Korea / Special Situations, Clepsydra Capital

Sanghyun Park

Korea / Special Situations

Korea / Special Sits, Pairs, Index Rebalancing

Clepsydra Capital

Investigate special situations, pairs, and index rebalancing trades in Korea.

Event-Driven

<ul>
<li>Samsung Life needs FSC approval for a 10-year holding plan on its Samsung Electronics stake. Without it, the whole plan could fall apart, so it’s all about regulatory green lights.</li>
<li>If FSC approves Samsung Life's long-term holding, they can't sell those shares for at least 5 years—no exit strategy for the next half-decade due to regulatory rules.</li>
<li>Samsung Life will convert part of its stake into long-term holdings, signaling how future buybacks and special dividends will balance in Samsung Electronics' next shareholder return program.</li>
</ul>


Samsung Life needs FSC approval for a 10-year holding plan on its Samsung Electronics stake. Without it, the whole plan could fall apart, so it’s all about regulatory green lights.
If FSC approves Samsung Life's long-term holding, they can't sell those shares for at least 5 years—no exit strategy for the next half-decade due to regulatory rules.
Samsung Life will convert part of its stake into long-term holdings, signaling how future buybacks and special dividends will balance in Samsung Electronics' next shareholder return program.


Converting Samsung Life's Samsung Electronics Stake to Long-Term Holdings: Clearing up the Confusion

Pan-Asia Index Rebalances/ Events/ Delta One, Periscope Analytics

Brian Freitas

Pan-Asia Index Rebalances/ Events/ Delta One

Periscope Analytics

Periscope Analytics focuses on event-driven trades across Asia Pacific and provides comprehensive, timely and systematic coverage of index changes to major Asia Pacific indices in a structured manner.

The analysis includes forecasted inclusions and exclusions to all major Asian indices that have significant amount of tracking assets, including estimates of passive buy/sell flow on the stocks. The service also provides commentary and impact of market consultations, ground rule changes, and other events (IPOs, spin-offs, M&A) that could lead to index changes and passive flow.

Periscope Analytics works with multi-strategy hedge funds, proprietary trading firms, stat arb trading groups and long-only investors that invest and trade in the Asia Pacific region with the data being used to trade index rebalances, avoid pre-positioning and passive flow, and to time entry into and exit from stocks.

Event-Driven Trades Across Asia Pacific

Samsung Electronics Pref Shares / Event-Driven

<ul>
<li>Over the last year, the discount of <a href="https://www.smartkarma.com/entities/samsung-electronics-pref-shares" target="_blank" data-smartkarma-citation="entities:23591:1" rel="noopener">Samsung Electronics Pref Shares (005935 KS)</a> to <a href="https://www.smartkarma.com/entities/samsung-electronics-co-ltd" target="_blank" data-smartkarma-citation="entities:191:1" rel="noopener">Samsung Electronics (005930 KS)</a> has increased from 5% to 17%.</li>
<li>The preferred shares have adequate liquidity, a large issue market cap, and now trade at a much higher dividend yield. A special dividend will further increase the dividend yield differential.</li>
<li>Breaking from history, the preferred shares discount has continued to increase as the stock has moved higher. With the preferred shares trading near its widest discount, that could change.</li>
</ul>


Over the last year, the discount of Samsung Electronics Pref Shares (005935 KS) to Samsung Electronics (005930 KS) has increased from 5% to 17%.
The preferred shares have adequate liquidity, a large issue market cap, and now trade at a much higher dividend yield. A special dividend will further increase the dividend yield differential.
Breaking from history, the preferred shares discount has continued to increase as the stock has moved higher. With the preferred shares trading near its widest discount, that could change.


Samsung Electronics: Prefs Need to Catch Up

Asia Pac IPO & Placement Research, China biotech, Aequitas Research

Ke Yan, CFA, FRM

Asia Pac IPO & Placement Research, China biotech

IPOs and Placements coverage across Asia Pacific

Aequitas Research

We cover all listing across the Asia Pacific along with follow-up placements. As of Dec 2020, our team had covered 539 IPOs with a hit rate of 73.5% and 685 placements with a hit rate of 66.8%.

We combine fundamental bottom-up views with our proprietary quantitative framework to provide a holistic coverage across new listings and placements. Our coverage includes pre-IPO notes before the deal is launched, follow-up analysis once the deal is live and post-listing trading analysis as well.

