Flashlight Capital Partners Pte. Ltd. (“Flashlight Capital”), a shareholder of S-1 Corporation (KRX: 012750) (“S-1” or the “Company”), today released a letter to the Board of Directors and fellow shareholders outlining a five-point plan to improve corporate governance and unlock shareholder value at Korea’s largest security services company.
According to Flashlight Capital, S-1 trades at approximately 3.3x EV/EBITDA, compared to 12.0x for SK Shieldus, Korea’s second-largest security company, and 11.1x for global peers.
Cash and financial assets account for nearly half of S-1’s market capitalization. Over the past ten years, the KOSPI Index rose approximately 370%, yet S-1’s share price declined 30%.
“S-1 is the market leader in a steadily growing industry, yet the stock trades at a steep discount,” said Sanghyun Lee, Managing Partner of Flashlight Capital. “We believe this valuation gap reflects deep-rooted governance failures within Samsung Group.”
Flashlight Capital calls on the Board to:
- Establish a three-year shareholder value creation roadmap;
- Present a five-year strategic plan addressing growth opportunities such as cybersecurity, drones, and senior care;
- Adopt a capital allocation framework for excess cash;
- Modernize investor relations with CEO-led quarterly earnings calls; and
- Reform the Board to comply with the amended Commercial Act.
Flashlight Capital said it sought discussions with both S-1’s CEO and its Chairman of the Board, but was rebuffed, and has therefore published its presentation and letter online.
Every S-1 CEO over the past quarter century has come from within Samsung Group, none with professional experience in the security industry. The current CEO previously served at a Samsung Group catering affiliate.
Flashlight Capital also identified an inverse correlation between CEO compensation and shareholder returns, calling it “highly unusual” and one that “raises serious questions about whether the Board has fulfilled its fiduciary responsibilities to the 80% of shareholders who are not Samsung.”
S-1 conducts no quarterly earnings calls and has historically required shareholders to attend its annual investor meeting in person on a day’s notice.
“We believe S-1 can double in value through governance normalization.” Lee said. “With new growth initiatives, the long-term upside could be substantially greater.”
Lee noted that the 2015 Samsung C&T merger case resulted in the criminal conviction of several individuals, including the former head of Korea’s National Pension Service. “We believe S-1 will become a bellwether for governance across Samsung Group,” Lee said.
About Flashlight Capital
Flashlight Capital Partners Pte. Ltd. was founded by Sanghyun Lee, former Head of Korea at The Carlyle Group, where he led the 2014 acquisition of Korean security company ADT Caps (later renamed SK Shieldus) and its sale to SK Telecom in 2018. In 2022, the firm launched an activist campaign at KT&G.
For more information, please visit www.FlashlightCap.com.
View source version on businesswire.com: https://www.businesswire.com/news/home/20260623840794/en/
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