Investors Eye Dividend Increases As Korean Firms Navigate Market Challenges

As South Korean companies grapple with fluctuating stock prices and changing market dynamics, investors are closely watching the dividend strategies of firms like Hansei Industries and Global SM. Both companies are attempting to boost shareholder value in an increasingly competitive environment.

On April 13, 2026, Hansei Industries reported a stock price of 11,230 won, with a price-to-book ratio (PBR) of 0.60, indicating that the company is valued at just 60% of its asset value. This valuation reflects a dramatic decline in investor sentiment, as the stock has fluctuated between a high of 15,540 won and a low of 9,050 won over the past year. At its peak in April 2022, the stock soared to 29,500 won, but it has since been perceived as heavily discounted.

Hansei Industries was briefly included in the Korean Exchange’s Value Up Index in September 2024 but was removed about eight months later due to its market capitalization falling below the 500 billion won threshold. As of April 13, its market capitalization stood at 449.2 billion won, failing to meet this benchmark.

In a bid to improve investor confidence, Hansei Industries raised its dividend from 500 won to 600 won per share last year, resulting in a payout ratio increase from 17.58% to 41.27%. This adjustment aligns with the criteria set by the Special Tax Treatment Control Act, which classifies companies as high-dividend if their payout ratio exceeds 40% or if they increase their total dividends by more than 10% compared to the previous year.

Yet, market reactions have been tepid, as analysts believe the increase in payout ratio is more a reflection of declining profits than genuine growth. The company’s net income is projected to drop significantly from 1.12 trillion won in 2023 to just 584 billion won in 2024, followed by a slight recovery to 573 billion won in 2025. This sharp decline raises questions about the sustainability of its dividend policy.

In comparison, Hansei’s parent company, Hansei Yes24 Holdings, has doubled its dividend from 250 won to 500 won per share, and Yes24 has increased its payout by 25% from 200 won to 250 won. Hansei Industries’ 20% dividend increase appears modest against its affiliates, indicating a potential lack of commitment to shareholder returns.

Looking ahead, Hansei Industries has outlined a long-term shareholder return policy targeting a minimum dividend of 600 won and a payout ratio of at least 10% for the fiscal years 2026 to 2028. Analysts view these targets as insufficient, especially considering the current payout ratio already exceeds 40%.

In a statement, a Hansei Industries representative said, "We are diligently implementing our disclosed corporate value enhancement plans to improve shareholder value. We are also considering various possibilities for additional shareholder return measures, taking into account the management environment and financial conditions." Nevertheless, the company’s ability to restore investor confidence remains uncertain, especially in light of its declining profit margins.

Meanwhile, Global SM, a precision metal manufacturing firm, is also taking steps to boost its market standing. On April 14, 2026, the company reported a market capitalization of 26.9 billion won, which is less than its net cash holdings of 30.4 billion won, indicating that the market values its operational assets negatively. This situation suggests that investors are not fully recognizing the potential of Global SM’s eight global production subsidiaries, which generate annual revenues of 1.293 trillion won.

Encouragingly, Global SM’s financial health has shown improvement, with total equity reaching 143.5 billion won and total liabilities at 30.4 billion won, resulting in an equity ratio of 82.5%. The company holds a total debt of only 2.7 billion won, which is a mere 2% of its capital, allowing it to maintain a strong cash position.

For the fiscal year 2025, Global SM’s net income is expected to soar by 339.9% to 8.3 billion won, with operating profit up 48.5% to the same amount. Revenue is projected to remain stable at 1.293 trillion won. The company credits its success to a shift toward high-value automotive electronic components, which saw sales of 634 billion won and a profit increase from 1.4 billion won to 2.9 billion won, a staggering 92% rise.

Global SM’s subsidiary in Spain, Industrias Gol, has been a standout performer, achieving an 8.2% increase in sales to 46.7 billion won and a remarkable 107% increase in net profit to 3.8 billion won. The company has successfully eliminated longstanding financial risks by repaying its bankruptcy debts and mortgages.

In a notable turnaround, Global SM’s Tianjin subsidiary has shifted from a 1 billion won loss in 2024 to a 4 billion won profit in 2025, now producing cutting bolts for electric vehicle batteries for a major domestic client. The Dongguan subsidiary is also thriving, supplying communication devices and automotive components, contributing a net profit of 2.6 billion won.

A spokesperson for Global SM stated, "The expansion of high-value products for automotive electronics is enhancing the quality of our revenue structure. We expect to maintain a stable position within our established supply chain, as new vendor registrations typically take over two years in this industry." The company plans to continue its efforts to improve corporate value following a successful stock consolidation decision made at the March shareholders meeting.

Meanwhile, JB Financial Group is also making strides in enhancing its shareholder returns. As of April 14, 2026, JB Financial’s stock price has fluctuated in the 30,000 won range and is on the verge of re-entering a PBR of 1.0. The company has announced a plan to buy back and retire shares worth approximately 45 billion won by June 30, 2026, which is expected to increase the ownership percentage of existing shareholders.

The anticipated share buyback is projected to reduce the total number of shares outstanding by about 0.5% to 0.6%. The largest shareholder, Samyang Corp, and related parties are expected to see their stake rise from 14.7% to approximately 14.82%.

JB Financial aims for a 50% shareholder return rate by 2026, with a fixed cash dividend ratio of 28%. The company’s return on equity (ROE) is currently between 12.5% and 13.5%, outperforming other regional financial groups. The firm’s commitment to shareholder returns reflects a broader trend among financial institutions, as they strive to achieve proper valuations in a regulated market.

As these companies navigate a complex financial environment, their approaches to dividends and shareholder engagement will be closely monitored by investors looking for signs of recovery and growth in the South Korean market.