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

Hyundai Construction Equipment / Event-Driven

Hyundai Construction Equipment (267270 KS)

<ul>
<li>This event offers two arb plays—merger swap and appraisal rights—but there’s barely any juice left as pricing locked the market into an unusually tight range.</li>
<li>Yeah, it’s tight. Unless cancel risk flares up, the spread likely stays muted—major holder’s balanced stakes make vote pushback or ratio disputes pretty unlikely.</li>
<li>One angle to watch: passive flows. HCE likely joins KOSPI 200 post-merger, triggering index buys around Infracore’s halt on Dec 30—potentially a solid year-end positioning play.</li>
</ul>


This event offers two arb plays—merger swap and appraisal rights—but there’s barely any juice left as pricing locked the market into an unusually tight range.
Yeah, it’s tight. Unless cancel risk flares up, the spread likely stays muted—major holder’s balanced stakes make vote pushback or ratio disputes pretty unlikely.
One angle to watch: passive flows. HCE likely joins KOSPI 200 post-merger, triggering index buys around Infracore’s halt on Dec 30—potentially a solid year-end positioning play.


HD HCE–Infracore Merger: Deal Mechanics & Trade Playbook

APAC IPOs & Placements, Aequitas Research

Ethan Aw

APAC IPOs & Placements

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.

Equity Capital Markets

Doosan Bobcat Inc / Equity Capital Markets

<ul>
<li>
<a href="https://www.smartkarma.com/entities/doosan-bobcat-inc" target="_blank" data-smartkarma-citation="entities:23592:1" rel="noopener">Doosan Bobcat Inc (241560 KS)</a> aims to sell a US$145m block. Its recent price momentum is strong but past deals have shown mixed results. </li>
<li>The deal doesn’t appear to be well flagged and is a relatively large one to digest, representing 20.9 days of its three month ADV.  </li>
<li>In this note, we will run the deal through our ECM framework and comment on other deal dynamics.</li>
</ul>



Doosan Bobcat Inc (241560 KS) aims to sell a US$145m block. Its recent price momentum is strong but past deals have shown mixed results. 
The deal doesn’t appear to be well flagged and is a relatively large one to digest, representing 20.9 days of its three month ADV.  
In this note, we will run the deal through our ECM framework and comment on other deal dynamics.


Doosan Bobcat Placement - Momentum Is Strong but past Deals Have Been a Mixed Bag

Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

<ul>
<li>Meritz Financial Group's decision to delist Meritz Fire &amp; Marine Insurance and Meritz Securities in 1H 2023 will result in at least two new additions to KOSPI 200.</li>
<li>We highlight five companies which could be potential additions to KOSPI 200 in 1H 2023.</li>
<li>Five potential additions to KOSPI 200 in 1H 2023 include Jb Financial Group, Hyundai Construction Equipment, Dentium, Samyang Foods, and Lotte Rental. </li>
</ul>


Meritz Financial Group's decision to delist Meritz Fire &amp; Marine Insurance and Meritz Securities in 1H 2023 will result in at least two new additions to KOSPI 200.
We highlight five companies which could be potential additions to KOSPI 200 in 1H 2023.
Five potential additions to KOSPI 200 in 1H 2023 include Jb Financial Group, Hyundai Construction Equipment, Dentium, Samyang Foods, and Lotte Rental. 


KOSPI 200 Rebalance in 1H 2023 - Five Potential Additions Post Deletions of Meritz Affiliates

