Korea / Special Situations, Clepsydra Capital

Sanghyun Park

Korea / Special Situations

Event-Driven

<div><p>Daelim Industrial (000210) is about to complete the three-way demerger.</p></div><div>
<p>It is undergoing an equity spin-off at a split ratio of 0.44 to 0.56.</p>
<ol>
<li>DL Corp (holding company)</li>
<li>DL E&amp;C (operating company - construction)</li>
</ol>
</div><div><div><table class="table table-striped">
<colgroup>
<col width="300">
<col width="200">
<col width="200">
<col width="200">
</colgroup>
<tbody>
<tr><td colspan="4" data-sheets-value='{"1":2,"2":"Overview"}'>Overview</td></tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Surviving"}'><strong>Surviving</strong></td>
<td colspan="3" data-sheets-value='{"1":2,"2":"DL Corp"}'><strong>DL Corp</strong></td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":" - Ticker"}'>- Ticker</td>
<td colspan="3" data-sheets-value='{"1":2,"2":"000210"}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}' data-sheets-formula="=R[-2]C[0]">000210</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":" - Bourse"}'>- Bourse</td>
<td colspan="3" data-sheets-value='{"1":2,"2":"KOSPI"}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}'>KOSPI</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":" - Ratio"}'>- Ratio</td>
<td colspan="3" data-sheets-value='{"1":3,"3":0.4437144}' data-sheets-numberformat='{"1":3,"2":"0.00000%","3":1}'>44.37144%</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":" - Type"}'>- Type</td>
<td colspan="3" data-sheets-value='{"1":2,"2":"Holding company"}'>Holding company</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":" - Business"}'>- Business</td>
<td colspan="3" data-sheets-value='{"1":2,"2":"Subsidiary management &amp; investment"}'>Subsidiary management &amp; investment</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"New 1"}'><strong>New</strong></td>
<td colspan="3" data-sheets-value='{"1":2,"2":"DL E&amp;C Corp"}'><strong>DL E&amp;C Corp</strong></td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":" - Type"}'>- Type</td>
<td colspan="3" data-sheets-value='{"1":2,"2":"Equity spin-off"}'>Equity spin-off</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":" - Ticker"}'>- Ticker</td>
<td colspan="3" data-sheets-value='{"1":2,"2":"TBA"}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}'>TBA</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":" - Bourse"}'>- Bourse</td>
<td colspan="3" data-sheets-value='{"1":2,"2":"KOSPI"}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}'>KOSPI</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":" - Ratio"}'>- Ratio</td>
<td colspan="3" data-sheets-value='{"1":3,"3":0.5562856}' data-sheets-numberformat='{"1":3,"2":"0.00000%","3":1}'>55.62856%</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":" - Type"}'>- Type</td>
<td colspan="3" data-sheets-value='{"1":2,"2":"Operating company"}'>Operating company</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":" - Business"}'>- Business</td>
<td colspan="3" data-sheets-value='{"1":2,"2":"Construction"}'>Construction</td>
</tr>
<tr><td colspan="4" data-sheets-value='{"1":2,"2":"Source: DART"}' data-sheets-numberformat='{"1":2,"2":"#,##0","3":1}'>Source: DART</td></tr>
</tbody>
</table></div></div><div><p>The stock trading will get suspended from December 29 to January 22. The trading will resume on January 25.</p></div><div><div><table class="table table-striped">
<colgroup>
<col width="300">
<col width="200">
<col width="200">
<col width="200">
</colgroup>
<tbody>
<tr><td colspan="4" style="width: 723.727px;" data-sheets-note="Sang Hyun Park: We have to buy shares until BOD+1 and hold onto them until the day immediately before the ex-rights date to be eligible to receive stock purchase rights. We then have to notify our dissenting opinion until the end of dissenting opinion notice period." data-sheets-value='{"1":2,"2":"Timetable"}'>Timetable</td></tr>
<tr>
