Undiscovered Gems in South Korea: Top Picks for August 2024

The South Korea stock market has tracked higher in back-to-back sessions, gathering almost 40 points or 1.5 percent along the way. Despite a broadly negative lead from Wall Street and concerns about an economic slowdown, the KOSPI has shown resilience, finishing slightly higher on Thursday. In this context of cautious optimism and selective gains across sectors, identifying undiscovered gems becomes crucial for investors looking to capitalize on unique opportunities within South Korea's dynamic market environment.

Top 10 Undiscovered Gems With Strong Fundamentals In South Korea

Name	Debt To Equity	Revenue Growth	Earnings Growth	Health Rating
Korea Ratings	NA	1.74%	0.87%	★★★★★★
Korea Cast Iron Pipe Ind	NA	2.58%	14.14%	★★★★★★
Miwon Chemicals	0.16%	12.04%	14.03%	★★★★★★
NOROO PAINT & COATINGS	17.16%	5.11%	6.31%	★★★★★★
ASIA Holdings	34.13%	8.28%	15.67%	★★★★★★
Woori Technology Investment	NA	22.60%	-1.67%	★★★★★★
Kyungdong Invest	8.15%	3.08%	15.07%	★★★★★★
Oriental Precision & EngineeringLtd	59.19%	3.54%	5.92%	★★★★★★
Ubiquoss Holdings	2.69%	9.93%	14.22%	★★★★★☆
EASY BIOInc	188.46%	15.71%	55.75%	★★★★☆☆

Click here to see the full list of 208 stocks from our KRX Undiscovered Gems With Strong Fundamentals screener.

Let's dive into some prime choices out of from the screener.

Hankook (KOSE:A000240)

Simply Wall St Value Rating: ★★★★★☆

Overview: Hankook & Company Co., Ltd. manufactures and sells storage batteries and has a market cap of ₩1.54 trillion.

Operations: Hankook generates revenue primarily from its Storage Battery Division (₩859.55 billion) and Investment Business Division (₩349.37 billion).

Hankook, a small cap player in South Korea, has shown remarkable earnings growth of 72% over the past year, outpacing the Auto Components industry average of 21.4%. The company’s net debt to equity ratio stands at a satisfactory 0.8%, reflecting prudent financial management despite an increase from 2.8% to 7.4% over five years. Recent earnings reported for Q1-2024 indicate net income surged to KRW 114 billion from KRW 32 billion year-on-year, with basic EPS jumping from KRW 341 to KRW 1,204.

• Delve into the full analysis health report here for a deeper understanding of Hankook.

• Understand Hankook's track record by examining our Past report.

Dongwon Systems (KOSE:A014820)

Simply Wall St Value Rating: ★★★★★☆

Overview: Dongwon Systems Corporation, a packaging company, manufactures and markets packaging materials in South Korea with a market cap of ₩1.39 trillion.

Operations: Dongwon Systems generates its revenue primarily from its packaging business, which brought in ₩1.26 billion. The company's market cap is ₩1.39 trillion.

Dongwon Systems, a notable player in the packaging sector, reported first-quarter sales of KRW 7.22 billion, down from KRW 7.68 billion last year. Despite this, net income rose to KRW 15.48 million from KRW 12.89 million previously, with earnings per share increasing to KRW 529 from KRW 441. The company's debt to equity ratio has improved over five years from 72% to 66%, although its current net debt to equity stands at a high level of approximately 49%.

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

• Gain insights into Dongwon Systems' past trends and performance with our Past report.

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 ₩658.14 billion.

Operations: STX Heavy Industries generates revenue primarily from the sale of marine engines, industrial facilities, and plants. The company has a market cap of approximately ₩658.14 billion.

STX Heavy Industries has been on a notable trajectory, with earnings growth of 148.6% over the past year, significantly outpacing the machinery industry's -1.9%. Its net debt to equity ratio stands at a satisfactory 8.6%, reflecting improved financial stability from 107% five years ago to 37.5%. The company recently saw Korea Shipbuilding & Offshore Engineering acquire a 22.85% stake for KRW 39.1 billion, highlighting its strategic importance in the sector and potential for further growth

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

• Examine STX Heavy Industries' past performance report to understand how it has performed in the past.

Key Takeaways

• Delve into our full catalog of 208 KRX Undiscovered Gems With Strong Fundamentals here.
• Got skin in the game with these stocks? Elevate how you manage them by using Simply Wall St's portfolio, where intuitive tools await to help optimize your investment outcomes.
• Take control of your financial future using Simply Wall St, offering free, in-depth knowledge of international markets to every investor.

Looking For Alternative Opportunities?

• 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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