[Featured Stock] Dongyang Life Insurance Hits Another 52-Week High... Persistent M&A Expectations

Two Consecutive Trading Days of Intraday Record Highs
Despite Hana Financial's 'Acquisition Incident,' Expectations Remain High
Even If It Goes to M&A... Challenges Due to Valuation and More

The stock price of Dongyang Life Insurance, which had been volatile recently due to merger and acquisition (M&A) rumors, is showing signs of recovery. Although the company denied contact rumors with Hana Financial Group, market expectations for an M&A continue to persist.

As of 9:33 AM on the 26th, Dongyang Life Insurance's stock was trading at 7,230 KRW, up 8.89% (590 KRW) from the previous day. This marks the second consecutive trading day with an intraday record high. On the 18th, the stock hit an intraday high of 6,810 KRW, surpassing the 52-week high of 5,200 KRW recorded in March. After fluctuating, the stock set a new 52-week intraday high again on the 25th and continued to reach intraday record highs on the 26th.

The stock price of Dongyang Life Insurance began to fluctuate after news emerged that Hana Financial Group had started preparations to acquire Dongyang Life. Following related reports, Dongyang Life Insurance issued a public announcement denying the claims as 'groundless.' Hana Financial Group also released a statement with the same position. However, many in the market still believe the possibility of an M&A involving Dongyang Life remains high. In particular, when Dongyang Life's value is calculated using the embedded value (EV) method, it amounts to about 5 trillion KRW, leading to analyses that only a large financial holding company could afford such a 'price.' Hana Financial Group, known for its small-scale subsidiary Hana Life and strong commitment to strengthening its insurance division, has consistently been linked to M&A discussions.

The path to an M&A for Dongyang Life Insurance is, of course, not easy. The multi-insurance group that owns Dongyang Life also holds ABL Life, and it is known that any acquirer of Dongyang Life would also be expected to acquire ABL Life. Additionally, although Dongyang Life's EV value is 5 trillion KRW, its market capitalization is around 1 trillion KRW, creating a significant price gap depending on the valuation method. This could lead to a large discrepancy in the 'price expectations' between buyers and sellers.