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

<p>We all know that Doosan Infracore's 0.6895026 portions (Investment Division) must move in proportion to the Doosan Heavy share price at a ratio of 0.4719929.</p><p>That is, 0.6895026 Infracore shares must be equal in value to 0.4719929 Heavy shares.</p><div><div><table class="table table-striped">
<colgroup>
<col width="200">
<col width="200">
</colgroup>
<tbody>
<tr><td colspan="2" style="width: 726.008px;" data-sheets-value='{"1":2,"2":"Swap ratio"}'>Doosan Infracore split ratio</td></tr>
<tr>
<td style="width: 488.693px;" data-sheets-value='{"1":2,"2":"Doosan Infracore split ratio"}'>Business Division</td>
<td style="text-align: right; width: 216.321px;" data-sheets-value='{"1":3,"3":0.6895026}' data-sheets-numberformat='{"1":2,"2":"#,##0.0000000","3":1}'>0.3104974</td>
</tr>
<tr>
<td style="width: 488.693px;" data-sheets-value='{"1":2,"2":"Swap ratio with Doosan Heavy"}'><strong>Investment Division (owning a 51.05% stake in Doosan Bobcat)</strong></td>
<td style="text-align: right; width: 216.321px;" data-sheets-value='{"1":3,"3":0.47342703366485994}' data-sheets-numberformat='{"1":2,"2":"#,##0.0000000","3":1}' data-sheets-formula="=R[-2]C[0]*R[-1]C[0]"><strong>0.6895026</strong></td>
</tr>
<tr>
<td style="width: 488.693px;">Merger ratio between Doosan Infracore Investment Division &amp; Doosan Heavy Industries</td>
<td style="text-align: right; width: 216.321px;">0.6866211</td>
</tr>
<tr>
<td style="width: 488.693px;">
<p><strong>Final swap ratio for each share of Doosan Infracore</strong></p>
<p><strong>: Split ratio (0.6895026) × Merger ratio (0.6866211)</strong></p>
</td>
<td style="text-align: right; width: 216.321px;"><strong>0.4719929</strong></td>
</tr>
<tr><td colspan="2" style="width: 726.008px;" data-sheets-value='{"1":2,"2":"Source: DART"}'>Source: DART</td></tr>
</tbody>
</table></div></div><div>
<p>Now, the tricky part is the value of Infracore's Business Division.</p>
<p>The split ratio indicates that 0.3104974 of the Infracore share price should be the worth of the Business Division.</p>
<p>Then, if you subtract the Infracore share price by 0.4719929 of the Heavy share price, you should have an outcome equal to 0.3104974 of the Infracore share price.</p>
<p>But there is a huge disparity now. 0.3104974 of the Infracore share price is currently ₩4,704, whereas the current market value (the Infracore share price minus 0.4719929 of the Heavy share price) is ₩2,831.</p>
<p><strong>So, it is like Infracore's Business Division is currently trading at a 39.82% discount to the nominal (or theoretical) value.</strong></p>
<table class="table table-striped">
<colgroup>
<col width="100">
<col width="100">
</colgroup>
<tbody>
<tr><td colspan="2" rowspan="1" style="width: 726.008px;" data-sheets-value='{"1":2,"2":"Value calculations"}'>Value calculations</td></tr>
<tr>
<td style="width: 352.5px;" data-sheets-value='{"1":2,"2":"Dooan Heavy share price"}'>Doosan Heavy share price</td>
<td style="text-align: right; width: 352.514px;" data-sheets-value='{"1":3,"3":26100}' data-sheets-numberformat='{"1":4,"2":"[$₩]#,##0","3":1}' data-sheets-formula="=R[-4]C[-6]">₩26,100</td>
</tr>
<tr>
<td style="width: 352.5px;" data-sheets-value='{"1":2,"2":"0.4719929 of Doosan Heavy share price"}'> - 0.4719929 of Doosan Heavy share price</td>
<td style="text-align: right; width: 352.514px;" data-sheets-value='{"1":3,"3":12319.01469}' data-sheets-numberformat='{"1":4,"2":"[$₩]#,##0","3":1}' data-sheets-formula="=R[-1]C[0]*R[-46]C[-4]">₩12,319</td>
</tr>
<tr>
<td style="width: 352.5px;" data-sheets-value='{"1":2,"2":"Doosan Infracore share price"}'>Doosan Infracore share price</td>
<td style="text-align: right; width: 352.514px;" data-sheets-value='{"1":3,"3":15150}' data-sheets-numberformat='{"1":4,"2":"[$₩]#,##0","3":1}' data-sheets-formula="=R[-6]C[-5]">₩15,150</td>
</tr>
<tr>
<td style="width: 352.5px;" data-sheets-value='{"1":2,"2":"Minus 0.4719929 of Doosan Heavy share price"}'> - Minus 0.4719929 of Doosan Heavy share price</td>
<td style="text-align: right; width: 352.514px;" data-sheets-value='{"1":3,"3":2830.98531}' data-sheets-numberformat='{"1":4,"2":"[$₩]#,##0","3":1}' data-sheets-formula="=R[-1]C[0]-R[-2]C[0]">₩2,831</td>
</tr>
<tr>
<td style="width: 352.5px;" data-sheets-value='{"1":2,"2":"0.3104974 of Doosan Infracore share price"}'> - 0.3104974 of Doosan Infracore share price</td>
<td style="text-align: right; width: 352.514px;" data-sheets-value='{"1":3,"3":4704.03561}' data-sheets-numberformat='{"1":4,"2":"[$₩]#,##0","3":1}' data-sheets-formula="=R[-2]C[0]*R[-49]C[-3]">₩4,704</td>
</tr>
<tr>
<td style="width: 352.5px;" data-sheets-value='{"1":2,"2":"Premium"}'><strong>Discount on 0.3104974 of Doosan Infracore share price</strong></td>
<td style="text-align: right; width: 352.514px;" data-sheets-value='{"1":3,"3":0.3981794474553308}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}' data-sheets-formula="=R[-9]C[-7]"><strong>39.82%</strong></td>
</tr>
<tr><td colspan="2" rowspan="1" style="width: 726.008px;" data-sheets-value='{"1":2,"2":"Source: KRX &amp; Clepsydra Capital"}'>Source: KRX &amp; Clepsydra Capital</td></tr>
</tbody>
</table>
</div>

We all know that Doosan Infracore's 0.6895026 portions (Investment Division) must move in proportion to the Doosan Heavy share price at a ratio of 0.4719929.That is, 0.6895026 Infracore shares must be equal in value to 0.4719929 Heavy shares.





