Seoul, South Korea – Align Partners Capital Management Inc. Is intensifying its campaign for change at Coway Co., Ltd., South Korea’s leading home appliance rental platform. The investment firm has submitted formal shareholder proposals for the company’s upcoming 37th Annual General Meeting (AGM) and issued a third public shareholder letter, urging the board to address what it describes as persistent undervaluation despite steady growth.
The core of Align Partners’ argument centers on a perceived decline in capital efficiency and Return on Equity (ROE). While Coway has demonstrated consistent operating growth since Netmarble became its largest shareholder in 2020 – with revenue and operating profit increasing at compound annual rates of 8.9% and 7.7% respectively, reaching KRW 5.0 trillion in revenue and KRW 878.7 billion in operating profit in 2025 – its share price has lagged. As of February 6, 2026, the share price had fallen 16% since 2019, a stark contrast to the 155% increase in the KOSPI 200 index over the same period.
This disconnect is reflected in compressed valuation multiples. The NTM PER (Price-to-Earnings Ratio) has declined from 16.9x to 8.2x and the MRQ PBR (Price-to-Book Ratio) has fallen from 6.0x to 1.6x. Align Partners attributes this to a structural decline in ROE, which has decreased from 30.7% in 2019 to 17.7% as of the third quarter of 2025. The ROE on new equity deployed since 2020 has been only 11.1%, raising concerns about the effective allocation of capital.
Align Partners specifically criticizes Coway’s expansion into financial leasing, arguing that it has been funded through retained earnings rather than more cost-effective debt financing. This, the firm contends, has reduced shareholder returns and contributed to the declining ROE.
The shareholder proposals submitted for the AGM aim to strengthen board independence, enhance audit committee oversight, and improve transparency regarding executive and director compensation. Specifically, the proposals include:
- An amendment to the Articles of Incorporation requiring an Independent Director to serve as Chairman of the Board.
- An amendment to ensure the Audit Committee is composed entirely of Independent Directors.
- An amendment regarding the number of Audit Committee members to be elected separately.
- The election of two Independent Director candidates to the Audit Committee: Park Yoo-kyung, former Managing Director at APG Asset Management, and Sim Jae-hyung, former CEO of Zinus and a member of the Hyundai Department Store Group.
- An advisory proposal requesting enhanced disclosure of executive and director compensation frameworks.
In its public letter, Align Partners has requested a formal response from Coway’s Board and management by March 13, 2026, urging them to conduct a thorough review of the issues raised. The firm also called on Coway to adhere to Korea Exchange (KRX) corporate governance guidelines by issuing the AGM convocation notice at least four weeks in advance.
The move by Align Partners underscores a growing trend of activist investors targeting Korean companies perceived as trading at a discount to their intrinsic value. The “Korea discount” refers to the historical tendency for Korean companies to be undervalued by international investors, often attributed to factors such as opaque corporate governance, complex ownership structures, and a lack of shareholder focus.
Align Partners, led by CEO Changhwan Lee, has positioned itself as a firm dedicated to addressing these governance inefficiencies and unlocking value in its portfolio companies. The outcome of the AGM and Coway’s response to the shareholder proposals will be closely watched by investors as a potential indicator of whether the company is willing to address the concerns raised and improve its capital allocation strategy.
The firm has made available the full public shareholder letter on its website, www.alignpartnerscap.com, for further review.
