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Photo courtesy of Yonhap News |
[Alpha Biz= Paul Lee] Seoul, October 12 — South Korea’s National Pension Service (NPS), the nation’s largest institutional investor, has expanded its stake in several holding companies (지주사), signaling confidence in governance reform momentum and policy-driven upside potential. Conversely, it has reduced exposure to construction and steel stocks, citing rising earnings uncertainty.
According to disclosures filed with the Financial Supervisory Service (FSS), the NPS recently increased its holdings in:
OCI Holdings, from 8.49% to 10.57% (+2.08 percentage points)
Hyosung, +1.04 percentage points
Dong-A Socio Holdings, +1.01 percentage points
Samsung C&T, +1 percentage point
Doosan, +1 percentage point
These adjustments reflect the fund’s strategic tilt toward undervalued conglomerates expected to benefit from improved corporate governance and regulatory incentives.
Undervalued Conglomerates
Korean holding companies typically trade at low price-to-book ratios (PBR) despite solid return-on-equity (ROE) fundamentals, making them attractive as deep-value plays. For example, OCI Holdings trades at a PBR of 0.43, Hyosung at 0.66, and Dong-A Socio Holdings at 0.65 — all below 1.0, meaning their market capitalization is lower than the liquidation value of their assets.
Governance Reform as a Catalyst
Analysts say investor interest in holding companies could rise further if the third phase of the Commercial Act amendment, which would mandate the cancellation of treasury shares, passes the National Assembly. The reform would directly enhance shareholder value at holding firms that hold significant treasury stock positions.
An industry source commented, “The NPS’s recent portfolio shift suggests a focus on corporate governance reform beneficiaries, especially conglomerate structures with transparent asset management and dividend potential.”
Alphabiz Reporter Paul Lee(hoondork1977@alphabiz.co.kr)