Doosan Infracore split ratio

Business Division
0.3104974


Investment Division (owning a 51.05% stake in Doosan Bobcat)
0.6895026


Merger ratio between Doosan Infracore Investment Division &amp; Doosan Heavy Industries
0.6866211



Final swap ratio for each share of Doosan Infracore
: Split ratio (0.6895026) × Merger ratio (0.6866211)

0.4719929

Source: DART


Now, the tricky part is the value of Infracore's Business Division.
The split ratio indicates that 0.3104974 of the Infracore share price should be the worth of the Business Division.
Then, if you subtract the Infracore share price by 0.4719929 of the Heavy share price, you should have an outcome equal to 0.3104974 of the Infracore share price.
But there is a huge disparity now. 0.3104974 of the Infracore share price is currently ₩4,704, whereas the current market value (the Infracore share price minus 0.4719929 of the Heavy share price) is ₩2,831.
So, it is like Infracore's Business Division is currently trading at a 39.82% discount to the nominal (or theoretical) value.






Value calculations

Doosan Heavy share price
₩26,100


 - 0.4719929 of Doosan Heavy share price
₩12,319


Doosan Infracore share price
₩15,150


 - Minus 0.4719929 of Doosan Heavy share price
₩2,831


 - 0.3104974 of Doosan Infracore share price
₩4,704


Discount on 0.3104974 of Doosan Infracore share price
39.82%

Source: KRX &amp; Clepsydra Capital




How Would We Capitalize on a Massive Discount Present on Doosan Infracore Business Unit?

