"Low PBR Stocks Volatility↑ for a While... Value-Up Beneficiary Stocks to Narrow Down"

Daishin Securities expected that short-term volatility of low price-to-book ratio (PBR) stocks would increase for the time being due to a value-up policy that fell short of market expectations on the 3rd. However, it anticipated that value-up momentum would focus on companies that disclose actual plans to enhance corporate value in the future.

The government held the '2nd Value-Up Support Seminar' the previous day and unveiled the 'Corporate Value Enhancement Plan Guidelines.' This focuses on encouraging listed companies to voluntarily establish concrete measures to enhance corporate value and actively communicate these with the market to receive appropriate evaluations from investors. It is essentially a disclosure guideline.

Strategist Lee Kyung-min said, "The problem remains that there is still a large gap between market expectations and the progress of value-up programs," adding, "This time as well, the tax incentive support measures expected by the market were not announced."

He added, "Of course, it was announced that corporate tax reductions and separate taxation on dividend income are being pursued as additional support measures," and "It is premature to conclude the sustainability of value-up programs simply because there are no specific tax support measures."

He continued, "From the perspective of improving the structure of Korean companies and the stock market, the approach is positive," and said, "If the guidelines are finalized soon and mid- to long-term structural changes are sought based on them, normalization of KOSPI valuation would also be possible."

He added a caveat, saying, "However, the short-term volatility of low PBR stocks, which surged due to market expectations running ahead once again, must be taken into account," and "The expansion of short-term volatility and the testing of downside support in box-range fluctuations of low PBR stocks should be considered."

Whether companies announce actual corporate value enhancement plans and whether they are included in the 'Korea Value-Up Index,' which gathers excellent companies in the future, will also affect momentum by stock. It is analyzed that as value-up programs become more concrete, beneficiary industries and companies will be narrowed down.

He also said, "One thing that has become clearer in terms of future investment strategy through this 2nd seminar is that industries and stocks recently referred to as low PBR stocks, which show sharp fluctuations depending on value-up momentum, will inevitably be streamlined."

He continued, "In fact, attention will inevitably focus on companies that have announced (corporate value enhancement plans)," and analyzed, "The Korea Value-Up Index is scheduled to be developed by September this year, and related exchange-traded funds (ETFs) will be launched and listed by the end of the year, so investors' interest will inevitably focus on whether stocks are included in the index."