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

<ul>
<li>With the FSS moving fast, Korea Zinc still has time to meet its target. The market started panicking this morning as it looks likely Choi will proceed.</li>
<li>An hour ago, word spread that some Korea Zinc board members were breaking with Choi, causing a stock rebound. Choi’s pushing the raise, but the board’s hesitating.</li>
<li>Choi and the board are set for a high-stakes debate this afternoon on the capital raise, aiming for a final decision by early next week.</li>
</ul>


With the FSS moving fast, Korea Zinc still has time to meet its target. The market started panicking this morning as it looks likely Choi will proceed.
An hour ago, word spread that some Korea Zinc board members were breaking with Choi, causing a stock rebound. Choi’s pushing the raise, but the board’s hesitating.
Choi and the board are set for a high-stakes debate this afternoon on the capital raise, aiming for a final decision by early next week.


The Latest Intel on Today’s Korea Zinc Rollercoaster

Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

Douglas Research Advisory

Event-Driven

<ul>
<li>Ham Young-Il (Deputy Director at FSS) stated that there is a high possibility of an unfair trading practice with regards to Korea Zinc's yesterday announcement of a massive capital raise.</li>
<li>If the FSS puts a break on the capital raise, then there is less likely probability of a fierce proxy war between the two sides. </li>
<li>All in all, we expect continued high volatility on Korea Zinc's share price and we remain negative on its share price in the next several weeks. </li>
</ul>


Ham Young-Il (Deputy Director at FSS) stated that there is a high possibility of an unfair trading practice with regards to Korea Zinc's yesterday announcement of a massive capital raise.
If the FSS puts a break on the capital raise, then there is less likely probability of a fierce proxy war between the two sides. 
All in all, we expect continued high volatility on Korea Zinc's share price and we remain negative on its share price in the next several weeks. 


FSS Could Put a Break on the Massive Capital Raise by Korea Zinc This Year

<ul>
<li>Korea Zinc announced a massive rights offering worth 2.5 trillion won. The expected rights offering price is 670,000 won (57% lower than the closing price on 29 October).</li>
<li>The company plans to use 2.3 trillion won in debt repayment and 135 billion won for working capital as well as help to alleviate the risk of delisting. </li>
<li><em><strong>This rights offering symbolizes a display of "Korea Discount" at its worst and likely to put continued negative pressure on Korea Zinc's share price in the coming weeks. </strong></em></li>
</ul>


Korea Zinc announced a massive rights offering worth 2.5 trillion won. The expected rights offering price is 670,000 won (57% lower than the closing price on 29 October).
The company plans to use 2.3 trillion won in debt repayment and 135 billion won for working capital as well as help to alleviate the risk of delisting. 
This rights offering symbolizes a display of "Korea Discount" at its worst and likely to put continued negative pressure on Korea Zinc's share price in the coming weeks. 


Korea Zinc - Rights Offering of 2.5 Trillion Won Is a Display Of "Korea Discount" At Its Worst

<ul>
<li>The main confusion is about the FSS's authority. According to the Capital Markets Act, they can’t approve capital raises but can request corrections for investor protection.</li>
<li>The FSS can issue unlimited correction requests, potentially stalling a capital raise indefinitely, which effectively pulls the plug on the entire deal.</li>
<li>Kum Yang's one is valid today; if no new correction requests arise, the capital increase proceeds. Korea Zinc faces a likely request on the 14th, causing a 2-week delay.</li>
</ul>


The main confusion is about the FSS's authority. According to the Capital Markets Act, they can’t approve capital raises but can request corrections for investor protection.
The FSS can issue unlimited correction requests, potentially stalling a capital raise indefinitely, which effectively pulls the plug on the entire deal.
Kum Yang's one is valid today; if no new correction requests arise, the capital increase proceeds. Korea Zinc faces a likely request on the 14th, causing a 2-week delay.


Clearing up the FSS's Authority on Capital Increases in Korea: Korea Zinc & Kum Yang

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 foreign holdings of KRX stocks as of Nov 1st which has an aggregated holding worth USD507.9bn.</li>
<li>We estimate that foreign flows to be outflows of USD1,513mln. We tabulate the league table for top changes by value for 1W/4W/1Y and top stocks held by foreign institutions.</li>
<li>We highlight changes of foreign holdings in Apr, Korzinc, Samsung Electronics, Hyundai Motor.</li>
</ul>


We analyzed the changes in foreign holdings of KRX stocks as of Nov 1st which has an aggregated holding worth USD507.9bn.
We estimate that foreign flows to be outflows of USD1,513mln. We tabulate the league table for top changes by value for 1W/4W/1Y and top stocks held by foreign institutions.
We highlight changes of foreign holdings in Apr, Korzinc, Samsung Electronics, Hyundai Motor.


KRX Foreign Holding Weekly (Nov 1st): Apr, Korzinc, Samsung Electronics, Hyundai Motor

South Korea

Korea Zinc Co., Ltd. specializes in non-ferrous metal smelting industry.  The Company manufactures zinc ingots, electrolytic gold, silver, lead, sulfuric acid, and copper.  Korea Zinc provides its products to domestic and overseas markets.

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Korea Zinc (010130 KS)

The Latest Intel on Today’s Korea Zinc Rollercoaster

This post delivers the latest scoop on today’s Korea Zinc rollercoaster, centered around its controversial, massive rights offering.

Sanghyun Park

FSS Could Put a Break on the Massive Capital Raise by Korea Zinc This Year

On 6 November, FSS announced that it requested a submission of a correction report on the 2.5 trillion capital raise plan by Korea Zinc. FSS...

Douglas Kim

Korea Zinc - Rights Offering of 2.5 Trillion Won Is a Display Of "Korea Discount" At Its Worst

MBK Partners Chairman Kim Byung-Joo revealed for the first time on why he is pushing to acquire Korea Zinc. According to MBK Chairman, he mentioned...

Douglas Kim

Clearing up the FSS's Authority on Capital Increases in Korea: Korea Zinc & Kum Yang

This post dives into the key points of confusion around the FSS's correction request process for capital increases in Korea.

Sanghyun Park

KRX Foreign Holding Weekly (Nov 1st): Apr, Korzinc, Samsung Electronics, Hyundai Motor

We analyzed KRX foreign holding data for the past week and highlighted foreign holding changes in Apr, Korzinc, Samsung Electronics, Hyundai Motor.

Ke Yan, CFA, FRM

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