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In the November newsletter, we talked about the developing opportunity set in Korea, accounting for 12% of AGT’s NAV at month end. We also explained how each individual position stands on its own two feet, with “typical” AVI traits. Samsung C&T is yet another example of this, and it is a position we have been adding to post month-end, such that Samsung C&T now accounts for over 5% of AGT’s NAV at the time of writing.

For those readers unfamiliar with the company, Samsung C&T is the de facto holding company through which the Lee family controls the wider Samsung Group. The company’s NAV is effectively comprised of two crown-jewel businesses, Samsung Electronics (39% of NAV) and Samsung Biologics (37%), plus a few smaller listed stakes and an unlisted construction and trading business.

We first initiated our position in Samsung C&T in June 2025, believing that the company exhibited many of the traits that we at AVI look for: 1) a robust, listed NAV that we felt was both undervalued and set to benefit from strong earnings growth, 2) an unduly wide -57% discount, and 3) a potential catalyst to close that discount through corporate governance reform in South Korea.

Breaking down the NAV, Samsung Electronics is the leading global technology conglomerate with three main businesses – device solutions (semiconductor memory and foundry), consumer electronics (mobile phones, smart devices etc), and display (OLED panels for smartphones and TVs) .

Our initial thesis for Samsung Electronics was predicated on the company’s near all-time low valuation of just 0.9x Price to Book (PB), driven by the manufacturing problems in High-Bandwidth Memory semiconductor chips (HBM), at a time when close-peer SK Hynix was benefitting from a very favourable supply/demand dynamic as the sole supplier of HBM to Nvidia. For context, HBM chips are fundamental for AI servers due to their ability to transfer lots of information very quickly and efficiently.

Trading below book, we felt that the market was pricing Samsung Electronics like a legacy memory player while ignoring the company’s sizable balance sheet firepower (23% net cash at time of investment), and long-term track-record of operational excellence.

In the period since investing, Samsung Electronics has made material progress in improving HBM competitiveness, with the company’s latest HBM4 chips achieving top performance scores in Nvidia and Broadcom’s recent testing. We believe this positions Samsung to capture 30%+ global HBM market share in 2026 versus mid-teens in 2025. The global supply shortage for both HBM and traditional memory chips is creating strong pricing power for Samsung and SK Hynix, with sell-side consensus estimating operating profit growth of +173%1 for Samsung in 2026. Today, Samsung Electronics trades at 2.0x PB, a 55% discount to SK Hynix (4.5x) and we see a great deal of scope for further NAV growth.

Samsung Biologics manufactures antibodies on behalf of global pharmaceutical companies. These companies typically outsource production because building equivalent capacity would require billions in capital and years of regulatory approvals. In short, Biologics operates large-scale manufacturing facilities which produce antibodies used in the treatment of cancer, autoimmune disorders, chronic conditions, etc.

The company generates 90% of revenues from large-scale antibody production. Larger antibodies can be produced at immense scale, enabling Biologics to benefit from very strong economies of scale through operational excellence. As a result, Samsung Biologics generates EBIT margins of 50% vs. peers at 20-25%. Biologics also operates one of the world’s largest biomanufacturing facilities and is expanding cumulative capacity which will make it approximately double the next largest competitor by 2032.

We believe Biologics is positioned to compound earnings at mid-teens rates through to 2032, supported by biologic drug demand outpacing industry supply growth.

Turning to the catalyst, we feel that South Korean governance reforms combined with the company’s new capital allocation policy expected at the end of January 2026 should drive a closing of C&T’s discount over time. Despite strong performance to date, generating an ROI of c. 30% to the end of December 2025 in local currency terms, we remain excited by our investment in Samsung C&T.

1 FactSet as at 09/01/2026