Delivery time2024-02-04 18:43
Corporate Governance Forum “Listed companies are the main culprits of Korea’s declines… Need to cancel the bond”
Samsung Electronics (CG) stock price
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(Seoul = Yonhap News) Reporter Song Eun-kyung = Samsung Electronics[005930]Hyundai Motors[005380]LG Chem[051910]KB Financial[105560] Analysis showed that if the corporate value up program is applied to listed companies representing the domestic stock market, their stock prices can increase by 50-120%.
According to the financial investment industry on the 4th, the Korea Corporate Governance Forum (hereinafter referred to as the Forum) plans to present this analysis at a New Year press conference at the International Finance Center (IFC) in Yeouido on the 5th.
The Forum, established in 2019, is an organization that seeks to promote the capital market by improving corporate governance, and has over 90 members from the financial investment industry, the legal profession, and academia.
The corporate value up program that financial authorities intend to announce within this month, modeled after the Japanese example, includes ▲ the implementation of comparative disclosure of major investment indicators of listed companies such as price-to- book (PBR) and return on equity. (ROE) ▲ recommendation for a public announcement of a corporate value improvement plan ▲ corporate value It is reported that this will include the introduction of an exchange traded fund (ETF) made up of outstanding improvement companies.
The forum pointed out that the undervaluation problem of the Korean stock market is very similar to the Japanese problem. Listed companies are too obsessed with profit and loss statements and neglect the balance sheet, holding excessive amounts of cash, investment assets and real estate.
The forum emphasized, “The main culprits of the ‘Korea discount’ (undervaluation of the Korean stock market) are listed companies, and companies must cancel their contracts. Resistance is expected from large companies, but listed companies need to reflect on themselves and resolve the issue.”
In the case of Hyundai Motor Company, it was argued that the board of directors ignores the fact that there are many idle assets in the financial statement, and if this issue is resolved, the stock price (based on common stock), which is currently 227,000 won, can jump to 500,000 won by gaining confidence in the market. .
Specifically, the analysis is that if 8 trillion won of the 19 trillion won in cash held was invested to buy and burn preferred stocks, and the sale of the Samseong-dong site was promoted against the will of the general shareholders, the inflow funds can be. used to invest more than 10 trillion won in future mobility.
And Hyundai Engineering and Construction[000720]and KT[030200] If the inflow of 1.3 trillion gained from the sale of 21% and 5% of shares, respectively, is used for returning shareholders, and promise that 30-50% of the future net profit will be used for shareholder returns, the current PBR of 0.6 x can be ‘levelled’ to 1x The forum has been diagnosed.
Samsung Electronics invested KRW 50 trillion out of KRW 92 trillion in cash to buy 100% of the preferred stocks, immediately burned KRW 20 trillion of it and used it to return shareholders, and listed the remaining KRW 30 trillion as stock depository receipts (ADRs) as recommended by the New York Stock Exchange.
In addition, if the company promises to spend 30-50% of its future net profit on shareholder returns and fills the board of directors with global figures such as Taiwan’s TSMC, the current PBR of 1.4 could work jump to 2.2 times and the stock price could jump to more than 130,000 won.
If a similar approach is used to burn or buy treasury shares and raise the shareholder return ratio, LG Chem’s PBR will rise from 0.9x to 1.2x, and KB Financial will rise from 0.4x to 0.7-0.8x, raising its stock price to over KRW 700,000 and KRW 100,000, respectively, I thought I could run. The current stock prices of LG Chem and KB Financial Group are 461,000 won and 66,300 won, respectively.
The forum asked the financial authorities to clarify that it is the board of directors, not the management, that implements the corporate value up programme.
Instead of the corporate governance report that companies listed on the stock market with total assets of KRW 500 billion or more are currently required to submit, a separate independent report on improving corporate value should be issued, and should’ the authorities continue to promote the value. -up program for at least three years.
norae@yna.co.kr
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2024/02/04 18:43 Sent
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