Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

Douglas Research Advisory

Cross Asset Strategy

<ul>
<li>Now that Lee Jae-Myung has become new South Korean President, the uncertainty revolving who will lead South Korea in the next five years is now over.</li>
<li>In this insight, we discuss four investment themes (related to Lee Jae-Myung becoming the new South Korean President) that could outperform the market for the remainder of 2025.</li>
<li>The four investment themes include Korean Holdcos/Quasi Holdcos, Korean Cultural Contents, Securities, and SK Group Companies.</li>
</ul>


Now that Lee Jae-Myung has become new South Korean President, the uncertainty revolving who will lead South Korea in the next five years is now over.
In this insight, we discuss four investment themes (related to Lee Jae-Myung becoming the new South Korean President) that could outperform the market for the remainder of 2025.
The four investment themes include Korean Holdcos/Quasi Holdcos, Korean Cultural Contents, Securities, and SK Group Companies.


Lee Jae-Myung Becomes the New South Korean President - Four Investment Themes That Could Outperform

Equity Long-Short

Mo Aziz

Thematic (Sector/Industry)

<ul>
<li>In aggregate, traffic among the Big-3 Chinese airlines was up 67% YoY in February and +18% vs 2019. Incontestable proof that China has regained its air travel mojo. </li>
<li>Published March schedules show total implied capacity is 31% higher YoY and 9% higher than 2019 levels. This is driven by domestic travel, international remains depressed. </li>
<li>Driven by domestic travel, international remains depressed. POSITIVE for China Eastern and other North Asian carriers that provide the missing North America link. </li>
</ul>


In aggregate, traffic among the Big-3 Chinese airlines was up 67% YoY in February and +18% vs 2019. Incontestable proof that China has regained its air travel mojo. 
Published March schedules show total implied capacity is 31% higher YoY and 9% higher than 2019 levels. This is driven by domestic travel, international remains depressed. 
Driven by domestic travel, international remains depressed. POSITIVE for China Eastern and other North Asian carriers that provide the missing North America link. 


China BIG-3 Mainland Airlines Traffic 18% Higher than 2019!

Founder & Managing Director, AIR Control Tower, AIR Control Tower

Neil Glynn

Founder & Managing Director, AIR Control Tower

AIR Control Tower

AIR Control Tower is an independent research and analysis platform. Its mission is to provide impactful insight and analysis across the global airline industry at a company and market level via detailed financial models to aid decision making for key stake holders at a time when risks have seldom, if ever, been higher and the global sector grapples with the imperative of funding de-carbonisation. Unique analysis forecasting global carrier-level earnings/cash flows, and restructuring/de-leveraging prospects, is designed to dynamically assess the health of the industry, predict surprises and identify potential requirements for third party support.

Insights on the global airline industry

<ul>
<li>Difficult for merger to receive approval in Europe, US and potentially Japan. But Korean Air financial recovery positions it well for the future.</li>
<li>Asiana vulnerable given it continues to struggle to make money, while its net debt is higher than 2019 revenues. South Korean precedent of focusing on one national champion in shipping.</li>
<li>Most M&amp;A destroys value. Strong argument for Korean continuing alone given stronger opportunities should Asiana be forced to retrench/cease ops, while Delta JV developmental potential attractive.</li>
</ul>


Difficult for merger to receive approval in Europe, US and potentially Japan. But Korean Air financial recovery positions it well for the future.
Asiana vulnerable given it continues to struggle to make money, while its net debt is higher than 2019 revenues. South Korean precedent of focusing on one national champion in shipping.
Most M&amp;A destroys value. Strong argument for Korean continuing alone given stronger opportunities should Asiana be forced to retrench/cease ops, while Delta JV developmental potential attractive.