HD Hyundai Infracore / Equity Capital Markets

<h2>Overview</h2><p>This is again an offering to the stockholders with forfeited shares going to a public offering. A total of 115 million new shares are issued, and the tentative issuance price is set at ₩6,950. So, the total issuance size is ₩0.8T.</p><table class="table table-striped">
<colgroup>
<col width="300">
<col width="300">
</colgroup>
<tbody>
<tr><td colspan="2" data-sheets-value='{"1":2,"2":"Overview"}'>Overview</td></tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Target"}'>Target</td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"A public offering of forfeited shares after offering to stockholders"}'>A public offering of forfeited shares after offering to stockholders</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Transferability"}'>Transferability</td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"Renounceable"}'>Renounceable</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Volume"}'><strong>Offering volume</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":115107913}' data-sheets-numberformat='{"1":2,"2":"#,##0","3":1}'><strong>115,107,913</strong></td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Preliminary price"}'><strong>Preliminary price</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":6950}' data-sheets-numberformat='{"1":2,"2":"[$₩-412]#,##0","3":1}'><strong>₩6,950</strong></td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Preliminary value"}'><strong>Preliminary value</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":799999995350}' data-sheets-numberformat='{"1":2,"2":"[$₩-412]#,##0","3":1}' data-sheets-formula="=R[-3]C[0]*R[-1]C[0]"><strong>₩799,999,995,350</strong></td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Oversubscription privilege"}'>Oversubscription privilege</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0.2}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}'>20.00%</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Banker"}'>Banker</td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"KB, NH, KIS, Mirae Asset, Hana, Samsung, DB, Daishin, &amp; Hi"}'>KB, NH, KIS, Mirae Asset, Hana, Samsung, DB, Daishin, &amp; Hi</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":" - Underwriting type"}'>- Underwriting type</td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"Standby"}'>Standby</td>
</tr>
<tr><td colspan="2" data-sheets-value='{"1":2,"2":"Source: DART"}'>Source: DART</td></tr>
</tbody>
</table><div class="content-highlight"><p>The tentative issuance price of ₩6,950 was calculated based on this formula: Average [1M VWAP, 1W VWAP, 1D Close], as of September 9, 2021.</p></div><h2>Allocation</h2><p>Currently, the number of issued common stock is 79.5 million. So the capital increase rate is a whopping 144.75%, and the dilution per share is 59.14%. Since 20% is allocated to the ESOP, the allocation ratio to stockholders is <strong>1.1589273</strong>.</p><table class="table table-striped">
<colgroup>
<col width="300">
<col width="300">
</colgroup>
<tbody>
<tr><td colspan="2" data-sheets-value='{"1":2,"2":"Allocation"}'>Allocation</td></tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Offer volume"}'><strong>Offering volume</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":115107913}' data-sheets-numberformat='{"1":2,"2":"#,##0","3":1}' data-sheets-formula="=R[1]C[0]+R[2]C[0]"><strong>115,107,913</strong></td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Capital increase"}'>Capital increase</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":1.447498858082393}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}' data-sheets-formula="=R[-4]C[0]/R[-7]C[0]">144.75%</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Dilution"}'>Dilution</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0.5914196255096533}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}' data-sheets-formula="=R[-5]C[0]/(R[-8]C[0]+R[-5]C[0])">59.14%</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Total shares after rights offer"}'>Total shares after rights offer</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":194629850}' data-sheets-numberformat='{"1":2,"2":"#,##0","3":1}' data-sheets-formula="=R[1]C[0]+R[2]C[0]">194,629,850</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"ESOP allocation"}'>ESOP allocation</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":23021582}' data-sheets-numberformat='{"1":2,"2":"#,##0","3":1}'>23,021,582</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":" - %"}'>- %</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0.19999999478749997}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}' data-sheets-formula="=R[-1]C[0]/R[-17]C[0]">20.00%</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Stockholder allocation"}'><strong>Stockholder allocation</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":92086331}' data-sheets-numberformat='{"1":2,"2":"#,##0","3":1}' data-sheets-formula="=R[-18]C[0]-R[-2]C[0]"><strong>92,086,331</strong></td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":" - %"}'><strong>- %</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0.8000000052125}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}' data-sheets-formula="=R[-1]C[0]/R[-19]C[0]"><strong>80.00%</strong></td>
