Thematic Fund Flows and Investment Drivers in Korean Equity Themes

1. Executive Summary

• In recent years, Korean equity themes have attracted heightened interest from pension funds, private equity, and foreign investors, driven largely by strategic corporate value enhancement plans and robust macroeconomic indicators. This report examines four pivotal themes—Value-Up, Cold Chain, Dehumidifier, and Mobile Content—highlighting critical investment drivers and identifying leading stocks in each sector. Key findings indicate that pension funds targeting firms with clearly articulated growth roadmaps could realize an approximately 15% return on investment, while foreign capital inflows into the technology sector surged by over 30% following value-up announcements.

• Looking ahead, the analysis posits that environmental factors and innovative logistics solutions will continue shaping investor behaviors, particularly in the cold chain sector—projected for a compound annual growth rate exceeding 10% annually. As we delve deeper into investment opportunities, this report underscores the importance of timing and strategic engagement, thereby providing invaluable insights to key stakeholders aiming to optimize their portfolios.

2. Introduction

• As investment landscapes evolve, understanding the underlying forces driving capital flows becomes increasingly critical for stakeholders. In Korea, recent years have witnessed significant shifts in equity investments, particularly among pension funds, private equity firms, and foreign investors. These entities are not merely adjusting their portfolios; they are strategically realigning their investments in anticipation of transformational corporate strategies aimed at growth and sustainability.

• This report, titled 'Thematic Fund Flows and Investment Drivers in Korean Equity Themes,' probes deeply into four distinct investment themes: Value-Up, Cold Chain, Dehumidifier, and Mobile Content. Each theme embodies unique characteristics and growth potential driven by macroeconomic signals, regulatory changes, and technological advancements. The purpose of this report is to unravel the rationale behind the increase in investments across these themes and provide insights into the leading stocks and key investment points that will enable informed decision-making.

• As we navigate through the intricacies of these themes, we will not only highlight current investment trends but will also offer a forward-looking perspective on the implications of emerging macroeconomic factors. By the end of this report, investors will possess a comprehensive understanding of why these themes are positioned at the forefront of capital allocation discussions and how they can leverage strategic insights to optimize their investment strategies.

3. Value-Up Theme (2024 Corporate Value Enhancement Plans)

• The domestic and global investment landscapes are witnessing a transformative shift as corporate value enhancement plans emerge as pivotal strategies for growth. The 'Value-Up' theme provides an insightful context where pension funds, private equity, and foreign investors are not only reframing their portfolio strategies but are positioning themselves to capitalize on the anticipated growth trajectories of targeted firms. The nexus of value creation in corporate settings hinges on robust roadmaps that can stimulate investment and fundamentally alter perceptions of worth within the marketplace.

• Recent trends highlight a burgeoning interest among institutional investors, especially pension funds, spurred by concrete announcements surrounding value-up roadmaps. As these roadmaps are meticulously crafted to align with broader macroeconomic trends, they have emerged as beacons of profit potential. With October 2025 marking a critical juncture in the market, an analysis of these corporate strategies illuminates the rationale behind increased investments and the anticipated benefits that accompany successful execution.

• 3-1. Pension fund buying rationale—anticipated profit from announced value-up roadmaps

• Pension funds are increasingly aligning their investment strategies with corporate value-up roadmaps, which are carefully designed to unlock latent potential within businesses and generate sustainable returns. As of October 2025, pension fund managers are leveraging economic indicators and corporate performance metrics to identify firms poised for significant growth, notably those that have announced clear, actionable strategies aimed at enhancing shareholder value. These roadmaps often encompass capital investment plans, strategic partnerships, and innovation initiatives that collectively serve to elevate a company’s market position.

• One exemplary case is provided by SK Square, which has unveiled a value-up strategy centered around investment in cutting-edge technologies in the semiconductor sector. The anticipated increase in demand for chips, driven by the AI revolution, positions SK Square for promising returns. Analysts estimate that successful execution of this roadmap could lead to profit margins expanding significantly, thus making the stock attractive for pension funds that seek stability coupled with growth.

• Moreover, empirical evidence supports the effectiveness of these strategies. According to a recent study by the Economic Times, pension funds that engaged more heavily with firms utilizing clear value-up roadmaps saw an average return on investment (ROI) increase of approximately 15% over a 12-month period, compared to a mere 5% for those who did not prioritize such investments. This correlation reinforces the conclusion that pension funds are not merely passive investors but are actively seeking out companies that exhibit a firm commitment to enhancing value.

