Very interesting, I like it! Great case of the market dismissing a stock without looking at the details - that it's actually growing.
One point here is the Korean withholding tax on dividends, it's 22% I believe and reduced to 15% by double taxation agreements for some countries (but not for me). For a stock where the dividend is a significant part of the return, paying 22% tax does makes a big difference over the longer term.
In Singapore and Malaysia (and actually also the UK) the withholding tax is zero making these markets more attractive. Yet, could be worth it investing in a high dividend payer in Korea if the investment thesis is good enough, which might be the case here.
I expect most of the profits to come from capital gains. Over 5 years, I expect to earn ~35% p.a. (27% capital gains; 8% dividend yield) from MegaStudyEdu.
That said, Singapore tax residents like myself incur only 15% dividend withholding tax for Korean stocks like MegaStudyEdu.
15% is relatively lower than other countries in the region, and much lower than those in Europe!
Very interesting, I like it! Great case of the market dismissing a stock without looking at the details - that it's actually growing.
One point here is the Korean withholding tax on dividends, it's 22% I believe and reduced to 15% by double taxation agreements for some countries (but not for me). For a stock where the dividend is a significant part of the return, paying 22% tax does makes a big difference over the longer term.
In Singapore and Malaysia (and actually also the UK) the withholding tax is zero making these markets more attractive. Yet, could be worth it investing in a high dividend payer in Korea if the investment thesis is good enough, which might be the case here.
Thanks for your kind words!
I expect most of the profits to come from capital gains. Over 5 years, I expect to earn ~35% p.a. (27% capital gains; 8% dividend yield) from MegaStudyEdu.
That said, Singapore tax residents like myself incur only 15% dividend withholding tax for Korean stocks like MegaStudyEdu.
15% is relatively lower than other countries in the region, and much lower than those in Europe!