Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

Douglas Research Advisory

Event-Driven

<ul>
<li>On 3 May, it was reported that Hankook Tire &amp; Technology agreed to purchase a 25% in Hanon Systems for 1.37 trillion won from Hahn &amp; Co private equity firm. </li>
<li>After this deal, Hankook Tire &amp; Technology will own a controlling 50.5% stake in Hanon Systems.</li>
<li>We have a negative view on Hankook Tire &amp; Technology's additional purchase of Hanon Systems, which has experienced a declining profit margins in the past several years.</li>
</ul>


On 3 May, it was reported that Hankook Tire &amp; Technology agreed to purchase a 25% in Hanon Systems for 1.37 trillion won from Hahn &amp; Co private equity firm. 
After this deal, Hankook Tire &amp; Technology will own a controlling 50.5% stake in Hanon Systems.
We have a negative view on Hankook Tire &amp; Technology's additional purchase of Hanon Systems, which has experienced a declining profit margins in the past several years.


Hankook Tire & Technology to Become the Controlling Shareholder of Hanon Systems

Korea / Special Sits, Pairs, Index Rebalancing, Clepsydra Capital

Sanghyun Park

Korea / Special Sits, Pairs, Index Rebalancing

Clepsydra Capital

Investigate special situations, pairs, and index rebalancing trades in Korea.

<ul>
<li>Carlyle's renewed interest in acquiring Hanon Systems is evident from recent local market news, indicating outreach to bankers for a potential buyout, as confirmed by a local brokerage.</li>
<li>Carlyle eyes majority control of Hanon Systems, targeting 50.5% from Hahn &amp; Co and 19.5% from Hankook Tire. Carlyle may extend a tender offer for the remaining 30%.</li>
<li>Still early stages; no solid info on deal certainty or specifics. Limited immediate trading opportunities, but worth monitoring as it progresses.</li>
</ul>


Carlyle's renewed interest in acquiring Hanon Systems is evident from recent local market news, indicating outreach to bankers for a potential buyout, as confirmed by a local brokerage.
Carlyle eyes majority control of Hanon Systems, targeting 50.5% from Hahn &amp; Co and 19.5% from Hankook Tire. Carlyle may extend a tender offer for the remaining 30%.
Still early stages; no solid info on deal certainty or specifics. Limited immediate trading opportunities, but worth monitoring as it progresses.


Local Observations on Carlyle's Possible Buyout of Hanon Systems

Asia Pac IPO & Placement Research, China biotech, Aequitas Research

Ke Yan, CFA, FRM

Asia Pac IPO & Placement Research, China biotech

IPOs and Placements coverage across Asia Pacific

Aequitas Research

We cover all listing across the Asia Pacific along with follow-up placements. As of Dec 2020, our team had covered 539 IPOs with a hit rate of 73.5% and 685 placements with a hit rate of 66.8%.

We combine fundamental bottom-up views with our proprietary quantitative framework to provide a holistic coverage across new listings and placements. Our coverage includes pre-IPO notes before the deal is launched, follow-up analysis once the deal is live and post-listing trading analysis as well.

Quantitative Analysis

<ul>
<li>We analyzed the changes in short interest of KRX Stocks as of Mar 29th which has an aggregated short interest worth USD7.4bn.</li>
<li>We tabulate league table for top short by value and short as multiple of ADT, as well as weekly increases &amp; decreases in short value, short as multiple of ADT.</li>
<li>We estimate short interest decreased by 2.5% WoW and highlight short interest changes in Posco.</li>
</ul>


We analyzed the changes in short interest of KRX Stocks as of Mar 29th which has an aggregated short interest worth USD7.4bn.
We tabulate league table for top short by value and short as multiple of ADT, as well as weekly increases &amp; decreases in short value, short as multiple of ADT.
We estimate short interest decreased by 2.5% WoW and highlight short interest changes in Posco.


KRX Short Interest Weekly (Mar 29th): Posco

Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

<ul>
<li>I tally 50 - mostly firm, mostly Asia-Pac - transactions currently being discussed and analysed on Smartkarma. Inside is a timetable of upcoming key events for each deal.</li>
<li>Two new deals were discussed this week on Smartkarma: <a href="https://www.smartkarma.com/entities/wam-leaders-ltd" target="_blank" data-smartkarma-citation="entities:24274:1" rel="noopener">WAM Leaders (WLE AU)</a> scrip-deal for <a href="https://www.smartkarma.com/entities/qv-equities-ltd" target="_blank" data-smartkarma-citation="entities:24284:1" rel="noopener">QV Equities (QVE AU)</a>; and <a href="https://www.smartkarma.com/entities/task-group-holdings-ltd" target="_blank" data-smartkarma-citation="entities:32991:1" rel="noopener">TASK Group (TSK AU)</a>'s Scheme with <a href="https://www.smartkarma.com/entities/par-technology-corp" target="_blank" data-smartkarma-citation="entities:37125:1" rel="noopener">PAR Technology (PAR US)</a>. </li>
<li>Key updates took place on: <a href="https://www.smartkarma.com/entities/qantm-intellectual-property" target="_blank" data-smartkarma-citation="entities:24317:1" rel="noopener">Qantm Intellectual Property (QIP AU)</a>, <a href="https://www.smartkarma.com/entities/superloop-ltd" target="_blank" data-smartkarma-citation="entities:23604:1" rel="noopener">Superloop (SLC AU)</a>, <a href="https://www.smartkarma.com/entities/cimc-vehicles-group-co-ltd" target="_blank" data-smartkarma-citation="entities:28012:1" rel="noopener">CIMC Vehicle (1839 HK)</a>, <a href="https://www.smartkarma.com/entities/jsr-corp" target="_blank" data-smartkarma-citation="entities:17620:1" rel="noopener">JSR Corp (4185 JP)</a>, <a href="https://www.smartkarma.com/entities/roland-dg-corp" target="_blank" data-smartkarma-citation="entities:10653:1" rel="noopener">Roland DG Corp (6789 JP)</a>, and <a href="https://www.smartkarma.com/entities/outsourcing-inc" target="_blank" data-smartkarma-citation="entities:7431:1" rel="noopener">Outsourcing (2427 JP)</a>.</li>
</ul>


