[Desk Column] Papyong Yoon Clan and Political Theme Stocks

The Pyeongyang Yun clan is a prestigious family with several historical figures mentioned in history books, such as Yun Gwan, who repelled the Jurchens and developed the Nine Northeastern Fortresses during the Goryeo Dynasty; the powerful in-laws Daeyun (Yun Im) and Soyun (Yun Won-hyung) during King Jungjong’s reign in the Joseon Dynasty; and independence activist Yun Bong-gil, who fought in Shanghai’s Hongkou Park during the Japanese colonial period. This long-established family began to be mentioned in the stock market in 2021. This is thanks to the rising interest of investors in companies managed by relatives of the Pyeongyang Yun clan, as former Prosecutor General Yoon Seok-yeol emerged as a leading contender for the next presidential election.

Specialized pesticide manufacturer Seongbo Chemical, English education company NE Neungyule, and Woongjin Group’s holding company Woongjin all hit their daily upper price limits simultaneously after June 8, sharing the commonality that their major shareholders are members of the Yun clan. Seongbo Chemical’s founder, the late Chairman Yun Jang-seop, was a descendant of merchants from Kaesong and was famous as a cash king. Although he was mentioned in the media for steadily purchasing shares of Seongbo Chemical, Yuhwa Securities, and other affiliates well into his nineties, it was only recently revealed that he belonged to the Pyeongyang Yun clan.

NE Neungyule, which showed the strongest surge among Pyeongyang Yun clan-themed stocks with three consecutive days of hitting the upper price limit, attracted attention because its largest shareholder, Chairman Yun Ho-jung of Korea Yakult, is from the Pyeongyang Yun clan. Woongjin also drew attention because Chairman Yun Seok-geum is a member of the clan. Additionally, Namseong and Inseong Information attracted investors due to their management’s affiliation with the Pyeongyang Yun clan.

Before the 2007 presidential election, political theme stocks surged dramatically, especially among small and mid-sized construction companies, fueled by then-presidential candidate Lee Myung-bak’s Grand Canal pledge. Since then, political theme stocks have become targets for investors seeking quick profits. Regardless of corporate value, prices often rose several to tens of times, leading to a proliferation of political theme stocks during major elections.

Regrettably, the reasons behind theme stocks have become increasingly trivial over time. Initially, policy-related theme stocks were dominant, but gradually, themes based on academic ties, regional ties, and blood relations emerged. In the case of blood relations, it was about siblings or cousins, but eventually, the scope expanded to include clan relatives. The Pyeongyang Yun clan alone comprises 221,477 households and 713,947 people (according to the 2000 national census).

Such abnormally soaring political theme stocks tend to plummet once elections end or when a prominent politician’s popularity fades. However, because the upward momentum is so strong, investors continue to be drawn to the sweet temptation of theme stocks. There are even those who have profited from political theme stocks. Therefore, advice like “Political theme stocks that rise regardless of corporate value are risky, so don’t even look at them” often falls on deaf ears.

Whether it is blue-chip stocks like Samsung Electronics, high-dividend stocks with dividend yields several times higher than bank interest rates, or theme stocks that can surge sharply but also have a high chance of falling, choosing an investment target is the investor’s own responsibility. However, it is essential to establish one’s own framework regarding specific investment goals and methods.

Just as a politician running for president must clearly explain “why I should be president” and “what I intend to do if I become president,” investors must precisely understand “why I should buy this stock” and “how this stock will behave if I buy it.”