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.

Event-Driven

<ul>
<li>We need to focus on the top 2 candidates among the Mid→Large candidates in the screening table mentioned above and the bottom 4 candidates among the Large→Mid candidates.</li>
<li>Since they are relatively far from the borderline, there is a significant likelihood that their classification will change. So, flow trading timing on these candidates could be brought forward.</li>
<li>Monitoring Doosan Robotics's market cap potentially nearing ₩3T and keeping an eye on the listing date of Ecopro Materials, we should make changes to the Mid→Large candidates from early December.</li>
</ul>


We need to focus on the top 2 candidates among the Mid→Large candidates in the screening table mentioned above and the bottom 4 candidates among the Large→Mid candidates.
Since they are relatively far from the borderline, there is a significant likelihood that their classification will change. So, flow trading timing on these candidates could be brought forward.
Monitoring Doosan Robotics's market cap potentially nearing ₩3T and keeping an eye on the listing date of Ecopro Materials, we should make changes to the Mid→Large candidates from early December.


A Proactive Long Short Basket Setup Targeting KOSPI Size Index's Next Rebal

Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

<ul>
<li>We believe the new restructuring plan of the Hanwha Group is likely to have a positive impact on Hanwha Corp but could negatively impact Hanwha Ocean. </li>
<li>Our NAV analysis of Hanwha Corp suggests NAV of 3.2 trillion won or NAV per share of 43,168 won, which is 50% higher than current share price. </li>
<li>The biggest component of the valuation is Hanwha Corp's 34% stake in Hanwha Aerospace which is worth 4.1 trillion won. (187% of Hanwha Corp's market cap). </li>
</ul>


We believe the new restructuring plan of the Hanwha Group is likely to have a positive impact on Hanwha Corp but could negatively impact Hanwha Ocean. 
Our NAV analysis of Hanwha Corp suggests NAV of 3.2 trillion won or NAV per share of 43,168 won, which is 50% higher than current share price. 
The biggest component of the valuation is Hanwha Corp's 34% stake in Hanwha Aerospace which is worth 4.1 trillion won. (187% of Hanwha Corp's market cap). 


Hanwha Group's Restructuring to Positively Benefit Hanwha Corp but Negatively Impact Hanwha Ocean

Equity Capital Markets

<ul>
<li>Samhyun is getting ready to complete its IPO on the KOSDAQ exchange in March. The IPO total offering amount is 40 billion won to 50 billion won. </li>
<li>The company generated sales of 99.8 billion won (up 45.5% YoY) and operating profit of 9.8 billion won (up 250% YoY) in 2023.</li>
<li>Samhyun developed one of the world's first CVVD (Continuously Variable Valve Duration) technology for automobile engines, which improves fuel efficiency by controlling the engine's valve opening time. </li>
</ul>


Samhyun is getting ready to complete its IPO on the KOSDAQ exchange in March. The IPO total offering amount is 40 billion won to 50 billion won. 
The company generated sales of 99.8 billion won (up 45.5% YoY) and operating profit of 9.8 billion won (up 250% YoY) in 2023.
Samhyun developed one of the world's first CVVD (Continuously Variable Valve Duration) technology for automobile engines, which improves fuel efficiency by controlling the engine's valve opening time. 


<ul>
<li>First, we can take on some risk and build up a short position using SSFs from now, aiming for an aggressively low price (likely Day 1) during the rights trading. </li>
<li>If this approach seems somewhat risky, the second is to wait until the rights trading and, although accepting some sacrifice in the spread, build positions relatively risk-free. </li>
<li>We can also actively build up a long position in the significantly backwardated SSFs from now and, instead, set up an aggressive short on the underlying shares.</li>
</ul>


First, we can take on some risk and build up a short position using SSFs from now, aiming for an aggressively low price (likely Day 1) during the rights trading. 
If this approach seems somewhat risky, the second is to wait until the rights trading and, although accepting some sacrifice in the spread, build positions relatively risk-free. 
We can also actively build up a long position in the significantly backwardated SSFs from now and, instead, set up an aggressive short on the underlying shares.


Trading Angles Using Severely Backwardated Hanwha Ocean's SSFs Ahead of the Rights Trading

Thematic (Sector/Industry)

<ul>
<li>The heightened political conflict between Russia and Ukraine which could lead to a more deadly military conflict has been impacting many defense related stocks in Korea this year.</li>
<li>A big concern is that this conflict could result in greater political outbursts around the world including between Taiwan &amp; China and South Korea &amp; North Korea.</li>
<li>The continued political conflict between Russia and Ukraine which could lead to further military conflict could lead to further outperformance of Korean defense stocks in the coming weeks. </li>
</ul>


The heightened political conflict between Russia and Ukraine which could lead to a more deadly military conflict has been impacting many defense related stocks in Korea this year.
A big concern is that this conflict could result in greater political outbursts around the world including between Taiwan &amp; China and South Korea &amp; North Korea.
The continued political conflict between Russia and Ukraine which could lead to further military conflict could lead to further outperformance of Korean defense stocks in the coming weeks. 


Korean Defense Plays Outperforming the Market in Light of Russia-Ukraine Conflict

South Korea

Hanwha Systems Co., Ltd. designs, develops, and distributes high-tech systems for the defense industry. The Company manufactures tactical communication systems, radar systems, naval combat systems, electro-optics, and fire control systems. Hanwha Systems markets its products throughout South Korea.

Hanwha Systems Co Ltd (272210 KS)

A Proactive Long Short Basket Setup Targeting KOSPI Size Index's Next Rebal

This post explores a proactive Long Short basket setup targeting the KOSPI Size Index's next rebalancing, whose entry timing should be early December.

Sanghyun Park

Hanwha Group's Restructuring to Positively Benefit Hanwha Corp but Negatively Impact Hanwha Ocean

We believe the new restructuring plan of the Hanwha Group is likely to have a positive impact on Hanwha Corp but could negatively impact Hanwha Ocean.

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Samhyun IPO Preview

Samhyun is getting ready to complete its IPO on the KOSDAQ exchange in March. Samhyun developed one of the world's first CVVD technology for...

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Trading Angles Using Severely Backwardated Hanwha Ocean's SSFs Ahead of the Rights Trading

Considering the significantly high spread based on the 2nd-round pricing while the trading deadline for Hanwha Ocean subscription rights is just a...

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Korean Defense Plays Outperforming the Market in Light of Russia-Ukraine Conflict

Amid the outbreak of a new war in Israel, there is likely to be increased capital inflow into global military/aerospace stocks. This insight...

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