📚 Stock Market Glossary

The Corporate Value-up Program is a capital market reform designed to dismantle the chronic 'Korea Discount' by incentivizing listed firms to improve corporate governance and shareholder returns.

Historically, many Korean corporations traded below book value (PBR < 1.0) due to conservative cash hoarding, low dividend payout ratios, and governance concerns.

Core Pillars of Value-up Initiative:

• Shareholder Return Incentives: Encourages companies to retire treasury shares and raise dividend payouts.
• Voluntary Disclosure Framework: Urges management to publish target ROE, PBR goals, and capital management plans.
• Index & Tax Support: Creation of the Korea Value-up Index/ETFs and potential tax relief for dividend-paying companies.

This framework has driven re-evaluations across undervalued sectors like banking, auto, and holding companies.

Despite robust earnings and clean balance sheets, many Korean stocks have historically traded below PBR 0.5x due to weak governance and low shareholder payout ratios.

• Core Value-up Pillars: Encourages listed corporations to: ① Disclose long-term ROE improvement targets, ② Execute treasury stock buybacks and cancellations, ③ Increase dividend payout ratios with tax incentives.
• Market Impact: The policy sparked historic net inflows into low-PBR sectors (banks, holding companies, automakers) and led to the creation of dedicated Value-up Stock Indices and ETFs.

The Korea Value-Up Program is a landmark government and exchange initiative to eliminate the longstanding 'Korea Discount' and unlock shareholder value across KOSPI and KOSDAQ listed companies.

• Key Drivers & Indexing: Tax incentives for compliant firms, creation of the Korea Value-Up Index, and dedicated ETF launches channel institutional and foreign inflows into high-dividend, high-ROE value stocks.
• Beneficiary Sectors: Low-PBR financial holding companies, automotive leaders, and cash-rich holding corporations.