Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

Equity Bottom-Up

<ul>
<li>In this insight, we highlight the pricing gap divergences of the major Korean holdcos and opcos in 2Q 2023.</li>
<li>Of the 38 pair trades, 21 of them involved holdcos outperforming opcos YTD and 17 of them involved opcos outperforming holdcos in the same period.</li>
<li>We highlight 38 pair trades that involve Korean holdcos and opcos.</li>
</ul>


In this insight, we highlight the pricing gap divergences of the major Korean holdcos and opcos in 2Q 2023.
Of the 38 pair trades, 21 of them involved holdcos outperforming opcos YTD and 17 of them involved opcos outperforming holdcos in the same period.
We highlight 38 pair trades that involve Korean holdcos and opcos.


Korean Holdcos Vs Opcos Gap Trading Opportunities in 2Q 2023

Event-Driven

<ul>
<li>In this insight, we discuss another very interesting situation brewing which is the potential family feud at the DB Group.</li>
<li>One of the scenarios of the Kim family at DB Group is a sibling conflict between Nam-Ho Kim (Chairman) and his sister Ju-Won Kim.</li>
<li>Our base case valuation of DB Inc is target market cap of 488 billion won or 2,428 won per share, which is 36% higher than current price.</li>
</ul>


In this insight, we discuss another very interesting situation brewing which is the potential family feud at the DB Group.
One of the scenarios of the Kim family at DB Group is a sibling conflict between Nam-Ho Kim (Chairman) and his sister Ju-Won Kim.
Our base case valuation of DB Inc is target market cap of 488 billion won or 2,428 won per share, which is 36% higher than current price.


DB Group: Kim Family Feud Leading to a Potential M&A Fight?

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.

<ul>
<li>A rather unusual price movement came out on February 20 for HLB. On the first trading day after the board of directors' decision, the price reached the upper daily limit.</li>
<li>The short covering got to a temporarily excessive level in the process of securing appraisal rights should be the reason that led to the upper limit.</li>
<li>We should design a trading setup targeting excessive short covering-triggered price overheating in split-off events. At this point, the most likely candidate to pursue a split-off is DB Hitek.</li>
</ul>


A rather unusual price movement came out on February 20 for HLB. On the first trading day after the board of directors' decision, the price reached the upper daily limit.
The short covering got to a temporarily excessive level in the process of securing appraisal rights should be the reason that led to the upper limit.
We should design a trading setup targeting excessive short covering-triggered price overheating in split-off events. At this point, the most likely candidate to pursue a split-off is DB Hitek.


Never-Seen Price Pattern Detected in a Split-Off Event Granting Appraisal Rights in Korea

<ul>
<li>The exercise price is the arithmetic average of weighted average prices for the past two months, the past month, and the past week from the day before the board resolution.  </li>
<li>Considering the governance structure of most local companies, a split-off will still be more likely to be preferred than a spin-off. Split-offs will emerge despite the mandate of appraisal rights.</li>
<li>We should look into staggering spread openings, with the pricing done on a two-month window, as a downward price revision will likely intensify toward the announcement with mandatory appraisal rights.</li>
</ul>


The exercise price is the arithmetic average of weighted average prices for the past two months, the past month, and the past week from the day before the board resolution.  
Considering the governance structure of most local companies, a split-off will still be more likely to be preferred than a spin-off. Split-offs will emerge despite the mandate of appraisal rights.
We should look into staggering spread openings, with the pricing done on a two-month window, as a downward price revision will likely intensify toward the announcement with mandatory appraisal rights.


Korea FSC: Official Mandate of Appraisal Rights in Split-Offs & Trading Ramifications

<ul>
<li>On 26 September, DB Hitek Co., Ltd. (000990 KS) announced that it will stop the proposed split-off of its semiconductor design business. </li>
<li>This move to stop the company split comes after numerous minority shareholders banded together to stop this move which could have a negative impact on DB Hitek. </li>
<li>Overall, we believe DB Hitek's decision to stop the company split driven by the campaigns from the minority shareholders is likely to have a positive impact on the company.</li>
</ul>


On 26 September, DB Hitek Co., Ltd. (000990 KS) announced that it will stop the proposed split-off of its semiconductor design business. 
This move to stop the company split comes after numerous minority shareholders banded together to stop this move which could have a negative impact on DB Hitek. 
Overall, we believe DB Hitek's decision to stop the company split driven by the campaigns from the minority shareholders is likely to have a positive impact on the company.


Minority Shareholders Convince DB Hitek to Stop a Company Split

South Korea

DB Hitek Co., Ltd. manufactures system semiconductor and provides foundry services. The Company's products inculde fabricated wafer and integrated circuits for mobile handsets and flat panel LCDs.

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DB Hitek Co., Ltd. (000990 KS)

Korean Holdcos Vs Opcos Gap Trading Opportunities in 2Q 2023

In this insight, we highlight the pricing gap divergences of the major Korean holdcos and opcos in 2Q 2023. We highlight 38 pair trades that...

Douglas Kim

DB Group: Kim Family Feud Leading to a Potential M&A Fight?

There is a brewing family feud at the DB Group. One of the scenarios of the Kim family at DB Group is a sibling conflict between Nam-Ho Kim...

Douglas Kim

Never-Seen Price Pattern Detected in a Split-Off Event Granting Appraisal Rights in Korea

This post tries to explain what led to HLB hitting the daily limit on Feb 20 and discusses trading implications for similar split-off events in the...

Sanghyun Park

Korea FSC: Official Mandate of Appraisal Rights in Split-Offs & Trading Ramifications

This post details the official announcement of Korea FSC on the mandate of appraisal rights in split-offs and discusses trading ramifications.

Sanghyun Park

Minority Shareholders Convince DB Hitek to Stop a Company Split

Overall, we believe DB Hitek's decision to stop the company split driven by the campaigns from the minority shareholders is likely to have a...

Douglas Kim

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