Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

Douglas Research Advisory

Equity Bottom-Up

<ul>
<li>I recently visited Daiso near Seoul Station. Daiso is one of the few off-line stores that has been crushing the competition in Korea in the past several years.</li>
<li>Amid continued weak economy in Korea in the past several years, Daiso has thrived through its detailed execution of focus on low priced products with highest value to consumers.</li>
<li>Able C&amp;C (078520 KS) is a prime example a company capitalizing on the strong demand for cosmetic products at Daiso. </li>
</ul>


I recently visited Daiso near Seoul Station. Daiso is one of the few off-line stores that has been crushing the competition in Korea in the past several years.
Amid continued weak economy in Korea in the past several years, Daiso has thrived through its detailed execution of focus on low priced products with highest value to consumers.
Able C&amp;C (078520 KS) is a prime example a company capitalizing on the strong demand for cosmetic products at Daiso. 


A Visit to Daiso in Seoul - A Retail Giant Crushing the Competition

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>At today’s close, Lotte Shopping (023530 KS) shows solid contango for a basis trade, with LS Corp (006260 KS) next; the rest are too tight or dry.</li>
<li>Lotte Shopping surprised the market today, changing its dividend record date to a board-set day, wiping out the backwardation that matched its dividend yield until yesterday.</li>
<li>Lotte Shopping’s move could signal other stocks changing dividend dates, causing similar dislocations. With a 7% yield and solid SSF volume, it's prime for aggressive dividend arbitrage.</li>
</ul>


At today’s close, Lotte Shopping (023530 KS) shows solid contango for a basis trade, with LS Corp (006260 KS) next; the rest are too tight or dry.
Lotte Shopping surprised the market today, changing its dividend record date to a board-set day, wiping out the backwardation that matched its dividend yield until yesterday.
Lotte Shopping’s move could signal other stocks changing dividend dates, causing similar dislocations. With a 7% yield and solid SSF volume, it's prime for aggressive dividend arbitrage.


Lotte Shopping and Potentially Others Are Shaping up as Fresh Picks for Dividend Arbitrage Plays

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

<ul>
<li>Nextrade (NXT) is an alternative trading system (ATS) in Korea which will start to go live on 4 March.</li>
<li>Nextrade provided a list of 10 stocks including Lotte Shopping,  Cheil Worldwide,  Kolon Industries, LG Uplus, and S Oil that will start to trade on NXT starting 4 March. </li>
<li>Most of these 10 stocks tend to be lower beta stocks with relatively low amounts of share volatility. These 10 stocks are up on average 2.8% YTD, underperforming KOSPI.</li>
</ul>


Nextrade (NXT) is an alternative trading system (ATS) in Korea which will start to go live on 4 March.
Nextrade provided a list of 10 stocks including Lotte Shopping,  Cheil Worldwide,  Kolon Industries, LG Uplus, and S Oil that will start to trade on NXT starting 4 March. 
Most of these 10 stocks tend to be lower beta stocks with relatively low amounts of share volatility. These 10 stocks are up on average 2.8% YTD, underperforming KOSPI.


Impact of Nextrade Alternative Trading System Going Live on the Korean Stock Market on 4 March

<ul>
<li>Despite the higher probability of the cancellation of treasury shares by Lotte Corp, we believe that its worsening balance sheet is a greater concern. </li>
<li>There does not appear to be a rapid business turnaround of its major affiliates including Lotte Chemical. As a result, we are concerned about further credit downgrades in 2026/2027.</li>
<li>Our base case NAV valuation of Lotte Corp is market cap of 2.2 trillion won or target price of 20,918 won per share, which is 29% lower than current price.</li>
</ul>


Despite the higher probability of the cancellation of treasury shares by Lotte Corp, we believe that its worsening balance sheet is a greater concern. 
There does not appear to be a rapid business turnaround of its major affiliates including Lotte Chemical. As a result, we are concerned about further credit downgrades in 2026/2027.
Our base case NAV valuation of Lotte Corp is market cap of 2.2 trillion won or target price of 20,918 won per share, which is 29% lower than current price.


Lotte Corp: Worsening Balance Sheet Offset by Its High Treasury Shares Level

South Korea

Lotte Shopping Co., Ltd. operates department stores and discount stores in South Korea.  The Company retails clothing, household goods, foods and other items through several branches.  Lotte Shopping also operates supermarkets and movie theaters.

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Lotte Shopping Co (023530 KS)

A Visit to Daiso in Seoul - A Retail Giant Crushing the Competition

I recently visited Daiso near Seoul Station. Daiso is one of the few off-line stores that has been crushing the competition in Korea in the past...

Douglas Kim

Lotte Shopping and Potentially Others Are Shaping up as Fresh Picks for Dividend Arbitrage Plays

Lotte Shopping and potentially some other stocks in the same boat are shaping up as fresh picks for the classic year-end dividend arbitrage plays.

Sanghyun Park

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

Impact of Nextrade Alternative Trading System Going Live on the Korean Stock Market on 4 March

Nextrade provided a list of 10 stocks including Lotte Shopping, Cheil Worldwide, Kolon Industries, LG Uplus, and S Oil that will start to trade...

Douglas Kim

Lotte Corp: Worsening Balance Sheet Offset by Its High Treasury Shares Level

Despite the higher probability of the cancellation of treasury shares by Lotte Corp, we believe that its worsening balance sheet is a greater concern.

Douglas Kim

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