Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

Equity Bottom-Up

GS Engineering & Construction / Equity Bottom-Up

<ul>
<li>We argue that the top 20 listed construction companies in Korea are likely to underperform KOSPI in 2024 mainly due to the excessive risks in the housing/commercial real estate sectors.</li>
<li>We expect the share prices of these 20 domestic construction companies to fall by at least 15%-20%+ on average in the next 6-12 months. </li>
<li>On 2 January 2024, Financial Supervisory Service (FSS) announced that there will be new reporting requirements for PF loans of Korean construction companies starting 2023 annual reports.</li>
</ul>


We argue that the top 20 listed construction companies in Korea are likely to underperform KOSPI in 2024 mainly due to the excessive risks in the housing/commercial real estate sectors.
We expect the share prices of these 20 domestic construction companies to fall by at least 15%-20%+ on average in the next 6-12 months. 
On 2 January 2024, Financial Supervisory Service (FSS) announced that there will be new reporting requirements for PF loans of Korean construction companies starting 2023 annual reports.


Top 20 Korean Construction Companies: Off-Balance Sheet Contingent Liabilities To Drive Lower Prices

Amorepacific Corporation / 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 1Q 2024. </li>
<li>We highlight 38 pair trades that involve Korean holdcos and opcos.</li>
<li>Of the 38 pair trades, 26 of them involved holdcos outperforming opcos in the past six months and 12 of them involved opcos outperforming holdcos in the same period.</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 1Q 2024. 
We highlight 38 pair trades that involve Korean holdcos and opcos.
Of the 38 pair trades, 26 of them involved holdcos outperforming opcos in the past six months and 12 of them involved opcos outperforming holdcos in the same period.


Korean Holdcos Vs Opcos Gap Trading Opportunities in 1Q 2024

<ul>
<li>In this insight, we discuss the alpha generation through companies that announced share buybacks in Korea in October and November 2023.</li>
<li>We provide a list of 24 stocks in the Korean stock market that have announced share buyback programs in October and November 2023.</li>
<li>The top five market cap stocks that have announced share repurchases include Celltrion Inc, Celltrion Healthcare, Shinhan Financial, Amore Pacific Corp, and Mirae Asset Securities. </li>
</ul>


In this insight, we discuss the alpha generation through companies that announced share buybacks in Korea in October and November 2023.
We provide a list of 24 stocks in the Korean stock market that have announced share buyback programs in October and November 2023.
The top five market cap stocks that have announced share repurchases include Celltrion Inc, Celltrion Healthcare, Shinhan Financial, Amore Pacific Corp, and Mirae Asset Securities. 


Alpha Generation Through Share Buybacks in Korea: October & November 2023

Event-Driven

<ul>
<li>On 18 October, DL E&amp;C announced that it will conduct a small scale share swap with DL Construction to make it into a 100% wholly owned subsidiary.</li>
<li>We believe this merger share swap will have a positive impact on both DL E&amp;C (375500 KS) and DL Construction (001880 KS) shares.</li>
<li>To prevent shares dilution, DL E&amp;C plans to cancel the same number of treasury shares of common stock as the number of newly issued shares of DL E&amp;C common stock.</li>
</ul>


On 18 October, DL E&amp;C announced that it will conduct a small scale share swap with DL Construction to make it into a 100% wholly owned subsidiary.
We believe this merger share swap will have a positive impact on both DL E&amp;C (375500 KS) and DL Construction (001880 KS) shares.
To prevent shares dilution, DL E&amp;C plans to cancel the same number of treasury shares of common stock as the number of newly issued shares of DL E&amp;C common stock.


Small Scale Share Swap Between DL E&C and DL Construction + Delisting

<ul>
<li>In this insight, we highlight the pricing gap divergences of the major Korean holdcos and opcos in 4Q 2023.</li>
<li>Of the 38 pair trades, 18 of them involved holdcos outperforming opcos YTD and 20 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 4Q 2023.
Of the 38 pair trades, 18 of them involved holdcos outperforming opcos YTD and 20 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 4Q 2023

South Korea

DL E&C Co.,Ltd. provides construction services. The Company builds industrial plants, infrastructure, high-rise residential buildings, low-rise apartments, villas, and other related areas. DL E&C offers services in Korea.

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DL E&C (375500 KS)

Top 20 Korean Construction Companies: Off-Balance Sheet Contingent Liabilities To Drive Lower Prices

Lotte Chemical (011170 KS)'s share price declined by 9.1% YTD. Lotte Chemical has a 44.02% stake in Lotte Construction whose PF loan balance as...

Douglas Kim

Korean Holdcos Vs Opcos Gap Trading Opportunities in 1Q 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 Holdcos Vs Opcos Gap Trading Opportunities in 4Q 2023

In this insight, we highlight the pricing gap divergences of the major Korean holdcos and opcos in 4Q 2023. We highlight 38 pair trades that...

Douglas Kim

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