Samsung Securities Raises Kumho Petrochemical Target Price by 38%
Executive Director Park Cheol-wan's Shareholder Proposal Expected to Strengthen Shareholder-Friendly Policies
Executive Director Park Cheol-wan's Allied Forces Accumulate Shares
[Asia Economy Reporter Hyungsoo Park] Samsung Securities on the 28th predicted that the management rights dispute occurring during Kumho Petrochemical's record-high profit period will lead to maximization of shareholder value and revaluation of corporate value.
Hyunryul Cho, a researcher at Samsung Securities, explained, "Yesterday, Kumho Petrochemical Executive Director Park Cheolwan disclosed the termination of special relations with Chairman Park Changu's family regarding his shareholding," adding, "Executive Director Park Cheolwan is Chairman Park Changu's nephew and the single largest shareholder."
He continued, "The possibility of a dispute over Kumho Petrochemical's management rights has greatly increased," and added, "Recently, the media reported that Executive Director Park Cheolwan's friendly forces have concentrated purchases of 3-4% shares."
Furthermore, he emphasized, "The first vote battle is expected in March this year," and "Executive Director Park Cheolwan explicitly stated that the purpose of holding shares is to exercise shareholder rights."
It is known that Executive Director Park Cheolwan sent a shareholder proposal focusing on dividend expansion and replacement of outside directors. Researcher Cho predicted, "The management rights dispute is expected to begin at the shareholders' meeting to be held in March," and "record-high profits were achieved last year and this year, with an average 20% ROE expected."
He said, "The management rights dispute triggered amid continued strong performance will lead to strengthening of shareholder-friendly policies such as dividend expansion," and "it is expected to result in valuation rerating." Additionally, he explained, "The stock price momentum will be stronger until the first vote battle shareholders' meeting (mid to late March)," and "reflecting this, we present a target stock price of 290,000 KRW, raised by 38%."
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