Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

Cross Asset Strategy

It was<a href="http://www.koreaherald.com/view.php?ud=20200820000835" target="_blank" rel="noopener"> reported</a> this afternoon by South Korea's National Intelligence Service that North Korea's Kim Jong-Un has "delegated" some of his authority to his younger sister Kim Yo-Jong, due to "high-stress levels."Today's announcement by the South Korean government raises the ultimate question - Is Kim Jong-Un really alive?  In our view, a more appropriate way to make sense of today's announcement is to put this in a scenario analysis. <ul>
<li>
The first scenario is that Kim Jong-Un may be already dead and that North Korea is trying to do everything they can to keep this news a secret. </li>
<li>
The second scenario is that Kim Jong-Un may be alive but he is very sick and unable to maintain every-day duties of drinking whiskey and maintaining his position as the ultimate authority in North Korea. </li>
<li>
The third scenario is that Kim Jong-Un may be healthy (as local news has emphasized) but is overstressed so he has decided to hand over some authority to his sister. [this is what was announced by South Korea's National Intelligence Dept]</li>
</ul>

It was reported this afternoon by South Korea's National Intelligence Service that North Korea's Kim Jong-Un has "delegated" some of his authority to his younger sister Kim Yo-Jong, due to "high-stress levels."Today's announcement by the South Korean government raises the ultimate question - Is Kim Jong-Un really alive?  In our view, a more appropriate way to make sense of today's announcement is to put this in a scenario analysis. 

The first scenario is that Kim Jong-Un may be already dead and that North Korea is trying to do everything they can to keep this news a secret. 

The second scenario is that Kim Jong-Un may be alive but he is very sick and unable to maintain every-day duties of drinking whiskey and maintaining his position as the ultimate authority in North Korea. 

The third scenario is that Kim Jong-Un may be healthy (as local news has emphasized) but is overstressed so he has decided to hand over some authority to his sister. [this is what was announced by South Korea's National Intelligence Dept]


This morning on May 2nd, it was widely reported in the media that dictator <a href="https://news.joins.com/article/23767647" target="_blank" rel="noopener">Kim Jong-Un</a> showed up at a fertilizer factory in North Korea on May 1st. This was the first time in 20 days that he has shown up publicly. There has been a huge amount of global media attention on his health conditions, especially after he failed to show up at Kim Il-Sung's birthday ceremony on April 15th. So far, the North Korean government has not stated why Kim Jong-Un disappeared for nearly three weeks. <div class="content-highlight">What we still do not know: Despite this announcement, the North Korean government has yet to provide actual videos of Kim Jong-Un walking around alive. Although the photos provide some confirmation that Kim Jong-Un is alive until there are actual videos of him walking on his own, theexact health conditions of Kim Jong-Un remain unclear. </div>

This morning on May 2nd, it was widely reported in the media that dictator Kim Jong-Un showed up at a fertilizer factory in North Korea on May 1st. This was the first time in 20 days that he has shown up publicly. There has been a huge amount of global media attention on his health conditions, especially after he failed to show up at Kim Il-Sung's birthday ceremony on April 15th. So far, the North Korean government has not stated why Kim Jong-Un disappeared for nearly three weeks. What we still do not know: Despite this announcement, the North Korean government has yet to provide actual videos of Kim Jong-Un walking around alive. Although the photos provide some confirmation that Kim Jong-Un is alive until there are actual videos of him walking on his own, theexact health conditions of Kim Jong-Un remain unclear. 

Kim Jong Un Shows Up At a Fertilizer Factory - Now You See Me?

<div class="content-highlight">In this insight, we provide some additional latest information about the status of Kim Jong-Un and North Korea. The last time that Kim Jong-Un appeared publicly was on 11 April and now it is 19 days that he has not shown up publicly (as of 30 April). This would not have been much of a problem, except for the fact that he missed his grandpa's birthday (April 15th), which is the most important date in the North Korean cult nation. </div>The latest news from the U.S. Congressional Report, South Korea's <a href="https://www.yna.co.kr/view/AKR20200428186100001?input=1195m" target="_blank" rel="noopener">National Assembly Research Service</a>, and South Korea's far-right newly elected National Assembly member Ji Seong-Ho (a North Korean defector to South Korea) all point to the higher likelihood of Kim Yo-Jong taking the leadership role of North Korea if indeed it is found that Kim Jong-Un is either dead or permanently incapacitated. All of these factors make for a political situation filled with danger that may pose a bigger than expected NEGATIVE impact on the Korean stock market. May is likely to be a key turning point since we will likely found out the status of Kim Jong-Un in the near future.