<td style="width: 278.542px;" data-sheets-value='{"1":2,"2":"Trade suspension begins"}'><strong>Trade suspension begins</strong></td>
<td colspan="3" style="width: 424.468px;" data-sheets-numberformat='{"1":5,"2":"[$-1009]mmmm\\ d\\,\\ yyyy","3":1}' data-sheets-value='{"1":3,"3":44194}'><strong>December 29, 2020</strong></td>
</tr>
<tr>
<td style="width: 278.542px;" data-sheets-value='{"1":2,"2":"Trade suspension ends"}'>Trade suspension ends</td>
<td colspan="3" style="width: 424.468px;" data-sheets-numberformat='{"1":5,"2":"[$-1009]mmmm\\ d\\,\\ yyyy","3":1}' data-sheets-value='{"1":3,"3":44218}'>January 22, 2021</td>
</tr>
<tr>
<td style="width: 278.542px;" data-sheets-value='{"1":2,"2":"Re-listing"}'><strong>Re-listing</strong></td>
<td colspan="3" style="width: 424.468px;" data-sheets-numberformat='{"1":5,"2":"[$-1009]mmmm\\ d\\,\\ yyyy","3":1}' data-sheets-value='{"1":3,"3":44221}'><strong>January 25, 2021</strong></td>
</tr>
<tr><td colspan="4" style="width: 723.727px;" data-sheets-value='{"1":2,"2":"Source: DART"}'>Source: DART</td></tr>
</tbody>
</table></div></div><hr><p>Daelim Industrials is currently a proud member of KOSPI 200.</p><table class="table table-striped">
<colgroup>
<col width="100">
<col width="100">
</colgroup>
<tbody>
<tr><td colspan="2" style="width: 723.636px;" data-sheets-value='{"1":2,"2":"KODEX 200 (₩B)"}'>Daelim Industrials in KOSPI 200 (₩B)</td></tr>
<tr>
<td style="width: 351.818px;" data-sheets-value='{"1":2,"2":"Weight"}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}'><strong>Weight</strong></td>
<td style="width: 350.909px;" data-sheets-value='{"1":3,"3":0.0021}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}'><strong>0.21%</strong></td>
</tr>
<tr>
<td style="width: 351.818px;" data-sheets-value='{"1":2,"2":"Float MC"}' data-sheets-numberformat='{"1":2,"2":"#,##0.0"}'>Float MC</td>
<td style="width: 350.909px;" data-sheets-value='{"1":3,"3":2301.6}' data-sheets-numberformat='{"1":2,"2":"#,##0.0"}'>2,301.6</td>
</tr>
<tr>
<td style="width: 351.818px;" data-sheets-value='{"1":2,"2":"MC"}' data-sheets-numberformat='{"1":2,"2":"#,##0.0"}'>MC</td>
<td style="width: 350.909px;" data-sheets-value='{"1":3,"3":3215.5}' data-sheets-numberformat='{"1":2,"2":"#,##0.0"}'>3,215.5</td>
</tr>
<tr>
<td style="width: 351.818px;" data-sheets-value='{"1":2,"2":"120DA MC"}' data-sheets-numberformat='{"1":2,"2":"#,##0.0"}'>120DA MC</td>
<td style="width: 350.909px;" data-sheets-value='{"1":3,"3":2909.2}' data-sheets-numberformat='{"1":2,"2":"#,##0.0"}'>2,909.2</td>
</tr>
<tr>
<td style="width: 351.818px;" data-sheets-value='{"1":2,"2":"Float"}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}'>Float</td>
<td style="width: 350.909px;" data-sheets-value='{"1":3,"3":0.7158}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}'>71.58%</td>
</tr>
<tr>
<td style="width: 351.818px;" data-sheets-value='{"1":2,"2":"Mirroring"}' data-sheets-numberformat='{"1":2,"2":"#,##0.0"}'><strong>Estimated passive money</strong></td>
<td style="width: 350.909px;" data-sheets-value='{"1":3,"3":126}' data-sheets-numberformat='{"1":2,"2":"#,##0.0"}'><strong>126.0</strong></td>
</tr>
<tr><td colspan="2" style="width: 351.818px;">Source: KRX</td></tr>
</tbody>
</table><p><strong>The KRX made it official yesterday that both DL Corp (the surviving entity) and DL E&amp;C will stay in KOSPI 200 after re-listing on January 25.</strong></p><p>Besides,</p><p>DL E&amp;C will be added to the KOSPI 200, KOSPI 200 Constructions, KRX300 and KRX300 Industrials.</p><div class="content-highlight">
<p><strong>Below is the corporate action schedule for DL E&amp;C (courtesy KRX).</strong></p>
<ul>
<li>Corporate action of DL E&amp;C will be applied after the close of trading on the first day from suspension.</li>
<li>The index market cap (index share and price) on the last trading day before the suspension will be applied in index calculation from December 29 to January 25.</li>
<li>The actual price and actual market cap will be reflected in calculating the Index on January 26.</li>
</ul>
</div>