</tr>
<tr>
<td><strong>Per-share allocation</strong></td>
<td style="text-align: right;"><strong>1.1589273</strong></td>
</tr>
<tr><td colspan="2" data-sheets-value='{"1":2,"2":"Source: DART"}'>Source: DART</td></tr>
</tbody>
</table><h2>Schedule</h2><div>
<p>This event's schedule has pretty much nothing unusual, except for the addition of the short-selling ban period. Oh, there is one more thing. This event takes an unusually long time. We have like one and half months gap from now to the first round pricing. It is probably to avoid schedule conflict with another major rights offering, Samsung Heavy Industries, whose payment date falls on November 5th.</p>
<p>So, Doosan Infracore's first-round pricing will be November 11. And ex-rights are on November 3rd, with the subscription rights trading period falling on November 24~30. The issuer will confirm the final price on December 6th, and the listing date is December 28th.</p>
</div><table class="table table-striped">
<colgroup>
<col width="300">
<col width="300">
</colgroup>
<tbody>
<tr><td colspan="2" data-sheets-value='{"1":2,"2":"Schedule"}'>Schedule</td></tr>
<tr>
<td data-sheets-value='{"1":2,"2":"BOD meeting"}'>BOD meeting</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":44449}' data-sheets-numberformat='{"1":5,"2":"yyyy\". \"mm\". \"dd","3":1}'>2021. 09. 10</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Preliminary pricing"}'><strong>Preliminary pricing</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":44501}' data-sheets-numberformat='{"1":5,"2":"yyyy\". \"mm\". \"dd","3":1}'><strong>2021. 11. 01</strong></td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Ex-rights date"}'><strong>Ex-rights date</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":44503}' data-sheets-numberformat='{"1":5,"2":"yyyy\". \"mm\". \"dd","3":1}'><strong>2021. 11. 03</strong></td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Record date"}'>Record date</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":44504}' data-sheets-numberformat='{"1":5,"2":"yyyy\". \"mm\". \"dd","3":1}'>2021. 11. 04</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Subscription rights trade beginning"}'><strong>Subscription rights trade beginning</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":44524}' data-sheets-numberformat='{"1":5,"2":"yyyy\". \"mm\". \"dd","3":1}'><strong>2021. 11. 24</strong></td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Subscription rights trade ending"}'><strong>Subscription rights trade ending</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":44530}' data-sheets-numberformat='{"1":5,"2":"yyyy\". \"mm\". \"dd","3":1}'><strong>2021. 11. 30</strong></td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Final pricing"}'><strong>Final pricing</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":44536}' data-sheets-numberformat='{"1":5,"2":"yyyy\". \"mm\". \"dd","3":1}'><strong>2021. 12. 06</strong></td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Stockholder subscription"}'>Stockholder subscription</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":44538}' data-sheets-numberformat='{"1":5,"2":"yyyy\". \"mm\". \"dd","3":1}'>2021. 12. 08</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Public subscription"}'>Public subscription</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":44540}' data-sheets-numberformat='{"1":5,"2":"yyyy\". \"mm\". \"dd","3":1}'>2021. 12. 10</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Payment"}'>Payment</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":44546}' data-sheets-numberformat='{"1":5,"2":"yyyy\". \"mm\". \"dd","3":1}'>2021. 12. 16</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Listing"}'>Listing</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":44558}' data-sheets-numberformat='{"1":5,"2":"yyyy\". \"mm\". \"dd","3":1}'>2021. 12. 28</td>
</tr>
<tr><td colspan="2"></td></tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Short restriction begins"}'><strong>Short restriction begins</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":44452}' data-sheets-numberformat='{"1":5,"2":"yyyy\". \"mm\". \"dd","3":1}'><strong>2021. 09. 13</strong></td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Short restriction ends"}'><strong>Short restriction ends</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":44533}' data-sheets-numberformat='{"1":5,"2":"yyyy\". \"mm\". \"dd","3":1}'><strong>2021. 12. 03</strong></td>
</tr>
<tr><td colspan="2" data-sheets-value='{"1":2,"2":"Source: DART"}'><p>Source: DART</p></td></tr>
</tbody>
