Alpha Generating Opportunities from the Corporate Value Up Disclosures on the KIND System

• One of the key takeaways of the Corporate Value Up disclosures on the KIND system is that it could potentially lead to alpha generating investing opportunities.

• Since the last week of May, there have been 7 companies that provided specific Corporate Value up programs; (4 major financials) have outperformed KOSPI.

• Companies such as KB Financial and Shinhan Financial that provide more meaningful Corporate Value Up action plans are likely to have greater impact on their share prices.

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Since the first disclosure by KB Financial (105560 KS) that announced its Corporate Value Up improvement plans in the KIND system starting 27 May 2024, there have been 13 disclosures by 11 different companies.

Among these 11 companies, there have been seven companies that provided specific details for capital return programs.The other four companies announced that they plan to provide their detailed Corporate Value up programs at later dates.

• We compared the share prices relative to KOSPI (one day prior to the announcement date vs current price as of 2 August 2024) for seven companies that have provided detailed Corporate Value Up programs. Among these seven companies, there were five financials related companies and four of them outperformed KOSPI.

• These four companies that outperformed KOSPI included the major financials including KB Financial (105560 KS), Woori Financial Group (316140 KS), Shinhan Financial (055550 KS), and Meritz Financial Group (138040 KS).

  • These four stocks are up on average 3.4% (from one day prior to announcement in KIND system for Corporate Value Up to current), outperforming KOSPI which declined on average 2.2%.

  • Taking the total seven companies on average are down 1.3%, same as the KOSPI average of 1.3%.

  • However, excluding Kolmar Holdings (which was down 20%), the remaining six stocks are up on average 1.8%, outperforming KOSPI which is down on average 1% in the same periods.