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>Starting next week, the tax subcommittee is set to hash out the 25% proposal, and with the opposition unlikely to block it, the 25% top rate is basically locked in.</li>
<li>The street’s treating 30% payout as base case, betting on more upside. The committee may pick it up next week, with headlines likely hitting the KRX tape fast.</li>
<li>Locals are already chasing 30%+ payout, deep-value names, with gov’t aiming for a Taiwan-style re-rating. If dividend-tax headlines drop next week, these screened names could rip.</li>
</ul>


Starting next week, the tax subcommittee is set to hash out the 25% proposal, and with the opposition unlikely to block it, the 25% top rate is basically locked in.
The street’s treating 30% payout as base case, betting on more upside. The committee may pick it up next week, with headlines likely hitting the KRX tape fast.
Locals are already chasing 30%+ payout, deep-value names, with gov’t aiming for a Taiwan-style re-rating. If dividend-tax headlines drop next week, these screened names could rip.


Korea's 25% Dividend Tax Basically Locked In, Market Now Trading the 30% Payout Angle

Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

Douglas Research Advisory

Equity Bottom-Up

<ul>
<li>Our updated NAV valuation of LG Corp suggests implied market cap of 17.2 trillion won or target price of 111,605 won per share, representing 29.3% higher than current levels.</li>
<li>LG Corp's investment stakes in LG Chem and LG Electronics are worth 15.7 trillion won representing 119% of LG Corp's entire market cap.</li>
<li>Lower taxes on dividends could accelerate the capital allocation to companies with higher dividend yields/payouts such as LG Corp.</li>
</ul>


Our updated NAV valuation of LG Corp suggests implied market cap of 17.2 trillion won or target price of 111,605 won per share, representing 29.3% higher than current levels.
LG Corp's investment stakes in LG Chem and LG Electronics are worth 15.7 trillion won representing 119% of LG Corp's entire market cap.
Lower taxes on dividends could accelerate the capital allocation to companies with higher dividend yields/payouts such as LG Corp.


LG Corp: NAV Analysis Suggests a 29% Upside, Likely to Catch Up to LG Chem

<ul>
<li>On 23 December, Doosan Corp (000150 KS) announced that it plans to sell an 18.05% stake (11.7 million shares) in Doosan Robotics (454910 KS) for 948 billion won.</li>
<li>It appears that the main purpose of sale is to secure adequate capital for Doosan Corp to acquire SK Siltron which is up for sale.</li>
<li>SK Siltron's corporate value is estimated at around 5 trillion won, so the transaction size for the 70.6% stake up for sale is expected to 3-4 trillion won+.</li>
</ul>


On 23 December, Doosan Corp (000150 KS) announced that it plans to sell an 18.05% stake (11.7 million shares) in Doosan Robotics (454910 KS) for 948 billion won.
It appears that the main purpose of sale is to secure adequate capital for Doosan Corp to acquire SK Siltron which is up for sale.
SK Siltron's corporate value is estimated at around 5 trillion won, so the transaction size for the 70.6% stake up for sale is expected to 3-4 trillion won+.


Doosan Corp To Sell 18.05% Stake in Doosan Robotics for 948 Billion Won

<ul>
<li>“In the next 50 years... we won’t give a thought to selling those [Japanese trading companies].... Japan’s record has been extraordinary.” (Warren Buffett)</li>
<li>In this insight, we provide detailed comparisons of the five major Japanese trading companies and five major Korean holdcos/trading companies. </li>
<li>Japanese trading companies have higher points for market cap, ROE, DPS increase, and shares cancellation. Korean holdcos have higher points for dividend yield, debt/equity ratio, ROIC, and valuations. </li>
</ul>


“In the next 50 years... we won’t give a thought to selling those [Japanese trading companies].... Japan’s record has been extraordinary.” (Warren Buffett)
In this insight, we provide detailed comparisons of the five major Japanese trading companies and five major Korean holdcos/trading companies. 
Japanese trading companies have higher points for market cap, ROE, DPS increase, and shares cancellation. Korean holdcos have higher points for dividend yield, debt/equity ratio, ROIC, and valuations. 


Shareholder Returns of Japanese Trading Companies Invested By Buffett Vs Top Korean Trading/Holdcos

<ul>
<li>I’m focusing on the price action of LG Corp when LG CNS enters the KOSPI 200 IT sector, causing LG Corp to be removed from the index.</li>
<li>With LG Corp's 6% weight, its removal could trigger ETF rebalancing (TIGER), leading to an outflow exceeding twice the usual daily trading volume.</li>
<li>If LG CNS misses Fast Entry, it’ll enter in December, not June. We’ll time our short position on LG Corp to align with passive outflows during that window.</li>
</ul>


I’m focusing on the price action of LG Corp when LG CNS enters the KOSPI 200 IT sector, causing LG Corp to be removed from the index.
With LG Corp's 6% weight, its removal could trigger ETF rebalancing (TIGER), leading to an outflow exceeding twice the usual daily trading volume.
If LG CNS misses Fast Entry, it’ll enter in December, not June. We’ll time our short position on LG Corp to align with passive outflows during that window.


The Unexpected Passive Trade from the LG CNS IPO: Short LG Corp

South Korea

LG Corp. is a holding company, which operates subsidiaries including LG Electronics, LG Household & Health Care, LG Chem Ltd., and Dacom Corp. The Company's main business areas are electronics, chemicals, and household products manufacturing and telecommunications services.

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LG Corp (003550 KS)

Korea's 25% Dividend Tax Basically Locked In, Market Now Trading the 30% Payout Angle

Both parties locked in a new divvy-tax top band: a KRW 5bn+ lane getting hit with a 30% take-rate, though the real cap is basically 25% since...

Sanghyun Park

LG Corp: NAV Analysis Suggests a 29% Upside, Likely to Catch Up to LG Chem

Our updated NAV valuation of LG Corp suggests implied market cap of 17.2 trillion won or target price of 111,605 won per share, representing 29.3%...

Douglas Kim

Doosan Corp To Sell 18.05% Stake in Doosan Robotics for 948 Billion Won

Doosan Corp (000150 KS) announced that it plans to sell an 18.05% stake (11.7 million shares) in Doosan Robotics (454910 KS) for 948 billion won.

Douglas Kim

Shareholder Returns of Japanese Trading Companies Invested By Buffett Vs Top Korean Trading/Holdcos

In this insight, we provide detailed comparisons of the five major Japanese trading companies and five major Korean holdcos/trading companies.

Douglas Kim

The Unexpected Passive Trade from the LG CNS IPO: Short LG Corp

This post dives into the unexpected passive trading play triggered by the LG CNS IPO, highlighting the potential short opportunity on LG Corp as a...

Sanghyun Park

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