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Tue, December 30, 2025
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Haechan (HAE) Stock: Potential for Double-Digit Yield?
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Published in Stocks and Investing on Tuesday, December 30th 2025 at 13:04 GMT by Forbes- 🞛 This publication is a summary or evaluation of another publication
- 🞛 This publication contains editorial commentary or bias from the source
Haechan (HAE) Stock: A Potential Yield Double Your Bank Account? Exploring the Controversial Case of a Korean Bio-Tech Play
The current low-interest rate environment has investors scrambling for yield, and many are turning to alternative investments. A recent Forbes article by Michael Bagelaia highlights one such option – Haechan Co., Ltd. (HAE), a South Korean biotechnology company specializing in the production of hyaluronic acid (HA). The piece argues that HAE stock presents an opportunity to potentially earn twice the yield typically offered by bank savings accounts, but cautions readers about significant risks and complexities involved.
What is Haechan and What Do They Do?
Haechan Co., Ltd., listed on the Korea Stock Exchange (KRX: 002870), isn't a household name globally. However, it’s a key player in the hyaluronic acid market. Hyaluronic acid is a naturally occurring substance found throughout the body, known for its exceptional water-retention properties. It's widely used in cosmetics (anti-aging creams, serums), pharmaceuticals (eye drops, joint injections), and increasingly, in medical devices. Haechan’s core business revolves around manufacturing and selling HA raw materials to these various industries. They differentiate themselves through a proprietary fermentation process that Bagelaia claims results in higher purity HA compared to competitors who rely on animal-derived sources (a significant concern for many consumers).
The Forbes article emphasizes the company's history, noting it was initially struggling but has undergone several transformations and ownership changes over the years. A crucial turning point came with a restructuring plan implemented in 2019, which included debt reduction and a focus on expanding production capacity. This restructuring is presented as a key factor behind the recent stock performance.
The Yield Argument: Why HAE Looks Attractive
Bagelaia’s central thesis revolves around the dividend yield offered by HAE stock. As of late December 2023, he states that HAE's annual dividend yield sits at approximately 6-7%, significantly higher than the average interest rates offered by traditional bank savings accounts (which are often below 1% in many developed economies). This alone makes it an appealing option for income-seeking investors.
However, Bagelaia goes further, arguing that this yield is sustainable and potentially even conservative. He bases this claim on several factors:
- Strong Demand for HA: The global hyaluronic acid market is projected to continue growing, driven by increasing demand in cosmetics and medical applications. The Forbes article cites reports indicating a substantial compound annual growth rate (CAGR) for the HA market.
- Haechan’s Competitive Advantage: The company's fermentation technology allows them to produce high-quality HA at potentially lower costs than competitors using animal-derived methods, giving them a pricing advantage and bolstering their margins. This is supported by claims that Haechan has secured long-term contracts with major customers.
- Improved Financial Performance: Following the 2019 restructuring, Haechan’s financial performance has reportedly improved significantly, with increased revenue and profitability. This allows for consistent dividend payouts.
- Undervaluation: Bagelaia suggests that HAE stock is currently undervalued by the market, meaning there's potential for capital appreciation in addition to the attractive dividend yield.
The Risks: A Complex Investment Landscape
While the potential rewards are enticing, Bagelaia doesn’t shy away from highlighting the significant risks associated with investing in HAE. These risks are substantial and should be carefully considered before making any investment decisions.
- Korean Market Volatility: The Korean stock market can be volatile and influenced by factors outside of Haechan's control, such as geopolitical tensions or changes in government regulations.
- Currency Risk: As an investor based outside of Korea, currency fluctuations between the Korean Won (KRW) and your home currency will impact returns. A weakening KRW would reduce the value of dividends received when converted back to your local currency.
- Competition: While Haechan has a competitive advantage, the HA market is becoming increasingly crowded with new entrants. Increased competition could put pressure on prices and margins.
- Regulatory Changes: The cosmetics and pharmaceutical industries are heavily regulated. Changes in regulations regarding hyaluronic acid production or usage could negatively impact Haechan’s business.
- Corporate Governance Concerns: Bagelaia mentions that Haechan has a history of complex ownership structures and corporate governance issues, which can create uncertainty and potentially lead to conflicts of interest. He points to past instances where shareholder rights were not fully protected. This is a recurring theme in some Korean companies, as highlighted by other analyses (linked within the original Forbes article).
- Information Asymmetry: The limited availability of English-language information about Haechan makes it difficult for international investors to conduct thorough due diligence.
Conclusion: A High-Risk, High-Reward Opportunity?
The Forbes article paints a picture of Haechan Co., Ltd. as a potentially lucrative investment opportunity – one that could deliver double the yield of traditional bank savings accounts. However, Bagelaia is clear that this potential comes with significant risks. He emphasizes the importance of conducting thorough research and understanding the complexities of the Korean stock market and Haechan’s corporate history before investing.
The article serves as a cautionary tale for investors seeking higher yields in a low-interest rate environment: while opportunities exist, they often come with increased risk. For those willing to accept that risk and conduct their own due diligence, HAE stock might be worth further investigation. However, it's not an investment suitable for the faint of heart or those requiring guaranteed returns.
Disclaimer: This is a summary based on the provided Forbes article and does not constitute financial advice. Investors should consult with a qualified financial advisor before making any investment decisions.
Read the Full Forbes Article at:
[ https://www.forbes.com/sites/greatspeculations/2025/12/30/earn-twice-the-yield-you-get-from-bank-on-hae-stock/ ]
