South Korea seems very much like an economy in transition. Recent economic data shows that its role as an Asian export powerhouse may not be as strong as it once was, but at the same time the country's consumer sector looks both vibrant and innovative.
The Armchair Trader has recently returned from an extended visit to Asia and we must admit we were impressed by the strength and diversity of South Korea's economy and its consumer sector especially. Other, less obvious Korean innovators are also doing well. If investors can get away from the doom and gloom headlines of possible Trump vs North Korea sabre-rattling next year, there are still some real gems to be had on the Seoul market.
Bear in mind also when looking at Korean success stories that the legacy of the chaebol - Korea's massive industrial conglomerates - is still alive and well in the country. For example, we very much liked the look of cosmetics retailer Olive Young, which is building a name for itself internationally, but this is still just a small part of chaebol CJ Group, which controls 51% (Korea H&B Holdings has another 23%). Olive Young would be an amazing stock to buy if management does decide to take it public.
Hyundai Heavy Industries [KRX:329180]
Not to be confused with the motor company. Hyundai Heavy Industries is looking in superb financial health at the moment, as the global shipping sector claws its way back to normality after the pandemic. Hyundai Heavy Industries shares the same founder as the Hyundai motor group, but is regarded now as one of the world's leading shipbuilders, including the building of specialist ships like LNG tankers and offshore drilling/exploration support vessels. Note also that Hyundai Heavy Industries recently signed a repair/support agreement with the US Navy for its operations in Asia, and is working on brand new ocean going ships that will provide carbon capture and storage technology.
SK Hynix Inc [KRX:000660]
SK Hynix was once part of Hyundai as well (see chaebols in my introduction, above) but is now one of the world's biggest vendors of semiconductors. Major customers include the likes of Apple, Microsoft, Asus, Dell and HP. SK Hynix is really a product of efforts to break up/reform the participation of chaebols in South Korea's electronics sector in the 1990s and early 2000s. South Korea's SK Telecom bought Hynix for $3bn in 2012, incorporating Hynix into its existing business. Hynix in turn bought Intel's NAND business for $9bn in 2021 and has just started mass production of 12-layer high bandwidth memory chips.
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