Exploring VT And Two Other Undiscovered South Korean Stocks

The South Korean stock market has experienced a notable downturn, declining over four consecutive sessions and shedding more than 100 points. This recent slump brings the KOSPI just below the 2,765-point mark, setting the stage for potential rebounds as global markets show signs of recovery and tech stocks begin to rally. In such a fluctuating environment, identifying stocks with strong fundamentals and potential for growth becomes crucial for investors looking to capitalize on market corrections.

Top 10 Undiscovered Gems With Strong Fundamentals In South Korea

Name	Debt To Equity	Revenue Growth	Earnings Growth	Health Rating
Samyang	47.03%	6.61%	22.07%	★★★★★★
CYMECHS	10.99%	11.45%	3.52%	★★★★★★
Korea Cast Iron Pipe Ind	NA	2.58%	14.14%	★★★★★★
Korea Ratings	NA	1.74%	0.87%	★★★★★★
NOROO PAINT & COATINGS	17.16%	5.11%	6.31%	★★★★★★
Kyung Dong Navien	26.97%	11.54%	19.49%	★★★★★★
Hansae Yes24 Holdings	97.82%	2.74%	18.89%	★★★★★☆
Daewon Cable	24.70%	8.50%	62.14%	★★★★★☆
Ubiquoss Holdings	2.69%	9.93%	14.22%	★★★★★☆
Kwang Dong Pharmaceutical	40.57%	5.48%	4.75%	★★★★☆☆

Click here to see the full list of 205 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. is a diversified company engaged in the production and global export of laminating machines and films, with additional operations in cosmetics and entertainment, boasting a market capitalization of ₩1.35 trillion.

Operations: The company operates predominantly in the cosmetics, laminating, and entertainment sectors, generating significant revenue streams from these areas. With a recent gross profit margin of 48.76% as of mid-2024, it reflects a substantial value addition through its operational activities despite varying net income figures over the years.

VT, a lesser-known player in South Korea's Personal Products sector, has demonstrated remarkable growth with earnings surging by 727% over the past year—outpacing the industry average of 37%. This impressive performance is supported by a robust financial structure; it holds more cash than debt and has reduced its debt-to-equity ratio from 43% to 25% over five years. Additionally, VT's interest payments are well-covered by EBIT, boasting a coverage ratio of 319 times.

• Get an in-depth perspective on VT's performance by reading our health report here.

• Examine VT's past performance report to understand how it has performed in the past.

KG Mobility (KOSE:A003620)

Simply Wall St Value Rating: ★★★★★★

Overview: KG Mobility Corp. is a manufacturer and seller of automobiles and parts, operating both in South Korea and internationally, with a market capitalization of ₩1.21 trillion.

Operations: The company generates revenue primarily through the sale of goods, as evidenced by consistently high cost of goods sold (COGS), which significantly impacts its gross profit. Over the years, it has experienced fluctuations in net income margins, reflecting varying operational efficiencies and market conditions.

KG Mobility, a lesser-known player in South Korea's automotive sector, has shown promising financial improvements. In the first quarter of 2024 alone, sales surged to KRW 48.3 billion from KRW 46.9 billion year-over-year, with net income skyrocketing to KRW 53.9 million from KRW 16.5 million. This remarkable growth is supported by a robust earnings per share increase from KRW 88 to KRW 287. Additionally, the company's debt-to-equity ratio improved significantly over five years, dropping from 44% to just over 16%, reflecting stronger financial health and operational efficiency.

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

• Assess KG Mobility'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. is a South Korean company engaged in the manufacturing and sale of marine engines, industrial facilities, and plants, operating both domestically and internationally with a market capitalization of ₩605.32 billion.

Operations: The company primarily generates revenue through the sale of goods, with a significant portion of its costs associated with the cost of goods sold (COGS). Over recent periods, it has reported varying gross profit margins, reaching as high as approximately 19.33% in recent quarters. This indicates a fluctuating but sometimes substantial difference between sales and the direct costs of producing those sales.

STX Heavy Industries, trading significantly below its estimated fair value by 80.8%, showcases a robust financial recovery with a debt to equity ratio improvement from 107% to 37.5% over five years. The company's earnings surged by 148.6% last year, outpacing the Machinery industry's -1.9%. Its ability to cover interest expenses comfortably (6.6x EBIT coverage) and strong earnings quality underscore its potential as an undervalued gem in South Korea’s vibrant market landscape.

• Unlock comprehensive insights into our analysis of STX Heavy Industries stock in this health report.

• Evaluate STX Heavy Industries' historical performance by accessing our past performance report.

Seize The Opportunity

• Gain an insight into the universe of 205 KRX Undiscovered Gems With Strong Fundamentals by clicking here.
• Have you diversified into these companies? Leverage the power of Simply Wall St's portfolio to keep a close eye on market movements affecting your investments.
• Elevate your portfolio with Simply Wall St, the ultimate app for investors seeking global market coverage.

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.

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