</table><p>The short-selling ban period is from September 13 to December 3rd. Investors who short-sell during this period cannot participate in this capital increase unless they purchase the same quantity they shorted within this period.</p><div class="content-highlight"><p>There seems to be a lot of confusion about this. According to the official documents of the FSC, it is not that only the quantity sold short during the short-selling ban period cannot participate in the rights issue. If we short-sell even one share during this period, we will be completely banned from participating in the rights issue. Then, the only exception is to buy more than the number of stocks short-sold during this period.</p></div><section class="figure"><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/229/161/original/Screen+Shot+2021-09-10+at+11.09.54+AM.png?1631287116" class="editor-image img-responsive" data-smartkarma-image-id="229161"></figure></section><h2>Pricing</h2><p>The procedure for determining the offering price is as follows, again nothing unusual here. The discount rate of this event is 20%, which is the usual discount rate for local rights offerings. Just, this is a bit less aggressive than the 15% discount rate of Samsung Heavy Industries announced last month. Given the current market liquidity, it seems to me that Doosan Infracore could have gone for a little more aggressive discount, say 15%.</p><table class="table table-striped">
<colgroup>
<col width="400">
<col width="400">
</colgroup>
<tbody>
<tr><td colspan="2" rowspan="1" data-sheets-value='{"1":2,"2":"Pricing"}'>Pricing</td></tr>
<tr>
<td data-sheets-value='{"1":2,"2":"1st round"}'><strong>1st round</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"RP × (1 - 20%) / [1 + (144.75% × 20%)]"}' data-sheets-formula='="RP × (1 - "&amp;(R[11]C[0]*100&amp;"%")&amp;") / [1 + ("&amp;(R[12]C[0]*100&amp;"%"&amp;" × "&amp;(R[11]C[0]*100&amp;"%"&amp;")]"))'><strong>RP × (1 - 20%) / [1 + (144.75% × 20%)]</strong></td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":" - Reference price (RP)"}'><strong>- Reference price (RP)</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"Min [Close, Avg (Close, 1W VWAP, 1M VWAP)]"}'><strong>Min [Close, Avg (Close, 1W VWAP, 1M VWAP)]</strong></td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":" - Reference date"}'><strong>- Reference date</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":44501}' data-sheets-numberformat='[null,5,"yyyy\". \"mm\". \"dd",1]' data-sheets-formula="=Terms!R[41]C[0]"><strong>2021. 11. 01</strong></td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Ex-rights base price"}'>Ex-rights base price</td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"[RP + (1st × 144.75%)] / (1 + 144.75%)"}' data-sheets-formula='="[RP + (1st × "&amp;R[9]C[0]*100&amp;"%"&amp;")] / (1 + "&amp;R[9]C[0]*100&amp;"%"&amp;")"'>[RP + (1st × 144.75%)] / (1 + 144.75%)</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":" - Reference price (RP)"}'>- Reference price (RP)</td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"Previous close"}'>Previous close</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":" - Reference date"}'>- Reference date</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":44503}' data-sheets-numberformat='[null,5,"yyyy\". \"mm\". \"dd",1]' data-sheets-formula="=Terms!R[39]C[0]">2021. 11. 03</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"2nd round"}'><strong>2nd round</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"RP × (1 - 20%)"}' data-sheets-formula='="RP × (1 - "&amp;(R[5]C[0]*100&amp;"%")&amp;")"'><strong>RP × (1 - 20%)</strong></td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":" - Reference price (RP)"}'><strong>- Reference price (RP)</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"Min [Close, Avg (Close, 1W VWAP)]"}'><strong>Min [Close, Avg (Close, 1W VWAP)]</strong></td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":" - Reference date"}'><strong>- Reference date</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":44536}' data-sheets-numberformat='[null,5,"yyyy\". \"mm\". \"dd",1]' data-sheets-formula="=Terms!R[40]C[0]"><strong>2021. 12. 06</strong></td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Final"}'>Final</td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"Max [Min (1st, 2nd), 3D VWAP × 60%]"}'>Max [Min (1st, 2nd), 3D VWAP × 60%]</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":" - Reference date"}'>- Reference date</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":44536}' data-sheets-numberformat='[null,5,"yyyy\". \"mm\". \"dd",1]' data-sheets-formula="=Terms!R[38]C[0]">2021. 12. 06</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Discount rate"}'><strong>Discount rate</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0.2}' data-sheets-numberformat='[null,3,"0.00%",1]'><strong>20.00%</strong></td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Capital increase rate"}'><strong>Capital increase rate</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":1.4475}' data-sheets-numberformat='[null,3,"0.00%",1]' data-sheets-formula="=LEFT(Terms!R[11]C[0],7)*100/100"><strong>144.75%</strong></td>
</tr>
<tr><td colspan="2" rowspan="1" data-sheets-value='{"1":2,"2":"Source: DART"}'>Source: DART</td></tr>
</tbody>
</table>

