Mirae Asset Securities (KRX: 006800 / KRX: 520003) 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 October and (in the order they covered them from the most recent to the earliest in the month) in this post include:
LG Chem, Posco International Corp, DGB Financial Group, Daewoong Pharmaceutical, Industrial Bank of Korea, Hana Financial Group, HL Mando Corp, LIG Nex1 Co, LG H&H, Kia Corp, Hyundai Mobis, Shinhan Financial Group, Hyundai AutoEver, OCI Holdings, Lotte Data Communication, SOCAR, Hyundai Motor, Samsung Card, NH Investment & Securities, Samsung Biologics, JB Financial Group, KB Financial Group, Koh Young Technology, KT Corp, LG Uplus, People & Technology, F&F Co, Samsung Electronics, Hotel Shilla, Hyundai Glovis, Samsung SDS, NAVER, SK Telecom and LX International
One thing that I have noticed about the Korean financial stocks covered in this post: They tend to have single digit trailing or forward P/Es and high single digit forward dividend yields. For me, that makes the sector and individual stocks in it worth taking a closer look at – especially in the wake of the property mess in China (who’s financial sector would have significant exposure too).
Note that Korean stocks are also known for their dividend paying preference or preferred shares and I will be adding the following update (for a London listed closed-end fund) to our weekly fund posts:
🗄️⚠️ Weiss Korea Opportunity Fund (LSE: WKOF)
The latest monthly factsheet (economic and portfolio) for this South Korean preference shares focused fund is from the end of October.
Otherwise, investors should take note of this recent news concerning the South Korean stock market:
South Korea to re-impose stock short-selling ban through June to ‘level playing field’ (Reuters) November 2023
- South Korea from Monday will re-impose a ban on short-selling shares at least until June to promote a “level playing field” for retail and institutional investors, financial authorities said on Sunday.
- The ban was lifted in May 2021 for trades involving the shares of companies with large market capitalisation included in the KOSPI200 and KOSDAQ150 share price indices. The restriction has remained in place for most other stocks.
South Korea bans short selling until 2024 (FT) November 2023 $
- Kospi stock index rises as much as 4% after regulator vows to investigate ‘naked’ short selling by institutional investors
- Shares in South Korea surged on Monday morning after the country’s financial regulator issued a blanket ban on short selling to appease retail investors ahead of parliamentary elections next year.
And this piece from November 23rd:
Shorting Ban Drives South Korea Stock Bears to Futures Market (Bloomberg) November 2023
- Futures of some Korean companies are trading at a discount of as much as 6% to their spot prices as investors try to hedge potential risks, according to exchange data. The move risks driving up volatility in the market, adding to challenges for investors seeking steady returns after the surprise crackdown on selling of borrowed shares.
Finally, our September and August posts mentioned the increasingly hot, or at-least active, Korean IPO market as Korean companies seek to raise more capital in a higher interest rate environment. In other words, Korea is a stock market worth taking a closer look at.
Getting back to the Korean stock picks in this post: 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, 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.
- 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.
LG Chem
LG Chem (KRX: 051910) is the parent company of LG Energy Solution (KRX: 373220) – the world’s #1 EV/ESS battery manufacturer outside of China and a Tesla supplier (See: LG Chem (KRX: 051910): Owns Battery Stock LG Energy Solution (And Might Be the Better Stock to Own)).
In the petrochemical business, LG Chem has established a vertically integrated system that produces basic raw materials such as ethylene and propylene as well as downstream products including PE, ABS, and synthetic rubber. The Company has achieved the highest productivity and cost competitiveness in the world in this core business area.
LG Chem develops top quality materials for rechargeable batteries, the IT industry, and the automotive industry that are instrumental in the e-Mobility and sustainability trends.
Life science, with outstanding R&D competence and new drugs that have been approved by USFDA for the first time in Korea, is LG Chem’s new growth engine in the mid to long term. The Company is aggressively making inroads in overseas markets and expanding pipelines for new drugs through constant investment and reinforcing R&D, with aspirations to become one of the top global pharmaceutical companies.
- Wikipedia
- LG Chem (051910 KS/Buy) Resilient cathode margins
- Trailing P/E: 29.21 (no forward P/E) / Forward Annual Dividend Yield: 1.95% (Yahoo! Finance)
Posco International Corp
Posco International Corp (KRX: 047050) is South Korea’s largest trading company and a subsidiary of Posco (NYSE: PKX). The company was founded by Kim Woo-choong in 1967 as Daewoo Industrial Co., Ltd, which ran its business in trading and construction.
Based on its over 80 global networks and marketing expertise,
POSCO International has been expanding business in various fields such as energy, steel, agro, component materials, etc.
Through the merger with POSCO Energy in January 2023, the entire LNG value chain will be completed, emerging as a global eco-friendly energy company.
- Wikipedia
- POSCO International (047050 KS/Buy)Valuation gap to narrow
- Trailing P/E: 13.72 (no forward P/E) / Forward Annual Dividend Yield: 1.70% (Yahoo! Finance)
DGB Financial Group
DGB Financial Group (KRX: 139130) has grown into a comprehensive financial group with ten subsidiaries: DGB Daegu Bank, HI Investment & Securities, DGB Life, DGB Capital, Hi Asset Management, DGB U Pay, DGB Data System and DGB Credit Information, Hi Investment Partners, and Newsystock.
- Wikipedia
- DGB Financial Group (139130 KS/Buy) Sustainability of earnings growth needs to be confirmed
- Trailing P/E: 3.25 (no forward P/E) / Forward Annual Dividend Yield: 7.78% (Yahoo! Finance)
To read more, please visit this article on Substack
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