Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

Douglas Research Advisory

Event-Driven

<ul>
<li>Hyundai G.F. Holdings announced that it is making a tender offer of a 15% stake its affiliate Ezwelfare (090850 KS) (Hyundai Ezwel Co).</li>
<li>The tender offer involves 3,561,954 shares of Hyundai Ezwel, at the tender offer price of 7,000 won per share (15.7% higher than the closing price on 9 November).</li>
<li>On Monday (11 November), Hyundai Ezwel's share price could reach about 1-3% below the tender offer price (about 6,800 won to 6,930 won) in the first few minutes of trading. </li>
</ul>


Hyundai G.F. Holdings announced that it is making a tender offer of a 15% stake its affiliate Ezwelfare (090850 KS) (Hyundai Ezwel Co).
The tender offer involves 3,561,954 shares of Hyundai Ezwel, at the tender offer price of 7,000 won per share (15.7% higher than the closing price on 9 November).
On Monday (11 November), Hyundai Ezwel's share price could reach about 1-3% below the tender offer price (about 6,800 won to 6,930 won) in the first few minutes of trading. 


Hyundai GF Holdings: A Tender Offer of 15% Stake in Hyundai Ezwel

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>It’s all about proration risk—65% is out there, but only 15% gets accepted. With just 20% of the theoretical max likely to be accepted, we could see a spread linger.</li>
<li>But the tender volume at ₩7,000 might be lighter than expected. 40% out of the 65% is with local retail, and 25% is mostly overseas funds that bought in 2021-2022.</li>
<li>At ₩7,000, most tenders will come from local retail buyers who net-grabbed 1.4M shares since Q4 of last year. This lowers proration risk, creating a potential mispricing and trade opportunity.</li>
</ul>


It’s all about proration risk—65% is out there, but only 15% gets accepted. With just 20% of the theoretical max likely to be accepted, we could see a spread linger.
But the tender volume at ₩7,000 might be lighter than expected. 40% out of the 65% is with local retail, and 25% is mostly overseas funds that bought in 2021-2022.
At ₩7,000, most tenders will come from local retail buyers who net-grabbed 1.4M shares since Q4 of last year. This lowers proration risk, creating a potential mispricing and trade opportunity.


Hyundai Ezwel Tender: Looking to Capitalize on Mispricing Driven by Inflated Proration Risk

Asia Pac ECM and Index Rebal, Shenton Research

Ke Yan, CFA, FRM

Asia Pac ECM and Index Rebal

Asia Pac IPO & Placement Research, China Biotech

DZT Research

DZT Research is an independent Asia Pacific equity specialist. Our quantitative research covers index rebalancing flows, alongside exchange data analytics accross Asia Pacific. On the equity capital markets side, we focus on Asia Pacific ECM, especially biotech and TMT. Our lead analyst is frequently cited by international media.

Quantitative Analysis

<ul>
<li>We analyzed the changes in short interest of KRX stocks as of Aug 23rd which has an aggregated short interest worth USD5.2bn.</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 the short interests to be USD 5.2bn and highlight short interest changes in Hlb (028300 KS).</li>
</ul>


We analyzed the changes in short interest of KRX stocks as of Aug 23rd which has an aggregated short interest worth USD5.2bn.
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 the short interests to be USD 5.2bn and highlight short interest changes in Hlb (028300 KS).


KRX Short Interest Weekly (Aug 23rd): Hlb

Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

<ul>
<li>Murakami to tender stake in <a href="https://www.smartkarma.com/entities/jsr-corp" target="_blank" data-smartkarma-citation="entities:17620:1" rel="noopener">JSR Corp (4185 JP)</a>? Maybe the "double arb": i.e. short on swap, long on cash, will tender the cash, remain short the back end.</li>
<li>
<a href="https://www.smartkarma.com/entities/austal-ltd" target="_blank" data-smartkarma-citation="entities:14420:1" rel="noopener">Austal Ltd (ASB AU)</a> rejected (for now) <a href="https://www.smartkarma.com/entities/hanwha-ocean-co-ltd" target="_blank" data-smartkarma-citation="entities:12531:1" rel="noopener">Hanwha Ocean (042660 KS)</a>'s bid based on regulatory concerns.  Hanwha reckons these should not be an issue.</li>
<li>If you can tolerate owning the mobile biz, buy <a href="https://www.smartkarma.com/entities/rakuten-group-inc" target="_blank" data-smartkarma-citation="entities:31:1" rel="noopener">Rakuten (4755 JP)</a> on dips. If not, avoid Rakuten Group and Rakuten Bank short-term; buy Rakuten Bank on larger dips.</li>
</ul>


Murakami to tender stake in JSR Corp (4185 JP)? Maybe the "double arb": i.e. short on swap, long on cash, will tender the cash, remain short the back end.