Daelim Industrial (000210) is about to complete the three-way demerger.
It is undergoing an equity spin-off at a split ratio of 0.44 to 0.56.

DL Corp (holding company)
DL E&amp;C (operating company - construction)









Overview

Surviving
DL Corp


- Ticker
000210


- Bourse
KOSPI


- Ratio
44.37144%


- Type
Holding company


- Business
Subsidiary management &amp; investment


New
DL E&amp;C Corp


- Type
Equity spin-off


- Ticker
TBA


- Bourse
KOSPI


- Ratio
55.62856%


- Type
Operating company


- Business
Construction

Source: DART

The stock trading will get suspended from December 29 to January 22. The trading will resume on January 25.







Timetable

Trade suspension begins
December 29, 2020


Trade suspension ends
January 22, 2021


Re-listing
January 25, 2021

Source: DART

Daelim Industrials is currently a proud member of KOSPI 200.





Daelim Industrials in KOSPI 200 (₩B)

Weight
0.21%


Float MC
2,301.6


MC
3,215.5


120DA MC
2,909.2


Float
71.58%


Estimated passive money
126.0

Source: KRX

The KRX made it official yesterday that both DL Corp (the surviving entity) and DL E&amp;C will stay in KOSPI 200 after re-listing on January 25.Besides,DL E&amp;C will be added to the KOSPI 200, KOSPI 200 Constructions, KRX300 and KRX300 Industrials.
Below is the corporate action schedule for DL E&amp;C (courtesy KRX).

Corporate action of DL E&amp;C will be applied after the close of trading on the first day from suspension.
The index market cap (index share and price) on the last trading day before the suspension will be applied in index calculation from December 29 to January 25.
The actual price and actual market cap will be reflected in calculating the Index on January 26.



DL Corp Stays & DL E&C Newly Joins KOSPI 200: Trade DL E&C on Inclusion

Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

<p><a href="https://www.smartkarma.com/entities/daelim-industrial-co-ltd" target="_blank" data-smartkarma-citation="entities:18095:1" rel="noopener">Daelim Industrial (000210 KS)</a> first announced its decision to form a holding company structure on 10 September 2020. Since then, Daelim Industrial's share price is down 9.2% in this period, underperforming KOSPI which is up 9.2% in the same period. On 4 December, Daelim Industrial's shareholders vote on this deal. We think the shareholders will confirm this formation of Holdco/spin-off. Over the years of following the Korean stock market, we have found that the shareholders sometimes do not like the initial spin-off story which knocks the price downwards but later on the share price makes a positive turnaround. In our view, Daelim Industrial could be one of these spin-off related turnaround plays that could outperform the market over the next 6 to 12 months.  </p><p>Daelim Industrial is one of the largest construction companies in Korea. It makes some of the finest apartments in Korea. The housing business (mostly apartments construction) accounted for 54% of total sales and 78% of the total operating profit of the company in 1Q-3Q 2020. The company has one of the most profitable and best E&amp;C business (especially housing/apartments construction) in Korea.</p><p><strong>What are the appropriate comps for DL E&amp;C? </strong>Hyundai E&amp;C, GS E&amp;C, and Daewoo E&amp;C are the most appropriate comps to DL E&amp;C. These three comps are currently trading at P/E ratios of 11.5x, 6.7x, and 7.6x, respectively. The average of these three multiples would be 8.6x. If we take a more conservative view and take just the lowest P/E of the comps (6.7x) and use this multiple to apply to the estimated annual net profit of 660 billion for the E&amp;C business, it would result in an implied market cap of 4.4 trillion won, which would exceed Daelim Industrial's current market cap of 2.9 trillion won. So essentially, you would be getting the other businesses for free.</p>

Daelim Industrial (000210 KS) first announced its decision to form a holding company structure on 10 September 2020. Since then, Daelim Industrial's share price is down 9.2% in this period, underperforming KOSPI which is up 9.2% in the same period. On 4 December, Daelim Industrial's shareholders vote on this deal. We think the shareholders will confirm this formation of Holdco/spin-off. Over the years of following the Korean stock market, we have found that the shareholders sometimes do not like the initial spin-off story which knocks the price downwards but later on the share price makes a positive turnaround. In our view, Daelim Industrial could be one of these spin-off related turnaround plays that could outperform the market over the next 6 to 12 months.  Daelim Industrial is one of the largest construction companies in Korea. It makes some of the finest apartments in Korea. The housing business (mostly apartments construction) accounted for 54% of total sales and 78% of the total operating profit of the company in 1Q-3Q 2020. The company has one of the most profitable and best E&amp;C business (especially housing/apartments construction) in Korea.What are the appropriate comps for DL E&amp;C? Hyundai E&amp;C, GS E&amp;C, and Daewoo E&amp;C are the most appropriate comps to DL E&amp;C. These three comps are currently trading at P/E ratios of 11.5x, 6.7x, and 7.6x, respectively. The average of these three multiples would be 8.6x. If we take a more conservative view and take just the lowest P/E of the comps (6.7x) and use this multiple to apply to the estimated annual net profit of 660 billion for the E&amp;C business, it would result in an implied market cap of 4.4 trillion won, which would exceed Daelim Industrial's current market cap of 2.9 trillion won. So essentially, you would be getting the other businesses for free.

