How the Market Underestimates South Korea’s Shareholder Efforts

韩国公司具有信誉良好的问题。这是该国股权市场相对于发达国家和新兴市场廉价交易的原因之一，仅次于仅在希腊和俄罗斯的价格到账面基础。投资者已经接近放弃了这种可能性Chaebol.- 主宰韩国行业的家庭控制的集团 - 将以更股东友好的方式利用他们的资本。但各种因素表明，这可能只是改变 - 而且，如果它确实如此更新South Korea可以在地平线上。

韩国的Chaebol传统上储存了现金，以推动资本密集型产业的未来增长。相比之下，政府和国家养老金服务（NPS）需要在经济中重新投资或分发给支持较高股息的股息，以支持韩国下降的十年债券收益率下降，现在首次下跌以下股息产量。这个千年。韩国央行6月9日裁判只会使产量稀缺变得越来越尖锐。

The South Korean government promulgated the corporate accumulated earnings tax on January 1, 2015, to pressure companies to reduce their cash piles. But reaction to the policy — penalizing companies that do not distribute or reinvest at least 60 percent of net profits — was disappointing. One major conglomerate announced a land purchase at an egregiously inflated price rather than raise dividends or pay extra tax. If that is part of a trend, rather than an exception, the government’s plan would appear to have backfired.

Opaque corporate governance, indeed, could be one reason why investors appear to have dismissed the prospect of improving shareholder returns. Our composite of international broker estimates at Man GLG indicates a fairly negligible pickup in payout ratios over the next several years, whereas a consensus of Korean brokers collected by Seoul-based financial research firm WISEfn forecasts the payout ratio actually declining into 2018.

投资者可能会设想韩国现金返回故事的积极变化。对于改革派，政府政策和公司治理变更可能足以改善分配政策。对于批评者来说，Chaebol将以自身利益行事。鉴于家庭继承问题和50％的遗产税，许多Chaebol几乎没有选择，而是增加支付比率。

In many respects, the situation in Japan provides a useful parallel to Korea’s problems. First, with $430 billion of assets and nearly 10 percent ownership in South Korea’s benchmark Kospi index, the NPS has underperformed the domestic equities index since 2013 and has emerged as the biggest proponent of higher payout ratios to counter falling bond yields. The same payout liability pressures compelledJapan’s Government Pension Investment Fund成为公司治理和资本分配的积极主动。

Second, return on equity and cash flow return on investment have deteriorated to a point where most Korean companies struggle to earn their cost of capital. Like in Japan, the culprit for most companies is excess cash weighing down asset turns and capital efficiency.

第三，Chaebol中的循环所有权问题会产生与日本交叉股权问题类似的控制家庭和少数股东之间的利益冲突。最后，高调的公司治理问题困扰着两个国家，有助于抑制估值。

作为韩国Chaebol最终 - 通过选择或其他方式 - 解决他们的有限的分配政策，他们将聪明日本的榜样，特别是重点是资本效率比，例如股权回报，在股东回归的简单关注上。虽然有很多批评前论者，但是日本值得改善股权回报率的信贷，并将资本成本与公司治理的概念联系起来。

We have long been an advocate for Japanese corporates signaling return on equity targets. Although there is room for improvement in Korea’s return on equity — at 8.2 percent, it’s barely above its cost of capital — we believe a signaling dynamic around shareholder distributions is developing in Korea, against very low consensus expectations. Boosting payout ratios would only partially address capital allocation, however. Such a strategy ignores underlying operational efficiencies necessary to sustain progressive dividend policies. We often hear analysts argue that a focus on return on equity isn’t appropriate for Korea’s cyclically geared economy. But many Japanese companies guide through the cycle, hitting return on equity targets on an earnings basis when the business cycle is recovering or strong, and managing the equity base through share buybacks and cancellations when the cycle is contracting.

The good news is that South Korea has already begun the process. The country’s Financial Services Commission introduced a管家准则草案2015年并正在考虑公司治理码。Still, more needs to be done similar to Japan’s steps on this front, which include the creation of the Nikkei 400, an index focused on return on equity, as well as campaigns to educate management teams on how to decompose return on equity in an effort to move away from short-termist forecasting.

无论如何,有鲜明的ng signs of rising dividend payout ratios. State-owned enterprises were the first to increase their payout ratios, and several chaebol have done the same. Many chaebol are simplifying their group structure and allowing underlying units to signal higher distribution policies. Only two chaebol make up 45 percent of the Kospi index. If these two companies were to adopt progressive payouts, it is reasonable to expect a trickle-down effect for the rest of the market.

In short, South Korea faces a unique confluence of factors — an underperforming national pension fund, tax policy changes, chaebol succession issues, falling bond yields and corporate governance reform — capable of rerating it relative to emerging and developed markets. A rerating requires a more mature South Korea to emerge, one that emphasizes better capital efficiency and improved corporate governance over a growth bias. With the government and NPS recognizing this, it is now time that South Korea’s corporations — especially the family-owned headliners — align themselves as well.

Jason Mitchell是一个投资组合经理男人glg.in London.

更多地获得更多规定.