Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

Event-Driven

<ul>
<li>On 17 October, Pan Ocean (028670 KS) announced that it will sell its 3.9 million shares (5.85% stake) in Hanjin KAL Corp (180640 KS) for about 163 billion won. </li>
<li>The main purpose of this stake sale is to secure more funds for Pan Ocean to potentially acquire HMM Co., Ltd. (011200 KS). </li>
<li>As evidenced by the recent increase in Baltic Dry Index, the potential expansion of the war in Israel could benefit major bulk shipping companies such as Pan Ocean.</li>
</ul>


On 17 October, Pan Ocean (028670 KS) announced that it will sell its 3.9 million shares (5.85% stake) in Hanjin KAL Corp (180640 KS) for about 163 billion won. 
The main purpose of this stake sale is to secure more funds for Pan Ocean to potentially acquire HMM Co., Ltd. (011200 KS). 
As evidenced by the recent increase in Baltic Dry Index, the potential expansion of the war in Israel could benefit major bulk shipping companies such as Pan Ocean.


Pan Ocean To Sell 5.8% Stake in Hanjin Kal To Secure Funds to Acquire HMM

Equity Bottom-Up

<ul>
<li>In this insight, we highlight the pricing gap divergences of the major Korean holdcos and opcos in 4Q 2023.</li>
<li>Of the 38 pair trades, 18 of them involved holdcos outperforming opcos YTD and 20 of them involved opcos outperforming holdcos in the same period.</li>
<li>We highlight 38 pair trades that involve Korean holdcos and opcos.</li>
</ul>


In this insight, we highlight the pricing gap divergences of the major Korean holdcos and opcos in 4Q 2023.
Of the 38 pair trades, 18 of them involved holdcos outperforming opcos YTD and 20 of them involved opcos outperforming holdcos in the same period.
We highlight 38 pair trades that involve Korean holdcos and opcos.


Korean Holdcos Vs Opcos Gap Trading Opportunities in 4Q 2023

<ul>
<li>There is a relatively high probability (70-80%+) that the FTCs in Europe and the United States will officially block the merger between Korean Air and Asiana Airlines in 2H 2023. </li>
<li>This could result in the Korea Development Bank (KDB) selling its 10.58% stake in Hanjin KAL Corp which could result in a fight for the control of Hanjin Kal.</li>
<li>Our NAV analysis of Hanjin Kal suggests NAV of 3.8 trillion won or implied target price of 57,259 won per share, representing 13% upside from current levels.</li>
</ul>


There is a relatively high probability (70-80%+) that the FTCs in Europe and the United States will officially block the merger between Korean Air and Asiana Airlines in 2H 2023. 
This could result in the Korea Development Bank (KDB) selling its 10.58% stake in Hanjin KAL Corp which could result in a fight for the control of Hanjin Kal.
Our NAV analysis of Hanjin Kal suggests NAV of 3.8 trillion won or implied target price of 57,259 won per share, representing 13% upside from current levels.


Hanjin Kal: Fight For Control Amid FTC Regulatory Concerns of Korean Air & Asiana Airlines Merger

Asian Equities Analyst, Logistics & Transport, Tracking Traffic

Daniel Hellberg

Asian Equities Analyst, Logistics & Transport

Tracking Traffic

Focusing on Asian logistics, transportation, and travel companies

<ul>
<li>Compared to depressed traffic from last year, outbound travel in July was up dramatically; strong M/M growth versus June suggests the outbound recovery still has legs </li>
<li>Does China's relaxation of group travel to Japan and Korea matter? We offer context and conclude the change is helpful, but not a "game-changer" for overall travel demand</li>
<li>We also review July domestic traffic and preview Trip.com's Q2 results (out Sept 4th)</li>
</ul>


Compared to depressed traffic from last year, outbound travel in July was up dramatically; strong M/M growth versus June suggests the outbound recovery still has legs 
Does China's relaxation of group travel to Japan and Korea matter? We offer context and conclude the change is helpful, but not a "game-changer" for overall travel demand
We also review July domestic traffic and preview Trip.com's Q2 results (out Sept 4th)


