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.

Equity Capital Markets

Hanwha Aerospace / Equity Capital Markets

<ul>
<li>Hanwha shot down any merger talks between Hanwha Corp and Hanwha Energy, saying they're just going to funnel Energy’s cash straight into Hanwha Aero via a third-party allotment.</li>
<li>These confirm no price manipulation for Hanwha Corp; Hanwha Energy will inject cash into Aero at market value, likely driving bullish short-term price action for both Hanwha Corp and Aero.</li>
<li>Despite tighter arb opportunities, doubts remain whether Hanwha Aero can raise the remaining KRW 1.6 trillion given a volatile market and the tight timeline.</li>
</ul>


Hanwha shot down any merger talks between Hanwha Corp and Hanwha Energy, saying they're just going to funnel Energy’s cash straight into Hanwha Aero via a third-party allotment.
These confirm no price manipulation for Hanwha Corp; Hanwha Energy will inject cash into Aero at market value, likely driving bullish short-term price action for both Hanwha Corp and Aero.
Despite tighter arb opportunities, doubts remain whether Hanwha Aero can raise the remaining KRW 1.6 trillion given a volatile market and the tight timeline.


Key Takeaways from the Updated Filing on Hanwha Aero’s Rights Offering

<ul>
<li>Market sees this as an M&amp;A play, not just de-leveraging. Sentiment’s split, and despite a tight discount, uncertainty on take-up could spark major dislocations in stock and rights.</li>
<li>Hanwha’s ₩3.6T raise drops just a week after Samsung SDI’s ₩2T—₩5.5T back-to-back. Absorption looks brutal, setting up serious volatility and prime trading opps if liquidity tightens.</li>
<li>The FSC fast-tracked this, flagging it instantly but also hinting approval. With regulator risk off, any cash market snapback tomorrow should stay in check.</li>
</ul>


Market sees this as an M&amp;A play, not just de-leveraging. Sentiment’s split, and despite a tight discount, uncertainty on take-up could spark major dislocations in stock and rights.
Hanwha’s ₩3.6T raise drops just a week after Samsung SDI’s ₩2T—₩5.5T back-to-back. Absorption looks brutal, setting up serious volatility and prime trading opps if liquidity tightens.
The FSC fast-tracked this, flagging it instantly but also hinting approval. With regulator risk off, any cash market snapback tomorrow should stay in check.


Hanwha Aerospace’s Monster Raise: Checking Key Angles

Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

Douglas Research Advisory

Event-Driven

<ul>
<li>After the market close on 27 March, the Financial Supervisory Service (FSS) surprisingly announced a temporary halt to the 3.6 trillion won rights offering capital raise of Hanwha Aerospace. </li>
<li>The FSS has requested a correction report to the massive paid-in capital increase securities report submitted by Hanwha Aerospace on 20 March.</li>
<li>While there could be a short term pop to Hanwha Aerospace's stock tomorrow, we continue remain negative on Hanwha Aerospace over next 1 year mainly due to its stretched valuations</li>
</ul>


After the market close on 27 March, the Financial Supervisory Service (FSS) surprisingly announced a temporary halt to the 3.6 trillion won rights offering capital raise of Hanwha Aerospace. 
The FSS has requested a correction report to the massive paid-in capital increase securities report submitted by Hanwha Aerospace on 20 March.
While there could be a short term pop to Hanwha Aerospace's stock tomorrow, we continue remain negative on Hanwha Aerospace over next 1 year mainly due to its stretched valuations


FSS Surprisingly Halts Hanwha Aerospace's Rights Offering Capital Raise Temporarily

<ul>
<li>Hanwha Aerospace (012450 KS) announced a rights offering capital raise of 3.6 trillion won (US$2.5 billion), which is the largest ever rights offering capital raise in Korea.</li>
<li>We believe this capital raise is likely to result in higher concerns about shares dilution at Hanwha Aerospace and negatively impact its share price.</li>
<li>It is also likely to have a significant negative impact on the entire Korean defense stocks, as it signals a top on this sector. </li>
</ul>


Hanwha Aerospace (012450 KS) announced a rights offering capital raise of 3.6 trillion won (US$2.5 billion), which is the largest ever rights offering capital raise in Korea.
We believe this capital raise is likely to result in higher concerns about shares dilution at Hanwha Aerospace and negatively impact its share price.
It is also likely to have a significant negative impact on the entire Korean defense stocks, as it signals a top on this sector. 


Hanwha Aerospace: Rights Offering of 3.6 Trillion Won (Negative on Entire Korean Defense Sector)

<ul>
<li>Hanwha Aerospace announced that it plans to purchase a 7.3% stake in Hanwha Ocean. </li>
<li>This 7.3% stake in Hanwha Ocean is currently worth about 1.3 trillion won (US$0.9 billion). After this purchase, Hanwha Aerospace's stake in Hanwha Ocean will increase from 23.14% to 30.44%.</li>
<li>There could be a further positive momentum on Hanwha Aerospace in the near-term due to its positive earnings report in 4Q24 combined with acquisition of additional stake in Hanwha Ocean.  </li>
</ul>


Hanwha Aerospace announced that it plans to purchase a 7.3% stake in Hanwha Ocean. 
This 7.3% stake in Hanwha Ocean is currently worth about 1.3 trillion won (US$0.9 billion). After this purchase, Hanwha Aerospace's stake in Hanwha Ocean will increase from 23.14% to 30.44%.
There could be a further positive momentum on Hanwha Aerospace in the near-term due to its positive earnings report in 4Q24 combined with acquisition of additional stake in Hanwha Ocean.  


Hanwha Aerospace Acquiring Additional 7.3% Stake in Hanwha Ocean for About 1.3 Trillion Won

South Korea

Hanwha Aerospace Co., Ltd. operates as an aircraft parts manufacturing company. The Company produces and sells aircraft gas turbine engine products, aircraft compressors, low pressure turbines, and other products. Hanwha Aerospace markets its products worldwide.

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Hanwha Aerospace (012450 KS)

Key Takeaways from the Updated Filing on Hanwha Aero’s Rights Offering

This post breaks down the key points from the updated filing on Hanwha Aero's rights offering, highlighting the key changes and strategic moves...

Sanghyun Park

Hanwha Aerospace’s Monster Raise: Checking Key Angles

Hanwha Aero’s raising the remaining KRW 1.3 trillion through a third-party allotment (no discount), with Hanwha Energy in the mix. The three...

Sanghyun Park

FSS Surprisingly Halts Hanwha Aerospace's Rights Offering Capital Raise Temporarily

After the market close on 27 March, the Financial Supervisory Service (FSS) surprisingly announced a temporary halt to the 3.6 trillion won rights...

Douglas Kim

Hanwha Aerospace: Rights Offering of 3.6 Trillion Won (Negative on Entire Korean Defense Sector)

Hanwha Aerospace announced a rights offering capital raise of 3.6 trillion won. We believe this capital raise is likely to result in higher...

Douglas Kim

Hanwha Aerospace Acquiring Additional 7.3% Stake in Hanwha Ocean for About 1.3 Trillion Won

Hanwha Aerospace announced a rights offering capital raise of 3.6 trillion won; this is the largest ever rights offering in Korea. This is likely...

Douglas Kim

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