<h2>A quick recap of the split-merger</h2><p>Doosan Infracore is a company that produces and sells construction equipment and engines. It is also engaged in the investment business of managing major affiliates. Now, Doosan Infracore's investment division merges with Doosan Heavy Industries &amp; Constructions.</p><p>Doosan Infracore will first spin off its business division and investment division. Through this, Doosan Infracore shareholders will have a stake in each business division. After that, Doosan Infracore investors will go through the process of exchanging their investment division shares for Doosan Heavy Industries &amp; Construction shares.</p><p><strong>For example, suppose you own 100 shares of Doosan Infracore.</strong></p><p><strong>Doosan Infracore split the business division and investment division at 0.31:0.69 (rounded to two decimal places).</strong> The investment division, which owns affiliate stocks, is larger than the business division. This is because Doosan Infracore owns a 51.05% stake in Doosan Bobcat and has included this stake as an investment asset. In other words, Doosan Bobcat is separated from Doosan Infracore to merge with Doosan Heavy. </p><table class="table table-striped">
<colgroup>
<col width="200">
<col width="200">
</colgroup>
<tbody>
<tr><td colspan="2" style="width: 726.008px;" data-sheets-value='{"1":2,"2":"Swap ratio"}'>Doosan Infracore split ratio</td></tr>
<tr>
<td style="width: 352.5px;" data-sheets-value='{"1":2,"2":"Doosan Infracore split ratio"}'>Business division</td>
<td style="text-align: right; width: 352.514px;" data-sheets-value='{"1":3,"3":0.6895026}' data-sheets-numberformat='{"1":2,"2":"#,##0.0000000","3":1}'><strong>0.3104974</strong></td>
</tr>
<tr>
<td style="width: 352.5px;" data-sheets-value='{"1":2,"2":"Swap ratio with Doosan Heavy"}'>Investment division (owning a 51.05% stake in Doosan Bobcat)</td>
<td style="text-align: right; width: 352.514px;" data-sheets-value='{"1":3,"3":0.47342703366485994}' data-sheets-numberformat='{"1":2,"2":"#,##0.0000000","3":1}' data-sheets-formula="=R[-2]C[0]*R[-1]C[0]"><strong>0.6895026</strong></td>
</tr>
<tr><td colspan="2" style="width: 726.008px;" data-sheets-value='{"1":2,"2":"Source: DART"}'>Source: DART</td></tr>
</tbody>
</table><p>Anyway, if 100 shares are divided according to the split ratio, 31 shares go to the business division, and 69 shares go to the investment division. And your 69 shares in the investment division are converted back to Doosan Heavy stocks according to the merger ratio with Doosan Heavy.</p><p>Doosan Infracore and Doosan Heavy Industries set a merger ratio of 0.69:1 (rounded to two decimal places). <strong>That is, 1 share of Doosan Infracore's investment division will receive 0.69 shares of the merged company. So, 69 shares of Doosan Infracore's investment division will be converted into 47 shares of the merged company, making the final swap ratio 0.47 (again rounded to two decimal places).</strong></p><table class="table table-striped">
<colgroup>
<col width="200">
<col width="200">
</colgroup>
<tbody>
<tr><td colspan="2" style="width: 726.008px;" data-sheets-value='{"1":2,"2":"Swap ratio"}'>Merger ratio &amp; final swap ratio</td></tr>
<tr>
<td style="width: 352.5px;" data-sheets-value='{"1":2,"2":"Doosan Infracore split ratio"}'>Merger ratio between Doosan Infracore Investment Division &amp; Doosan Heavy Industries</td>
<td style="text-align: right; width: 352.514px;" data-sheets-value='{"1":3,"3":0.6895026}' data-sheets-numberformat='{"1":2,"2":"#,##0.0000000","3":1}'><strong>0.6866211</strong></td>
</tr>
<tr>
<td style="width: 352.5px;" data-sheets-value='{"1":2,"2":"Swap ratio with Doosan Heavy"}'>
<p>Final swap ratio for each share of Doosan Infracore</p>
<p><strong>: Split ratio (0.6895026) × Merger ratio (0.6866211)</strong></p>
</td>
<td style="text-align: right; width: 352.514px;" data-sheets-value='{"1":3,"3":0.47342703366485994}' data-sheets-numberformat='{"1":2,"2":"#,##0.0000000","3":1}' data-sheets-formula="=R[-2]C[0]*R[-1]C[0]"><strong>0.4719929</strong></td>
</tr>
<tr><td colspan="2" style="width: 726.008px;" data-sheets-value='{"1":2,"2":"Source: DART"}'>Source: DART</td></tr>
</tbody>
</table><div class="content-highlight">
<p><strong>In conclusion:</strong></p>
<p><strong>Your 100 shares of Doosan Infracore are divided into 31 shares of Doosan Infracore business unit and 47 shares of Doosan Heavy Industries &amp; Construction.</strong></p>
</div><p>Doosan Infracore's largest shareholder is Doosan Heavy Industries &amp; Construction (a 35% stake).  Doosan Infracore's minority shareholders will receive Doosan Heavy shares according to the merger ratio, but new shares are not allocated to Doosan Heavy Industries &amp; Construction.</p><h2>Schedule</h2><p>March 19 was the day Doosan Infracore and Doosan Heavy Industries &amp; Construction signed a merger agreement. April 5 was the day to determine the shareholders who could exercise their voting rights when the spinoff-merger was listed on the agenda of the general meeting of shareholders.</p><p>From April 28 to May 13, you must have notified the company of your intention in writing to oppose the spin-off merger. If you hadn't expressed your objection during this period, you were automatically considered to favor the spin-off and merger, and you will receive Doosan Heavy's new shares according to the split-merger ratio.</p><p>On May 13, the spinoff and merger agenda passed the general shareholders' meeting. The merger is a matter of a special resolution at the general meeting of shareholders. At least two-thirds of the shareholders present and at least one-third of the total number of issued stocks must agree.</p><p>Shareholders who had expressed their opposition could exercise their stock appraisal rights from May 13 to June 2. <strong>Shareholders of Doosan Infracore who exercised their stock requisition rights can receive ₩8,224 per share, and shareholders of Doosan Heavy can receive a cash refund of ₩11,447 per share.</strong></p><p>On July 1, Doosan Infracore's investment division will be legally transferred to Doosan Heavy Industries &amp; Construction. From June 29 to July 20, Doosan Infracore stock trading is suspended. Lastly, July 21 marks the first day that Doosan Infracore shareholders can trade their business division stocks and Doosan Heavy's new stocks on the stock market.</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":"Schedule"}'>Schedule</td></tr>
<tr>
<td style="width: 351.818px;">Split-merger contract date</td>
<td style="text-align: right; width: 350.909px;">March 19</td>
</tr>
<tr>
<td style="width: 351.818px;" data-sheets-value='{"1":2,"2":"Record date for appraisal rights"}'>Appraisal rights record date</td>
<td style="text-align: right; width: 350.909px;" data-sheets-value='{"1":3,"3":44291}' data-sheets-numberformat='{"1":5,"2":"mmmm d","3":1}'>April 5</td>
</tr>
<tr>
<td style="width: 351.818px;" data-sheets-value='{"1":2,"2":"Dissenting opinion notice"}'>Dissenting opinion notice</td>
<td style="text-align: right; width: 350.909px;" data-sheets-value='{"1":2,"2":"April 28~May 13"}'>April 28~May 13</td>
</tr>
<tr>
<td style="width: 351.818px;" data-sheets-value='{"1":2,"2":"Shareholder meeting"}'>Shareholder meeting</td>
<td style="text-align: right; width: 350.909px;" data-sheets-value='{"1":3,"3":44329}' data-sheets-numberformat='{"1":5,"2":"mmmm d","3":1}'>May 13</td>
</tr>
<tr>
<td style="width: 351.818px;" data-sheets-value='{"1":2,"2":"Appraisal rights exercise"}'>Appraisal rights exercise</td>
<td style="text-align: right; width: 350.909px;" data-sheets-value='{"1":2,"2":"May 13~June 2"}'>May 13~June 2</td>
</tr>
<tr>
<td style="width: 351.818px;" data-sheets-value='{"1":2,"2":"Trade suspension"}'><strong>Trade suspension (Infracore)</strong></td>
<td style="text-align: right; width: 350.909px;" data-sheets-value='{"1":2,"2":"June 29~July 20"}'><strong>June 29~July 20</strong></td>
</tr>
<tr>
<td style="width: 351.818px;" data-sheets-value='{"1":2,"2":"Re-listing"}'><strong>Re-listing</strong></td>
<td style="text-align: right; width: 350.909px;" data-sheets-value='{"1":3,"3":44398}' data-sheets-numberformat='{"1":5,"2":"mmmm d","3":1}'><strong>July 21</strong></td>
</tr>
<tr><td colspan="2" style="width: 723.636px;" data-sheets-value='{"1":2,"2":"Source: DART"}'>Source: DART</td></tr>
</tbody>
</table><h2>Carve-out closure</h2><p>After the spin-off and merger, Doosan Infracore's business division will soon be sold to Hyundai Heavy Industries Holdings. On February 5, Doosan Heavy announced that it would sell a 35% stake in Doosan Infracore business to Hyundai Heavy Industries Holdings. That is, Doosan Heavy and Hyundai Heavy Industries Holdings signed a carve-out contract to sell only Doosan Infracore's business division.</p><p><strong>In fact, the spin-off and merger of Doosan Infracore and Doosan Heavy Industries is a process for a carve-out deal signed with Hyundai Heavy Industries Holdings.</strong></p><p>If this spinoff and merger are completed without any problems, the largest shareholder in Doosan Infracore's business division will be Hyundai Heavy Industries Holdings. <strong>In the future, Doosan Infracore's business division is expected to merge with Hyundai Construction Equipment (267270 KS)</strong>.</p><div class="content-highlight">
<p><strong>In conclusion:</strong></p>
<p><strong>The shares of Doosan Infracore shareholders are eventually divided into shares of Doosan Heavy Industries and shares of Hyundai Construction Equipment.</strong></p>
</div>