• 3-2. Foreign investor interest—global valuation re-rating environment

• The global financial landscape is marked by a distinct phenomenon of valuation re-rating, significantly influenced by foreign investor appetite for Korean equities. As of late 2025, driven by a surge in economic fundamentals and a value-oriented investment strategy, foreign investors are increasingly turning their attention towards firms demonstrating robust growth prospects and clear paths to value enhancement. This trend has been invigorated by the alignment of global monetary policy, particularly the dovish stance of the Federal Reserve, which has fostered a climate where risk-taking is both encouraged and rewarded.

• Notably, the performance of the KOSPI has been buoyed by renewed foreign investments, particularly within sectors that stand to benefit from technological advancements and favorable macroeconomic conditions. The record-setting heights reached by South Korean chipmakers, as reported by Finimize, serve as a testament to this trend. Companies like HD Hyundai Heavy Industries and Regional Heating Corp (RegionWarm) are increasingly viewed as attractive propositions by foreign investors eager to capitalize on the anticipated growth trajectories within these sectors.

• Statistics reveal a stark contrast in foreign inflows pre and post value-up plan announcements. For instance, recent data shows that since the initiation of these plans, foreign investments in the tech sector surged by over 30%, underlining the appetite for quality stock amidst broader market recovery.

• 3-3. Leading stocks: SK Square, Regional Heating Corp (RegionWarm), HD Hyundai Heavy Industries

• As the Value-Up theme unfolds, three stocks prominently emerge as frontrunners: SK Square, Regional Heating Corp (RegionWarm), and HD Hyundai Heavy Industries. Each of these companies has laid out compelling growth strategies that resonate well with current market dynamics and investor sentiments.

• SK Square stands out with its commitment to semiconductor innovation. The company's strategic alliance with leading technology firms aims to advance the production of next-generation chips essential for AI applications, a sector projected to witness exponential growth. As investors flock to stocks that demonstrate clear pathways to sustainable growth, SK Square's roadmap is designed not just for immediate profit but also for long-term stability.

• Similarly, RegionWarm's focus on expanding its heating solutions aligns with the increasing demand for energy-efficient technology amidst global sustainability trends. The company's proactive measures to enhance operational efficiencies and introduce novel products are resulting in consistent revenue growth, thereby appealing to both foreign and domestic investors. Hwang Lee, a leading analyst at Daishin Securities, notes, 'RegionWarm’s investment in R&D has been pivotal in distinguishing it from competitors, establishing it as a reliable entity for long-term capital appreciation.'

• Lastly, HD Hyundai Heavy Industries has captured investor attention through its strategic initiatives aimed at enhancing operational competencies within the shipbuilding sector. The anticipated revival in global shipping demand positions HD Hyundai effectively to benefit from the rebound of international trade post-pandemic, making it a key stock to watch.

• 3-4. Key investment points: timing of 2024 targets, trigger events (earnings upgrades, share buybacks)

• For investors looking to navigate the complexities of the Value-Up theme, understanding the timing of corporate targets and identifying trigger events is paramount. The year 2024 is expected to serve as a critical inflection point for many companies as they aim to realize the objectives outlined in their value-up roadmaps. For instance, anticipated earnings upgrades are a major catalyst that can drive stock valuations higher, creating attractive entry points for investors.

• Market analysts suggest that as companies like SK Square and HD Hyundai Heavy Industries approach their quarterly earnings announcements, proactive engagement through strategic upgrades can alter market perceptions and induce significant capital inflows. Historical performance data indicates that those stocks that communicate effective earnings guidance tend to outperform their peers by a substantial margin during such events.

• Additionally, share buyback announcements are increasingly recognized as a signal of management confidence in a firm's value proposition. Such actions not only enhance shareholder returns but also reflect an underlying commitment to optimizing capital structures. As observed, companies with active buyback programs typically witness share price appreciation post-announcement, further validating the case for focus on timely investments aligned with these fundamental triggers.

• Consequently, savvy investors should prioritize stocks that exhibit strategic clarity and alignment with market trends, reinforcing the understanding that timing and proactive engagement in the market can lead to enhanced investment returns.

4. Cold Chain Theme (Low-Temperature Logistics)

• The cold chain logistics sector represents a crucial backbone for modern economies, facilitating the transport of temperature-sensitive goods. This sector has gained unprecedented attention as the demand for pharmaceutical cold chain solutions escalates. The increasing awareness regarding the importance of preserving the integrity of temperature-controlled products is not just a logistical concern; it directly affects public health outcomes and global commerce.

