️

🌐🅿️ Doosan Fuel Cell (KRX: 336260 / 33626K) – Power generation fuel cells. Develops, manufactures & sells facilities. 🇼 🇼 🏷️
Price/Book (Current): 3.79
Forward P/E: 69.44 / Forward Annual Dividend Yield: N/A (Yahoo! Finance)

Yuhan

🔬 Yuhan (000100 KS/Buy) – API exports and licensing income drive earnings surprise (Mirae Asset Securities) 07.31.2025 ⚠️

🌐🅿️ Yuhan Corp (KRX: 000100 / 000105) – Global pharmaceutical company. One-stop custom synthesis services from R&D to commercial production of active pharmaceutical products (APIs) & intermediates. 🇼 🏷️
Price/Book (Current): 4.28
Forward P/E: 90.91 / Forward Annual Dividend Yield: 0.49% (Yahoo! Finance)

Hanwha Solutions

🔬 Hanwha Solutions (009830 KS/Buy) – Concerns over rising costs (Mirae Asset Securities) 07.31.2025 ⚠️

🔬 Hanwha Solutions (009830 KS/Buy) – Front-loaded demand to provide a short-term boost (Mirae Asset Securities) 07.04.2025 ⚠️

🌐🅿️ Hanwha Solutions (KRX: 009830 / 009835) – Chemicals, energy solutions & advanced materials. Operation of photovoltaic power plants & department stores, real estate development, packaging materials, automobile parts, bearings, machine tools, etc. 🇼 🇼 🏷️
Price/Book (Current): 0.57
Forward P/E: 18.98 / Forward Annual Dividend Yield: 0.98% (Yahoo! Finance)