A quick recap of the split-mergerDoosan Infracore is a company that produces and sells construction equipment and engines. It is also engaged in the investment business of managing major affiliates. Now, Doosan Infracore's investment division merges with Doosan Heavy Industries &amp; Constructions.Doosan Infracore will first spin off its business division and investment division. Through this, Doosan Infracore shareholders will have a stake in each business division. After that, Doosan Infracore investors will go through the process of exchanging their investment division shares for Doosan Heavy Industries &amp; Construction shares.For example, suppose you own 100 shares of Doosan Infracore.Doosan Infracore split the business division and investment division at 0.31:0.69 (rounded to two decimal places). The investment division, which owns affiliate stocks, is larger than the business division. This is because Doosan Infracore owns a 51.05% stake in Doosan Bobcat and has included this stake as an investment asset. In other words, Doosan Bobcat is separated from Doosan Infracore to merge with Doosan Heavy. 





Doosan Infracore split ratio

Business division
0.3104974


Investment division (owning a 51.05% stake in Doosan Bobcat)
0.6895026

Source: DART

Anyway, if 100 shares are divided according to the split ratio, 31 shares go to the business division, and 69 shares go to the investment division. And your 69 shares in the investment division are converted back to Doosan Heavy stocks according to the merger ratio with Doosan Heavy.Doosan Infracore and Doosan Heavy Industries set a merger ratio of 0.69:1 (rounded to two decimal places). That is, 1 share of Doosan Infracore's investment division will receive 0.69 shares of the merged company. So, 69 shares of Doosan Infracore's investment division will be converted into 47 shares of the merged company, making the final swap ratio 0.47 (again rounded to two decimal places).





Merger ratio &amp; final swap ratio

Merger ratio between Doosan Infracore Investment Division &amp; Doosan Heavy Industries
0.6866211



Final swap ratio for each share of Doosan Infracore
: Split ratio (0.6895026) × Merger ratio (0.6866211)

0.4719929

Source: DART


In conclusion:
Your 100 shares of Doosan Infracore are divided into 31 shares of Doosan Infracore business unit and 47 shares of Doosan Heavy Industries &amp; Construction.
Doosan Infracore's largest shareholder is Doosan Heavy Industries &amp; Construction (a 35% stake).  Doosan Infracore's minority shareholders will receive Doosan Heavy shares according to the merger ratio, but new shares are not allocated to Doosan Heavy Industries &amp; Construction.ScheduleMarch 19 was the day Doosan Infracore and Doosan Heavy Industries &amp; Construction signed a merger agreement. April 5 was the day to determine the shareholders who could exercise their voting rights when the spinoff-merger was listed on the agenda of the general meeting of shareholders.From April 28 to May 13, you must have notified the company of your intention in writing to oppose the spin-off merger. If you hadn't expressed your objection during this period, you were automatically considered to favor the spin-off and merger, and you will receive Doosan Heavy's new shares according to the split-merger ratio.On May 13, the spinoff and merger agenda passed the general shareholders' meeting. The merger is a matter of a special resolution at the general meeting of shareholders. At least two-thirds of the shareholders present and at least one-third of the total number of issued stocks must agree.Shareholders who had expressed their opposition could exercise their stock appraisal rights from May 13 to June 2. Shareholders of Doosan Infracore who exercised their stock requisition rights can receive ₩8,224 per share, and shareholders of Doosan Heavy can receive a cash refund of ₩11,447 per share.On July 1, Doosan Infracore's investment division will be legally transferred to Doosan Heavy Industries &amp; Construction. From June 29 to July 20, Doosan Infracore stock trading is suspended. Lastly, July 21 marks the first day that Doosan Infracore shareholders can trade their business division stocks and Doosan Heavy's new stocks on the stock market.





Schedule

Split-merger contract date
March 19


Appraisal rights record date
April 5


Dissenting opinion notice
April 28~May 13


Shareholder meeting
May 13


Appraisal rights exercise
May 13~June 2


Trade suspension (Infracore)
June 29~July 20


Re-listing
July 21

Source: DART

Carve-out closureAfter the spin-off and merger, Doosan Infracore's business division will soon be sold to Hyundai Heavy Industries Holdings. On February 5, Doosan Heavy announced that it would sell a 35% stake in Doosan Infracore business to Hyundai Heavy Industries Holdings. That is, Doosan Heavy and Hyundai Heavy Industries Holdings signed a carve-out contract to sell only Doosan Infracore's business division.In fact, the spin-off and merger of Doosan Infracore and Doosan Heavy Industries is a process for a carve-out deal signed with Hyundai Heavy Industries Holdings.If this spinoff and merger are completed without any problems, the largest shareholder in Doosan Infracore's business division will be Hyundai Heavy Industries Holdings. In the future, Doosan Infracore's business division is expected to merge with Hyundai Construction Equipment (267270 KS).
In conclusion:
The shares of Doosan Infracore shareholders are eventually divided into shares of Doosan Heavy Industries and shares of Hyundai Construction Equipment.