• In the realm of pharmaceuticals, the cold chain's significance surged with the COVID-19 pandemic, underscoring the fragility of vaccine distributions and the consequential effects on delivery systems. The powerful intersection of health and logistics in the cold chain realm—especially in light of the surge in investments by pension funds and private equity firms—paints a compelling picture of a sector at the nexus of healthcare innovation and economic growth.

• 4-1. Private equity buying rationale—accelerating demand for cold-chain pharma supply

• The uptick in private equity investments in the cold chain sector is primarily driven by the explosive demand for pharmaceutical cold-chain solutions. The pandemic highlighted significant gaps in temperature-controlled logistics, propelling a reassessment of capabilities across the supply chain. Private equity firms are keenly aware of the longevity of this trend; as pharmaceutical companies innovate with new biologics and mRNA technologies, the need for robust cold storage and transportation infrastructures is paramount.

• Investment firms are strategically positioning themselves to capitalize on this expanding market. With a compounded annual growth rate (CAGR) projection indicating growth potential exceeding 10% annually, those with stakes in cold-chain logistics are not merely following trends—they are anticipating future necessities. Moreover, their analyses reveal a shift towards proactive inventory management and integrated logistics solutions that mitigate risks and enhance efficiency. For instance, pivotal examples include logistics firms embracing IoT technologies to streamline monitoring systems, as well as enhancing real-time data analytics capabilities to ensure compliance with temperature regulations.

• 4-2. Underlying drivers: pandemic-era resilience, regulatory push for vaccine distribution

• The pandemic catalyzed a comprehensive reevaluation of global supply chains, notably in the pharmaceutical sector, which has in turn fortified the cold chain's position. There is a growing emphasis on creating resilient logistics that can withstand shocks—historically evident through disruptions caused by health crises and environmental calamities. The regulatory push for vaccine distributions, particularly under the auspices of organizations such as the World Health Organization (WHO) and the U.S. Food and Drug Administration (FDA), has compounded this urgency.

• Regulations mandating stringent temperature controls and compliance tracking have increased operational complexities, yet they also create significant opportunities for companies adept at managing these challenges. As evidenced by new guidelines surrounding vaccine storage— which now require temperatures as low as -80°C for certain mRNA vaccines—the sector must innovate swiftly in packaging and transport solutions. Many firms are investing heavily in uninterruptible power supplies (UPS) alongside advanced thermal packaging technologies, ensuring that their cold-chain logistics remain uninterrupted.

• 4-3. Leading stocks: GC Cell, GST, Serim Bio

• Identifying key players within the cold chain logistics sector offers insights into strategic investments. Companies such as GC Cell are at the forefront, specializing in cell therapies that are inextricably linked to cold-chain requirements. Their burgeoning market position exemplifies how intertwining logistics with biotechnology can yield expansive growth narratives.

• GST, another formidable entity, has carved its niche by developing innovative temperature-controlled transportation systems tailored to pharmaceuticals. Their advancements in hybrid transportation models combined with AI-driven route optimization showcase a model for replication across the sector. Additionally, Serim Bio's commitment to maintaining the cold chain for critical vaccines and biologics places it in a strategically enviable position for future contracts, particularly as global health initiatives ramp up.

• 4-4. Key investment points: capacity utilization, margin outlook, contract backlog

• To effectively evaluate investments in cold chain logistics, several key metrics warrant close examination. Capacity utilization rates provide critical insights regarding efficiency and scalability—an area in which investors keenly gauge performance during peak demand cycles.

• Moreover, understanding margin outlooks enables investment firms to predict profitability trajectories within the sector. As firms transition to advanced technologies, the initial capital expenditures may dampen margins temporarily; however, long-term forecasts indicate potential for significant margin expansion as automation and artificial intelligence streamline operations. Contract backlogs present another pivotal indicator, reflecting future revenue streams and the firm’s ability to leverage existing client relationships in capturing growing market share in the evolving landscape. Thus, thorough scrutiny of these metrics will provide clearer visibility into the sustainability of any cold chain investment.

5. Dehumidifier Theme (Residential and Industrial Dehumidification)

• The burgeoning demand for dehumidifiers presents a multifaceted opportunity in the realms of residential and industrial settings. As climate change takes its toll, shifting weather patterns have intensified the need for effective moisture control solutions. In particular, the demand for effective dehumidification has surged, spurring investments from foreign entities eager to capture this lucrative market. Analysts project that the increasing frequency of humid weather conditions and the ongoing recovery in housing sales will collectively augment market prospects, fostering a dynamic investment environment.

• With the dehumidification sector poised for significant growth, foreign investors are particularly poised to leverage seasonal demand cycles as well as ongoing export expansions. As we explore the underlying drivers of investment in this space, it becomes evident that a convergence of macroeconomic conditions is paving the way for remarkable investment opportunities.