Austal Ltd (ASB AU) rejected (for now) Hanwha Ocean (042660 KS)'s bid based on regulatory concerns.  Hanwha reckons these should not be an issue.
If you can tolerate owning the mobile biz, buy Rakuten (4755 JP) on dips. If not, avoid Rakuten Group and Rakuten Bank short-term; buy Rakuten Bank on larger dips.


Last Week in Event SPACE: JSR, Austal, Rakuten, Hyundai Home Shopping, Hanmi Science

Hyundai Home Shopping Network / Event-Driven

Hyundai Home Shopping Network (057050 KS)

<ul>
<li>Yesterday, the 3rd April, <a href="https://www.smartkarma.com/entities/hyundai-g-f-holdings-co-ltd" target="_blank" data-smartkarma-citation="entities:19560:1" rel="noopener">Hyundai G.F. Holdings (005440 KS)</a> <a href="https://n.news.naver.com/mnews/article/030/0003194952" target="_blank" rel="noopener">announced</a> it would conduct a Tender Offer for 3mn shares, or 25% of <a href="https://www.smartkarma.com/entities/hyundai-home-shopping-network-corp" target="_blank" data-smartkarma-citation="entities:2357:1" rel="noopener">Hyundai Home Shopping Network (057050 KS)</a> (HHSN).</li>
<li>A successful Tender would lift Holdings stake to 50% from 25% currently, satisfying the <a href="https://www.businesskorea.co.kr/news/articleView.html?idxno=55003" target="_blank" rel="noopener">30% holding company threshold</a> introduced in 2022.</li>
<li>Minimum proration is 33%. Shares popped 13.8% on the news. That looks a bit too aggressive. </li>
</ul>


Yesterday, the 3rd April, Hyundai G.F. Holdings (005440 KS) announced it would conduct a Tender Offer for 3mn shares, or 25% of Hyundai Home Shopping Network (057050 KS) (HHSN).
A successful Tender would lift Holdings stake to 50% from 25% currently, satisfying the 30% holding company threshold introduced in 2022.
Minimum proration is 33%. Shares popped 13.8% on the news. That looks a bit too aggressive. 


Hyundai Home Shopping (057050 KS)'s Partial Offer

South Korea

Hyundai G.F. Holdings Co., Ltd. operates as a office furniture distribution company. The Company produces built in furniture, upcycling waste materials bottles furniture, wood furniture, and other related products. Hyundai G.F. Holdings also offers food, information and technology, groceries sale, and food materials distribution services.

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Hyundai G.F. Holdings (005440 KS)

Hyundai GF Holdings: A Tender Offer of 15% Stake in Hyundai Ezwel

Hyundai G.F. Holdings announced that it is making a tender offer of a 15% stake its affiliate Ezwelfare (090850 KS) (Hyundai Ezwel Co).

Douglas Kim

Hyundai Ezwel Tender: Looking to Capitalize on Mispricing Driven by Inflated Proration Risk

This post aims to capitalize on potential mispricing, likely fueled by inflated proration risk, in the Hyundai EZwell tender event.

Sanghyun Park

KRX Short Interest Weekly (Aug 23rd): Hlb

We analyzed KRX short interest report for the past week. We estimate the short interests to be USD 5.2bn and highlighted short interest changes in...

Ke Yan, CFA, FRM

Last Week in Event SPACE: JSR, Austal, Rakuten, Hyundai Home Shopping, Hanmi Science

The weekend is here! Pour yourself a coffee, grab a comfortable seat, and sift through a brief summary of insights on various events discussed...

David Blennerhassett

Hyundai Home Shopping (057050 KS)'s Partial Offer

HHSN is not particularly liquid, trading ~US$1mn/day. Unless you believe pro-ration to be materially higher than 65%, I'd be disinclined to enter...

David Blennerhassett

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