Dong-A For All

Materials:

DONG-A PHARMACEUTICAL (KOSPI 000640)

The case:

  1. 1

    Dong-A has great assets

    A consumer health business led by Bacchus that has earned a 12% operating margin and a return on equity above 30% for twelve years, the best among Korean OTC peers.

  2. 2

    These assets should make Dong-A worth 3x today

    Valued on their own results, intrinsically or against Dongkook and global consumer health peers, Dong-A is worth about 261,200 KRW per share.

  3. 3

    Instead, the discount keeps widening

    Over the last decade Dong-A's price to book has halved while the KOSPI tripled shareholders' money.

  4. 4

    Bad governance led to bad allocation, and bad allocation to a widening discount

    Dong-A has put capital into its worst-performing businesses and kept dividends low, with no buybacks since 2020, while its shares traded far below fair value.

  5. 5

    Five changes would fix it

    Each is a Board decision that can be made at or before the March 2027 AGM. We have asked the Board to respond in writing by December 4.

  6. 6

    Why Korea should care

    The National Pension Service and Dong-A's employee stock ownership association together own 18% of the company. Better returns mean more capital to innovate, grow and hire.