Doosan Heavy/Infracore Corporate Actions Walkthrough & KOSPI 200 Index Treatments

Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

<div class="content-highlight">
<p>We continue to have a positive view of Doosan Infracore. The fundamentals are improving significantly and the shorts need to cover more before the stock is suspended from trading on 29 June. The price ratio between Doosan Infracore/DHIC recently peaked on 12 May to 0.87 and has been declining since then to 0.66. So on a relative basis, we think that Doosan Infracore could outperform DHIC this month. </p>
<p>Over a longer view (1-2 years), DHIC can benefit from increased exports of SMR nuclear power and if the opposition party wins the Presidency in South Korea next March, this could also fuel higher demand for nuclear power in Korea which should benefit DHIC. Due to the sharp increase in its share price in the past few weeks, DHIC's shares could enter a correction in the near term, but we would not short it at current levels.</p>
<p>Certainly, many investors are betting against DHIC right now, especially in the past one month. However, we believe that the tides are turning big time for nuclear power (in both South Korea and for exports through SMR). DHIC has the best technology and expertise for nuclear power in South Korea and if there are greater demand for nuclear power for both exports as well as in Korea, DHIC would be the number one company to benefit from this trend. </p>
</div>


We continue to have a positive view of Doosan Infracore. The fundamentals are improving significantly and the shorts need to cover more before the stock is suspended from trading on 29 June. The price ratio between Doosan Infracore/DHIC recently peaked on 12 May to 0.87 and has been declining since then to 0.66. So on a relative basis, we think that Doosan Infracore could outperform DHIC this month. 
Over a longer view (1-2 years), DHIC can benefit from increased exports of SMR nuclear power and if the opposition party wins the Presidency in South Korea next March, this could also fuel higher demand for nuclear power in Korea which should benefit DHIC. Due to the sharp increase in its share price in the past few weeks, DHIC's shares could enter a correction in the near term, but we would not short it at current levels.
Certainly, many investors are betting against DHIC right now, especially in the past one month. However, we believe that the tides are turning big time for nuclear power (in both South Korea and for exports through SMR). DHIC has the best technology and expertise for nuclear power in South Korea and if there are greater demand for nuclear power for both exports as well as in Korea, DHIC would be the number one company to benefit from this trend. 


Declining Shorts for Doosan Infracore & A Big Jump in Shorts for Doosan Heavy Industries

