Three Undiscovered Gems In South Korea With Strong Potential

Over the last 7 days, the South Korean market has dropped 2.8%, and it is also down 3.9% over the past year, despite earnings being expected to grow by 29% per annum over the next few years. In this context, identifying stocks with strong fundamentals and growth potential can be particularly rewarding for investors seeking opportunities in a challenging market environment.

Top 10 Undiscovered Gems With Strong Fundamentals In South Korea

Name	Debt To Equity	Revenue Growth	Earnings Growth	Health Rating
Samyang	49.49%	6.68%	23.96%	★★★★★★
Korea Airport ServiceLtd	NA	3.97%	42.22%	★★★★★★
NOROO PAINT & COATINGS	13.99%	5.04%	7.74%	★★★★★★
Korea Cast Iron Pipe Ind	NA	1.97%	8.84%	★★★★★★
Woori Technology Investment	NA	25.66%	-1.45%	★★★★★★
Kyung Dong Navien	22.40%	11.19%	18.84%	★★★★★★
Namuga	14.47%	0.88%	38.25%	★★★★★★
SELVAS Healthcare	13.50%	9.36%	71.59%	★★★★★★
iMarketKorea	28.53%	5.35%	1.30%	★★★★★☆
Daewon Cable	30.50%	8.72%	60.28%	★★★★★☆

Click here to see the full list of 186 stocks from our KRX Undiscovered Gems With Strong Fundamentals screener.

Below we spotlight a couple of our favorites from our exclusive screener.

VT (KOSDAQ:A018290)

Simply Wall St Value Rating: ★★★★★★

Overview: VT Co., Ltd. produces and exports laminating machines and films worldwide, with a market cap of ₩1.25 trillion.

Operations: VT's revenue streams include cosmetics (₩256.27 billion), laminating machines and films (₩33.86 billion), and entertainment (₩93.74 billion).

VT Co., Ltd. has shown remarkable earnings growth of 563.7% over the past year, far outpacing the Personal Products industry average of 30.2%. For Q2 2024, sales reached KRW 113.35 billion compared to KRW 74.69 billion a year ago, while net income jumped to KRW 15.40 million from KRW 5.08 million last year. Despite recent shareholder dilution and volatile share prices over the past three months, VT trades at a value approximately 10% below its estimated fair value and has reduced its debt-to-equity ratio from 71.2% to 22.4% over five years.

• Click here and access our complete health analysis report to understand the dynamics of VT.

• Gain insights into VT's historical performance by reviewing our past performance report.

Cheryong ElectricLtd (KOSDAQ:A033100)

Simply Wall St Value Rating: ★★★★★★

Overview: Cheryong Electric Co., Ltd. manufactures and sells power electric equipment in South Korea and has a market cap of ₩894.68 billion.

Operations: Cheryong Electric generates revenue primarily from the sale of power electric equipment in South Korea. The company's net profit margin is 8.5%.

Cheryong Electric Ltd. appears undervalued, trading at 81.2% below its estimated fair value. The company has no debt, a significant improvement from five years ago when its debt-to-equity ratio was 2.3%. Over the past year, earnings surged by 134%, outpacing the electrical industry’s growth of 18.5%. Despite recent share price volatility, Cheryong remains profitable with positive free cash flow and high-quality earnings, positioning it well for future opportunities in the sector.

• Dive into the specifics of Cheryong ElectricLtd here with our thorough health report.

• Assess Cheryong ElectricLtd's past performance with our detailed historical performance reports.

Hankook (KOSE:A000240)

Simply Wall St Value Rating: ★★★★★☆

Overview: Hankook & Company Co., Ltd. manufactures and sells storage batteries, with a market cap of ₩1.69 trillion.

Operations: Hankook generates revenue primarily from the sale of storage batteries.

Hankook has shown impressive performance, with earnings growing 267% over the past year, significantly outpacing the Auto Components industry’s 20.8%. The company reported net income of KRW 108.48 million for Q2 2024, up from KRW 36.32 million a year ago. Trading at a price-to-earnings ratio of 4.9x compared to the market's 11.1x, it offers good value relative to peers and industry standards while maintaining a satisfactory net debt to equity ratio of just 1.4%.

• Take a closer look at Hankook's potential here in our health report.

• Evaluate Hankook's historical performance by accessing our past performance report.

Where To Now?

• Gain an insight into the universe of 186 KRX Undiscovered Gems With Strong Fundamentals by clicking here.
• Invested in any of these stocks? Simplify your portfolio management with Simply Wall St and stay ahead with our alerts for any critical updates on your stocks.
• Join a community of smart investors by using Simply Wall St. It's free and delivers expert-level analysis on worldwide markets.

Contemplating Other Strategies?

• Explore high-performing small cap companies that haven't yet garnered significant analyst attention.
• Fuel your portfolio with companies showing strong growth potential, backed by optimistic outlooks both from analysts and management.
• Find companies with promising cash flow potential yet trading below their fair value.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com