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>Korea's majority party plans to amend the Capital Markets Act to base listed companies' merger ratios on intrinsic rather than market value, dubbed the "Doosan Bobcat Prevention Law."</li>
<li>Other conglomerates, like Hanwha and Hyundai Motor Group, may execute mergers just before this amendment.</li>
<li>We should expect shareholder-favorable merger ratios. So, we should position in such companies before announcements, ideally just before the new amendment's enforcement.</li>
</ul>


Korea's majority party plans to amend the Capital Markets Act to base listed companies' merger ratios on intrinsic rather than market value, dubbed the "Doosan Bobcat Prevention Law."
Other conglomerates, like Hanwha and Hyundai Motor Group, may execute mergers just before this amendment.
We should expect shareholder-favorable merger ratios. So, we should position in such companies before announcements, ideally just before the new amendment's enforcement.


Trading Opportunities Arising from the Enactment of The "Doosan Bobcat Prevention Law"

Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

Douglas Research Advisory

Equity Bottom-Up

<ul>
<li>In this insight, we highlight the recent pricing gap divergences of the major Korean holdcos and opcos which could provide trading opportunities in 3Q 2024.</li>
<li>Of the 38 pair trades, 21 of them involved holdcos outperforming opcos in the past six months, suggesting increased capital allocation to Korean holdcos relative to their opcos.</li>
<li>These pairs could generate trading opportunities in terms of their pricing gaps closing reversal (Doosan Corp vs. Doosan Enerbility; Hyundai Mobis vs Hyundai Motor).</li>
</ul>


In this insight, we highlight the recent pricing gap divergences of the major Korean holdcos and opcos which could provide trading opportunities in 3Q 2024.
Of the 38 pair trades, 21 of them involved holdcos outperforming opcos in the past six months, suggesting increased capital allocation to Korean holdcos relative to their opcos.
These pairs could generate trading opportunities in terms of their pricing gaps closing reversal (Doosan Corp vs. Doosan Enerbility; Hyundai Mobis vs Hyundai Motor).


Korean Holdcos Vs Opcos Gap Trading Opportunities in 3Q 2024

Cross Asset Strategy

<ul>
<li>In the past several days, the South Korean Presidential Office has announced that it is pushing for a comprehensive inheritance tax reforms.</li>
<li>Although the Presidential Office mentioned it is pushing to reduce highest inheritance tax rates from 60% to 30%, the more likely scenario is to reduce this rate to about 50%.</li>
<li>The lump sum personal deduction of 500 million won or inheritance tax which has been maintained for nearly 27 years could be doubled to about 1 billion won or more. </li>
</ul>


In the past several days, the South Korean Presidential Office has announced that it is pushing for a comprehensive inheritance tax reforms.
Although the Presidential Office mentioned it is pushing to reduce highest inheritance tax rates from 60% to 30%, the more likely scenario is to reduce this rate to about 50%.
The lump sum personal deduction of 500 million won or inheritance tax which has been maintained for nearly 27 years could be doubled to about 1 billion won or more. 


Korean Government Is Pushing for a Comprehensive Inheritance Reforms - Will They Pass or Fail?

<ul>
<li>Early this morning, rumors spread that Hyundai’s honorary chairman Chung Mong-koo was hospitalized and died, causing stock prices to surge, but Hyundai denied this news.</li>
<li>Control of Hyundai hinges on increasing the stake in Mobis. Chung Eui-sun aims to keep Mobis's stock low, but Chung Mong-koo’s health complicates timing and strategy.</li>
<li>Mobis's trading point depends on Chung Mong-koo's health. Three scenarios: he's healthy, critically ill, or deceased. Current rumors' price impacts are unlikely to subside soon.</li>
</ul>


Early this morning, rumors spread that Hyundai’s honorary chairman Chung Mong-koo was hospitalized and died, causing stock prices to surge, but Hyundai denied this news.
Control of Hyundai hinges on increasing the stake in Mobis. Chung Eui-sun aims to keep Mobis's stock low, but Chung Mong-koo’s health complicates timing and strategy.
Mobis's trading point depends on Chung Mong-koo's health. Three scenarios: he's healthy, critically ill, or deceased. Current rumors' price impacts are unlikely to subside soon.


The Latest on the Rumors Surrounding the Death of Chung Mong-Koo of Hyundai Motor Group

<ul>
<li>Hyundai Motor Group has become the largest shareholder of KT Corp, as the National Pension Service has recently reduced its stake in KT from 8.53% previously to 7.51%. </li>
<li>Despite this recent change in the largest shareholder status of KT Corp, this requires the approval from the Korean Ministry of Science and ICT. </li>
<li>Although the Hyundai Motor Group (HMG) has become the largest owner in KT Corp, the most likely scenario is for HMG to remain a passive investor in KT.</li>
</ul>


Hyundai Motor Group has become the largest shareholder of KT Corp, as the National Pension Service has recently reduced its stake in KT from 8.53% previously to 7.51%. 
Despite this recent change in the largest shareholder status of KT Corp, this requires the approval from the Korean Ministry of Science and ICT. 
Although the Hyundai Motor Group (HMG) has become the largest owner in KT Corp, the most likely scenario is for HMG to remain a passive investor in KT.


Hyundai Motor Group Becomes the Largest Shareholder of KT Corp

South Korea

Hyundai Mobis Co., Ltd. manufactures and markets automotive parts and equipment, such as  automotive service components, modules, and systems. The Company also contractsenvironmental projects, including sewage treatment plant and industrial waste water treatment plant construction.

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Hyundai Mobis (012330 KS)

Trading Opportunities Arising from the Enactment of The "Doosan Bobcat Prevention Law"

This post explores trading opportunities expected from the upcoming "Doosan Bobcat Prevention Law," as labeled by the local market.

Sanghyun Park

Korean Holdcos Vs Opcos Gap Trading Opportunities in 3Q 2024

In this insight, we highlight the recent pricing gap divergences of the major Korean holdcos and opcos which could provide trading opportunities in...

Douglas Kim

Korean Government Is Pushing for a Comprehensive Inheritance Reforms - Will They Pass or Fail?

Although the South Korean Presidential Office mentioned it is pushing to reduce highest inheritance tax rates from 60% to 30%, the more likely...

Douglas Kim

The Latest on the Rumors Surrounding the Death of Chung Mong-Koo of Hyundai Motor Group

This post offers the latest update on market rumors concerning the passing of Chung Mong-koo, chairman of Hyundai Motor Group.

Sanghyun Park

Hyundai Motor Group Becomes the Largest Shareholder of KT Corp

On 9 May, KT Corp (030200 KS) announced that it will cancel 5.1 million treasury shares (about 2% of outstanding shares), representing...

Douglas Kim

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