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

Brian Freitas

Pan-Asia Index Rebalances/ Events/ Delta One

Quantitative Analysis

<div><p>The Asia Short Interest weekly looks at moves in market wide short interest and highlights movements in stock specific short interest across Hong Kong, Japan, Korea and Taiwan using the last available data published by the relevant authorities.</p></div><div><p>Hong Kong saw shorts rise on <a href="https://www.smartkarma.com/entities/tencent-holdings-ltd" target="_blank" data-smartkarma-citation="entities:26:1" rel="noopener">Tencent Holdings (700 HK)</a>, <a href="https://www.smartkarma.com/entities/meituan-dianping" target="_blank" data-smartkarma-citation="entities:26970:1" rel="noopener">Meituan (3690 HK)</a>, <a href="https://www.smartkarma.com/entities/china-merchants-bank-co-ltd-3388a037-4214-4997-b45d-520518cfdb57" target="_blank" data-smartkarma-citation="entities:10987:1" rel="noopener">China Merchants Bank H (3968 HK)</a>, <a href="https://www.smartkarma.com/entities/wuxi-apptec-co-ltd-bf4a1265-beef-48b6-b82d-29308426030f" target="_blank" data-smartkarma-citation="entities:27795:1" rel="noopener">WuXi AppTec Co. Ltd. (2359 HK)</a> and <a href="https://www.smartkarma.com/entities/sunny-optical-tech" target="_blank" data-smartkarma-citation="entities:13363:1" rel="noopener">Sunny Optical (2382 HK)</a> while there was short covering on <a href="https://www.smartkarma.com/entities/ping-an-insurance-grp-co-of-china-ltd" target="_blank" data-smartkarma-citation="entities:12880:1" rel="noopener">Ping An Insurance (H) (2318 HK)</a>, <a href="https://www.smartkarma.com/entities/baidu-inc-a55ca720-5968-48f0-8194-ac94390d065c" target="_blank" data-smartkarma-citation="entities:32212:1" rel="noopener">Baidu (9888 HK)</a>, <a href="https://www.smartkarma.com/entities/haier-smart-home-co-ltd-b3ef445f-0f54-4586-8c58-9073de98d60e" target="_blank" data-smartkarma-citation="entities:31105:1" rel="noopener">Haier Smart Home Co Ltd (6690 HK)</a>, <a href="https://www.smartkarma.com/entities/alibaba-group" target="_blank" data-smartkarma-citation="entities:28434:1" rel="noopener">Alibaba Group (9988 HK)</a> and <a href="https://www.smartkarma.com/entities/citic-securities-h" target="_blank" data-smartkarma-citation="entities:463:1" rel="noopener">Citic Securities (H) (6030 HK)</a>. Shorts increased in the Communication Services, Consumer Discretionary, Health Care and Real Estate sectors, and decreased in the Financials, Industrials, and Information Technology sectors.</p></div><div><p>In Japan, stocks that saw the most shorts were <a href="https://www.smartkarma.com/entities/lasertec-corp" target="_blank" data-smartkarma-citation="entities:4126:1" rel="noopener">Lasertec Corp (6920 JP)</a>, <a href="https://www.smartkarma.com/entities/anritsu-corp" target="_blank" data-smartkarma-citation="entities:3700:1" rel="noopener">Anritsu Corp (6754 JP)</a>, <a href="https://www.smartkarma.com/entities/daito-trust-construct-co-ltd" target="_blank" data-smartkarma-citation="entities:10503:1" rel="noopener">Daito Trust Construct (1878 JP)</a>, <a href="https://www.smartkarma.com/entities/jfe-holdings-inc" target="_blank" data-smartkarma-citation="entities:210:1" rel="noopener">JFE Holdings (5411 JP)</a> and <a href="https://www.smartkarma.com/entities/tokyu-fudosan-holdings-corp" target="_blank" data-smartkarma-citation="entities:8355:1" rel="noopener">Tokyu Fudosan Holdings (3289 JP)</a> while shorts decreased on <a href="https://www.smartkarma.com/entities/toshiba-corp" target="_blank" data-smartkarma-citation="entities:637:1" rel="noopener">Toshiba Corp (6502 JP)</a>, <a href="https://www.smartkarma.com/entities/ana-holdings-inc" target="_blank" data-smartkarma-citation="entities:5308:1" rel="noopener">Ana Holdings (9202 JP)</a>, <a href="https://www.smartkarma.com/entities/h-i-s-co-ltd" target="_blank" data-smartkarma-citation="entities:19311:1" rel="noopener">H I S Co Ltd (9603 JP)</a>, <a href="https://www.smartkarma.com/entities/outsourcing-inc" target="_blank" data-smartkarma-citation="entities:7431:1" rel="noopener">Outsourcing Inc (2427 JP)</a> and <a href="https://www.smartkarma.com/entities/euglena-co-ltd" target="_blank" data-smartkarma-citation="entities:8414:1" rel="noopener">Euglena Co Ltd (2931 JP)</a>. Shorts increased in the Real Estate and Consumer Discretionary sectors, and decreased in the Industrials sector.</p></div><div><p>In Korea, shorts increased on <a href="https://www.smartkarma.com/entities/celltrion-inc" target="_blank" data-smartkarma-citation="entities:991:1" rel="noopener">Celltrion Inc (068270 KS)</a> and <a href="https://www.smartkarma.com/entities/hyundai-motor-co" target="_blank" data-smartkarma-citation="entities:155:1" rel="noopener">Hyundai Motor Co (005380 KS)</a> during the week while decreasing on <a href="https://www.smartkarma.com/entities/samsung-electronics-co-ltd" target="_blank" data-smartkarma-citation="entities:191:1" rel="noopener">Samsung Electronics (005930 KS)</a>, <a href="https://www.smartkarma.com/entities/hyundai-heavy-industries" target="_blank" data-smartkarma-citation="entities:10155:1" rel="noopener">Hyundai Heavy Industries (009540 KS)</a> and <a href="https://www.smartkarma.com/entities/doosan-infracore-co-ltd" target="_blank" data-smartkarma-citation="entities:3982:1" rel="noopener">Doosan Infracore (042670 KS)</a>. The short sell ban has ended today and short selling will be permitted on <a href="https://www.smartkarma.com/entities/korea-stock-exchange-kospi-200-index" target="_blank" data-smartkarma-citation="entities:26021:1" rel="noopener">Korea Stock Exchange Kospi 200 Index (KOSPI2 INDEX)</a> and <a href="https://www.smartkarma.com/entities/kosdaq-150-index" target="_blank" data-smartkarma-citation="entities:31077:1" rel="noopener">KOSDAQ 150 Index (KOSDQ150 INDEX)</a> constituents from Monday, 3 May.</p></div><div><p>Stocks in Taiwan that saw the highest increase in shorts were <a href="https://www.smartkarma.com/entities/china-development-financial" target="_blank" data-smartkarma-citation="entities:13818:1" rel="noopener">China Development Financial (2883 TT)</a>, <a href="https://www.smartkarma.com/entities/yang-ming-marine-transport" target="_blank" data-smartkarma-citation="entities:8502:1" rel="noopener">Yang Ming Marine Transport (2609 TT)</a>, <a href="https://www.smartkarma.com/entities/evergreen-marine-corp-ltd" target="_blank" data-smartkarma-citation="entities:15428:1" rel="noopener">Evergreen Marine Corp (2603 TT)</a>, <a href="https://www.smartkarma.com/entities/walsin-lihwa-corp" target="_blank" data-smartkarma-citation="entities:17142:1" rel="noopener">Walsin Lihwa (1605 TT)</a> and <a href="https://www.smartkarma.com/entities/compal-electronics" target="_blank" data-smartkarma-citation="entities:4620:1" rel="noopener">Compal Electronics (2324 TT)</a> while shorts were covered on <a href="https://www.smartkarma.com/entities/au-optronics-corp" target="_blank" data-smartkarma-citation="entities:6704:1" rel="noopener">AU Optronics (2409 TT)</a>, <a href="https://www.smartkarma.com/entities/winbond-electronics-corp" target="_blank" data-smartkarma-citation="entities:9177:1" rel="noopener">Winbond Electronics (2344 TT)</a>, <a href="https://www.smartkarma.com/entities/asmedia-technology-inc" target="_blank" data-smartkarma-citation="entities:15732:1" rel="noopener">Asmedia Technology (5269 TT)</a>, <a href="https://www.smartkarma.com/entities/genius-electronic-optical-co-ltd" target="_blank" data-smartkarma-citation="entities:9632:1" rel="noopener">Genius Electronic Optical (3406 TT)</a> and <a href="https://www.smartkarma.com/entities/novatek-microelectronics-corp" target="_blank" data-smartkarma-citation="entities:10904:1" rel="noopener">Novatek Microelectronics Corp (3034 TT)</a>.</p></div>

The Asia Short Interest weekly looks at moves in market wide short interest and highlights movements in stock specific short interest across Hong Kong, Japan, Korea and Taiwan using the last available data published by the relevant authorities.Hong Kong saw shorts rise on Tencent Holdings (700 HK), Meituan (3690 HK), China Merchants Bank H (3968 HK), WuXi AppTec Co. Ltd. (2359 HK) and Sunny Optical (2382 HK) while there was short covering on Ping An Insurance (H) (2318 HK), Baidu (9888 HK), Haier Smart Home Co Ltd (6690 HK), Alibaba Group (9988 HK) and Citic Securities (H) (6030 HK). Shorts increased in the Communication Services, Consumer Discretionary, Health Care and Real Estate sectors, and decreased in the Financials, Industrials, and Information Technology sectors.In Japan, stocks that saw the most shorts were Lasertec Corp (6920 JP), Anritsu Corp (6754 JP), Daito Trust Construct (1878 JP), JFE Holdings (5411 JP) and Tokyu Fudosan Holdings (3289 JP) while shorts decreased on Toshiba Corp (6502 JP), Ana Holdings (9202 JP), H I S Co Ltd (9603 JP), Outsourcing Inc (2427 JP) and Euglena Co Ltd (2931 JP). Shorts increased in the Real Estate and Consumer Discretionary sectors, and decreased in the Industrials sector.In Korea, shorts increased on Celltrion Inc (068270 KS) and Hyundai Motor Co (005380 KS) during the week while decreasing on Samsung Electronics (005930 KS), Hyundai Heavy Industries (009540 KS) and Doosan Infracore (042670 KS). The short sell ban has ended today and short selling will be permitted on Korea Stock Exchange Kospi 200 Index (KOSPI2 INDEX) and KOSDAQ 150 Index (KOSDQ150 INDEX) constituents from Monday, 3 May.Stocks in Taiwan that saw the highest increase in shorts were China Development Financial (2883 TT), Yang Ming Marine Transport (2609 TT), Evergreen Marine Corp (2603 TT), Walsin Lihwa (1605 TT) and Compal Electronics (2324 TT) while shorts were covered on AU Optronics (2409 TT), Winbond Electronics (2344 TT), Asmedia Technology (5269 TT), Genius Electronic Optical (3406 TT) and Novatek Microelectronics Corp (3034 TT).

