EWY - EWY: South Korean Equities Are Probably Undervalued

• South Korea's macroeconomic backdrop is positive.
• While near-term risks remain in global supply chains and logistics, the South Korean won is probably undervalued, while the country's exports remain strong, and forecast earnings growth rates are high.
• I think that South Korean stocks have suffered from a short-term negative shift in sentiment which will probably not hold for long.
• At present prices, I think forward returns of about 10% per annum are possible here.
• Over a shorter period of time, I think returns of more than 10% (annualized) are possible in a valuation repricing of EWY and/or the South Korean won.

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