Pertento Partners' Eduardo Marques: Long This Korean Defense Holding Company And Short This Battery Materials Holdco

(MENAFN- ValueWalk) Korean holding companies almost always trade below the value of what they own, but it's uncommon to find a good stock trading at less than 40% of asset value. Eduardo Marques found one that trades at 36% of its assets while sitting on a fast-growing howitzer maker, and another that trades at 177% of its assets while its main holding, a battery cathode maker, loses money on an economic basis. At Sohn Tokyo 2026, the founder and CIO of Pertento Partners pitched the pair as a single trade: long the first, short the second.

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The chaebol discount, and why it is so random Howitzers inside a holdco The BYD of land defense The father, the son and the law A commodity business dressed as a tech company Leverage on questionable profits Heads for Hanwha, tails for Ecopro Why the gap exists Mind the gap

Marques is as comfortable on the short side as the long. He started out in 2004 as an analyst at 3G Capital in New York, then spent 13 years at Valiant Capital Management in San Francisco, where as a Managing Partner he ran the firm's single stock short book. In February 2021 he set up Pertento Partners, where he works with a team of five research analysts and around $5 billion AUM according to SEC filings.

The chaebol discount, and why it is so random

Marques shifted the attention from Japan to a market that is earlier in its governance reforms, and added a warning to the usual disclaimers: Korean stocks are not for the faint of heart, so investors might want to consult a physician alongside their financial advisor.

The reasons Korean chaebol holding companies trade at a deep discount to the sum of their parts are well known, he said. Minority shareholders rarely see cash, corporate actions tend to dilute them, they have no seat on the board, and activists struggle to force change. The government's Value-Up program is meant to tackle this, but the discounts remain large and, in Marques's view, close to random. His chart of thirteen Korean-listed holding companies showed twelve averaging 0.50 times NAV, with one at 0.36 times and one far out on its own at 1.77 times.

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