Korea Small Cap Gem #33: Shinyoung Wacoal [Real Estate Value Is More Than 5x Market Cap]

• A core investment thesis of Shinyoung Wacoal is that its market cap is 94 billion won but its real estate properties in Seoul/Daejeon account for more than 500 billion won.

• Shinyoung Wacoal's net cash as a percentage of market cap is 99%. If the real estate is revalued to market values, it would be trading at P/B of only 0.1x.

• Shin Young Wacoal (005800 KS) is one of the largest companies in Korea that specializes in women's underwear.

Shinyoung Wacoal [Real Estate Value More Than 5x Market Cap]

A core investment thesis of Shinyoung Wacoal is that the company's market cap is only 94 billion won but its real estate properties in Seoul/Daejeon account for more than 500 billion won.

Shinyoung Wacoal owns four main buildings in Seoul and Daejeon. Shinyoung Wacoal currently owns Shinyoung building in Jamwon-dong, Seoul, Shinyoung Wacoal building in Nonhyeon-dong, Seoul, Shinyoung Wacoal building in Daejeon, and a factory in Sadang 2-dong. Shinyoung Wacoal calculated the book value of these buildings at about 96 billion won last year.

Based on these book values, the company had total consolidated equity of 369 billion won at the end of 2024. If the company's real estate is revalued to market values, the total equity of the company would increase to more than 770 billion won. Based on this adjusted equity, Shinyoung Wacoal is currently trading at P/B of only 0.1x.

In addition, the company had cash, cash equivalents, and short term investments of 106 billion won and debt of 13.2 billion won, resulting in net cash of 92.8 billion won at the end of 2024. In other words, net cash as a percentage of market cap is 99%.

Shinyoung building in Jamwondong, Seoul (Source: Naver)

Shinyoung Wacoal Venus building in Nonhyeon dong, Seoul (Source: Naver)