April 24, 2024

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[THE INVESTOR] UK-based fund Hermes Investment Management disclosed on Nov. 23 that it owns slightly more than 5 percent in Korean Iron and Steel Co.

By acquiring a 5.03 percent stake in KISCO, Hermes has become the fourth-largest shareholder, following KISCO Holdings (40.81 percent), Shin Keum-sun, the mother of KISCO CEO Chang Se-hong (10.86 percent), and National Pension Service (7.47 percent).

Korea Iron and Steel Co.

In its regulatory filing, the asset management company said it acquired the shares for investment purposes and has no intention to participate in management.

Market watchers said Hermes might be betting on a rebound of the share price, which has been tumbling since last year partly because of deteriorating profitability. Shares of KOSPI-listed KISCO declined to 5,510 won on Nov. 22 from 9,020 won in May last year.

KISCO’s price to book ratio in the recent quarter was 0.34, meaning the its market capitalization is far less than the value of the company assets.

“Despite a decrease in demand for steel there are expectations that profitability will improve as steelmakers have recently raised prices,” Park Hyun-wook, an analyst with HMC Investment Securities said. “There is a possibility that KISCO share price will bounce back.”

By Park Ga-young (gypark@heraldcorp.com)