Daelim Industrial: Unlocking Higher Value Through A Holdco & Spin-Off (Voting on 4 December)

Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

Last Week in Event SPACE: Vedanta, Cardinal Res., Japan Retail Fund, HSBC, Opticomm, Tiffany/LVMH

<p>Daelim Industrial announces a three-way demerger plan.</p><p>It is part of the long-planned and anticipated holding company conversion reorganization.</p><p>First, Daelim Industrial undergoes an equity spin-off at a split ratio of 0.44 to 0.56. As a result, we will have two separate entities: 1. DL Corp (holding company) and 2. DL E&amp;C (operating company - construction).</p><p>Second, Daelim then spins out the petrochemical unit in the form of physical division. This newly spun-out company, DL Chemical, will become a wholly-owned subsidiary of DL Corp.</p><table class="table table-striped">
<colgroup>
<col width="300">
<col width="200">
<col width="200">
<col width="200">
</colgroup>
<tbody>
<tr><td colspan="4" rowspan="1" data-sheets-value='{"1":2,"2":"Overview"}'>Overview</td></tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Name"}'>Name</td>
<td colspan="3" rowspan="1" style="text-align: right;" data-sheets-value='{"1":2,"2":"Daelim Industrial Co Ltd"}' data-sheets-formula='=googlefinance(R[1]C[0], "name")'>Daelim Industrial Co Ltd</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Ticker"}'>Ticker</td>
<td colspan="3" rowspan="1" style="text-align: right;" data-sheets-value='{"1":2,"2":"000210"}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}' data-sheets-formula='="000210"'>000210</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Surviving"}'><strong>Surviving</strong></td>
<td colspan="3" rowspan="1" style="text-align: right;" data-sheets-value='{"1":2,"2":"DL Corp"}'><strong>DL Corp</strong></td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":" - Ticker"}'>- Ticker</td>
<td colspan="3" rowspan="1" style="text-align: right;" data-sheets-value='{"1":2,"2":"000210"}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}' data-sheets-formula="=R[-2]C[0]">000210</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":" - Bourse"}'>- Bourse</td>
<td colspan="3" rowspan="1" style="text-align: right;" data-sheets-value='{"1":2,"2":"KOSPI"}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}'>KOSPI</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":" - Ratio"}'>- Ratio</td>
<td colspan="3" rowspan="1" style="text-align: right;" data-sheets-value='{"1":3,"3":0.4437144}' data-sheets-numberformat='{"1":3,"2":"0.00000%","3":1}'>44.37144%</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":" - Type"}'>- Type</td>
<td colspan="3" rowspan="1" style="text-align: right;" data-sheets-value='{"1":2,"2":"Holding company"}'>Holding company</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":" - Business"}'>- Business</td>
<td colspan="3" rowspan="1" style="text-align: right;" data-sheets-value='{"1":2,"2":"Subsidiary management &amp; investment"}'>Subsidiary management &amp; investment</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":" - Stock split"}'>- Stock split</td>
<td colspan="3" rowspan="1" style="text-align: right;" data-sheets-value='{"1":3,"3":1}' data-sheets-numberformat='{"1":2,"2":"#,##0.0"}'>1.0</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"New 1"}'><strong>New 1</strong></td>
<td colspan="3" rowspan="1" style="text-align: right;" data-sheets-value='{"1":2,"2":"DL E&amp;C Corp"}'><strong>DL E&amp;C Corp</strong></td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":" - Type"}'>- Type</td>
<td colspan="3" rowspan="1" style="text-align: right;" data-sheets-value='{"1":2,"2":"Equity spin-off"}'>Equity spin-off</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":" - Ticker"}'>- Ticker</td>
