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As the regular shareholders' meeting season approaches, activist funds are intensifying their shareholder actions. Recently, Align Partners has begun shareholder actions targeting Coway, while analysts suggest that Humedix, POSCO INTERNATIONAL, and others are under the radar of activist funds.

According to the financial investment industry on the 26th, IBK Securities recently published an issue report titled "What businesses are activist funds interested in?" identifying Humedix, POSCO INTERNATIONAL, PharmaResearch, DONGJIN SEMICHEM, and Dongwon F&B as possible targets for activist actions.

Gwon Soon-ho, a researcher at IBK Securities, noted, "If a corporation with a stable revenue structure sees a significant decrease in its shareholder return rate, it is highly likely to become a target for an activist campaign," adding, "A representative example is Coway, which was chosen for public transition of activist campaigning by Align Partners."

Earlier, on the 16th, Align Partners, considered a leading activist fund in South Korea, sent a letter to Coway requesting improvements to its shareholder return policy. This letter reportedly included a demand for a shareholder return rate that amounts to about 90% of Coway's consolidated net income.

The shareholder return rate is defined as the ratio of the money spent on dividends and share buybacks to net income. A higher ratio indicates that a corporation distributes more profits to its shareholders. In the case of Coway, the shareholder return rate dropped from 91% to 20% after a change in its largest shareholder in 2021.

Gwon emphasized, "It is necessary to pay attention to corporations experiencing a decrease in shareholder return rates, similar to Coway," adding, "Humedix, POSCO INTERNATIONAL, PharmaResearch, DONGJIN SEMICHEM, and Dongwon F&B have all recorded a decline in shareholder return rates recently."

Notably, the shareholder return rate for DONGJIN SEMICHEM is reported to be around 4.9% as of 2023. The shareholder return rates for PharmaResearch and Dongwon F&B remained in the 10% range. Additionally, POSCO INTERNATIONAL's shareholder return rate was relatively high at 25% as of 2023, but it has sharply decreased from 47.7% in 2018.

Gwon stated, "Align Partners has transitioned its shareholder actions targeting Coway to a public campaign," adding, "There is a significant possibility that similar demands will be made against corporations like Coway that have a return on equity (ROE) of over 5% and high profit stability but low shareholder return rates."