Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

Douglas Research Advisory

Event-Driven

HD Hyundai Heavy Industries  / Event-Driven

<ul>
<li>It was announced today that HD Hyundai Heavy Industries will merge with HD Hyundai Mipo. The merger ratio between HD Hyundai Heavy Industries and HD Hyundai Mipo is 1:0.4059146. </li>
<li>HD Korea Shipbuilding &amp; Offshore Engineering (009540 KS) will own a 66.29% stake in the merged entity.</li>
<li>HD KSOE is proceeding with this merger of its two major subsidiaries ahead of the full-scale launch of the MASGA ("Make America Shipbuilding Great Again") project.</li>
</ul>


It was announced today that HD Hyundai Heavy Industries will merge with HD Hyundai Mipo. The merger ratio between HD Hyundai Heavy Industries and HD Hyundai Mipo is 1:0.4059146. 
HD Korea Shipbuilding &amp; Offshore Engineering (009540 KS) will own a 66.29% stake in the merged entity.
HD KSOE is proceeding with this merger of its two major subsidiaries ahead of the full-scale launch of the MASGA ("Make America Shipbuilding Great Again") project.


A Merger Between HD Hyundai Heavy Industries and HD Hyundai Mipo

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.

<ul>
<li>HHI–Mipo merger spread looks minimal, but today’s MASGA-driven pop signals momentum flows—likely to mean-revert toward appraisal rights once the theme dissipates.</li>
<li>Froth lifted prices past fundamentals—once it unwinds, HHI–Mipo could diverge from swap ratio, creating the spread window where traders can get paid.</li>
<li>This isn’t classic merger arb—it’s about fading a policy-fueled pop, riding the snapback toward appraisal baseline, with flow-driven swings creating short-term tactical arb setups.</li>
</ul>


HHI–Mipo merger spread looks minimal, but today’s MASGA-driven pop signals momentum flows—likely to mean-revert toward appraisal rights once the theme dissipates.
Froth lifted prices past fundamentals—once it unwinds, HHI–Mipo could diverge from swap ratio, creating the spread window where traders can get paid.
This isn’t classic merger arb—it’s about fading a policy-fueled pop, riding the snapback toward appraisal baseline, with flow-driven swings creating short-term tactical arb setups.


HHI–Mipo Merger Swap: Deal Mechanics & Spread Play Opportunities

<ul>
<li>NAV sets the floor under the proposed bill. That’d cut the swap ratio from 1:0.162 to 1:0.128 — meaning Infracore holders get fewer CE shares than under market pricing.</li>
<li>Unlike the Doosan deal, this one’s unlikely to get walked back. With wide spreads and HD setting a 10% SO cap, the dislocation looks tradable despite appraisal right overhang.</li>
<li>Top holders/NPS hold ~50%, local instos 20%, foreigners 15% and retail the rest. Sentiment’s cautious but not hostile; appraisal risk looks manageable, making this spread a potential convergence play.</li>
</ul>


NAV sets the floor under the proposed bill. That’d cut the swap ratio from 1:0.162 to 1:0.128 — meaning Infracore holders get fewer CE shares than under market pricing.
Unlike the Doosan deal, this one’s unlikely to get walked back. With wide spreads and HD setting a 10% SO cap, the dislocation looks tradable despite appraisal right overhang.
Top holders/NPS hold ~50%, local instos 20%, foreigners 15% and retail the rest. Sentiment’s cautious but not hostile; appraisal risk looks manageable, making this spread a potential convergence play.


HD Merger: Overblown Policy Risk Creates a Convergence Play Opportunity

Equity Capital Markets

HD Hyundai Heavy Industries  / Equity Capital Markets

<ul>
<li>HD KSOE plans a second EB similar to earlier this year: a zero-coupon, 2% HD Hyundai Heavy stake with 13–15% premium, aiming to raise around ₩850 billion.</li>
<li>With Korea’s Commercial Act revision expected by July 4, EB deals risk director liability; HD KSOE aims to raise cash now before stricter rules limit easy board-approved EB issuance.</li>
<li>Targeting a short in HD Hyundai Heavy triggered by HD KSOE’s board approval before July 4; consider hedging with a long position in HD KSOE due to ongoing sector catalysts.</li>
</ul>


HD KSOE plans a second EB similar to earlier this year: a zero-coupon, 2% HD Hyundai Heavy stake with 13–15% premium, aiming to raise around ₩850 billion.
With Korea’s Commercial Act revision expected by July 4, EB deals risk director liability; HD KSOE aims to raise cash now before stricter rules limit easy board-approved EB issuance.
Targeting a short in HD Hyundai Heavy triggered by HD KSOE’s board approval before July 4; consider hedging with a long position in HD KSOE due to ongoing sector catalysts.


EB Event Trade Setup: HD KSOE Lining up a New Deal with HD Hyundai Heavy as the Underlying

External broker reports(aggregated public sources), Daishin Securities

Daishin Securities

External broker reports(aggregated public sources)

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Equity Bottom-Up

HD Hyundai Heavy Industries  / Equity Bottom-Up

<ul><li>Maintain Buy rating and raise target price by 25% to W450,000</li><li>1Q25 OP came in at W433.7bn, beating market consensus by a mile</li><li>Earnings growth solely achieved through productivity enhancement, without any one-off factors</li></ul><p><em>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.</em></p>

Maintain Buy rating and raise target price by 25% to W450,0001Q25 OP came in at W433.7bn, beating market consensus by a mileEarnings growth solely achieved through productivity enhancement, without any one-off factorsContent is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

HD Hyundai Heavy Industries (329180 KS Apr 25, 2025) - Above Already-High Forecasts

South Korea

HD Hyundai Heavy Industries Co., Ltd. operates as a shipbuilding company. The Company provides naval shipbuilding, industrial shipbuilding, crude oil tanker, bulk carrier, container carrier, and other related services. HD Hyundai Heavy Industries also offers offshore and engineering, engine and machinery, offshore, industrial, and marine plant services.

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HD Hyundai Heavy Industries (329180 KS)

A Merger Between HD Hyundai Heavy Industries and HD Hyundai Mipo

It was announced today that HD Hyundai Heavy Industries will merge with HD Hyundai Mipo. The merger ratio between HD Hyundai Heavy Industries and...

Douglas Kim

HHI–Mipo Merger Swap: Deal Mechanics & Spread Play Opportunities

This post offers a deep dive into the HHI–Mipo merger swap, unpacking the deal mechanics and highlighting where tactical spread plays might emerge.

Sanghyun Park

HD Merger: Overblown Policy Risk Creates a Convergence Play Opportunity

The HD merger’s policy risk is way overhyped right now. Given that, the current spread looks like a solid setup for a convergence play.

Sanghyun Park

EB Event Trade Setup: HD KSOE Lining up a New Deal with HD Hyundai Heavy as the Underlying

This post dives into the EB event trade setup, with HD KSOE lining up a new issuance backed by HD Hyundai Heavy as the underlying.

Sanghyun Park

HD Hyundai Heavy Industries (329180 KS Apr 25, 2025) - Above Already-High Forecasts

Maintain Buy rating and raise target price by 25% to W450,000. 1Q25 OP came in at W433.7bn, beating market consensus by a mile

Daishin Securities

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