HMM: Material Improvement in Corporate Value Up Plan

• On 22 January, HMM Co., Ltd. (011200 KS) announced its new Corporate Value Up plan which included five major items.

• They include higher shareholder returns, achieve average sales growth of 9% and ROE of 4% in the next three years, and improve communication with stakeholders and shareholders.

• The company plans to implement total shareholder returns of at least 2.5 trillion won within one year, which represents 14.8% of its market cap.

On 22 January, HMM Co., Ltd. (011200 KS) announced its new Corporate Value Up plan which included five major items which are as follows:

• Achieve annual average sales growth rate of 9% and ROE of 4% (average for the next three years)

  • In order to achieve these goals, the company plans to invest 23.5 trillion won by 2030.

  • The company plans to expand its capacity to 1.55 million TEU of containers (1 TEU = 1 20-foot container, 130 ships) and 12.56 million DWT of bulk (110 ships) to gain economies of scale and enable the company to compete on a global level.

• Increase total shareholder returns

  • Shareholder return includes the purchase and cancellation of treasury stocks in addition to dividends.

  • The company plans to establish a shareholder return policy to expand shareholder return to the smaller amount of the dividend payout ratio of 30% and the market dividend yield of 5% by 2030.

  • In the short term, it will implement a total shareholder return of more than 2.5 trillion won (including the 2024 fiscal year dividend) within one year.

    • The consensus estimates DPS of 831 won in 2024 (which represents total dividend payout of 732 billion won).

    • This would result in potential share buyback/cancellation of 1.8 trillion won.

    • Given that the company's current market cap is 16.9 trillion won, a share buyback/cancellation of 1.8 trillion won would be 10.4% of its market cap.

    • This is significant and likely to have a material positive impact on its share price.