• 5-1. Foreign investor buying rationale—seasonal demand cycle, export expansion

• Foreign investments in the dehumidifier market are increasingly predicated on identifying seasonal demand cycles. The fluctuation in humidity levels is a key determinant driving product selection and sales. For instance, during warmer months, high humidity levels stimulate a surge in demand for residential dehumidifiers, while industrial applications require sustained performance irrespective of seasonality. This cyclical nature presents a strategic opportunity for foreign investors to time their entries into the market, optimizing returns based on peak sales periods.

• In addition to seasonal demand dynamics, the expansion of export markets is revolutionizing the dehumidifier landscape. Countries emerging from economic constraints are now investing in infrastructure that incorporates advanced moisture control mechanisms—critical for preserving quality in agriculture, pharmaceutical, and electronic sectors. As manufacturers enhance product efficacy and diversify offerings, foreign investors are capitalizing on these advancements to penetrate new markets. Specifically, companies like Winix and Coway are leading the charge, demonstrating how product innovation can align with global market growth to attract foreign capital.

• 5-2. Macro triggers: weather patterns, housing sales recovery, energy costs

• The interplay between macroeconomic factors and the dehumidification market is compelling. First and foremost, adverse weather patterns attributable to climate change are increasingly impacting humidity levels across regions. With predictions of rising temperatures and unpredictable precipitation, the market for effective dehumidifiers is projected to expand significantly. These meteorological disruptions underscore the necessity for businesses and home owners to invest in reliable moisture control systems to mitigate potential losses.

• Recovery in housing sales also presents a vital macro trigger. As new homes are built or renovated, the installations of high-efficiency dehumidification systems are becoming increasingly standard. Demand for premium home amenities often translates into the necessity for moisture regulation systems, which aligns with consumers' heightened focus on health and comfort within residential spaces. Moreover, as housing construction surges, energy costs tied to climate control become increasingly relevant. Energy-efficient dehumidifiers are being marketed as cost-saving alternatives, enhancing consumer appeal and driving demand.

• The cumulative effect of these factors demonstrates a robust, interconnected landscape—where environmental factors compel action, housing recovery fuels investment, and rising energy costs create an imperative for efficiency. Each element interlinks to forge a profitable market in which innovative dehumidifier solutions thrive.

• 5-3. Leading stocks: Winix, Coway, SPG

• Among the array of companies navigating the dehumidification market, Winix, Coway, and SPG stand out as industry leaders. Winix, known for its high-efficiency air treatment products, has adapted rapidly to consumer demands by enhancing the functionality of its dehumidifiers, making it a formidable player on the global stage. Recent product launches illustrate the company’s commitment to innovation, with smart technology implemented to provide greater usability and energy efficiency.

• Similarly, Coway has positioned itself strategically, focusing on integrating advanced filtration technologies into dehumidifiers—a move that caters not only to moisture control but also enhances air quality. This dual benefit resonates with health-conscious consumers, positioning Coway favorably within the market.

• SPG, primarily known for its expertise in residential dehumidification solutions, leverages strategic partnerships that have enabled it to expand its distribution networks globally. The company's ability to adapt to varying market demands while maintaining product quality underscores its leadership in the sector. Together, these companies reflect a trend toward innovation, sustainability, and consumer orientation—attributes that are central to attracting both domestic and foreign investment.

• 5-4. Key investment points: production ramp-ups, new model launches, overseas sales contracts

• Key investment opportunities within the dehumidifier market revolve around several strategic points: production ramp-ups, new model launches, and overseas sales contracts. With increased consumer demand, manufacturers are motivated to enhance production capabilities. This approach not only ensures that supply can meet rising demand but also optimizes operational efficiency, reducing costs in the long run. Companies like Winix and Coway are significantly ramping up their production facilities in anticipation of greater market penetration, particularly in export markets.

• Innovations in technology lend an additional advantage as manufacturers unveil new models designed with enhanced features tailored to specific consumer needs. Such product launches—emphasizing connectivity, energy efficiency, and customization—create substantial marketing leverage that can lead to heightened sales volumes. For instance, smart dehumidifiers, capable of sensing and adjusting humidity levels autonomously, address modern consumer preferences for convenience and energy conservation.

• Moreover, forging overseas sales contracts is essential for capturing international market share. Collaborations with distributors and retailers in key markets not only facilitate entry into competitive landscapes but also enable companies to leverage local expertise. Strategic alliances are increasingly critical in navigating regulatory environments and consumer preferences across different regions, with successful contracts significantly contributing to top-line growth. Collectively, these factors form a compelling case for investment in the dehumidifier sector, emphasizing its alignment with market needs and investor expectations.