Monthly Chinese Tourism Tracker | July Outbound Firm | Group Tour Impact | Trip.com Q2 (August 2023)

<ul>
<li>There have been increasing local news flows about KDB's potential "Plan B" for Asiana Airlines in case the merger between Asiana Airlines and Korean Air Lines is finally cancelled.</li>
<li>The final decisions by the European and US regulators on whether to pass/block this merger are likely to take place in 4Q 2023. </li>
<li>The higher probability scenarios are for one or both of these regulators to block this deal. As such, KDB will need to come up with Plan B.</li>
</ul>


There have been increasing local news flows about KDB's potential "Plan B" for Asiana Airlines in case the merger between Asiana Airlines and Korean Air Lines is finally cancelled.
The final decisions by the European and US regulators on whether to pass/block this merger are likely to take place in 4Q 2023. 
The higher probability scenarios are for one or both of these regulators to block this deal. As such, KDB will need to come up with Plan B.


What Is KDB's Plan B for Asiana Airlines?

South Korea

Korean Air Lines Co., Ltd. operates air transportation services.  The Company's services include passenger and cargo transportation, aircraft maintenance, and air catering.  Korean Air Lines provides domestic and international airline services.

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Korean Air Lines (003490 KS)

Pan Ocean To Sell 5.8% Stake in Hanjin Kal To Secure Funds to Acquire HMM

Pan Ocean plans to sell stake in Hanjin KAL to raise funds for potential acquisition of HMM Co. The outbreak of a war in Israel has resulted in...

Douglas Kim

Korean Holdcos Vs Opcos Gap Trading Opportunities in 4Q 2023

In this insight, we highlight the pricing gap divergences of the major Korean holdcos and opcos in 4Q 2023. We highlight 38 pair trades that...

Douglas Kim

Hanjin Kal: Fight For Control Amid FTC Regulatory Concerns of Korean Air & Asiana Airlines Merger

Hanjin Kal's shares rose 27% today to 52,500 won yesterday. Some investors believe that FTCs in Europe and the United States will officially block...

Douglas Kim

Monthly Chinese Tourism Tracker | July Outbound Firm | Group Tour Impact | Trip.com Q2 (August 2023)

The recovery in outbound Chinese tourism remained strong in July. In this insight we also look at relaxation of Chinese group travel to Japan and...

Tracking Traffic

What Is KDB's Plan B for Asiana Airlines?

There have been increasing local news flows about KDB's potential "Plan B" for Asiana Airlines in case the merger between Asiana Airlines and...

Douglas Kim

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

Pan Ocean To Sell 5.8% Stake in Hanjin Kal To Secure Funds to Acquire HMM

​Pan Ocean plans to sell stake in Hanjin KAL to raise funds for potential acquisition of HMM Co. The outbreak of a war in Israel has resulted in...

Douglas Kim

Korean Holdcos Vs Opcos Gap Trading Opportunities in 4Q 2023

In this insight, we highlight the pricing gap divergences of the major Korean holdcos and opcos in 4Q 2023. We highlight 38 pair trades that...

Douglas Kim

Hanjin Kal: Fight For Control Amid FTC Regulatory Concerns of Korean Air & Asiana Airlines Merger

Hanjin Kal's shares rose 27% today to 52,500 won yesterday. Some investors believe that FTCs in Europe and the United States will officially block...

Douglas Kim

Monthly Chinese Tourism Tracker | July Outbound Firm | Group Tour Impact | Trip.com Q2 (August 2023)

The recovery in outbound Chinese tourism remained strong in July. In this insight we also look at relaxation of Chinese group travel to Japan and...

Tracking Traffic

What Is KDB's Plan B for Asiana Airlines?

There have been increasing local news flows about KDB's potential "Plan B" for Asiana Airlines in case the merger between Asiana Airlines and...

Douglas Kim

Pan Ocean plans to sell stake in Hanjin KAL to raise funds for potential acquisition of HMM Co. The outbreak of a war in Israel has resulted in...