Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

Equity Bottom-Up

<ul>
<li>In this insight, we highlight the pricing gap divergences of the major Korean holdcos and opcos in 1Q 2023.</li>
<li>Of the 33 pair trades, 2/3 of them involved holdcos outperforming opcos in the past year and 1/3 of them involved opcos outperforming holdcos in the same period.</li>
<li>We highlight 33 pair trades that involve Korean holdcos and opcos.</li>
</ul>


In this insight, we highlight the pricing gap divergences of the major Korean holdcos and opcos in 1Q 2023.
Of the 33 pair trades, 2/3 of them involved holdcos outperforming opcos in the past year and 1/3 of them involved opcos outperforming holdcos in the same period.
We highlight 33 pair trades that involve Korean holdcos and opcos.


Korean Holdcos Vs Opcos Gap Spreads Opportunities in 1Q 2023

<ul>
<li>In this insight, we discuss a pair trade between Hanmi Science (long) and Hanmi Pharm (short). There are three major reasons we like this pair trade.</li>
<li>First, the gap between these two stocks have widened too much in the past year. Second, Hanmi Science may pay higher cash dividends due to inheritance tax issue. </li>
<li>Third, Hanmi Pharm's valuations remain lofty and Hanmi Science's valuation discount relative to its historical valuation has become more compelling. </li>
</ul>


In this insight, we discuss a pair trade between Hanmi Science (long) and Hanmi Pharm (short). There are three major reasons we like this pair trade.
First, the gap between these two stocks have widened too much in the past year. Second, Hanmi Science may pay higher cash dividends due to inheritance tax issue. 
Third, Hanmi Pharm's valuations remain lofty and Hanmi Science's valuation discount relative to its historical valuation has become more compelling. 


Korea Biotech & Healthcare: A Pair Trade Between Hanmi Science and Hanmi Pharm

<ul>
<li>In this insight, we highlight the pricing gap divergence of the major Korean holdcos and opcos amid market carnage.</li>
<li>In general, more holdcos/quasi-holdcos have been outperforming the opcos in the past year, as compared to the previous years as more investors seek value-oriented, deep NAV discount stocks.</li>
<li>We highlight 26 pair trades that involve Korean holdcos and opcos.</li>
</ul>


In this insight, we highlight the pricing gap divergence of the major Korean holdcos and opcos amid market carnage.
In general, more holdcos/quasi-holdcos have been outperforming the opcos in the past year, as compared to the previous years as more investors seek value-oriented, deep NAV discount stocks.
We highlight 26 pair trades that involve Korean holdcos and opcos.


Korean Holdcos Vs Opcos Gap Spreads Opportunities Amid Market Carnage

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 results are pretty much in line with the predictions, except for Hanwha Aerospace which made it to LARGE instead of Hyundai Marine &amp; Fire Insurance.</li>
<li>Assuming that ten names, including Hyundai Marine, were traded in a LONG/SHORT basket with equal weight, the yield from August 17 to the last close would have been 4.6%.</li>
<li>I would still approach with an equal-weighted basket trading until this Thursday. This flow trading usually loses its effect rapidly after rebalancing. So, I wouldn't carry it beyond this Thursday.</li>
</ul>


The results are pretty much in line with the predictions, except for Hanwha Aerospace which made it to LARGE instead of Hyundai Marine &amp; Fire Insurance.
Assuming that ten names, including Hyundai Marine, were traded in a LONG/SHORT basket with equal weight, the yield from August 17 to the last close would have been 4.6%.
I would still approach with an equal-weighted basket trading until this Thursday. This flow trading usually loses its effect rapidly after rebalancing. So, I wouldn't carry it beyond this Thursday.


KOSPI Size Index Migration: Official Results & Trading Approach Towards Implementation

<ul>
<li>This event provides three trading angles. 1. merger swap arbitrage, 2. passive flow trading, and 3. proxy battle-triggered momentum trading. But a proxy battle would be the only actionable one.</li>
<li>The market will likely see the dissolution of Hanmi Healthcare, owning a 6.43% stake in the holding company as a prelude to a full-fledged proxy battle.</li>
<li>Predicting the triggering timing is difficult, but we should note that the mother is 72 years old. How long she will remain in the current managerial position is highly doubtful.</li>
</ul>


This event provides three trading angles. 1. merger swap arbitrage, 2. passive flow trading, and 3. proxy battle-triggered momentum trading. But a proxy battle would be the only actionable one.
The market will likely see the dissolution of Hanmi Healthcare, owning a 6.43% stake in the holding company as a prelude to a full-fledged proxy battle.
Predicting the triggering timing is difficult, but we should note that the mother is 72 years old. How long she will remain in the current managerial position is highly doubtful.


Hanmi Science Merger: Proxy Battle-Triggered Momentum Trading

South Korea

Hanmi Science Co., Ltd. produces pharmaceutical products, including antibiotics, vitamins, and intestinal tonics.  The Company also provides beverages and processes soft capsules for other pharmaceutical firms.

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Hanmi Science (008930 KS)

Korean Holdcos Vs Opcos Gap Spreads Opportunities in 1Q 2023

In this insight, we highlight the pricing gap divergences of the major Korean holdcos and opcos in 1Q 2023. We highlight 33 pair trades that...

Douglas Kim

Korea Biotech & Healthcare: A Pair Trade Between Hanmi Science and Hanmi Pharm

In this insight, we discuss a pair trade between Hanmi Science (long) and Hanmi Pharm (short). There are three major reasons we like this pair trade.

Douglas Kim

Korean Holdcos Vs Opcos Gap Spreads Opportunities Amid Market Carnage

In this insight, we highlight the pricing gap divergence of the major Korean holdcos and opcos amid market carnage. We highlight 26 pair trades...

Douglas Kim

KOSPI Size Index Migration: Official Results & Trading Approach Towards Implementation

This post looks at the official results of the KOSPI Size Index migration in the September rebalancing and discusses the noteworthy flow patterns...

Sanghyun Park

Hanmi Science Merger: Proxy Battle-Triggered Momentum Trading

This post details the recently announced merger of Hanmi Science and Hanmi Healthcare and how it can be received by the market as a prelude to a...

Sanghyun Park

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