Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

Equity Capital Markets

<ul>
<li>Our base case valuation of Oasis Corp is EV of 605 billion won, implied market cap of 788 billion won, and target price of 24,847 won per share. </li>
<li>This is 18.5% lower than the low end of the IPO price range. Given the lack of upside, we have a Negative View of the Oasis Corp IPO.</li>
<li>The end of COVID pandemic and relaxed regulations for hypermarkets in early morning delivery services are likely to have greater negative impact on Oasis Corp. </li>
</ul>


Our base case valuation of Oasis Corp is EV of 605 billion won, implied market cap of 788 billion won, and target price of 24,847 won per share. 
This is 18.5% lower than the low end of the IPO price range. Given the lack of upside, we have a Negative View of the Oasis Corp IPO.
The end of COVID pandemic and relaxed regulations for hypermarkets in early morning delivery services are likely to have greater negative impact on Oasis Corp. 


Equity Bottom-Up

<ul>
<li>It was announced today that Hong Jung-Guk (eldest son) received a 10.5% stake in BGF Co. (10 million shares) from his father Hong Suk-Jo. </li>
<li>Hong Jung-Hyeok's (second son) stake in BGF also increased from 0.03% to 10.5%.</li>
<li>We like a pair trade between BGF Co (go long) and BGF Retail (go short). The combination of price momentum and valuation favor BGF vs BGF Retail. </li>
</ul>


It was announced today that Hong Jung-Guk (eldest son) received a 10.5% stake in BGF Co. (10 million shares) from his father Hong Suk-Jo. 
Hong Jung-Hyeok's (second son) stake in BGF also increased from 0.03% to 10.5%.
We like a pair trade between BGF Co (go long) and BGF Retail (go short). The combination of price momentum and valuation favor BGF vs BGF Retail. 


BGF & BGF Retail Pair Trade: Two Sons of BGF Chairman Hong Receive a Combined 20.9% Stake in BGF

<ul>
<li>In this insight, we highlight the pricing gap divergence of the major Korean holdcos and opcos amid market carnage.</li>
<li>In general, more holdcos/quasi-holdcos have been outperforming the opcos in the past year, as compared to the previous years as more investors seek value-oriented, deep NAV discount stocks.</li>
<li>We highlight 26 pair trades that involve Korean holdcos and opcos.</li>
</ul>


In this insight, we highlight the pricing gap divergence of the major Korean holdcos and opcos amid market carnage.
In general, more holdcos/quasi-holdcos have been outperforming the opcos in the past year, as compared to the previous years as more investors seek value-oriented, deep NAV discount stocks.
We highlight 26 pair trades that involve Korean holdcos and opcos.


Korean Holdcos Vs Opcos Gap Spreads Opportunities Amid Market Carnage

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>The results are pretty much in line with the predictions, except for Hanwha Aerospace which made it to LARGE instead of Hyundai Marine &amp; Fire Insurance.</li>
<li>Assuming that ten names, including Hyundai Marine, were traded in a LONG/SHORT basket with equal weight, the yield from August 17 to the last close would have been 4.6%.</li>
<li>I would still approach with an equal-weighted basket trading until this Thursday. This flow trading usually loses its effect rapidly after rebalancing. So, I wouldn't carry it beyond this Thursday.</li>
</ul>


The results are pretty much in line with the predictions, except for Hanwha Aerospace which made it to LARGE instead of Hyundai Marine &amp; Fire Insurance.
Assuming that ten names, including Hyundai Marine, were traded in a LONG/SHORT basket with equal weight, the yield from August 17 to the last close would have been 4.6%.
I would still approach with an equal-weighted basket trading until this Thursday. This flow trading usually loses its effect rapidly after rebalancing. So, I wouldn't carry it beyond this Thursday.


KOSPI Size Index Migration: Official Results & Trading Approach Towards Implementation

GS Engineering & Construction / Event-Driven

GS Engineering & Construction (006360 KS)

<ul>
<li>Eight stocks are highly likely to migrate with a substantial passive flow. Compared to the early phase of the screening period, GS Engineering &amp; Construction newly made the list.</li>
<li>Most names should show a quite substantial passive flow (x ADTV). In particular, KCC Corp and BGF Retail deserve our special attention for their expected passive impact.</li>
<li>The flow occurs on high potential migration stocks about 20 days before the effective date. So I would start building Long/Short Basket positions with the above eight names around mid-August.</li>
</ul>


Eight stocks are highly likely to migrate with a substantial passive flow. Compared to the early phase of the screening period, GS Engineering &amp; Construction newly made the list.
Most names should show a quite substantial passive flow (x ADTV). In particular, KCC Corp and BGF Retail deserve our special attention for their expected passive impact.
The flow occurs on high potential migration stocks about 20 days before the effective date. So I would start building Long/Short Basket positions with the above eight names around mid-August.


KOSPI Size Index Series Rebalancing in September: Eight Strong Targets

South Korea

BGF Retail Co., Ltd. operates convenience stores. The Company retails delicatessen, sweets, snacks, beverages, tobacco, and other related products. BGF Retail markets its products throughout South Korea.

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

BGF retail (282330 KS)

Oasis Corp IPO Valuation Analysis

Our base case valuation of Oasis Corp is implied market cap of 788 billion won, and target price of 24,847 won per share, which is 18.5% lower than...

Douglas Kim

BGF & BGF Retail Pair Trade: Two Sons of BGF Chairman Hong Receive a Combined 20.9% Stake in BGF

Two sons of Chairman Hong received a combined 20.9% stake in BGF. We like a pair trade between BGF Co (go long) and BGF Retail (go short). Price...

Douglas Kim

Korean Holdcos Vs Opcos Gap Spreads Opportunities Amid Market Carnage

In this insight, we highlight the pricing gap divergence of the major Korean holdcos and opcos amid market carnage. We highlight 26 pair trades...

Douglas Kim

KOSPI Size Index Migration: Official Results & Trading Approach Towards Implementation

This post looks at the official results of the KOSPI Size Index migration in the September rebalancing and discusses the noteworthy flow patterns...

Sanghyun Park

KOSPI Size Index Series Rebalancing in September: Eight Strong Targets

This post filters eight strong targets for long/short basket trading ahead of the September KOSPI Size Index Series rebalancing.

Sanghyun Park

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)