Quantitative Analysis

<ul>
<li>We analyzed the changes in foreign holdings of KRX stocks as of Jul 25th. The aggregated holding was USD646.8bn.</li>
<li>We estimate that foreign flows to be inflows of USD2,752mln. We tabulate the league table for top changes by value for 1W/4W/1Y and top stocks held by foreign institutions.</li>
<li>We highlight changes of foreign holdings in Hanwha Aerospace, Samsung Electronics, Hanwha Ocean, Hyundai Motor, Celltrion.</li>
</ul>


We analyzed the changes in foreign holdings of KRX stocks as of Jul 25th. The aggregated holding was USD646.8bn.
We estimate that foreign flows to be inflows of USD2,752mln. We tabulate the league table for top changes by value for 1W/4W/1Y and top stocks held by foreign institutions.
We highlight changes of foreign holdings in Hanwha Aerospace, Samsung Electronics, Hanwha Ocean, Hyundai Motor, Celltrion.


KRX Foreign Holding Weekly (Jul 25th): Hanwha Aerospace, Samsung Electronics, Hanwha Ocean

Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

Douglas Research Advisory

Equity Bottom-Up

<ul>
<li>In this insight, we discuss some of the key beneficiaries in Korea that could actually stand to gain from such export restrictions. </li>
<li>We also discuss other Korean companies that could be negatively impacted by this move by the Chinese government. </li>
<li>Despite the uncertainties related to China’s export restrictions of rare earths minerals, we do not expect sudden collapse of the entire semiconductor and EVs value-chain in Korea.</li>
</ul>


In this insight, we discuss some of the key beneficiaries in Korea that could actually stand to gain from such export restrictions. 
We also discuss other Korean companies that could be negatively impacted by this move by the Chinese government. 
Despite the uncertainties related to China’s export restrictions of rare earths minerals, we do not expect sudden collapse of the entire semiconductor and EVs value-chain in Korea.


China's Export Restrictions on Rare Earth Minerals - Key Impact on Korean Companies

<ul>
<li>Three major reasons why Samsung Electronics is our 2025 high conviction pick include attractive valuations, reduced concerns about inheritance tax overhang, and higher likely total shareholder returns.</li>
<li>Given that 2025 will be the last year of major inheritance tax payment for the Lee family, this reduced overhang could act as a positive sentiment on Samsung Electronics.</li>
<li>Pressures on Samsung to announce material improvement to shareholder returns are coming not just from existing shareholders but also from the Korean government due to Korea Corporate Value Up program.</li>
</ul>


Three major reasons why Samsung Electronics is our 2025 high conviction pick include attractive valuations, reduced concerns about inheritance tax overhang, and higher likely total shareholder returns.
Given that 2025 will be the last year of major inheritance tax payment for the Lee family, this reduced overhang could act as a positive sentiment on Samsung Electronics.
Pressures on Samsung to announce material improvement to shareholder returns are coming not just from existing shareholders but also from the Korean government due to Korea Corporate Value Up program.


2025 High Conviction: Samsung Electronics

South Korea

Samsung Electronics Co., Ltd. manufactures a wide range of consumer and industrial electronic equipment and products such as semiconductors, personal computers, peripherals, monitors, televisions, and home appliances including air conditioners and microwave ovens. The Company also produces Internet access network systems and telecommunications equipment including mobile phones.

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Samsung Electronics (005930 KS)

Converting Samsung Life's Samsung Electronics Stake to Long-Term Holdings: Clearing up the Confusion

Turning Samsung Life’s stake in Samsung Electronics into long-term holdings: Sorting out the noise and digging into the key moves that matter most...

Sanghyun Park

Samsung Electronics: Prefs Need to Catch Up

Samsung Electronics preferred shares have a large market cap, are liquid, and offer a higher div yield compared to the ordinary shares. With the...

Brian Freitas

KRX Foreign Holding Weekly (Jul 25th): Hanwha Aerospace, Samsung Electronics, Hanwha Ocean

We analyzed KRX foreign holding data for the past week and highlighted foreign holding changes in Hanwha Aerospace, Samsung Electronics, Hanwha...

Ke Yan, CFA, FRM

China's Export Restrictions on Rare Earth Minerals - Key Impact on Korean Companies

Despite the uncertainties related to China’s export restrictions of rare earths minerals, we do not expect sudden collapse of the entire...

Douglas Kim

2025 High Conviction: Samsung Electronics

A BIG relief rally on Samsung Electronics likely next week. Trump administration just announced that smartphones, computers, semiconductor devices,...

Douglas Kim

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