Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

<ul>
<li>On the 24th July, <a href="https://www.smartkarma.com/entities/sk-holdings-co-ltd" target="_blank" data-smartkarma-citation="entities:393:1" rel="noopener">SK Inc (034730 KS)</a> launched a voluntary public Tender Offer to acquire full control of ultra-fast EV charger play <a href="https://www.smartkarma.com/entities/sk-signet-inc" target="_blank" data-smartkarma-citation="entities:55377:1" rel="noopener">SK Signet (260870 KS)</a>.</li>
<li>SK Inc is offering ₩8,200/share, a 26.2% premium to undisturbed. SK Inc, which owns 74.9% of SK Signet, is making the Offer after SK Signet touched a multi-year low. </li>
<li>There is no minimum tendering condition. SK Inc is taking advantage of an illiquid KONEX stock, three years of losses, plus capital-impairment concerns. It is what it is.</li>
</ul>


On the 24th July, SK Inc (034730 KS) launched a voluntary public Tender Offer to acquire full control of ultra-fast EV charger play SK Signet (260870 KS).
SK Inc is offering ₩8,200/share, a 26.2% premium to undisturbed. SK Inc, which owns 74.9% of SK Signet, is making the Offer after SK Signet touched a multi-year low. 
There is no minimum tendering condition. SK Inc is taking advantage of an illiquid KONEX stock, three years of losses, plus capital-impairment concerns. It is what it is.


SK Signet (260870 KS): SK Inc (034730 KS)'s Low-Balled Offer

Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

Douglas Research Advisory

<ul>
<li>On 24 July, SK Inc (034730 KS) launched a tender offer for common shares of SK Signet (260870 KS), a subsidiary listed on the KONEX market. </li>
<li>The tender offer is for a 46.5% stake in SK Signet. Post a successful tender offer, SK Inc plans to delist SK Signet.</li>
<li>Overall, I am negative on this tender offer and on SK Signet. I think the more realistic scenario is for investors to tender about 10-15% of outstanding shares. </li>
</ul>


On 24 July, SK Inc (034730 KS) launched a tender offer for common shares of SK Signet (260870 KS), a subsidiary listed on the KONEX market. 
The tender offer is for a 46.5% stake in SK Signet. Post a successful tender offer, SK Inc plans to delist SK Signet.
Overall, I am negative on this tender offer and on SK Signet. I think the more realistic scenario is for investors to tender about 10-15% of outstanding shares. 


A Tender Offer of a 46.5% Stake in SK Signet by SK Inc

Asia Pac ECM and Index Rebal, Shenton Research

Ke Yan, CFA, FRM

Asia Pac ECM and Index Rebal

Asia Pac IPO & Placement Research, China Biotech

Shenton Research

Shenton Research is an independent Asia Pacific equity specialist. Our quantitative research covers index rebalancing flows, alongside exchange data analytics accross Asia Pacific. On the equity capital markets side, we focus on Asia Pacific ECM, especially biotech and TMT. Our lead analyst is frequently cited by international media.

Quantitative Analysis

<ul>
<li>We analyzed the changes in foreign holdings of KRX stocks as of Jul 24th. The aggregated holding was USD1,525.1bn.</li>
<li>We estimate that foreign flows to be inflows of USD3,927mln. 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 Samsung Electronics, SK Hynix, SKSQUARE, SamsungElecMech, SKTelecom.</li>
</ul>


We analyzed the changes in foreign holdings of KRX stocks as of Jul 24th. The aggregated holding was USD1,525.1bn.
We estimate that foreign flows to be inflows of USD3,927mln. 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 Samsung Electronics, SK Hynix, SKSQUARE, SamsungElecMech, SKTelecom.


KRX Foreign Holding Weekly (Jul 24th): Samsung Electronics, SK Hynix, SKSQUARE, SamsungElecMech

Cross Asset Strategy

<ul>
<li>In this insight, we provide a ranking of all the KOSPI 200 stocks, in terms of their treasury shares as a percentage of total outstanding shares.</li>
<li>We highlight 29 companies whose treasury shares/outstanding shares are more than 10%. These companies' values could be improved significantly if treasury shares are cancelled. </li>
<li>The potential implementation of compulsory tender offer in the next 2-3 years is likely to put increased focus on Korean companies with especially large levels of treasury shares/total outstanding shares. </li>
</ul>


In this insight, we provide a ranking of all the KOSPI 200 stocks, in terms of their treasury shares as a percentage of total outstanding shares.
We highlight 29 companies whose treasury shares/outstanding shares are more than 10%. These companies' values could be improved significantly if treasury shares are cancelled. 
The potential implementation of compulsory tender offer in the next 2-3 years is likely to put increased focus on Korean companies with especially large levels of treasury shares/total outstanding shares. 


Treasury Shares as % of Total Outstanding Shares: Screening for Potential Activist Candidates

<ul>
<li>There are two key, positive catalysts for major Korean holding companies that could result in these stocks outperforming the market in the coming months.</li>
<li>The first main catalyst is that the two leading presidential candidates are both have campaign pledges to protect minority shareholders when conglomerates conduct physical division spin-offs/splits. </li>
<li>The second key catalyst is the shift from growth to value stocks amid heightened market volatility.</li>
</ul>


There are two key, positive catalysts for major Korean holding companies that could result in these stocks outperforming the market in the coming months.
The first main catalyst is that the two leading presidential candidates are both have campaign pledges to protect minority shareholders when conglomerates conduct physical division spin-offs/splits. 
The second key catalyst is the shift from growth to value stocks amid heightened market volatility.


Two Key Positive Catalysts for Major Korean Holding Companies

South Korea

SK Holdings Co., Ltd. is a holdings company that is engaged in various industries including energy, chemicals, information technology, semiconductors, marketing, and services businesses in South Korea and internationally.

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SK Inc (034730 KS)

SK Signet (260870 KS): SK Inc (034730 KS)'s Low-Balled Offer

Trading at a 0.8%/112% gross/annualised spread, inclusive of a 0.35% tendering fee. If illiquid arbs are your bag, and not it, I might get exposure...

David Blennerhassett

A Tender Offer of a 46.5% Stake in SK Signet by SK Inc

On 24 July, SK Inc (034730 KS) launched a tender offer for common shares of SK Signet (260870 KS), a subsidiary listed on the KONEX market.

Douglas Kim

KRX Foreign Holding Weekly (Jul 24th): Samsung Electronics, SK Hynix, SKSQUARE, SamsungElecMech

We analyzed KRX foreign holding data for the past week and highlighted foreign holding changes in Samsung Electronics, SK Hynix, SKSQUARE,...

Ke Yan, CFA, FRM

Treasury Shares as % of Total Outstanding Shares: Screening for Potential Activist Candidates

In this insight, we provide a ranking of all the KOSPI 200 stocks, in terms of their treasury shares as a percentage of total outstanding shares.

Douglas Kim

Two Key Positive Catalysts for Major Korean Holding Companies

There are two key, positive catalysts for major Korean holding companies that could result in these stocks outperforming the market in the coming...

Douglas Kim

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