Korea Zinc Co., a leading zinc smelter, has become a hot commodity for investors anticipating a fierce proxy battle set to unfold next month.The company’s stock has skyrocketed, making it the top performer on a global equity index.
Shares of Korea Zinc surged as much as 12% on Thursday, reaching a record high adn extending its year-to-date gain to an impressive 270%. This eight-day winning streak marks the company’s best performance in over two years,effectively doubling its stock value and propelling it to the top spot on MSCI’s global equity gauge.
The dramatic surge in stock price is fueled by a high-stakes takeover battle. Young poong Corp., Korea Zinc’s largest shareholder, has teamed up with private equity firm MBK Partners Ltd. to launch a tender offer aimed at seizing control of the company’s board. this unexpected move caught chairman Yun B. Choi and his allies off guard,igniting a fierce counteroffensive with multiple counteroffers.
“The stock price level is just inexplicable and unsustainable,” said Kim Dojoon, chief investment officer at Zian Investment Management in Seoul. “Each stock can be a casting vote” in the upcoming management decision,according to Kim. The crucial extraordinary general meeting is scheduled for January 23, with the deadline for shareholder registration to vote set for December 20.
This remarkable rally has pushed korea Zinc’s valuation to nearly double the median of its global peers and approximately six times higher than the benchmark Kospi index, which currently trades at about eight times its forward earnings, according to Bloomberg data.
Despite the bullish sentiment, analysts predict a potential 66% decline in share price over the next 12 months, based on average analyst forecasts compiled by Bloomberg. Though, the stock still enjoys a favorable rating, with 14 buy recommendations, six holds, and only one sell rating.
The battle for control of Korea Zinc is closely watched by investors worldwide, as the outcome could have notable implications for the company’s future direction and the broader zinc industry.
