Korean Stock Picks (March 2024) - Emerging Market Skeptic

A couple of quick notes: I have long been interested in preferred stock or preference shares albeit they are a bit more complicated to understand and seem to depend upon a country’s tax structure (e.g. they seem to be more common in Korea and Brazil). I have Doug K. Le Du’s Preferred Stock Investing book and he runs a site (PreferredStockInvesting.com) focused mostly on US preferred stocks.

The Weiss Korea Opportunity Fund (LSE: WKOF) invests “primarily in listed South Korean preference shares trading at a discount to common shares of the same issuers” and “as a result of their discount to the common shares, South Korean preference shares’ price-to-earnings ratios are typically lower and the dividend yields higher than their respective common shares…”

However, the fund has undergone a strategic review and will be winding down (WKOF – Strategic Review (November 2024)):

Weiss Korea Opportunity Fund Ltd (“WKOF”) announces that it has been notified by its Investment Manager, Weiss Asset Management LP (“WAM”), that it believes that the opportunity set and strategy for the fund continuing in its current form is less attractive than it has been in the past, including at the Company’s inception in 2013, and that it does not think this change in circumstances is likely to improve in the foreseeable future.

🗄️ WKOF – Wind-Down Circular (March 2025)
🗄️ WKOF – Strategic Review Update (December 2024)

Performance has not exactly been spectacular:

Nevertheless, there is certainly a place for some preferred stocks in an investor’s overall investment strategy (just like there is a place for bonds and dividend paying stocks). It just may not make sense to have an entire fund focused on them.

Unfortunately, I have not come across any sites with a comprehensive list of preferred stocks for beyond the USA. Those stocks that I am aware of having such shares are denoted by a 🅿️ in our indices.

Frontier & Emerging Market Stock Index

Our March 23rd post mentioned an interview with activist Tiffany Cianci (who became an anti-private equity activist after having her franchise taken away and her life almost destroyed when a PE firm took over the company she owned a franchise from and forced her out…) about how private equity and their use of adjustable rate loans can destroy good businesses (aka Red Lobster, Party City, Joann’s, Forever 21, Big Lots and now Hooter’s)

Then our April 20th post mentioned The end of globalisation (Apollo Asia Fund: the manager’s report for 1Q25) which noted predictions of “looming crises in private equity and debt are relevant to American universities, already in some financial difficulty” plus “some Asian pension funds have also been marketing targets for US private equity firms – and major market dislocations usually expose weaknesses in unexpected places.”

I was just listening to another podcast where it was also mentioned how private equity shops are trying to exit their bad investments by flogging them onto pension funds with the last resort (if pension funds don’t bite) being the government in the form of getting some sort of a bail out…

Here is another datapoint or rather a piece about problems in the private equity space in Korea and elsewhere:

💻 Collapse of Homeplus & More Bankruptcies of PE Owned Companies Globally [A Prelude to Big Short II?] (Douglas Research Insights) Mar 22, 2025 $

We discuss an emerging concern in the global financial markets which is that many high-profile PE owned companies around the world are increasingly experiencing bankruptcies or near bankruptcies.

The excessive leverage that MBK Partners has tried to use on Homeplus has backfired due to higher interest rates, greater competition from E-Mart (KRX: 139480)/Coupang, Inc. (NYSE: CPNG), COVID-19, and lower buying power from asset sales.

Although it may be premature to declare these bankruptcies/near-bankruptcies to be a prelude to the next Big Short 2, they indeed raise so many alarming bells.

Korean stocks from a variety of research sources covered in the rest of this post for March just prior to the tariff war (but with up-to-date charts and 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…]

DoubleDown Interactive, Bukwang Pharmaceutical, Hanwha Aerospace, Ecopro Materials, Hyundai Motor, Yuhan Corp, Chong Kun Dang Holdings, Korean Reinsurance Company, Kumyang Co Ltd, Kolmar Korea, Sanil Electric, HanAll Biopharma, SL Corp, POSCO Holdings, Dongjin Semichem, Douzone Bizon, Shift Up Corp, Hyundai Rotem, Samsung SDI, HMM, Poongsan Corp, Kakao Corp, Paradise Co, SOCAR Inc, LS Corp, LG Energy Solution, LG Electronics, Korea Zinc, KEPCO, NAVER, Young Poong Precision Corporation, Kiwoom Securities, NH Investment & Securities, i-SENS, NongShim, Cafe24 Corp, Nexon Games, Dentium, Krafton, Hanwha Systems, Dear U Co Ltd, Woori Financial Group & KT Corp

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.

Japan, Korea & Taiwan Stock Index

Frontier & Emerging Market Stock Index

DoubleDown Interactive

💻 DoubleDown Interactive: A Cash Cow Trading For A Bargain (Seeking Alpha) March 31, 2025 $ 🗃️

💻 DoubleDown Interactive: Strong Buy On Valuation, Growth Potential (Seeking Alpha) March 17, 2025 $ 🗃️

🌐 DoubleDown Interactive (NASDAQ: DDI) – Developer of social casino games, casual games & mobile applications. 🇼 🏷️
Price/Book (Current): 0.56
Trailing P/E: 3.83 (no forward P/E) / Forward Annual Dividend Yield: N/A (Yahoo! Finance)

Bukwang Pharmaceutical

💻 Bukwang Pharm Announces A Capital Raise of 100 Billion Won (Douglas Research Insights) Mar 28, 2025 $

🌐 Bukwang Pharmaceutical Co Ltd (KRX: 003000) – Ethical drugs, over-the-counter drugs, nutraceuticals & personal care products. 🏷️
Price/Book (Current): 1.12
Trailing P/E: 879.31 (no forward P/E) / Forward Annual Dividend Yield: N/A (Yahoo! Finance)

Hanwha Aerospace

💻 FSS Surprisingly Halts Hanwha Aerospace’s Rights Offering Capital Raise Temporarily (Douglas Research Insights) Mar 27, 2025 $

💻 Hanwha Aerospace: Rights Offering of 3.6 Trillion Won (Negative on Entire Korean Defense Sector) (Douglas Research Insights) Mar 21, 2025 $

🌐 Hanwha Aerospace (KRX: 012450) – Formerly Samsung Precision. Subs. of Hanwha Group. Aerospace industrial company. Gas turbine engine manufacturer + development, production & maintenance of aircraft engines. 🇼 🇼 🏷️
Price/Book (Current): 7.53
Trailing P/E: 17.35 (no forward P/E) / Forward Annual Dividend Yield: 0.44% (Yahoo! Finance)

Ecopro Materials

💻 Ecopro Materials: Announces A Capital Raise Worth 389 Billion Won (Douglas Research Insights) Mar 27, 2025 $

💻 Ecopro Materials: Seeking 300 Billion Won in Additional Capital Raise (Douglas Research Insights) Mar 02, 2025 $

🌐 Ecopro Materials (KRX: 450080) – Developing & mass-producing high-nickel cathode materials for the battery market. 🏷️
Price/Book (Current): 5.26
Forward P/E: N/A / Forward Annual Dividend Yield: N/A (Yahoo! Finance)

[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…]

DoubleDown Interactive

Bukwang Pharmaceutical

Hanwha Aerospace

Ecopro Materials

To read more, please visit this article on Substack

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