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This article appeared on the capital markets compass "Signal" at 6:26 p.m. on June 23, 2026.
Activist fund manager Flashlight Capital Partners (FCP) has launched a public campaign targeting S-1 Corporation, a Samsung Group affiliate. FCP argues that S-1's stock is undervalued due to governance issues and has urged the board to devise countermeasures.
According to the investment banking (IB) industry on the 23rd, FCP recently sent a shareholder letter to S-1's board, demanding improvements in corporate value and governance. The letter contained five questions and demands, including the board's perception of and measures for the current stock price, an assessment of the business situation, and a future vision. FCP holds more than 1% of S-1's outstanding shares.
FCP believes S-1's stock is undervalued relative to its business competitiveness. S-1 is the top player with more than 50% of the domestic security and guarding market, but its stock has fallen about 30% over the past decade. The core of FCP's challenge is that its enterprise value (EV) to EBITDA ratio stands at about 6 times based on the current stock price, markedly lower than the 12 times that runner-up SK Shieldus was credited with several years ago.
FCP pointed to governance-driven erosion of competitiveness as the cause of the undervaluation. It argues that all of the company's key executives came from other Samsung Group affiliates and lack expertise in the security and guarding market, leading to a decline in business competitiveness over the medium to long term. For the past 25 years, all of S-1's CEOs have been executives dispatched from Samsung Group. An FCP official said, "It is difficult to explain, without mentioning governance, why the company loses market share to competitors every year and why its service margin is declining."
FCP is an activist fund manager founded in 2020 by CEO Lee Sang-hyun, who previously worked at global private equity firms such as Affinity Equity Partners and the Carlyle Group. In 2022, it launched an activist campaign actively voicing shareholder demands at KT&G, calling for a higher shareholder return ratio. As head of Carlyle Korea in 2014, Lee acquired ADT Caps (now SK Shieldus) for 2.065 trillion won, raised its corporate value, and sold it for 2.97 trillion won in 2018.
An S-1 official said, "S-1 posted record earnings last year and maintained a 60% dividend payout ratio, exceeding the market average," adding, "We will continue to balance the interests of all shareholders and review the best ways to enhance corporate value while communicating with the market."
