Having covered the overview of the South Korean economy previously, we would be sharing of the 3 types of mispricing that is prevalent in South Korea.

Type 1: Net-Net

The traditional form of mispricing as identified by Graham. Doing a quick scan, there are 18 net-net companies in South Korea with most having a market capitalisation of less than USD100m. However, the discount to NCAV for these net-nets are not huge with some trading roughly equivalent to the NCAV.

Type 2: Preferred Stocks Discount

Over 100 South Korean public companies have listed both common and preferred shares. One has to understand that the preferred shares in South Korea are very much different compared to the ones we know in other countries such as in the US. The preferred stock in South Korea are virtually the same as common stock, where not only do they get a higher dividend, they have an equal ......