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

Korea Stock Exchange Kospi Index / Event-Driven

Korea Stock Exchange Kospi Index (KOSPI INDEX)

<ul>
<li>The Constitutional Court approved President Yoon’s impeachment. The PM steps in as interim president, with a new election expected by May 28, 2025, before June 3.</li>
<li>The Democratic Party is the frontrunner, and if they win, expect a "regime change trade" with policy shifts toward green energy, welfare, public stimulus, and SME-focused initiatives.</li>
<li>Big-Cap builders, nuclear stocks, and major financials may struggle if the new regime focuses on public housing, anti-nuclear policies, and pro-SME, labor-friendly initiatives.</li>
</ul>


The Constitutional Court approved President Yoon’s impeachment. The PM steps in as interim president, with a new election expected by May 28, 2025, before June 3.
The Democratic Party is the frontrunner, and if they win, expect a "regime change trade" with policy shifts toward green energy, welfare, public stimulus, and SME-focused initiatives.
Big-Cap builders, nuclear stocks, and major financials may struggle if the new regime focuses on public housing, anti-nuclear policies, and pro-SME, labor-friendly initiatives.


Yoon’s Impeachment Confirmed: Key Timeline & Regime Change Trade

Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

Equity Bottom-Up

GS Engineering & Construction / Equity Bottom-Up

GS Engineering & Construction (006360 KS)

<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

<ul>
<li>In the first table, we provide a list of 56 stocks (2.2% of total) which have dividend yields of 7% or more. </li>
<li>The second table is a list of stocks with dividend yields of 7% or more and they are ranked in terms of market cap. </li>
<li>These 25 stocks have an average dividend yield of 9.1%. The second table has 12 financials related stocks, representing 48% of total. </li>
</ul>


In the first table, we provide a list of 56 stocks (2.2% of total) which have dividend yields of 7% or more. 
The second table is a list of stocks with dividend yields of 7% or more and they are ranked in terms of market cap. 
These 25 stocks have an average dividend yield of 9.1%. The second table has 12 financials related stocks, representing 48% of total. 


Alpha Generation Through High Dividend Stocks in Korea

ESG Analyst, Who's Good

Heejeong (Hollie) Park

ESG Analyst

ASIA’S FIRST AI-DRIVEN ESG INSIGHT PROVIDER

Who's Good

Using AI technologies and public data, Who’s Good provides objective and up-to-date corporate ESG insights on Asian companies.

WHY WHO'S GOOD

* Time-sensitive: Time is the essence in finance. Artificial Intelligence (AI) can process vast amount of information in a short span of time. Our powerful algorithm offers real-time in-depth corporate ESG analysis with out compromising its quality.
* Objective: We turned to public big data and news big data as source to base our analysis on and to preserve impartiality. We leverage 350 public big data sources and 93 news data sources in Korea to uncover insights.
* Insightful: Who’s Good ESG analysis coverage extends to all listed and non-listed companies in Korea. This allows us to provide a comprehensive insight into the Korean market.
* Global approach to ESG: Our ESG research framework is built on international standards and principles including UN Global Compact, ISO 26000, ICGN and CFA Guidelines on Corporate Governance to meet the global standards.

<ul>
<li>The Ministry of Land, Infrastructure and Transport's investigation revealed that the collapse of GS E&amp;C's underground parking lot was due to deficiencies in design, construction, and supervision.</li>
<li>As a response, GS E&amp;C will undergo a comprehensive reconstruction of the entire apartment complex, costing approximately KRW 300 billion, which is equivalent to approximately USD 264 million.</li>
<li>ESG risks have risen due to consumer relations regarding occupational health and safety and risk oversight, with GS E&amp;C's company risk rating at a ‘very high’ level of 3.1.</li>
</ul>


The Ministry of Land, Infrastructure and Transport's investigation revealed that the collapse of GS E&amp;C's underground parking lot was due to deficiencies in design, construction, and supervision.
As a response, GS E&amp;C will undergo a comprehensive reconstruction of the entire apartment complex, costing approximately KRW 300 billion, which is equivalent to approximately USD 264 million.
ESG risks have risen due to consumer relations regarding occupational health and safety and risk oversight, with GS E&amp;C's company risk rating at a ‘very high’ level of 3.1.


GS E&Cㅣ Underground Parking Lot Collapse Incidentㅣ Full-Scale Reconstruction and Rising Risks

<ul>
<li>On 22 May, it was announced that Sambu Construction was invited to the Ukraine Global Reconstruction Forum held in Warsaw and Krakow, Poland from 22 to 25 May. </li>
<li>Sambu Construction is likely to be one of the Korean construction companies to be involved in the Ukraine reconstruction projects. </li>
<li>The total cost of reconstruction of Ukraine has been estimated from about $0.4 trillion to $1.1 trillion.</li>
</ul>


On 22 May, it was announced that Sambu Construction was invited to the Ukraine Global Reconstruction Forum held in Warsaw and Krakow, Poland from 22 to 25 May. 
Sambu Construction is likely to be one of the Korean construction companies to be involved in the Ukraine reconstruction projects. 
The total cost of reconstruction of Ukraine has been estimated from about $0.4 trillion to $1.1 trillion.


Sambu Construction: Likely to Be Included in Ukraine Reconstruction Projects

South Korea

GS Engineering & Construction Corp. contracts civil engineering and architectural works, residential and commercial building constructions, and plant installations.  The Company also builds educational, leisure, distribution, and environmental facilities.

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GS Engineering & Construction (006360 KS)

Yoon’s Impeachment Confirmed: Key Timeline & Regime Change Trade

Yoon’s impeachment confirmed: What is the immediate impact on the local stock market, and which sectors are likely to move.

Sanghyun Park

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

Alpha Generation Through High Dividend Stocks in Korea

There are 2,576 listed stocks in Korea. In this insight, we provide a list of 56 stocks (2.2% of total) which have dividend yields of 7% or more.

Douglas Kim

GS E&Cㅣ Underground Parking Lot Collapse Incidentㅣ Full-Scale Reconstruction and Rising Risks

Explore the ESG (Environmental, Social, Governance) risks resulting from GS E&C’s underground parking lot collapse incident.

Heejeong (Hollie) Park

Sambu Construction: Likely to Be Included in Ukraine Reconstruction Projects

Sambu Construction is likely to be one of the Korean construction companies to be involved in the Ukraine reconstruction projects.

Douglas Kim

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