Asia Shorts: Tencent, CM Bank, Wuxi Apptec, Baidu, Anritsu, Daito, Ana, Yang Ming, Evergreen Marine

<div><p>The Asia Short Interest weekly looks at moves in market wide short interest and highlights movements in stock specific short interest across Hong Kong, Japan, Korea and Taiwan using the last available data published by the relevant authorities.</p></div><div><p>Hong Kong saw shorts rise on <a href="https://www.smartkarma.com/entities/xinyi-solar-holdings-ltd" target="_blank" data-smartkarma-citation="entities:318:1" rel="noopener">Xinyi Solar Holdings (968 HK)</a>, <a href="https://www.smartkarma.com/entities/lenovo-group-ltd" target="_blank" data-smartkarma-citation="entities:13359:1" rel="noopener">Lenovo (992 HK)</a>, <a href="https://www.smartkarma.com/entities/jd-health-international-inc" target="_blank" data-smartkarma-citation="entities:29677:1" rel="noopener">JD Health (6618 HK)</a>, <a href="https://www.smartkarma.com/entities/byd-co-ltd-h" target="_blank" data-smartkarma-citation="entities:20962:1" rel="noopener">BYD (1211 HK)</a> and <a href="https://www.smartkarma.com/entities/alibaba-group" target="_blank" data-smartkarma-citation="entities:28434:1" rel="noopener">Alibaba Group (9988 HK)</a> while there was short covering on <a href="https://www.smartkarma.com/entities/tencent-holdings-ltd" target="_blank" data-smartkarma-citation="entities:26:1" rel="noopener">Tencent Holdings (700 HK)</a>, <a href="https://www.smartkarma.com/entities/xiaomi-corp" target="_blank" data-smartkarma-citation="entities:24409:1" rel="noopener">Xiaomi Corp (1810 HK)</a>, <a href="https://www.smartkarma.com/entities/china-pacific-insurance-group" target="_blank" data-smartkarma-citation="entities:6177:1" rel="noopener">China Pacific Insurance (2601 HK)</a>, <a href="https://www.smartkarma.com/entities/sunny-optical-tech" target="_blank" data-smartkarma-citation="entities:13363:1" rel="noopener">Sunny Optical (2382 HK)</a> and <a href="https://www.smartkarma.com/entities/cspc-pharmaceutical-group-ltd" target="_blank" data-smartkarma-citation="entities:229:1" rel="noopener">CSPC Pharmaceutical Group (1093 HK)</a>. Shorts increased in Consumer Discretionary, Consumer Staples, Health Care and Information Technology, while shorts decreased in Communication Services, Financials, Real Estate and Industrials.</p></div><div><p>In Japan, stocks that saw the most shorts were <a href="https://www.smartkarma.com/entities/eneos-holdings-inc" target="_blank" data-smartkarma-citation="entities:638:1" rel="noopener">ENEOS Holdings (5020 JP)</a>, <a href="https://www.smartkarma.com/entities/mitsubishi-ufj-financial-group" target="_blank" data-smartkarma-citation="entities:218:1" rel="noopener">Mitsubishi UFJ Financial (MUFG) (8306 JP)</a>, <a href="https://www.smartkarma.com/entities/resona-holdings-inc" target="_blank" data-smartkarma-citation="entities:6841:1" rel="noopener">Resona Holdings (8308 JP)</a>, <a href="https://www.smartkarma.com/entities/mitsubishi-ufj-lease-finance" target="_blank" data-smartkarma-citation="entities:1467:1" rel="noopener">Mitsubishi UFJ Lease &amp; Finance (8593 JP)</a> and <a href="https://www.smartkarma.com/entities/nsk-ltd" target="_blank" data-smartkarma-citation="entities:6309:1" rel="noopener">NSK Ltd (6471 JP)</a> while shorts decreased on <a href="https://www.smartkarma.com/entities/toshiba-corp" target="_blank" data-smartkarma-citation="entities:637:1" rel="noopener">Toshiba Corp (6502 JP)</a>, <a href="https://www.smartkarma.com/entities/asics-corp" target="_blank" data-smartkarma-citation="entities:16287:1" rel="noopener">ASICS Corp (7936 JP)</a>, <a href="https://www.smartkarma.com/entities/haseko-corp" target="_blank" data-smartkarma-citation="entities:748:1" rel="noopener">Haseko Corp (1808 JP)</a>, <a href="https://www.smartkarma.com/entities/cyberagent-inc" target="_blank" data-smartkarma-citation="entities:8197:1" rel="noopener">CyberAgent Inc (4751 JP)</a> and <a href="https://www.smartkarma.com/entities/idemitsu-kosan-co-ltd" target="_blank" data-smartkarma-citation="entities:109:1" rel="noopener">Idemitsu Kosan (5019 JP)</a>. Shorts increased in Financials, Energy, Health Care and Information Technology sectors, and decreased in the Industrials sector.</p></div><div><p>In Korea, short increased on <a href="https://www.smartkarma.com/entities/amorepacific-corp" target="_blank" data-smartkarma-citation="entities:20854:1" rel="noopener">Amorepacific Corp (090430 KS)</a>, <a href="https://www.smartkarma.com/entities/korea-united-pharm-inc" target="_blank" data-smartkarma-citation="entities:5207:1" rel="noopener">Korea United Pharm (033270 KS)</a>, <a href="https://www.smartkarma.com/entities/lg-chem-ltd" target="_blank" data-smartkarma-citation="entities:3583:1" rel="noopener">LG Chem Ltd (051910 KS)</a> and <a href="https://www.smartkarma.com/entities/korea-electric-power-corp" target="_blank" data-smartkarma-citation="entities:16:1" rel="noopener">Korea Electric Power (015760 KS)</a> while shorts decreased on <a href="https://www.smartkarma.com/entities/samsung-electronics-co-ltd" target="_blank" data-smartkarma-citation="entities:191:1" rel="noopener">Samsung Electronics (005930 KS)</a>, <a href="https://www.smartkarma.com/entities/doosan-infracore-co-ltd" target="_blank" data-smartkarma-citation="entities:3982:1" rel="noopener">Doosan Infracore (042670 KS)</a>, <a href="https://www.smartkarma.com/entities/naver-corp" target="_blank" data-smartkarma-citation="entities:16029:1" rel="noopener">Naver Corp (035420 KS)</a> and <a href="https://www.smartkarma.com/entities/sk-hynix-inc" target="_blank" data-smartkarma-citation="entities:16955:1" rel="noopener">SK Hynix (000660 KS)</a>. </p></div><div><p>Stocks in Taiwan that saw the highest increase in shorts were <a href="https://www.smartkarma.com/entities/pegatron-corp" target="_blank" data-smartkarma-citation="entities:12852:1" rel="noopener">Pegatron Corp (4938 TT)</a>, <a href="https://www.smartkarma.com/entities/unimicron-technology-corp" target="_blank" data-smartkarma-citation="entities:18778:1" rel="noopener">Unimicron Technology (3037 TT)</a>, <a href="https://www.smartkarma.com/entities/yulon-motor-company" target="_blank" data-smartkarma-citation="entities:18249:1" rel="noopener">Yulon Motor Company (2201 TT)</a> and <a href="https://www.smartkarma.com/entities/united-microelectronics-corp" target="_blank" data-smartkarma-citation="entities:6450:1" rel="noopener">United Microelectronics Corp (2303 TT)</a> while shorts were covered on <a href="https://www.smartkarma.com/entities/taiwan-semiconductor-manufacturing-company" target="_blank" data-smartkarma-citation="entities:11230:1" rel="noopener">TSMC (2330 TT)</a>, <a href="https://www.smartkarma.com/entities/yageo-corporation" target="_blank" data-smartkarma-citation="entities:13212:1" rel="noopener">Yageo Corporation (2327 TT)</a>, <a href="https://www.smartkarma.com/entities/au-optronics-corp" target="_blank" data-smartkarma-citation="entities:6704:1" rel="noopener">AU Optronics (2409 TT)</a> and <a href="https://www.smartkarma.com/entities/acer-inc" target="_blank" data-smartkarma-citation="entities:15726:1" rel="noopener">Acer Inc (2353 TT)</a>. </p></div>