Korean Air - Plan B Should Asiana Merger Fail to Gain Approval

Equity Bottom-Up

<ul>
<li>In this insight, we highlight the recent pricing gap divergences of the major Korean holdcos and opcos which could provide trading opportunities in 2Q 2025.</li>
<li>Among the 38 holdcos/opcos, there have been several pairs that have resulted in significant price ratio divergence which could provide trading opportunities in terms of their pricing gaps closing reversal.</li>
<li>Given the resumption in short selling in Korea, there is going to be a lot more interest in pair trades in Korea, especially among the major Korean holdcos/opcos. </li>
</ul>


In this insight, we highlight the recent pricing gap divergences of the major Korean holdcos and opcos which could provide trading opportunities in 2Q 2025.
Among the 38 holdcos/opcos, there have been several pairs that have resulted in significant price ratio divergence which could provide trading opportunities in terms of their pricing gaps closing reversal.
Given the resumption in short selling in Korea, there is going to be a lot more interest in pair trades in Korea, especially among the major Korean holdcos/opcos. 


Korean Holdcos Vs Opcos Gap Trading Opportunities in 2Q 2025

<ul>
<li>On 4 November, the Chinese government suddenly announced it will waive visa requirements for South Korean citizens entering China. </li>
<li>This is likely to have a major positive impact on major travel/airline stocks including Hana Tour Service, Korean Air Lines,  Very Good Leisure, Yellow Balloon Tour, and Modetour Network.</li>
<li>A no-visa policy by China for South Korean citizens could also imply a reciprocal policy by the South Korean government. </li>
</ul>


On 4 November, the Chinese government suddenly announced it will waive visa requirements for South Korean citizens entering China. 
This is likely to have a major positive impact on major travel/airline stocks including Hana Tour Service, Korean Air Lines,  Very Good Leisure, Yellow Balloon Tour, and Modetour Network.
A no-visa policy by China for South Korean citizens could also imply a reciprocal policy by the South Korean government. 


Chinese Government Announces a No-Visa Policy for South Korean Citizens Entering China

South Korea

Korean Air Lines Co., Ltd. operates air transportation services.  The Company's services include passenger and cargo transportation, aircraft maintenance, and air catering.  Korean Air Lines provides domestic and international airline services.

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Korean Air Lines (003490 KS)

Lee Jae-Myung Becomes the New South Korean President - Four Investment Themes That Could Outperform

In this insight, we discuss four investment themes (related to Lee Jae-Myung becoming the new South Korean President) that could outperform the...

Douglas Kim

China BIG-3 Mainland Airlines Traffic 18% Higher than 2019!

Chinese airlines see significant increase in traffic, with domestic travel driving growth while international remains depressed. China's air...

Mo Aziz

Korean Air - Plan B Should Asiana Merger Fail to Gain Approval

Deep dive on prospects for Korean Air should it fail to achieve approval for planned Asiana merger. Global airline M&A perspective/organic...

Neil Glynn

Korean Holdcos Vs Opcos Gap Trading Opportunities in 2Q 2025

In this insight, we highlight the recent pricing gap divergences of the major Korean holdcos and opcos which could provide trading opportunities in...

Douglas Kim

Chinese Government Announces a No-Visa Policy for South Korean Citizens Entering China

The Chinese government suddenly announced it will waive visa requirements for South Korean citizens entering China. This is likely to have a major...

Douglas Kim

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

Lee Jae-Myung Becomes the New South Korean President - Four Investment Themes That Could Outperform

In this insight, we discuss four investment themes (related to Lee Jae-Myung becoming the new South Korean President) that could outperform the...

Douglas Kim

China BIG-3 Mainland Airlines Traffic 18% Higher than 2019!

​Chinese airlines see significant increase in traffic, with domestic travel driving growth while international remains depressed. China's air...

Mo Aziz

Korean Air - Plan B Should Asiana Merger Fail to Gain Approval

Deep dive on prospects for Korean Air should it fail to achieve approval for planned Asiana merger. Global airline M&A perspective/organic...

Neil Glynn

Korean Holdcos Vs Opcos Gap Trading Opportunities in 2Q 2025

In this insight, we highlight the recent pricing gap divergences of the major Korean holdcos and opcos which could provide trading opportunities in...

Douglas Kim

Chinese Government Announces a No-Visa Policy for South Korean Citizens Entering China

The Chinese government suddenly announced it will waive visa requirements for South Korean citizens entering China. This is likely to have a major...

Douglas Kim

Chinese airlines see significant increase in traffic, with domestic travel driving growth while international remains depressed. China's air...