Kiwoom Launches Samsung Electronics and SK hynix ELS with 35% Knock-in Barrier

"Focusing on Launching Mainly Low Knock-in Barrier Products"

Kiwoom Securities announced on May 21 that it will be offering the “Kiwoom 4000th Equity-Linked Securities (ELS),” based on Samsung Electronics and SK hynix as underlying assets, with a total subscription amount of 20 billion won.

ELS is a financial investment product that can provide an agreed-upon return even if the share price of the underlying asset moves sideways or falls within a certain range. According to Kiwoom Securities, this product allows investors to pursue a high pre-tax annual return of 32.1%, even if the share prices of the underlying assets—Samsung Electronics common stock and SK hynix—decline moderately.

The knock-in barrier for the “Kiwoom 4000th ELS” is set at 35%. The knock-in barrier is the threshold that determines whether principal loss occurs in an ELS. For this product, if the price of either Samsung Electronics common stock or SK hynix falls to 65% below the initial reference price (the closing price on May 28), the possibility of principal loss on the ELS arises.

This product has a maturity of three years, with early redemption evaluation dates every six months. It features a step-down structure, with the early redemption barriers decreasing in stages: 85%-85%-85%-80%-75%-70%.

Generally, for ELS products with the same conditions, a lower knock-in barrier means a reduced risk of principal loss, making low knock-in barrier products more advantageous for investors.

However, investors should note that this is still a high-risk financial investment product, and depending on the movement of the underlying assets, it is possible to incur a total loss of principal. The risk grade is classified as “very high risk (grade 1).” In addition, unlike direct investment, mid-term redemption may be restricted, so caution is needed from a liquidity perspective. In certain situations, such as mid-term redemption requests from investors or the issuer's default, principal loss may occur even if the knock-in barrier has not been breached.

A representative from Kiwoom Securities explained, “With the recent strength in major semiconductor stocks, the supply of domestic ELS products using Samsung Electronics or SK hynix as underlying assets is expanding,” adding, “Given investors’ heightened concerns about market volatility, we are mainly launching low knock-in barrier products.”

According to the investor cooling-off system, eligible investors must complete their subscription by 5:00 p.m. on May 26. They must then confirm their final subscription intention by 1:00 p.m. on Friday, May 29.

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