<td colspan="3" rowspan="1" style="text-align: right;" data-sheets-value='{"1":2,"2":"TBA"}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}'>TBA</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":" - Bourse"}'>- Bourse</td>
<td colspan="3" rowspan="1" style="text-align: right;" data-sheets-value='{"1":2,"2":"KOSPI"}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}'>KOSPI</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":" - Ratio"}'>- Ratio</td>
<td colspan="3" rowspan="1" style="text-align: right;" data-sheets-value='{"1":3,"3":0.5562856}' data-sheets-numberformat='{"1":3,"2":"0.00000%","3":1}'>55.62856%</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":" - Type"}'>- Type</td>
<td colspan="3" rowspan="1" style="text-align: right;" data-sheets-value='{"1":2,"2":"Operating company"}'>Operating company</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":" - Business"}'>- Business</td>
<td colspan="3" rowspan="1" style="text-align: right;" data-sheets-value='{"1":2,"2":"Construction"}'>Construction</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":" - Stock split"}'>- Stock split</td>
<td colspan="3" rowspan="1" style="text-align: right;" data-sheets-value='{"1":3,"3":1}' data-sheets-numberformat='{"1":2,"2":"#,##0.0"}'>1.0</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"New 2"}'><strong>New 2</strong></td>
<td colspan="3" rowspan="1" style="text-align: right;" data-sheets-value='{"1":2,"2":"DL Chemical Corp"}'><strong>DL Chemical Corp</strong></td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":" - Type"}'>- Type</td>
<td colspan="3" rowspan="1" style="text-align: right;" data-sheets-value='{"1":2,"2":"Spin-out (physical division)"}'>Spin-out (physical division)</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":" - Ticker"}'>- Ticker</td>
<td colspan="3" rowspan="1" style="text-align: right;" data-sheets-value='{"1":2,"2":"N/A"}'>N/A</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":" - Bourse"}'>- Bourse</td>
<td colspan="3" rowspan="1" style="text-align: right;" data-sheets-value='{"1":2,"2":"N/A"}'>N/A</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":" - Ratio"}'>- Ratio</td>
<td colspan="3" rowspan="1" style="text-align: right;" data-sheets-value='{"1":2,"2":"N/A"}'>N/A</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":" - Type"}'>- Type</td>
<td colspan="3" rowspan="1" style="text-align: right;" data-sheets-value='{"1":2,"2":"Operating company"}'>Operating company</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":" - Business"}'>- Business</td>
<td colspan="3" rowspan="1" style="text-align: right;" data-sheets-value='{"1":2,"2":"Petro chemical"}'>Petrochemical</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":" - Stock split"}'>- Stock split</td>
<td colspan="3" rowspan="1" style="text-align: right;" data-sheets-value='{"1":3,"3":1}' data-sheets-numberformat='{"1":2,"2":"#,##0.0"}'>1.0</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Stock purchase"}'>Stock purchase</td>
<td colspan="3" rowspan="1" style="text-align: right;" data-sheets-value='{"1":2,"2":"N/A"}' data-sheets-numberformat='{"1":2,"2":"#,##0.0000000","3":1}'>N/A</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Banker"}'>Banker</td>
<td colspan="3" rowspan="1" style="text-align: right;" data-sheets-value='{"1":2,"2":"N/A"}' data-sheets-numberformat='{"1":2,"2":"#,##0.0000000","3":1}'>N/A</td>
</tr>
<tr><td colspan="4" rowspan="1" data-sheets-value='{"1":2,"2":"Source: DART"}' data-sheets-numberformat='{"1":2,"2":"#,##0","3":1}'><em>Source: DART</em></td></tr>
</tbody>
</table><table class="table table-striped">
<colgroup>
<col width="300">
<col width="200">
<col width="200">
<col width="200">
</colgroup>
<tbody>