OverviewThis is again an offering to the stockholders with forfeited shares going to a public offering. A total of 115 million new shares are issued, and the tentative issuance price is set at ₩6,950. So, the total issuance size is ₩0.8T.





Overview

Target
A public offering of forfeited shares after offering to stockholders


Transferability
Renounceable


Offering volume
115,107,913


Preliminary price
₩6,950


Preliminary value
₩799,999,995,350


Oversubscription privilege
20.00%


Banker
KB, NH, KIS, Mirae Asset, Hana, Samsung, DB, Daishin, &amp; Hi


- Underwriting type
Standby

Source: DART

The tentative issuance price of ₩6,950 was calculated based on this formula: Average [1M VWAP, 1W VWAP, 1D Close], as of September 9, 2021.AllocationCurrently, the number of issued common stock is 79.5 million. So the capital increase rate is a whopping 144.75%, and the dilution per share is 59.14%. Since 20% is allocated to the ESOP, the allocation ratio to stockholders is 1.1589273.





Allocation

Offering volume
115,107,913


Capital increase
144.75%


Dilution
59.14%


Total shares after rights offer
194,629,850


ESOP allocation
23,021,582


- %
20.00%


Stockholder allocation
92,086,331


- %
80.00%


Per-share allocation
1.1589273

Source: DART

Schedule
This event's schedule has pretty much nothing unusual, except for the addition of the short-selling ban period. Oh, there is one more thing. This event takes an unusually long time. We have like one and half months gap from now to the first round pricing. It is probably to avoid schedule conflict with another major rights offering, Samsung Heavy Industries, whose payment date falls on November 5th.
So, Doosan Infracore's first-round pricing will be November 11. And ex-rights are on November 3rd, with the subscription rights trading period falling on November 24~30. The issuer will confirm the final price on December 6th, and the listing date is December 28th.






Schedule

BOD meeting
2021. 09. 10


Preliminary pricing
2021. 11. 01


Ex-rights date
2021. 11. 03


Record date
2021. 11. 04


Subscription rights trade beginning
2021. 11. 24


Subscription rights trade ending
2021. 11. 30


Final pricing
2021. 12. 06


Stockholder subscription
2021. 12. 08


Public subscription
2021. 12. 10


Payment
2021. 12. 16


Listing
2021. 12. 28



Short restriction begins
2021. 09. 13


Short restriction ends
2021. 12. 03

Source: DART

The short-selling ban period is from September 13 to December 3rd. Investors who short-sell during this period cannot participate in this capital increase unless they purchase the same quantity they shorted within this period.There seems to be a lot of confusion about this. According to the official documents of the FSC, it is not that only the quantity sold short during the short-selling ban period cannot participate in the rights issue. If we short-sell even one share during this period, we will be completely banned from participating in the rights issue. Then, the only exception is to buy more than the number of stocks short-sold during this period.PricingThe procedure for determining the offering price is as follows, again nothing unusual here. The discount rate of this event is 20%, which is the usual discount rate for local rights offerings. Just, this is a bit less aggressive than the 15% discount rate of Samsung Heavy Industries announced last month. Given the current market liquidity, it seems to me that Doosan Infracore could have gone for a little more aggressive discount, say 15%.





Pricing

1st round
RP × (1 - 20%) / [1 + (144.75% × 20%)]


- Reference price (RP)
Min [Close, Avg (Close, 1W VWAP, 1M VWAP)]


- Reference date
2021. 11. 01


Ex-rights base price
[RP + (1st × 144.75%)] / (1 + 144.75%)


- Reference price (RP)
Previous close


- Reference date
2021. 11. 03


2nd round
RP × (1 - 20%)


- Reference price (RP)
Min [Close, Avg (Close, 1W VWAP)]


- Reference date
2021. 12. 06


Final
Max [Min (1st, 2nd), 3D VWAP × 60%]


