Several positive developments in the corporate reform space occurred in January:
- Hanwha Corp., the apex of the Hanwha conglomerate, became the second major listed holding company in Korea to outline plans for reducing its share price discount to NAV, which currently stands at 63% on the company’s numbers.
In this respect it is following the lead of SK Square, which is the current “gold standard” among holding companies from a corporate governance perspective.
Hanwha’s approach is different to SK’s. While SK aims to reduce its discount via management incentives, Hanwha Corp. will focus on reducing the number of listed subsidiaries. According to Hanwha’s analysis, holdcos with fewer parts trade at smaller NAV discounts. Hanwha’s announcement is significant because it is now harder for other holding companies to explain why they’re not doing something similar.
To that end, Metrica last week initiated engagement campaigns against two new targets, valued at 0.22x and 0.25x NAV by the market. - On 22nd January, President Lee reiterated his support for the ”Stock Price Suppression Prevention Act” and instructed his chief policy officer to work on immediate implementation. We first wrote about this bill in May 2025. It seeks to prevent majority owners reducing inheritance taxes by driving down share prices ahead of succession events. The bill would treat listed companies the same as unlisted companies, setting a valuation floor of 0.8x NAV.
Naturally, this bill will encounter opposition from the conglomerates, but President Lee already has a track record of pushing through reform-oriented legislation, so we are optimistic about the prospects for this bill, which will have a meaningful impact on the valuations of affected names. - Also on the 22nd, President Lee highlighted the issue of duplicate listings. This refers to chaebols creating multiple layers of subsidiaries to solidify control while depressing share prices to save on inheritance tax.
Duplicate listings are bad for minority investors and most stock exchanges globally are against them. They are however prevalent in Korea (18% of the market) for historical reasons. Japan used to be in a similar position but now only has 4% thanks to Tokyo Stock Exchange initiatives.
We wrote about this issue in April 2025, when the Korea Exchange blocked SK Innovation’s spin-out of its subsidiary SK Enmove. Now the president himself is calling out conglomerates such as LS and LG for spinning off subsidiaries against the interests of minority shareholders.
LS has been shamed into withdrawing its plans, and it seems that spin-off IPOs by other conglomerates are also on ice. The next catalyst for this trade will be when the KRX releases newguidelines in Q1, with a corresponding Capital Markets Act revision to come. Metrica expects this to generate further trading opportunities in this space.
Sources:
Will Dual Listings, the ‘KOSPI 5000 Obstacle,’ Disappear?, The Asia Business Daily, 26 Jan 2026