<tr>
<td data-sheets-value='{"1":2,"2":"Financials - 3Q19 (₩ bil)"}'>Financials - 3Q19 (₩ bil)</td>
<td style="text-align: right;" data-sheets-formula="=R[-67]C[-1]" data-sheets-value='{"1":2,"2":"Surviving"}'>Surviving</td>
<td style="text-align: right;" data-sheets-formula="=R[-60]C[-2]" data-sheets-value='{"1":2,"2":"New 1"}'>New 1</td>
<td style="text-align: right;" data-sheets-formula="=R[-52]C[-3]" data-sheets-value='{"1":2,"2":"New 2"}'>New 2</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Name"}'>Name</td>
<td style="text-align: right;" data-sheets-formula="=R[-68]C[0]" data-sheets-numberformat='{"1":2,"2":"#,##0.0"}' data-sheets-value='{"1":2,"2":"DL Corp"}'>DL Corp</td>
<td style="text-align: right;" data-sheets-formula="=R[-61]C[-1]" data-sheets-numberformat='{"1":2,"2":"#,##0.0"}' data-sheets-value='{"1":2,"2":"DL E&amp;C Corp"}'>DL E&amp;C Corp</td>
<td style="text-align: right;" data-sheets-formula="=R[-53]C[-2]" data-sheets-value='{"1":2,"2":"DL Chemical Corp"}'>DL Chemical Corp</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Split type"}'>Split type</td>
<td style="text-align: right;" data-sheets-numberformat='{"1":2,"2":"#,##0.0"}' data-sheets-value='{"1":2,"2":"-"}'>-</td>
<td style="text-align: right;" data-sheets-formula="=R[-61]C[-1]" data-sheets-numberformat='{"1":2,"2":"#,##0.0"}' data-sheets-value='{"1":2,"2":"Equity spin-off"}'>Equity spin-off</td>
<td style="text-align: right;" data-sheets-formula="=R[-53]C[-2]" data-sheets-value='{"1":2,"2":"Spin-out (physical division)"}'>Spin-out (physical division)</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Total assets"}'>Total assets</td>
<td style="text-align: right;" data-sheets-numberformat='{"1":2,"2":"#,##0.0"}' data-sheets-value='{"1":3,"3":3292.553730996}'>3,292.6</td>
<td style="text-align: right;" data-sheets-numberformat='{"1":2,"2":"#,##0.0"}' data-sheets-value='{"1":3,"3":6339.708505598}'>6,339.7</td>
<td style="text-align: right;" data-sheets-numberformat='{"1":2,"2":"#,##0.0"}' data-sheets-value='{"1":3,"3":1385.835086962}'>1,385.8</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Total liabilities"}'>Total liabilities</td>
<td style="text-align: right;" data-sheets-numberformat='{"1":2,"2":"#,##0.0"}' data-sheets-value='{"1":3,"3":718.549764572}'>718.5</td>
<td style="text-align: right;" data-sheets-numberformat='{"1":2,"2":"#,##0.0"}' data-sheets-value='{"1":3,"3":3112.674847365}'>3,112.7</td>
<td style="text-align: right;" data-sheets-numberformat='{"1":2,"2":"#,##0.0"}' data-sheets-value='{"1":3,"3":572.053354996}'>572.1</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Total equity"}'><strong>Total equity</strong></td>
<td style="text-align: right;" data-sheets-numberformat='{"1":2,"2":"#,##0.0"}' data-sheets-value='{"1":3,"3":2574.003966424}'><strong>2,574.0</strong></td>
<td style="text-align: right;" data-sheets-numberformat='{"1":2,"2":"#,##0.0"}' data-sheets-value='{"1":3,"3":3227.033658233}'><strong>3,227.0</strong></td>
<td style="text-align: right;" data-sheets-numberformat='{"1":2,"2":"#,##0.0"}' data-sheets-value='{"1":3,"3":813.781731966}'>813.8</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":" - Capital"}'>- Capital</td>
<td style="text-align: right;" data-sheets-numberformat='{"1":2,"2":"#,##0.0"}' data-sheets-value='{"1":3,"3":111.136885}'>111.1</td>
<td style="text-align: right;" data-sheets-numberformat='{"1":2,"2":"#,##0.0"}' data-sheets-value='{"1":3,"3":107.363115}'>107.4</td>
<td style="text-align: right;" data-sheets-numberformat='{"1":2,"2":"#,##0.0"}' data-sheets-value='{"1":3,"3":30}'>30.0</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Split ratio"}'><strong>Split ratio</strong></td>