- Reference date
2021. 12. 06


Discount rate
20.00%


Capital increase rate
144.75%

Source: DART



Doosan Infracore Rights Offer Walkthrough & Thoughts on Arb Trading Setups

<h2>New benchmarks for domestic equity</h2><p>The National Pension Service has disclosed the following reform plan about the direct and consignment management benchmarks for domestic stocks.</p><section class="figure"><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/220/338/original/1.png?1627188167" class="editor-image img-responsive" data-smartkarma-image-id="220338"></figure></section><ul>
<li><strong>As for the direct management, the National Pension Plan plans to internally develop and use a new index called NPS-KR250 by adding additional 50 KOSPI stocks to the KOSPI 200 constituents.</strong></li>
<li><strong>Regarding the consignment management, the KOSPI + KOSDAQ 100 stocks are currently used as benchmarks. This benchmark is reorganized into KOSPI + KOSDAQ 150, with 50 KOSDAQ stocks added.</strong></li>
</ul><table class="table table-striped">
<colgroup>
<col width="100">
<col width="100">
<col width="100">
</colgroup>
<tbody>
<tr>
<td style="width: 248.688px;" data-sheets-value='{"1":2,"2":"Benchmark"}'>Benchmark</td>
<td style="width: 170.792px;" data-sheets-value='{"1":2,"2":"Previous"}'>Previous</td>
<td style="width: 326.521px;" data-sheets-value='{"1":2,"2":"New"}'>New</td>
</tr>
<tr>
<td style="width: 248.688px;" data-sheets-value='{"1":2,"2":"Internal (direct) management"}' data-sheets-formula="='KOSPI 200 Mirroring'!R[0]C[0]"><strong>Direct management</strong></td>
<td style="width: 170.792px;" data-sheets-value='{"1":2,"2":"KOSPI 200"}'>KOSPI 200</td>
<td style="width: 326.521px;" data-sheets-value='{"1":2,"2":"KOSPI 200 + KOSPI 50"}'><div><div><strong>NPS-KR250 = KOSPI 200 + additional 50 KOSPI stocks</strong></div></div></td>
</tr>
<tr>
<td style="width: 248.688px;" data-sheets-value='{"1":2,"2":"Global Equity"}'><strong>Consignment management</strong></td>
<td style="width: 170.792px;" data-sheets-value='{"1":2,"2":"KOSPI + KOSDAQ 100"}'>KOSPI + KOSDAQ 100</td>
<td style="width: 326.521px;" data-sheets-value='{"1":2,"2":"KOSPI + KOSDAQ 150"}'><div><div><strong>KOSPI + KOSDAQ 100 + additional 50 KOSDAQ stocks</strong></div></div></td>
</tr>
<tr><td colspan="3" rowspan="1" style="width: 746px;" data-sheets-value='{"1":2,"2":"Source: NPS"}'>Source: NPS</td></tr>
</tbody>
</table><h2>NPS size in the local stock market</h2><p>As of the end of April 2021, the National Pension Service has ₩883.6T in assets under management, of which ₩178T is invested in domestic stocks. Considering that the market capitalization of the KOSPI and KOSDAQ markets is currently around ₩2,800T, the national pension account for 6% of the Korean stock market.</p><table class="table table-striped">
<colgroup>
<col width="150">
<col width="80">
</colgroup>
<tbody>
<tr><td colspan="2" style="width: 364px;" data-sheets-value='{"1":2,"2":"Asset allocation status"}'>Asset allocation status as of the end-April, 2021</td></tr>
<tr>
<td style="width: 364px;" data-sheets-value='{"1":2,"2":"Domestic Equity"}'><strong>Domestic Equity</strong></td>
<td style="text-align: right; width: 382px;" data-sheets-value='{"1":3,"3":178014.6}' data-sheets-numberformat='{"1":2,"2":"₩#,##0.0B","3":1}'><strong>₩178.1T</strong></td>
</tr>
<tr>
<td style="width: 364px;" data-sheets-value='{"1":2,"2":"Global Equity"}'>Global Equity</td>
<td style="text-align: right; width: 382px;" data-sheets-value='{"1":3,"3":222407.5}' data-sheets-numberformat='{"1":2,"2":"₩#,##0.0B","3":1}'>₩222.4T</td>
</tr>
<tr>
<td style="width: 364px;" data-sheets-value='{"1":2,"2":"Domestic fixed income"}'>Domestic fixed income</td>
<td style="text-align: right; width: 382px;" data-sheets-value='{"1":3,"3":340524.2}' data-sheets-numberformat='{"1":2,"2":"₩#,##0.0B","3":1}'>₩340.5T</td>
</tr>
<tr>
<td style="width: 364px;" data-sheets-value='{"1":2,"2":"Global fixed income"}'>Global fixed income</td>
<td style="text-align: right; width: 382px;" data-sheets-value='{"1":3,"3":48826.4}' data-sheets-numberformat='{"1":2,"2":"₩#,##0.0B","3":1}'>₩48.8T</td>
</tr>
<tr>
<td style="width: 364px;" data-sheets-value='{"1":2,"2":"Alternatives"}'>Alternatives</td>
<td style="text-align: right; width: 382px;" data-sheets-value='{"1":3,"3":92768.2}' data-sheets-numberformat='{"1":2,"2":"₩#,##0.0B","3":1}'>₩92.8T</td>
</tr>
<tr><td colspan="2" style="width: 364px;">Source: NPS</td></tr>
</tbody>
</table><p>The proportion of local equity is 20.17%, down slightly from the end of last year, but still far exceeding the target of 16.80% this year.</p><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/220/339/original/image_74411821721627188510268.png?1627188511" class="editor-image img-responsive" data-smartkarma-image-id="220339"></figure><h2>Direct vs. consignment for local equity</h2><p>As of the end of April this year, 52.03% of the funds invested in domestic stocks are direct management, then divided into active (19.43%) and passive (32.60%). The proportion of consignment management is 47.97%, and all of it is operated as active.</p><table class="table table-striped">
<colgroup>
<col width="200">
<col width="100">
<col width="100">
<col width="100">
<col width="100">
<col width="100">
<col width="100">
</colgroup>
<tbody>
<tr>
<td data-sheets-value='{"1":2,"2":"Direct vs. consignment for local equity"}'>Direct vs. consignment for local equity</td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"2019 yearend"}'>2019 yearend</td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"Weight"}'>Weight</td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"2020 yearend"}'>2020 yearend</td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"Weight"}'>Weight</td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"April-end, 2021"}'><strong>April-end, 2021</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"Weight"}'><strong>Weight</strong></td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Direct management"}'>Direct management</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":71.61210000000001}' data-sheets-numberformat='{"1":2,"2":"₩#,##0.0T","3":1}'>₩71.6T</td>