In this insight, we provide some additional latest information about the status of Kim Jong-Un and North Korea. The last time that Kim Jong-Un appeared publicly was on 11 April and now it is 19 days that he has not shown up publicly (as of 30 April). This would not have been much of a problem, except for the fact that he missed his grandpa's birthday (April 15th), which is the most important date in the North Korean cult nation. The latest news from the U.S. Congressional Report, South Korea's National Assembly Research Service, and South Korea's far-right newly elected National Assembly member Ji Seong-Ho (a North Korean defector to South Korea) all point to the higher likelihood of Kim Yo-Jong taking the leadership role of North Korea if indeed it is found that Kim Jong-Un is either dead or permanently incapacitated. All of these factors make for a political situation filled with danger that may pose a bigger than expected NEGATIVE impact on the Korean stock market. May is likely to be a key turning point since we will likely found out the status of Kim Jong-Un in the near future. 

Kim Yo-Jong: From an Ashtray Holder to the Next Queen? (Kim Jong-Un Death Update)

<div class="content-highlight">
Today (April 29th), South Korea's <a href="https://www.yna.co.kr/view/AKR20200428186100001?input=1195m" target="_blank" rel="noopener">National Assembly Research Service</a> (입법조사처) announced that Kim Yo-Jong could become the next successor after Kim Jong-Un. This is an important announcement since it is really the first major implicit acknowledgment by the South Korean government that there could be a near-term transfer of power from Kim Jong-Un to his sister Kim Yo-Jong.
May could be a key turning point in the Korean markets as the status of KJU is likely to be known to the world.  
</div>The top 10 events impacting the Korean stock market, economy, &amp; politics in April 2020 were as follows:<div><ul>
<li>KIM JONG-UN (DEAD?) </li>
<li>EXCELLENT PROGRESS OF LOWERING COVID-19 IN SOUTH KOREA</li>
<li>POSCO'S MASSIVE SHARE BUYBACK</li>
<li>BLOCK DEAL SALES OF CELLTRION &amp; CELLTRION HEALTHCARE</li>
<li>DOOSAN GROUP RESTRUCTURING </li>
<li>SK E&amp;S BLOCK DEAL OF 10.2% STAKE IN CHINA GAS HOLDINGS </li>
<li>NEXON KOREA RAISES DEBT BY 1.5 TRILLION WON </li>
<li>KURLY RECEIVES $150 MILLION IN INVESTMENT </li>
<li>BINGGRAE ACQUIRES HAITAI'S ICE CREAM BUSINESS </li>
<li>STUDIO DRAGON'S BLOCK DEAL</li>
</ul></div>Among the 33 reports we have written so far in April, the three most widely read insights were all related to Kim Jong-Un:<ul>
<li>
<a href="https://www.smartkarma.com/insights/kim-jong-un-dead-or-alive" target="_blank" data-smartkarma-citation="insights:38606" rel="noopener">Kim Jong-Un: Dead or Alive?</a> </li>
<li>
<a href="https://www.smartkarma.com/insights/choe-ryong-hae-china-s-man-post-kim-jong-un" target="_blank" data-smartkarma-citation="insights:38737" rel="noopener">Choe Ryong-Hae: China's Man Post Kim Jong-Un?</a> </li>
<li>
<a href="https://www.smartkarma.com/insights/the-power-struggle-between-kim-yo-jong-vs-kim-pyong-il-in-north-korea" target="_blank" data-smartkarma-citation="insights:38628" rel="noopener">The Power Struggle Between Kim Yo-Jong Vs. Kim Pyong-Il (Post Kim Jong-Un) In North Korea?</a> </li>
</ul>


