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>The FSS requested Doosan Robotics to revise the prospectuses for both the Share Swap with Doosan Bobcat and Merger with Doosan Enerbility.</li>
<li>Although the FSS's wording seems aggressive, it does not request the cancellation. Authorities are displeased but lack political momentum to derail Doosan's restructuring.</li>
<li>The FSS asks Doosan to clarify merger synergies, warn of Robotics' overvalued stock price and potential decline, and highlight the collaborative robot market's growth risks.</li>
</ul>


The FSS requested Doosan Robotics to revise the prospectuses for both the Share Swap with Doosan Bobcat and Merger with Doosan Enerbility.
Although the FSS's wording seems aggressive, it does not request the cancellation. Authorities are displeased but lack political momentum to derail Doosan's restructuring.
The FSS asks Doosan to clarify merger synergies, warn of Robotics' overvalued stock price and potential decline, and highlight the collaborative robot market's growth risks.


Clarifications Regarding the FSS's Unexpected Revision Request for the Doosan Mergers

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

Brian Freitas

Pan-Asia Index Rebalances/ Events/ Delta One

Periscope Analytics

Periscope Analytics focuses on event-driven trades across Asia Pacific and provides comprehensive, timely and systematic coverage of index changes to major Asia Pacific indices in a structured manner.

The analysis includes forecasted inclusions and exclusions to all major Asian indices that have significant amount of tracking assets, including estimates of passive buy/sell flow on the stocks. The service also provides commentary and impact of market consultations, ground rule changes, and other events (IPOs, spin-offs, M&A) that could lead to index changes and passive flow.

Periscope Analytics works with multi-strategy hedge funds, proprietary trading firms, stat arb trading groups and long-only investors that invest and trade in the Asia Pacific region with the data being used to trade index rebalances, avoid pre-positioning and passive flow, and to time entry into and exit from stocks.

Event-Driven Trades Across Asia Pacific

Index Rebalance

Sprott Physical Uranium Trust / Index Rebalance

<ul>
<li>Solactive has announced the constituent changes for the Global Uranium &amp; Nuclear Components Index with implementation at the close on 31 July.</li>
<li>
<a href="https://www.smartkarma.com/entities/oklo-inc" target="_blank" data-smartkarma-citation="entities:38840" rel="noopener">Oklo (OKLO US)</a> and <a href="https://www.smartkarma.com/entities/western-uranium-vanadium-corp" target="_blank" data-smartkarma-citation="entities:43774" rel="noopener">Western Uranium &amp; Vanadium (WUC CN)</a> will be added to the index. Estimated one-way turnover is 7.9% resulting in a round-trip trade of US$486m.</li>
<li>There are only 4 trading days to implementation of the changes and we'd watch out for big moves on stocks that have more than 2x ADV to trade.</li>
</ul>


Solactive has announced the constituent changes for the Global Uranium &amp; Nuclear Components Index with implementation at the close on 31 July.

Oklo (OKLO US) and Western Uranium &amp; Vanadium (WUC CN) will be added to the index. Estimated one-way turnover is 7.9% resulting in a round-trip trade of US$486m.
There are only 4 trading days to implementation of the changes and we'd watch out for big moves on stocks that have more than 2x ADV to trade.


Solactive Global Uranium & Nuclear Components Index Rebalance: Two Adds & US$500m Trade

Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

Douglas Research Advisory

<ul>
<li>On 26 July, it was reported in the local media that there has been a major breach of duty by nearly 40 current/former employees at Doosan Bobcat.</li>
<li>The fact that this material breach of duty was not revealed prior to the merger announcement adds to the argument that this merger/split/delisting should be either cancelled or redone. </li>
<li>We remain negative on all major companies involved in this deal including Doosan Bobcat and Doosan Robotics. The breach of duty at Doosan Bobcat adds to the fire. </li>
</ul>


On 26 July, it was reported in the local media that there has been a major breach of duty by nearly 40 current/former employees at Doosan Bobcat.
The fact that this material breach of duty was not revealed prior to the merger announcement adds to the argument that this merger/split/delisting should be either cancelled or redone. 
We remain negative on all major companies involved in this deal including Doosan Bobcat and Doosan Robotics. The breach of duty at Doosan Bobcat adds to the fire. 


