1、Korea Strategy:New President and reforms around the cornerANCHOR REPORTGlobal Markets Research28 May 2025Bumpy 2H25F outlook;Value Up is upside riskSouth Korea will embark on a new five-year leadership era after the Presidential election on 3 June.The two leading presidential candidates have voiced

2、their support for“improved capital market”policies,with the Democratic Party(approval rating highest at 44%vs 36%for the People Power Party PPP)advocating more proactive corporate and capital market reforms relative to the PPP.We forecast the KOSPI to reach 2,900 in 2H25F,based on a 2025F P/BV 0.94x

3、,and believe that the degree of reform efforts and outcome of US tariff negotiations will provide upside/downside risks.We forecast 2025F/26F EPS to grow 24%/16%y-y(2024:44%y-y).We are positive on AI-themed sectors(HBM,transformers),defense(overseas new orders momentum),bio(biosimilars production ou

4、tsourcing structurally growing globally),and K-brand beauty products.Auto and shipbuilding are fundamentally attractive,but we are selective in our stock recommendations due to macro concerns(i.e.,tariff uncertainty,a stronger Korean Won for autos),and valuation(shipbuilding).Key themes and analysis

5、 in this Anchor Report include:“Value Up”theme plays holding companies with large non-core assets,“best in class”shareholder return companies,undervalued stocks with large treasury share or cash holdings,distressed valuation stocks with P/BV below 0.2xHistory of Koreas past Presidents vs macro data

6、housing,interest rates,KOSPIResearch AnalystsKorea StrategyCindy Park-NFIKKorea TechnologyCW Chung-NIHKKorea Autos&Auto PartsAngela Hong-NFIKKorea Tech/IndustrialsEon Hwang-NFIKKorea Consumer RelatedSiwoo Kim-NFIKKorea EconomicsJeong Woo Park-NSLAsia ex-Japan Equity StrategyChetan Seth,CFA-NSLSee Ap