Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

Event-Driven

<ul>
<li>Samsung Asset Management announced today that it will be launching the first Corporate Value Up ETF on 27 February. It will focus on low PBR and positive cash flow generators.</li>
<li>This ETF which will be called KoAct Dividend Growth Active ETF. There are about 45 stocks that are expected to be included in this ETF. </li>
<li>Among the 92 companies in KOSPI 200 that are trading at less than 1x PBR, those that generate positive free cash flow are outperforming significantly. </li>
</ul>


Samsung Asset Management announced today that it will be launching the first Corporate Value Up ETF on 27 February. It will focus on low PBR and positive cash flow generators.
This ETF which will be called KoAct Dividend Growth Active ETF. There are about 45 stocks that are expected to be included in this ETF. 
Among the 92 companies in KOSPI 200 that are trading at less than 1x PBR, those that generate positive free cash flow are outperforming significantly. 


The Launch of 1st Corporate Value Up ETF on 27 February - Focus on Low PBR and Cash Flow

<ul>
<li>On 14 December, it was reported that US based Whitebox Advisors has started an activist campaign on Samsung C&amp;T (028260 KS).</li>
<li>Whitebox estimates that Samsung C&amp;T's stock price is about 68% undervalued compared to its NAV.</li>
<li>In addition to Whitebox, there are two other foreign investors including Palliser Capital and City of London Investment Management that have requested Samsung C&amp;T to improve corporate governance.</li>
</ul>


On 14 December, it was reported that US based Whitebox Advisors has started an activist campaign on Samsung C&amp;T (028260 KS).
Whitebox estimates that Samsung C&amp;T's stock price is about 68% undervalued compared to its NAV.
In addition to Whitebox, there are two other foreign investors including Palliser Capital and City of London Investment Management that have requested Samsung C&amp;T to improve corporate governance.


<ul>
<li>We discuss the surging share cancellations in Korea in 2024. As of 8 February 2024, Korean companies have announced 3.3 trillion won worth of shares to be completed this year. </li>
<li>At current blistering pace, it is likely that the share cancellations in Korea could jump at least 100% YoY to jump more than 10 trillion won in 2024. </li>
<li>Some of the leading Korean companies including Samsung C&amp;T and KT&amp;G that have announced share cancellations this year continue to outperform the market on average. </li>
</ul>


We discuss the surging share cancellations in Korea in 2024. As of 8 February 2024, Korean companies have announced 3.3 trillion won worth of shares to be completed this year. 
At current blistering pace, it is likely that the share cancellations in Korea could jump at least 100% YoY to jump more than 10 trillion won in 2024. 
Some of the leading Korean companies including Samsung C&amp;T and KT&amp;G that have announced share cancellations this year continue to outperform the market on average. 


Korea: Surging Share Cancellations in 2024

Korea / Special Sits, Pairs, Index Rebalancing, Clepsydra Capital

Sanghyun Park

Korea / Special Sits, Pairs, Index Rebalancing

Clepsydra Capital

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

<ul>
<li>Today, the Financial Services Commission of Korea announced treasury stock rule improvements: (1) No new share allocation to treasury shares during equity spinoffs. (2) Strengthened disclosure requirements.</li>
<li>No mandatory cancellation may disappoint the market. Nevertheless, the decision not to issue new shares during equity spinoffs amplifies the volume targeted during subsequent tender offers, potentially intensifying price impacts.</li>
<li>Also, enhanced disclosure for treasury stocks, especially for companies with over 10% holdings, may trigger significant trading events based on pre-information about holdings and disposals.</li>
</ul>


Today, the Financial Services Commission of Korea announced treasury stock rule improvements: (1) No new share allocation to treasury shares during equity spinoffs. (2) Strengthened disclosure requirements.
No mandatory cancellation may disappoint the market. Nevertheless, the decision not to issue new shares during equity spinoffs amplifies the volume targeted during subsequent tender offers, potentially intensifying price impacts.
Also, enhanced disclosure for treasury stocks, especially for companies with over 10% holdings, may trigger significant trading events based on pre-information about holdings and disposals.


Korean FSC's Official Disclosure of New Treasury Share Regulations & Potential Trading Dynamics

<ul>
<li>The total amount of share cancellations by Korean companies increased sharply in the past three years. Share cancellations of 6.1 trillion won in 2023 represented a 140% increase from 2021.</li>
<li>Although the total amount of share cancellations of 6.1 trillion won in 2023 seems fairly large, this represented only 0.24% of total market caps of Korean companies. </li>
<li>We also provide a list of seven Korean companies that have been targeted by activist investors  to cancel more shares and improve corporate governance. </li>
</ul>


The total amount of share cancellations by Korean companies increased sharply in the past three years. Share cancellations of 6.1 trillion won in 2023 represented a 140% increase from 2021.
Although the total amount of share cancellations of 6.1 trillion won in 2023 seems fairly large, this represented only 0.24% of total market caps of Korean companies. 
We also provide a list of seven Korean companies that have been targeted by activist investors  to cancel more shares and improve corporate governance. 


A 140% Increase in Share Cancellations by Korean Companies from 2021 to 2023

South Korea

Samsung C&T Corporation conducts diversified business support services and resort operation activities. The Company offers a range of services in areas including clothing retail, construction, energy, real estate, food service, and resort accommodations. Samsung C&T also operates a resort with amusement rides, a zoo, water park, golf clubs, and restaurants.

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Samsung C&T (028260 KS)

The Launch of 1st Corporate Value Up ETF on 27 February - Focus on Low PBR and Cash Flow

Samsung Asset Management announced today that it will be launching the first Corporate Value Up ETF on 27 February. This ETF which will be called...

Douglas Kim

Whitebox Goes Activist on Samsung C&T

On 14 December, it was reported that US based Whitebox Advisors has started an activist campaign on Samsung C&T (028260 KS).

Douglas Kim

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

The Launch of 1st Corporate Value Up ETF on 27 February - Focus on Low PBR and Cash Flow

Samsung Asset Management announced today that it will be launching the first Corporate Value Up ETF on 27 February. This ETF which will be called...

Douglas Kim

Whitebox Goes Activist on Samsung C&T

On 14 December, it was reported that US based Whitebox Advisors has started an activist campaign on Samsung C&T (028260 KS).

Douglas Kim

Korea: Surging Share Cancellations in 2024

We discuss the surging share cancellations in Korea in 2024. As of 8 February 2024, Korean companies have announced 3.3 trillion won worth of...

Douglas Kim

Korean FSC's Official Disclosure of New Treasury Share Regulations & Potential Trading Dynamics

This post highlights key aspects of the newly disclosed treasury share regulations by the Korean FSC today and their influence on trading dynamics.

Sanghyun Park

A 140% Increase in Share Cancellations by Korean Companies from 2021 to 2023

The total amount of share cancellations by Korean companies increased sharply in the past three years. Share cancellations of 6.1 trillion won in...

Douglas Kim