Soren Andahl CIO: "Interest in Korean Stock Market to Grow Due to Popularity of K-pop and K-food"

Founder of Blue Oak Capital, a U.S. Activist Fund
Investing in DN Automotive... Conducting Research on Various Companies
"Fantastic Opportunities Await Activist Investors"

"I am aware that there is a negative perception of dual listings in the Korean stock market. It may be more of an issue arising from the undervaluation of the Korean stock market rather than the problem of dual listings itself. I do not believe that the listing of DN Solutions will act as a discount factor for DN Automotive's stock price."

Soren Andal, founder and Chief Investment Officer (CIO) of Blue Oak Capital, an activist fund in the U.S., presented a new perspective on DN Solutions, which has recently been the subject of controversy over dual listings.

CIO Andal explained, "When DN Solutions is listed, it will receive a proper corporate valuation for its machine tool business division. As the number one machine tool company domestically and with better profitability compared to competitors, a high multiple will be applied."

Blue Oak Capital holds direct and indirect long positions (purchases) in DN Automotive, a company listed on the KOSPI market. The specific timing of purchases and shareholding ratio were not disclosed. They anticipate that if DN Solutions forms a market capitalization of 5 trillion won after listing, the corporate value of DN Automotive will also increase.

DN Automotive established GMT Holdings in August 2021 to acquire management rights of DN Solutions. GMT Holdings, a 100% subsidiary of DN Automotive, will hold a 69.4% stake in DN Solutions after listing. Currently, DN Automotive’s market capitalization is 1.34 trillion won. The value of DN Automotive’s stake could exceed DN Automotive’s market capitalization.

CIO Andal said, "I am interested not only in DN Automotive but also in various Korean companies," adding, "I will find companies with great potential and introduce them to foreign investors." He continued, "Many listed companies lack dedicated investor relations (IR) departments, and English disclosures are often inadequate. Simply providing proper information to foreign investors can create significant value." He also emphasized, "Efforts to increase governance transparency and enhance shareholder value are underway in the Korean stock market, presenting fantastic opportunities for activist investors."

Having been interested in the Korean stock market for quite some time, CIO Andal visited Korea for the first time this year. He said, "With K-Food and K-Pop gaining worldwide popularity, interest in the Korean stock market among foreigners has grown," and added, "I was impressed by the movie 'The Good, the Bad, the Weird'."

Regarding Blue Oak Capital’s investment criteria, CIO Andal introduced, "Subjective judgment and opinions to find good companies are important, but there must be short-term catalysts for stock price increases." He added, "An IPO of a subsidiary, like DN Automotive’s, will act as a catalyst for corporate value growth."

He expressed optimism, saying, "The Korean stock market, with many companies possessing excellent technological capabilities, is similar to Japan’s market five years ago. With improvements in governance and efforts to increase value, positive growth momentum will be formed."