Discovering Undiscovered Gems in South Korea August 2024

Over the last 7 days, the South Korean market has dropped 3.1%, and over the past year, its performance has been flat. Despite this, earnings are expected to grow by 28% per annum over the next few years, making it an opportune time to identify promising stocks that may be undervalued or overlooked.

Top 10 Undiscovered Gems With Strong Fundamentals In South Korea

Name	Debt To Equity	Revenue Growth	Earnings Growth	Health Rating
Korea Airport ServiceLtd	NA	0.40%	27.17%	★★★★★★
Samyang	47.03%	6.61%	22.07%	★★★★★★
NOROO PAINT & COATINGS	17.16%	5.11%	6.31%	★★★★★★
ASIA Holdings	34.13%	8.28%	15.67%	★★★★★★
Oriental Precision & EngineeringLtd	59.19%	3.54%	5.92%	★★★★★★
SELVAS Healthcare	13.58%	10.16%	77.14%	★★★★★★
KG Chemical	43.62%	33.46%	8.39%	★★★★★☆
Daewon Cable	24.70%	8.50%	62.14%	★★★★★☆
Kwang Dong Pharmaceutical	40.57%	5.48%	4.75%	★★★★☆☆
EASY BIOInc	188.46%	15.71%	55.75%	★★★★☆☆

Click here to see the full list of 198 stocks from our KRX Undiscovered Gems With Strong Fundamentals screener.

Here we highlight a subset of our preferred stocks from the 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 ₩1.31 trillion.

Operations: VT Co., Ltd. generates revenue primarily from its cosmetic segment (₩213.71 billion), followed by entertainment (₩98.08 billion) and laminating products (₩33.15 billion). The company's diverse revenue streams highlight its focus on cosmetics, which is the largest contributor to its income.

VT has shown impressive earnings growth of 727.4% over the past year, significantly outpacing the Personal Products industry average of 36.9%. The company's debt-to-equity ratio has improved from 43.3% to 24.6% in five years, indicating a stronger balance sheet. Despite some shareholder dilution recently, VT's interest payments are well covered by EBIT at 318.5x coverage, highlighting robust financial health and potential for sustained performance in its sector.

• Click to explore a detailed breakdown of our findings in VT's health report.

• Gain insights into VT's past trends and performance with our Past report.

Cheryong ElectricLtd (KOSDAQ:A033100)

Simply Wall St Value Rating: ★★★★★★

Overview: Cheryong Electric Co., Ltd. manufactures and sells power electric equipment in South Korea, with a market cap of ₩1.18 billion.

Operations: Cheryong Electric Co., Ltd. generates revenue primarily from the sale of power electric equipment in South Korea. The company has a market cap of ₩1.18 billion.

Cheryong Electric Ltd. stands out with its impressive earnings growth of 244% over the past year, surpassing the Electrical industry average of 16%. The company boasts a price-to-earnings ratio of 16.7x, lower than the industry's 22.4x, making it an attractive prospect in terms of valuation. Notably, Cheryong is debt-free now compared to five years ago when its debt-to-equity ratio was 2.8%. However, its share price has been highly volatile over the past three months.

• Click here to discover the nuances of Cheryong ElectricLtd with our detailed analytical health report.

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

STX Heavy Industries (KOSE:A071970)

Simply Wall St Value Rating: ★★★★★☆

Overview: STX Heavy Industries Co., Ltd. manufactures and sells marine engines, industrial facilities, and plants in South Korea and internationally, with a market cap of approximately ₩672.41 billion.

Operations: STX Heavy Industries generates revenue from the sale of marine engines, industrial facilities, and plants. The company has a market cap of approximately ₩672.41 billion.

STX Heavy Industries has shown impressive financial health, with a net debt to equity ratio of 8.6%, considered satisfactory. The company’s earnings growth of 148.6% over the past year significantly outpaced the machinery industry average of -3.5%. Additionally, its interest payments are well covered by EBIT at 6.6x coverage, indicating solid profitability and operational efficiency. Recent acquisition by Korea Shipbuilding & Offshore Engineering Co., Ltd., valued at KRW 39.1 billion, further underscores investor confidence in STX's future potential.

• Get an in-depth perspective on STX Heavy Industries' performance by reading our health report here.

• Learn about STX Heavy Industries' historical performance.

Next Steps

• Get an in-depth perspective on all 198 KRX Undiscovered Gems With Strong Fundamentals by using our screener here.
• Shareholder in one or more of these companies? Ensure you're never caught off-guard by adding your portfolio in Simply Wall St for timely alerts on significant stock developments.
• Elevate your portfolio with Simply Wall St, the ultimate app for investors seeking global market coverage.

Want To Explore Some Alternatives?

• 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.

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