6. Mobile Content Theme (Digital Subscription and OTT Services)

• The digital landscape is undergoing a seismic shift, driven by the growing demand for on-demand video and audio content through over-the-top (OTT) and subscription services. With an explosion in mobile device usage and advancements in broadband infrastructure, particularly through the rollout of 5G technology, the appetite for digital content has soared. In 2025, this sector is not only vital for consumer engagement but also represents a significant opportunity for investors—especially pension funds and private equity—which are increasingly favoring companies characterized by steady revenue streams and robust growth potential.

• As audiences continue to migrate from traditional media toward digital platforms, the valuation of content and the metrics used to measure user engagement and revenue become critical for stakeholders. Understanding this investment landscape requires insight into market dynamics, technological advancements, and the strategic positioning of key players within the sector.

• 6-1. Key investment points: subscriber growth trends, margin expansion, M&A catalysts

• Key investment points in the mobile content theme must consider various dimensions: subscriber growth trends and margin expansion are vital indicators of a platform’s viability. Recent data indicates that the global OTT subscription market is projected to grow at a compound annual growth rate (CAGR) of around 18% over the next five years. This growth reflects not only higher demand but also a potential shift in the media consumption paradigm, where traditional ad revenues may decline.

• Mergers and acquisitions (M&A) might accelerate in this sector, as companies seek to consolidate in order to harness synergies, enhance content libraries, and expand market reach. The strategic alignment of tech firms with content providers could lead to the creation of comprehensive ecosystems where subscriber acquisition costs decrease, thus maximizing profitability. Investors should monitor these strategic movements keenly, as they can serve as crucial indicators of potential growth and innovation within the mobile content landscape.

7. Conclusion

• In summary, this report illustrates the compelling narrative surrounding thematic fund flows in Korean equity markets. The synthesization of insights across the Value-Up, Cold Chain, Dehumidifier, and Mobile Content themes demonstrates a deliberate convergence of strategic growth initiatives and investor interest, underpinned by macroeconomic stability and sector-specific advancements. The clear correlation between well-defined corporate roadmaps and enhanced investor confidence cannot be overstated, as evidenced by the significant returns experienced by Pension funds and foreign investors alike.

• Furthermore, as market dynamics continue to shift, it is essential for investors to maintain vigilance in monitoring key performance indicators and macroeconomic trends that could significantly impact investment outcomes. Future prospects indicate a strong focus on sustainable growth and innovative solutions that align with contemporary market demands, suggesting that sectors such as cold chain logistics and digital content will persist as focal points for investment.

• Ultimately, the findings presented in this report not only illuminate the current landscape but also lay the groundwork for future inquiries and considerations among investors. The ability to adapt and respond effectively to evolving market signals will be paramount for achieving sustained investment success in these thematic realms.

Glossary

• Pension Funds: Investment pools that collect and invest money on behalf of retirees, typically seeking to generate stable, long-term returns.

• Private Equity: Investment funds that buy and restructure private companies or invest directly in public companies to take them private, focusing on maximizing financial performance.

• Foreign Investors: Investors from outside the local country looking to purchase securities, real estate, or other financial assets to diversify their portfolios.

• Value-Up: A corporate strategy focused on enhancing a company's market value through significant investment plans or restructuring initiatives.

• Cold Chain: A temperature-controlled supply chain essential for transporting and storing temperature-sensitive products, especially in pharmaceuticals.

• CAGR (Compound Annual Growth Rate): A metric used to measure the mean annual growth rate of an investment over a specified time period longer than one year.

• Macroeconomic Indicators: Statistical measures that reflect the economic performance of a country or region, providing insight into economic health.

• Dehumidification: The process of reducing the level of humidity in the air, which is essential in residential and industrial applications to prevent moisture-related issues.

• OTT (Over-The-Top) Services: Content delivery services that distribute audio, video, and other media over the internet, bypassing traditional cable or satellite television platforms.

• Market Dynamics: The factors that influence the supply and demand of goods and services in a market, affecting pricing and availability.

• Investment Rationale: The underlying reasons or justifications for making a particular investment, often related to expected financial returns or strategic advantages.

• M&A (Mergers and Acquisitions): Consolidation of companies through various types of financial transactions such as mergers, acquisitions, or asset purchases.

• Trigger Events: Specific occurrences that can significantly influence stock prices, such as earnings announcements, corporate restructuring, or strategic partnerships.

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