Heungkuk Metaltech Securities predicted that stock re-rating of holding companies will gather steam due to the third Commercial Act amendment, centered on the cancellation of treasury shares, which passed in Feb. 2026.
Park Jong-ryeol, a researcher at Heungkuk Metaltech Securities, said, "After the third Commercial Act amendment, holding companies are rapidly shifting policy direction from holding treasury shares to canceling them," and noted, "Many other corporations are either reviewing (treasury share cancellations) internally or will announce plans after shareholder meetings."
Park explained that the passage of the Commercial Act amendment has created an environment in which holding companies have little choice but to move to cancel treasury shares. Earlier, the National Assembly passed a Commercial Act amendment requiring newly acquired treasury shares to be canceled or disposed of within one year, and existing treasury shares within one year and six months. Accordingly, corporations are expected to disclose their plans for handling treasury shares between late 2026 and early 2027 at the latest.
Park noted, "Corporations that do not present cancellation plans are likely to face pressure for relative undervaluation from investors." This is because major holding companies have already set a benchmark by canceling treasury shares. SK decided to cancel 20.3% (about 4.8 trillion won) out of its 24.8% treasury shares, and Samsung C&T completed a cancellation of treasury shares amounting to 4.6% (about 2.3 trillion won).
Amid this trend, analysts say holding companies could see a strong stock re-rating. Park said, "For low-PBR holding companies, when they announce treasury share cancellation plans, the discount to net asset value (NAV) will narrow quickly, and a strong stock re-rating will emerge," adding, "This year will be a turning point where holding companies move away from the practice of simply holding treasury shares and improve capital efficiency through cancellations."
He said canceling treasury shares can simultaneously raise per-share value and re-rate PBR. Park explained, "Canceling treasury shares reduces the number of shares outstanding, immediately lifting earnings per share (EPS) and book value per share (BPS)," and added, "As a result, the value of subsidiaries' equity allocated per share expands, producing an effect of narrowing the discount to net NAV."
He also analyzed that, in accounting terms, canceling treasury shares tidies up capital deduction items, raising return on equity (ROE) and lowering cost of equity (COE). In particular, once opaquely held treasury shares are canceled, the risk that a controlling shareholder could use them to strengthen control is resolved. As investors perceive less risk, the discount, or COE, falls, which theoretically leads to a rise in corporate value.