Today (April 29th), South Korea's National Assembly Research Service (입법조사처) announced that Kim Yo-Jong could become the next successor after Kim Jong-Un. This is an important announcement since it is really the first major implicit acknowledgment by the South Korean government that there could be a near-term transfer of power from Kim Jong-Un to his sister Kim Yo-Jong.
May could be a key turning point in the Korean markets as the status of KJU is likely to be known to the world.  
The top 10 events impacting the Korean stock market, economy, &amp; politics in April 2020 were as follows:
KIM JONG-UN (DEAD?) 
EXCELLENT PROGRESS OF LOWERING COVID-19 IN SOUTH KOREA
POSCO'S MASSIVE SHARE BUYBACK
BLOCK DEAL SALES OF CELLTRION &amp; CELLTRION HEALTHCARE
DOOSAN GROUP RESTRUCTURING 
SK E&amp;S BLOCK DEAL OF 10.2% STAKE IN CHINA GAS HOLDINGS 
NEXON KOREA RAISES DEBT BY 1.5 TRILLION WON 
KURLY RECEIVES $150 MILLION IN INVESTMENT 
BINGGRAE ACQUIRES HAITAI'S ICE CREAM BUSINESS 
STUDIO DRAGON'S BLOCK DEAL
Among the 33 reports we have written so far in April, the three most widely read insights were all related to Kim Jong-Un:

Kim Jong-Un: Dead or Alive? 

Choe Ryong-Hae: China's Man Post Kim Jong-Un? 

The Power Struggle Between Kim Yo-Jong Vs. Kim Pyong-Il (Post Kim Jong-Un) In North Korea? 


Korea Stock Market Monthly Recap #47 (April 2020): Kim Jong-Un Dead?

<div class="content-highlight">It has been <a href="https://www.reuters.com/article/us-northkorea-politics-exclusive/exclusive-china-sent-team-including-medical-experts-to-advise-on-north-koreas-kim-sources-say-idUSKCN2263DW" target="_blank" rel="noopener">reported</a> in the past few days that China has sent a team of about 50 people, including medical experts to North Korea to check up on Kim Jong-Un. The local <a href="http://news.khan.co.kr/kh_news/khan_art_view.html?artid=202004261113001&amp;code=970203" target="_blank" rel="noopener">media</a> mentioned that one of the main reasons why the number of medical professionals is so large (nearly 50) is because some serious medical help may be needed by not just Kim Jong-Un but also because of potential COVID-19 issues in North Korea.</div>If the medical problem was related just for Kim Jong-Un, sending a team of 50 medical professionals does not make sense. Hence, the more likely scenario is that China sent this team to North Korea for both Kim Jong-Un as well as potential medical problems affecting the closest members of Kim Jong-Un family.<div class="content-highlight">In the midst of this recent news and confusion, it is worth highlighting another potential scenario that could arise which includes a pro-Chinese government political elite leading the entire regime change in North Korea. If so, the most likely man appears to be Choe Ryong-Hae, who could lead North Korea through a "collective leadership" with strong support from China.  </div>

It has been reported in the past few days that China has sent a team of about 50 people, including medical experts to North Korea to check up on Kim Jong-Un. The local media mentioned that one of the main reasons why the number of medical professionals is so large (nearly 50) is because some serious medical help may be needed by not just Kim Jong-Un but also because of potential COVID-19 issues in North Korea.If the medical problem was related just for Kim Jong-Un, sending a team of 50 medical professionals does not make sense. Hence, the more likely scenario is that China sent this team to North Korea for both Kim Jong-Un as well as potential medical problems affecting the closest members of Kim Jong-Un family.In the midst of this recent news and confusion, it is worth highlighting another potential scenario that could arise which includes a pro-Chinese government political elite leading the entire regime change in North Korea. If so, the most likely man appears to be Choe Ryong-Hae, who could lead North Korea through a "collective leadership" with strong support from China.  

Choe Ryong-Hae: China's Man Post Kim Jong-Un?

Geopolitical risk in the Korean Peninsula