Doosan Bobcat Employees Involved In Major Breach of Duty + Doosan Group Pushes Ahead With Merger

Equity Bottom-Up

<ul>
<li>Doosan Robotics reported disappointing 2Q 2024 results. It generated sales of 14.4 billion won (up 10.1% YoY) and operating loss of 7.9 billion won in 2Q 2024.</li>
<li>After the disappointing results in 2Q 2024, it is likely that the consensus will lower their sales and profit estimates of Doosan Robotics for the next three years.</li>
<li>The consensus is likely to lower sales estimates by at least 15-20%+ in the next two years. In addition, the profit margin estimates are likely to be reduced materially. </li>
</ul>


Doosan Robotics reported disappointing 2Q 2024 results. It generated sales of 14.4 billion won (up 10.1% YoY) and operating loss of 7.9 billion won in 2Q 2024.
After the disappointing results in 2Q 2024, it is likely that the consensus will lower their sales and profit estimates of Doosan Robotics for the next three years.
The consensus is likely to lower sales estimates by at least 15-20%+ in the next two years. In addition, the profit margin estimates are likely to be reduced materially. 


Doosan Robotics: 2Q 2024 Results Analysis

<ul>
<li>On 24 July, the Financial Supervisory Service (FSS) ordered the Doosan Group to resubmit the merger plan. </li>
<li>It is rare for FSS to reject companies' merger reports but there has been an exception this time since this deal is egregiously negative to many minority investors.</li>
<li>Doosan Group needs to resubmit a revised merger plan within next three months. Otherwise, the securities report involving the merger plan of the Doosan Group companies will be considered withdrawn. </li>
</ul>


On 24 July, the Financial Supervisory Service (FSS) ordered the Doosan Group to resubmit the merger plan. 
It is rare for FSS to reject companies' merger reports but there has been an exception this time since this deal is egregiously negative to many minority investors.
Doosan Group needs to resubmit a revised merger plan within next three months. Otherwise, the securities report involving the merger plan of the Doosan Group companies will be considered withdrawn. 


FSS Orders Doosan Group to Resubmit the Merger Plan - "Merger Plan Is Not Illegal, But Is It Fair?"

South Korea

Doosan Enerbility Co., Ltd. manufactures and distributes construction machines. The Company produces gas turbines, engines, turbine generators, boilers, power plant equipment, and other related products. Doosan Enerbility also offers energy solutions for thermal power, nuclear power, and renewable energy.

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Doosan Enerbility (034020 KS)

Clarifications Regarding the FSS's Unexpected Revision Request for the Doosan Mergers

Doosan submitted the revised securities registration statement for its restructuring. As suggested in this post, the merger ratio remains...

Sanghyun Park

Solactive Global Uranium & Nuclear Components Index Rebalance: Two Adds & US$500m Trade

The changes for the Global Uranium & Nuclear Components Index will be implemented at the close tomorrow. There is a fair bit to trade on some...

Brian Freitas

Doosan Bobcat Employees Involved In Major Breach of Duty + Doosan Group Pushes Ahead With Merger

On 26 July, it was reported in the local media that there has been a major breach of duty by nearly 40 current/former employees at Doosan Bobcat.

Douglas Kim

Doosan Robotics: 2Q 2024 Results Analysis

Doosan Robotics reported disappointing 2Q 2024 results which is likely to lead to consensus lowering sales and profit estimates for the next three...

Douglas Kim

FSS Orders Doosan Group to Resubmit the Merger Plan - "Merger Plan Is Not Illegal, But Is It Fair?"

Doosan Group needs to resubmit a revised merger plan within next three months. Otherwise, the securities report involving the merger plan of the...

Douglas Kim

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52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

Clarifications Regarding the FSS's Unexpected Revision Request for the Doosan Mergers

Doosan submitted the revised securities registration statement for its restructuring. As suggested in this post, the merger ratio remains...

Sanghyun Park

Solactive Global Uranium & Nuclear Components Index Rebalance: Two Adds & US$500m Trade

The changes for the Global Uranium & Nuclear Components Index will be implemented at the close tomorrow. There is a fair bit to trade on some...

Brian Freitas

Doosan Bobcat Employees Involved In Major Breach of Duty + Doosan Group Pushes Ahead With Merger

On 26 July, it was reported in the local media that there has been a major breach of duty by nearly 40 current/former employees at Doosan Bobcat.

Douglas Kim

Doosan Robotics: 2Q 2024 Results Analysis

​Doosan Robotics reported disappointing 2Q 2024 results which is likely to lead to consensus lowering sales and profit estimates for the next three...

Douglas Kim

FSS Orders Doosan Group to Resubmit the Merger Plan - "Merger Plan Is Not Illegal, But Is It Fair?"

Doosan Group needs to resubmit a revised merger plan within next three months. Otherwise, the securities report involving the merger plan of the...

Douglas Kim

Doosan Robotics reported disappointing 2Q 2024 results which is likely to lead to consensus lowering sales and profit estimates for the next three...