I tally 50 - mostly firm, mostly Asia-Pac - transactions currently being discussed and analysed on Smartkarma. Inside is a timetable of upcoming key events for each deal.
Two new deals were discussed this week on Smartkarma: WAM Leaders (WLE AU) scrip-deal for QV Equities (QVE AU); and TASK Group (TSK AU)'s Scheme with PAR Technology (PAR US). 
Key updates took place on: Qantm Intellectual Property (QIP AU), Superloop (SLC AU), CIMC Vehicle (1839 HK), JSR Corp (4185 JP), Roland DG Corp (6789 JP), and Outsourcing (2427 JP).


(Mostly) Asia-Pac M&A:QV Equities, TASK, Qantm, Superloop, CIMC Vehicle, JSR, Roland DG, Outsourcing

<ul>
<li>Back in 2014, Hahn &amp; Co and <a href="https://www.smartkarma.com/entities/hankook-tire-technology" target="_blank" data-smartkarma-citation="entities:20031:1" rel="noopener">Hankook Tire (161390 KS)</a> acquired a 70% stake in <a href="https://www.smartkarma.com/entities/hanon-systems" target="_blank" data-smartkarma-citation="entities:11506:1" rel="noopener">Hanon Systems (018880 KS)</a> from <a href="https://www.smartkarma.com/entities/visteon-corp" target="_blank" data-smartkarma-citation="entities:5471:1" rel="noopener">Visteon (VC US)</a>, an automotive electronics supplier, for ₩3.8tn.</li>
<li>Three years ago, Hahn/Hankook explored the sale of this 70% stake, which was expected to fetch ~₩8tn (US$7bn). Reportedly, Carlyle, TPG, Bain and auto supplier Mahle submitted preliminary bids.</li>
<li>That 70% stake is now worth ₩2.3tn. And reportedly, Carlyle has returned to the trough. </li>
</ul>


Back in 2014, Hahn &amp; Co and Hankook Tire (161390 KS) acquired a 70% stake in Hanon Systems (018880 KS) from Visteon (VC US), an automotive electronics supplier, for ₩3.8tn.
Three years ago, Hahn/Hankook explored the sale of this 70% stake, which was expected to fetch ~₩8tn (US$7bn). Reportedly, Carlyle, TPG, Bain and auto supplier Mahle submitted preliminary bids.
That 70% stake is now worth ₩2.3tn. And reportedly, Carlyle has returned to the trough. 


On A Charge: Hanon Systems & Renewed Interest In Hahn/Hankook's Stake

South Korea

Hanon Systems manufactures a variety of automotive air control equipment.  The Company's products include air conditioners, heaters, cooling modules, compressors, radiators, fans, evaporators, and condensers. Hanon Systems distributes its products on an original equipment manufacturing (OEM) basis.

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Hanon Systems (018880 KS)

Hankook Tire & Technology to Become the Controlling Shareholder of Hanon Systems

We have a negative view on Hankook Tire & Technology's additional purchase of Hanon Systems, which has experienced a declining profit margins in...

Douglas Kim

Local Observations on Carlyle's Possible Buyout of Hanon Systems

Hankook Tire has entered into a MoU with Hahn & Co to acquire shares in Hanon Systems. The deal structure entails acquiring 25% of SO, half of Hahn...

Sanghyun Park

KRX Short Interest Weekly (Mar 29th): Posco

We analyzed KRX short interest report for the past week. We estimate short interest decreased by 2.5% WoW and highlighted short interest changes in...

Ke Yan, CFA, FRM

(Mostly) Asia-Pac M&A:QV Equities, TASK, Qantm, Superloop, CIMC Vehicle, JSR, Roland DG, Outsourcing

This insight provides a summary of gross/annualised spreads (on deals discussed on Smartkarma) across Asia-Pacific as at the last trading date, and...

David Blennerhassett

On A Charge: Hanon Systems & Renewed Interest In Hahn/Hankook's Stake

There is currently no firm Offer. It's doubtful Hahn/Hankook will sell at these levels. Hanon appears inexpensive here, with a solid backlog and...

David Blennerhassett

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