<td style="text-align: right;" data-sheets-formula="=R[-71]C[0]" data-sheets-numberformat='{"1":3,"2":"0.00000%"}' data-sheets-value='{"1":3,"3":0.4437144}'><strong>44.37144%</strong></td>
<td style="text-align: right;" data-sheets-formula="=R[-63]C[-1]" data-sheets-numberformat='{"1":3,"2":"0.00000%"}' data-sheets-value='{"1":3,"3":0.5562856}'><strong>55.62856%</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"-"}'>-</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"FY19 de-consolidated sales"}'>FY19 de-consolidated sales</td>
<td style="text-align: right;" data-sheets-numberformat='{"1":2,"2":"#,##0.0"}' data-sheets-value='{"1":3,"3":19.425641927}'>19.4</td>
<td style="text-align: right;" data-sheets-numberformat='{"1":2,"2":"#,##0.0"}' data-sheets-value='{"1":3,"3":6213.26356221}'>6,213.3</td>
<td style="text-align: right;" data-sheets-numberformat='{"1":2,"2":"#,##0.0"}' data-sheets-value='{"1":3,"3":1115.058658494}'>1,115.1</td>
</tr>
<tr><td colspan="4" rowspan="1" data-sheets-numberformat='{"1":2,"2":"#,##0","3":1}' data-sheets-value='{"1":2,"2":"Source: DART"}'><em>Source: DART</em></td></tr>
</tbody>
</table><p>There is no appraisal right. But it still requires shareholder approval.</p><p>The shareholder meeting is on December 4. Upon approval, the stock trading will get suspended from December 29 to January 22. The trading will resume on January 25.</p><table class="table table-striped">
<colgroup>
<col width="300">
<col width="200">
<col width="200">
<col width="200">
</colgroup>
<tbody>
<tr><td colspan="4" rowspan="1" style="width: 723.727px;" data-sheets-note="Sang Hyun Park: We have to buy shares until BOD+1 and hold onto them until the day immediately before the ex-rights date to be eligible to receive stock purchase rights. We then have to notify our dissenting opinion until the end of dissenting opinion notice period." data-sheets-value='{"1":2,"2":"Timetable"}'>Timetable</td></tr>
<tr>
<td style="width: 278.542px;" data-sheets-value='{"1":2,"2":"BOD meeting"}'>BOD meeting</td>
<td colspan="3" rowspan="1" style="text-align: right; width: 424.468px;" data-sheets-numberformat='{"1":5,"2":"[$-1009]mmmm\\ d\\,\\ yyyy","3":1}' data-sheets-value='{"1":3,"3":44084}'>September 10, 2020</td>
</tr>
<tr>
<td style="width: 278.542px;" data-sheets-value='{"1":2,"2":"Shareholder approval at EGM"}'>Shareholder approval at EGM</td>
<td colspan="3" rowspan="1" style="text-align: right; width: 424.468px;" data-sheets-numberformat='{"1":5,"2":"[$-1009]mmmm\\ d\\,\\ yyyy","3":1}' data-sheets-value='{"1":3,"3":44169}'>December 4, 2020</td>
</tr>
<tr>
<td style="width: 278.542px;" data-sheets-value='{"1":2,"2":"Trade suspension begins"}'><strong>Trade suspension begins</strong></td>
<td colspan="3" rowspan="1" style="text-align: right; width: 424.468px;" data-sheets-numberformat='{"1":5,"2":"[$-1009]mmmm\\ d\\,\\ yyyy","3":1}' data-sheets-value='{"1":3,"3":44194}'><strong>December 29, 2020</strong></td>
</tr>
<tr>
<td style="width: 278.542px;" data-sheets-value='{"1":2,"2":"Trade suspension ends"}'><strong>Trade suspension ends</strong></td>
<td colspan="3" rowspan="1" style="text-align: right; width: 424.468px;" data-sheets-numberformat='{"1":5,"2":"[$-1009]mmmm\\ d\\,\\ yyyy","3":1}' data-sheets-value='{"1":3,"3":44218}'><strong>January 22, 2021</strong></td>
</tr>
<tr>
<td style="width: 278.542px;" data-sheets-value='{"1":2,"2":"Re-listing"}'>Re-listing</td>
<td colspan="3" rowspan="1" style="text-align: right; width: 424.468px;" data-sheets-numberformat='{"1":5,"2":"[$-1009]mmmm\\ d\\,\\ yyyy","3":1}' data-sheets-value='{"1":3,"3":44221}'>January 25, 2021</td>
</tr>
<tr><td colspan="4" rowspan="1" style="width: 723.727px;" data-sheets-value='{"1":2,"2":"Source: DART"}'><em>Source: DART</em></td></tr>
</tbody>
</table>