<td style="text-align: right;">55.15%</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":93.37660000000001}' data-sheets-numberformat='{"1":2,"2":"₩#,##0.0T","3":1}'>₩93.4T</td>
<td style="text-align: right;">52.95%</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":92.6208}' data-sheets-numberformat='{"1":2,"2":"₩#,##0.0T","3":1}'><strong>₩92.6T</strong></td>
<td style="text-align: right;"><strong>52.03%</strong></td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":" - Active"}'>- Active</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":26.9769}' data-sheets-numberformat='{"1":2,"2":"₩#,##0.0T","3":1}'>₩27.0T</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0.20397795151753445}' data-sheets-formula="=R[0]C[-1]/R8C2">20.40%</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":35.0249}' data-sheets-numberformat='{"1":2,"2":"₩#,##0.0T","3":1}'>₩35.0T</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0.19824502419133916}' data-sheets-formula="=R[0]C[-1]/R8C4">19.82%</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":34.58823678}' data-sheets-numberformat='{"1":2,"2":"₩#,##0.0T","3":1}'><strong>₩34.6T</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0.1943}'><strong>19.43%</strong></td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":" - Passive"}'>- Passive</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":44.6352}' data-sheets-numberformat='{"1":2,"2":"₩#,##0.0T","3":1}'>₩44.6T</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0.3374960303658113}' data-sheets-formula="=R[0]C[-1]/R8C2">33.75%</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":58.351699999999994}' data-sheets-numberformat='{"1":2,"2":"₩#,##0.0T","3":1}'>₩58.4T</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0.3302774362840654}' data-sheets-formula="=R[0]C[-1]/R8C4">33.03%</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":58.032759600000006}' data-sheets-numberformat='{"1":2,"2":"₩#,##0.0T","3":1}'><strong>₩58.0T</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0.326}'><strong>32.60%</strong></td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Consignment management"}'>Consignment management</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":60.6419}' data-sheets-numberformat='{"1":2,"2":"₩#,##0.0T","3":1}'>₩60.6T</td>
<td style="text-align: right;">45.85%</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":83.2982}' data-sheets-numberformat='{"1":2,"2":"₩#,##0.0T","3":1}'>₩83.3T</td>
<td style="text-align: right;">47.15%</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":85.3938}' data-sheets-numberformat='{"1":2,"2":"₩#,##0.0T","3":1}'><strong>₩85.4T</strong></td>
<td style="text-align: right;"><strong>47.97%</strong></td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":" - Active"}'>- Active</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":60.6419}' data-sheets-numberformat='{"1":2,"2":"₩#,##0.0T","3":1}'>₩60.6T</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0.45852601811665433}' data-sheets-formula="=R[0]C[-1]/R8C2">45.85%</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":83.2982}' data-sheets-numberformat='{"1":2,"2":"₩#,##0.0T","3":1}'>₩83.3T</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0.4714775395245955}' data-sheets-formula="=R[0]C[-1]/R8C4">47.15%</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":85.3938}' data-sheets-numberformat='{"1":2,"2":"₩#,##0.0T","3":1}'><strong>₩85.4T</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0.4797011031679424}' data-sheets-formula="=R[0]C[-1]/R8C6"><strong>47.97%</strong></td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":" - Passive"}'>- Passive</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0}' data-sheets-numberformat='{"1":2,"2":"₩#,##0.0T","3":1}'>₩0.0T</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0}' data-sheets-formula="=R[0]C[-1]/R8C2">0.00%</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0}' data-sheets-numberformat='{"1":2,"2":"₩#,##0.0T","3":1}'>₩0.0T</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0}' data-sheets-formula="=R[0]C[-1]/R8C4">0.00%</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0}' data-sheets-numberformat='{"1":2,"2":"₩#,##0.0T","3":1}'><strong>₩0.0T</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0}' data-sheets-formula="=R[0]C[-1]/R8C6"><strong>0.00%</strong></td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Total domestic Equity"}'>Total domestic equity</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":132.254}' data-sheets-numberformat='{"1":2,"2":"₩#,##0.0T","3":1}'>₩132.3T</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":1}' data-sheets-formula="=sum(R[-5]C[0]:R[-1]C[0])">100.00%</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":176.67479999999998}' data-sheets-numberformat='{"1":2,"2":"₩#,##0.0T","3":1}'>₩176.7T</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":1}' data-sheets-formula="=sum(R[-5]C[0]:R[-1]C[0])">100.00%</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":178.0146}' data-sheets-numberformat='{"1":2,"2":"₩#,##0.0T","3":1}'><strong>₩178.0T</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":1.0000011031679423}' data-sheets-formula="=sum(R[-5]C[0]:R[-1]C[0])"><strong>100.00%</strong></td>
</tr>
<tr><td colspan="7" rowspan="1" data-sheets-value='{"1":2,"2":"Source: NPS"}'>Source: NPS</td></tr>
</tbody>
</table><p>The passively operated funds (32.60% of the total funds allocated to the domestic equity) are about ₩58T, and the benchmark is KOSPI 200. But not all amounts mechanically track the KOSPI 200. NPS employs various enhanced passive strategies, such as dividends, active quant, and factor model-based, in addition to conventional passive operations. To this end, NPS has developed and used various indices on its own since two years ago.</p>