The Asia Short Interest weekly looks at moves in market wide short interest and highlights movements in stock specific short interest across Hong Kong, Japan, Korea and Taiwan using the last available data published by the relevant authorities.Hong Kong saw shorts rise on Xinyi Solar Holdings (968 HK), Lenovo (992 HK), JD Health (6618 HK), BYD (1211 HK) and Alibaba Group (9988 HK) while there was short covering on Tencent Holdings (700 HK), Xiaomi Corp (1810 HK), China Pacific Insurance (2601 HK), Sunny Optical (2382 HK) and CSPC Pharmaceutical Group (1093 HK). Shorts increased in Consumer Discretionary, Consumer Staples, Health Care and Information Technology, while shorts decreased in Communication Services, Financials, Real Estate and Industrials.In Japan, stocks that saw the most shorts were ENEOS Holdings (5020 JP), Mitsubishi UFJ Financial (MUFG) (8306 JP), Resona Holdings (8308 JP), Mitsubishi UFJ Lease &amp; Finance (8593 JP) and NSK Ltd (6471 JP) while shorts decreased on Toshiba Corp (6502 JP), ASICS Corp (7936 JP), Haseko Corp (1808 JP), CyberAgent Inc (4751 JP) and Idemitsu Kosan (5019 JP). Shorts increased in Financials, Energy, Health Care and Information Technology sectors, and decreased in the Industrials sector.In Korea, short increased on Amorepacific Corp (090430 KS), Korea United Pharm (033270 KS), LG Chem Ltd (051910 KS) and Korea Electric Power (015760 KS) while shorts decreased on Samsung Electronics (005930 KS), Doosan Infracore (042670 KS), Naver Corp (035420 KS) and SK Hynix (000660 KS). Stocks in Taiwan that saw the highest increase in shorts were Pegatron Corp (4938 TT), Unimicron Technology (3037 TT), Yulon Motor Company (2201 TT) and United Microelectronics Corp (2303 TT) while shorts were covered on TSMC (2330 TT), Yageo Corporation (2327 TT), AU Optronics (2409 TT) and Acer Inc (2353 TT). 

Asia Short Interest: Xinyi Solar, Alibaba, Tencent, ENEOS, Resona, Toshiba, Samsung, TSMC, Yageo

South Korea

Hyundai Doosan Infracore Co., Ltd. produces construction machinery. The Company manufactures construction equipment, industrial vehicles, diesel engines, power generators, machine tools, factory automation system, and other products, such as armored vehicles for the defense industry. Hyundai Doosan Infracore markets its products worldwide.

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HD Hyundai Infracore (042670 KS)

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