[Click eStock] "Jisoo Companies with Many Treasury Shares Have High Potential for Value Up"

An analysis has emerged suggesting that special attention should be paid to holding companies with a high proportion of treasury shares due to the government's corporate value improvement policies. As the disposal procedures become more stringent with the improvement of treasury share-related systems, the number of holding companies canceling treasury shares is increasing, and it is expected that the undervaluation of these companies will likely be resolved.

On the 5th, analyst Choi Gwansoon of SK Securities stated in a report, "As part of the corporate value-up program, whose detailed plan will be released in mid-February, the financial authorities announced an improvement plan for the treasury share system," adding, "If the related policy is implemented, companies are likely to feel a burden in holding treasury shares long-term and actively consider canceling treasury shares."

The main point of the treasury share system improvement plan announced by the financial authorities is to require disclosure in business reports of reasons for holding treasury shares, additional purchase plans, and cancellation or sale plans. Furthermore, when disposing of treasury shares, it will be mandatory to disclose detailed descriptions of the disposal purpose, the background of selecting the disposal counterpart, and the impact on the rights and interests of general shareholders.

Analyst Choi said, "As of the end of the third quarter last year, the treasury shares held by domestic listed companies accounted for about 2.7%, but the proportion of treasury shares held by holding companies under the Fair Trade Act and companies at the top of group governance structures such as Samsung C&T, Doosan, and Hanwha, which are not holding companies, reached 8.2%," adding, "In particular, these companies are highly likely to proceed with treasury share cancellations."

He predicted, "For these reasons, investor interest in holding companies with low price-to-book ratios (PBR) and a high proportion of treasury shares will continue to increase."