Temasek is said to be buying Korean stock for the first time. In 2018 it sold a trillion won of it

A Korean exclusive published on August 12 says Singapore's sovereign wealth fund Temasek is buying into Samsung Electronics and SK Hynix. After the report circulated, Samsung closed 4.1% higher at 239,500 won and SK Hynix 0.4% higher at 1,425,000 won.

The report called this Temasek's "first ever investment in the Korean stock market." It also carried an investment banker's line that Temasek sees memory chips as the most undervalued corner of the AI value chain. The first of those two claims does not hold.

Who was selling in the 2018 Celltrion block deal

Temasek was Celltrion's second-largest shareholder as of March 2018 and described itself as a longtime investor. The money is reported to have gone in first in 2010. On March 5, 2018, its investment arm Ion Investments sold 2.24 million Celltrion shares and 2.9 million Celltrion Healthcare shares in an after-hours block deal worth 1.1 trillion won. Even after that sale it still held 12.4% of Celltrion and 10.4% of Celltrion Healthcare, worth roughly 7 trillion won.

Temasek sells shares worth W1.1tr in Korea's Celltrion, Celltrion Healthcare (The Korea Herald, 2018-03-07)

출처: koreaherald.com

So "first ever" only works if the scope is narrowed. First in semiconductors rather than biotech, or first bought on the open market rather than through a placement, would both be defensible readings. Neither qualifier appears in the original report.

What exactly is being called undervalued

Both stocks have multiplied several times over the past year. Yet today's price sits well below where each traded at its twelve-month peak.

A forward price-to-earnings ratio divides today's share price by the profit a company is expected to earn over the next twelve months. A reading in the low fives means that buying the whole company at today's price would return the outlay in about six years of earnings. SK Hynix, standing in the same business, carries a trailing P/E of 18.29. Trailing uses profit already booked and forward uses profit still to come, so the two numbers cannot be lined up to say which stock is cheaper. When memory earnings are climbing fast, the gap between the two measures widens sharply.

Unless Temasek crosses 5%

A stake in a Korean listed company only surfaces on the regulator's electronic disclosure system once it passes 5%. Temasek's net portfolio value, as it reported a year ago, was 518 billion Singapore dollars. Samsung's market capitalisation is 1,527 trillion won and SK Hynix's is 1,035 trillion won, so 5% of either would tie up a large share of everything the fund owns in a single name. Which is to say the buying is unlikely to reach the disclosure line, and the market therefore has no way to verify it for now. It is worth keeping apart what is confirmed and what is not. Confirmed is that two stocks rose on August 12; the buyer, the size and the timing have not been stated by anyone on the record. If Temasek or either company confirms the investment by the end of September, the report hardens into fact; if nothing is confirmed by then, the August 12 gain stays a gain with one leg missing.