Daelim Industrial announces a three-way demerger plan.It is part of the long-planned and anticipated holding company conversion reorganization.First, Daelim Industrial undergoes an equity spin-off at a split ratio of 0.44 to 0.56. As a result, we will have two separate entities: 1. DL Corp (holding company) and 2. DL E&amp;C (operating company - construction).Second, Daelim then spins out the petrochemical unit in the form of physical division. This newly spun-out company, DL Chemical, will become a wholly-owned subsidiary of DL Corp.







Overview

Name
Daelim Industrial Co Ltd


Ticker
000210


Surviving
DL Corp


- Ticker
000210


- Bourse
KOSPI


- Ratio
44.37144%


- Type
Holding company


- Business
Subsidiary management &amp; investment


- Stock split
1.0


New 1
DL E&amp;C Corp


- Type
Equity spin-off


- Ticker
TBA


- Bourse
KOSPI


- Ratio
55.62856%


- Type
Operating company


- Business
Construction


- Stock split
1.0


New 2
DL Chemical Corp


- Type
Spin-out (physical division)


- Ticker
N/A


- Bourse
N/A


- Ratio
N/A


- Type
Operating company


- Business
Petrochemical


- Stock split
1.0


Stock purchase
N/A


Banker
N/A

Source: DART










Financials - 3Q19 (₩ bil)
Surviving
New 1
New 2


Name
DL Corp
DL E&amp;C Corp
DL Chemical Corp


Split type
-
Equity spin-off
Spin-out (physical division)


Total assets
3,292.6
6,339.7
1,385.8


Total liabilities
718.5
3,112.7
572.1


Total equity
2,574.0
3,227.0
813.8


- Capital
111.1
107.4
30.0


Split ratio
44.37144%
55.62856%
-


FY19 de-consolidated sales
19.4
6,213.3
1,115.1

Source: DART

There is no appraisal right. But it still requires shareholder approval.The shareholder meeting is on December 4. Upon approval, the stock trading will get suspended from December 29 to January 22. The trading will resume on January 25.







Timetable

BOD meeting
September 10, 2020


Shareholder approval at EGM
December 4, 2020


Trade suspension begins
December 29, 2020


Trade suspension ends
January 22, 2021


Re-listing
January 25, 2021

Source: DART



Daelim Industrial Divestiture: Terms & Trading Situations (1P Diversion)

Pan-Asia Index Rebalances/ Events/ Delta One, Periscope Analytics

Brian Freitas

Pan-Asia Index Rebalances/ Events/ Delta One

Quantitative Analysis

<p>Preferred shares in Korea have historically traded at a discount. At times the discount has been so wide that funds have been set up just to invest in Korean preferred shares. What makes the trade attractive are the low valuations of Korean stocks, the discount on the preferred shares and the higher dividend on preferred shares compared to common shares.</p><p>This year, the discount on a few preferred shares has tightened noticeably accompanied by a big pick up in trading volume. There have also been some huge moves in some of the preferred shares as corporate boardroom battles pick up.</p><p>In this Insight, we look at a few names where the preferred shares have significantly outperformed the common shares year to date and recommend a basket of preferred shares that trade at a big discount to the common shares while sporting significantly higher dividend yields. </p>

Preferred shares in Korea have historically traded at a discount. At times the discount has been so wide that funds have been set up just to invest in Korean preferred shares. What makes the trade attractive are the low valuations of Korean stocks, the discount on the preferred shares and the higher dividend on preferred shares compared to common shares.This year, the discount on a few preferred shares has tightened noticeably accompanied by a big pick up in trading volume. There have also been some huge moves in some of the preferred shares as corporate boardroom battles pick up.In this Insight, we look at a few names where the preferred shares have significantly outperformed the common shares year to date and recommend a basket of preferred shares that trade at a big discount to the common shares while sporting significantly higher dividend yields. 

Korea Preferred Shares - Liquidity Picks Up Amid Some Big Moves

South Korea

DL Holdings Co., Ltd. provides civil engineering, architectural, and plant construction services. The Company constructs bridges, highways, tunnels, harbors, and governmental buildings. DL also manufactures petrochemical products , including polyester, benzene, butane, and methyl tertiary butyl ether (MTBE).

Price Gauge
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DL Holdings Co (000210 KS)

DL Corp Stays & DL E&C Newly Joins KOSPI 200: Trade DL E&C on Inclusion

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Sanghyun Park

Daelim Industrial: Unlocking Higher Value Through A Holdco & Spin-Off (Voting on 4 December)

Daelim Industrial is one of the cheapest stocks in Korea. The company could unlock greater shareholder value through the spin-off of the...

Douglas Kim

Last Week in Event SPACE: Vedanta, Cardinal Res., Japan Retail Fund, HSBC, Opticomm, Tiffany/LVMH

Last Week in Event SPACE ... Plus, other events, CCASS movements and Mood Spins. (This insight covers specific insights & comments...

David Blennerhassett

Daelim Industrial Divestiture: Terms & Trading Situations (1P Diversion)

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Sanghyun Park

Korea Preferred Shares - Liquidity Picks Up Amid Some Big Moves

Preferred shares in Korea have historically traded at a discount. At times the discount has been so wide that funds have been set up just to invest...

Brian Freitas

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52-week Range

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