[Click eStock] "Yeongpung, Stock Price Undervalued Compared to Asset Value"

[Asia Economy Reporter Oh Ju-yeon] Kiwoom Securities evaluated on the 21st that Youngpoong's current market capitalization of 900 billion KRW is significantly below the sum of its asset value and is undervalued.

According to Kiwoom Securities, Youngpoong's net cash at the end of Q2 was 372.1 billion KRW, an increase of 97.3 billion KRW compared to the end of Q1. Youngpoong's net cash increased by more than 300 billion KRW over two and a half years from 70.4 billion KRW at the end of 2017, and the net cash ratio relative to the current market capitalization of about 900 billion KRW reaches approximately 40%.

Currently, Korea Zinc's market capitalization is about 7.4 trillion KRW, and the value of the stake held by Youngpoong (26.9% ownership) is about 2 trillion KRW.

Researcher Lee Jong-hyung of Kiwoom Securities analyzed, "Youngpoong's current market capitalization of 900 billion KRW is only 45% of the value of its stake in Korea Zinc."

Additionally, as of the end of Q2, the book value of the Jongno Youngpoong Bookstore Building is about 400 billion KRW (land 320 billion KRW, building and facilities 80 billion KRW), and the book value of the building next to the Youngpoong Building in Nonhyeon-dong is 75 billion KRW (land 64 billion KRW, building and facilities 11 billion KRW), explaining that the total book value of these buildings is 475 billion KRW. The land book value of these buildings has been maintained for about 10 years since it was last updated at the end of 2011, so the actual market value is estimated to significantly exceed the book value.

The researcher said, "Even without considering the value of the Seokpo Smelter, considering that the sum of the aforementioned asset values reaches 3 trillion KRW, the current market capitalization of 900 billion KRW is considerably undervalued," adding, "Although we raised the discount rate on subsidiary value from 50% to 60% and lowered the target stock price by 22% to 700,000 KRW, we maintain a 'Buy' investment rating considering the gap with the current stock price."

This content was produced with the assistance of AI translation services.