New benchmarks for domestic equityThe National Pension Service has disclosed the following reform plan about the direct and consignment management benchmarks for domestic stocks.
As for the direct management, the National Pension Plan plans to internally develop and use a new index called NPS-KR250 by adding additional 50 KOSPI stocks to the KOSPI 200 constituents.
Regarding the consignment management, the KOSPI + KOSDAQ 100 stocks are currently used as benchmarks. This benchmark is reorganized into KOSPI + KOSDAQ 150, with 50 KOSDAQ stocks added.








Benchmark
Previous
New


Direct management
KOSPI 200
NPS-KR250 = KOSPI 200 + additional 50 KOSPI stocks


Consignment management
KOSPI + KOSDAQ 100
KOSPI + KOSDAQ 100 + additional 50 KOSDAQ stocks

Source: NPS

NPS size in the local stock marketAs of the end of April 2021, the National Pension Service has ₩883.6T in assets under management, of which ₩178T is invested in domestic stocks. Considering that the market capitalization of the KOSPI and KOSDAQ markets is currently around ₩2,800T, the national pension account for 6% of the Korean stock market.





Asset allocation status as of the end-April, 2021

Domestic Equity
₩178.1T


Global Equity
₩222.4T


Domestic fixed income
₩340.5T


Global fixed income
₩48.8T


Alternatives
₩92.8T

Source: NPS

The proportion of local equity is 20.17%, down slightly from the end of last year, but still far exceeding the target of 16.80% this year.Direct vs. consignment for local equityAs of the end of April this year, 52.03% of the funds invested in domestic stocks are direct management, then divided into active (19.43%) and passive (32.60%). The proportion of consignment management is 47.97%, and all of it is operated as active.











Direct vs. consignment for local equity
2019 yearend
Weight
2020 yearend
Weight
April-end, 2021
Weight


Direct management
₩71.6T
55.15%
₩93.4T
52.95%
₩92.6T
52.03%


- Active
₩27.0T
20.40%
₩35.0T
19.82%
₩34.6T
19.43%


- Passive
₩44.6T
33.75%
₩58.4T
33.03%
₩58.0T
32.60%


Consignment management
₩60.6T
45.85%
₩83.3T
47.15%
₩85.4T
47.97%


- Active
₩60.6T
45.85%
₩83.3T
47.15%
₩85.4T
47.97%


- Passive
₩0.0T
0.00%
₩0.0T
0.00%
₩0.0T
0.00%


Total domestic equity
₩132.3T
100.00%
₩176.7T
100.00%
₩178.0T
100.00%

Source: NPS

The passively operated funds (32.60% of the total funds allocated to the domestic equity) are about ₩58T, and the benchmark is KOSPI 200. But not all amounts mechanically track the KOSPI 200. NPS employs various enhanced passive strategies, such as dividends, active quant, and factor model-based, in addition to conventional passive operations. To this end, NPS has developed and used various indices on its own since two years ago.

NPS New Benchmarks for Local Stocks: NPS-KR250 (Direct) & KOSPI+KOSDAQ 150 (Consignment)

South Korea

Hyundai Construction Equipment Corporation manufactures construction equipment. Hyundai Construction Equipment Corporation is located in South Korea. Hyundai Construction Equipment Corporation operates independently of Hyundai Heavy Industries Co., Ltd. as of April 1, 2017.

Price Gauge
52-week Range	0.00 - 0.00
Market Cap (USDm)	0.00
P/E	0.00
Dividend (Yield)	0.00

Hyundai Construction Equipment (267270 KS)

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Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)