Why Is LG CNS One of the Hottest Stocks in Korea in the Past One Month? Answer: Stablecoin Platform

• LG CNS has been one of the hottest stocks in the Korean stocks market in the past one month (up 87%), sharply outperforming KOSPI.

• The biggest driver of LG CNS's share price in the past month has been that this company has the potential to become a leading stablecoin platform in Korea.

• Many investors believe that LG CNS has the expertise in blockchain/AI/cryptocurrency backend solutions to become one of the leading Won based stablecoin platforms in Korea.

LG CNS (064400 KS) has been one of the hottest stocks in the Korean stocks market in the past one month. LG CNS's share price is up 87% to 97,400 won in the past one month, sharply outperforming KOSPI which is up "not too shabby" 14% in the same period.

Disappointing Post IPO Performance Until the Past Month - LG CNS completed its IPO on 5 February with an IPO price of 61,900 won. It had a disappointing post IPO performance until the past one month. The stock broke past its IPO price on 13 June when it closed at a price of 63,900 won. Most of the share price appreciation has occurred from 11 to 23 June when its share price increased by 85%.

Sharp Increase in Foreign Ownership - Foreign ownership of LG CNS also increased sharply from 1.5% as of 11 June to 4.1% as of 23 June.

---

Why Is LG CNS One of the Hottest Stocks in Korea in the Past One Month? Answer - Potential To Provide a Leading Stablecoin Platform in Korea

The biggest driver of LG CNS's share price in the past month has been the fact that many investors believe this company has the potential to become a leading stablecoin platform in Korea.

With the passage of the Genius Act in the United States, there is an increasing momentum building in Korea as well to provide KRW based stablecoin. The recent spectacular rise in the share price of Circle Internet Group (CRCL US) post its IPO (up nearly 750% from the IPO price) has also increased interest in local companies that could potentially provide similar stablecoin platform. Circle's market cap has surged to $54 billion.

Many investors believe that LG CNS has the expertise in blockchain/AI/cryptocurrency backend solutions to become one of the leading Won based stablecoin platforms in Korea. Going forward, if the Korean government allows private enterprises to provide stablecoin platforms, there are likely to be numerous companies that offer such products and services.

However, as the size of the Won based stablecoin becomes bigger and more institutional money goes into such platform, it is likely that "winner takes all" is likely to take place customers will be very picky about where they put their hard earned money in stablecoin platforms.

For now, it is all an educated guess as to who may become the market leader in the stablecoin based platform in Korea since the Korean government has yet to approve of Won based stablecoin and companies have yet to formally announce their business plans regarding the roll-out of such platforms.

Nonetheless, there could be about five major groups/companies that are likely to fight for a dominance of the stablecoin based platforms which are as follows:

• LG CNS (064400 KS)/LG Group

• Samsung SDS (018260 KS)/Samsung Group

• Naver Corp (035420 KS)

• Kakaopay (377300 KS)/Kakao Corp (035720 KS)

• SK Square (402340 KS)/SK Group

At this point, it is too early to call for certain company/group to become the leading stablecoin platform provider in Korea. All five companies/groups above certainly have the technical expertise and financial backing to aggressively push ahead with stablecoin platform if the Korean government approves such financial system to operate.

These five companies/groups have also been some of the best performing stocks in KOSPI in the past one/two months as investors increase their capital allocation to companies that could potentially become the dominant player in the stablecoin platform business in Korea.