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.

Event-Driven

<p>The three-party opposition, the KCGI (activist fund), Bando Group, and Cho Hyun-ah (the eldest sibling of the Hanjin owner family), ended their joint ownership of their stakes in Hanjin Kal.</p><p>The regulatory filings by all of the three parties were posted on DART last Thursday.</p><section class="figure"><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/198/817/original/Screen+Shot+2021-04-04+at+10.44.14+AM.png?1617547476" class="editor-image img-responsive" data-smartkarma-image-id="198817"></figure></section><div class="content-caption">(Source: DART)</div><p>They signed the joint ownership agreement a year ago, and they appear to have agreed not to renew it.</p><p>Of course, it is no surprise. Ever since KDB came into the scene, the proxy fight must have been pretty much over. With the help of KDB, the Cho WT side now controls 47.41%, whereas the opposition remains at 40.40%.</p><p>The casting votes amount to 12.19%, but local retail has only about 4%. The other 8% are held by local institutions, many of which are pro-Cho WT.</p><table class="table table-striped">
<colgroup>
<col width="100">
<col width="100">
<col width="100">
<col width="100">
</colgroup>
<tbody>
<tr>
<td style="width: 238.182px;" data-sheets-value='{"1":2,"2":"Hanjin Kal proxy fight"}'>Hanjin Kal proxy fight</td>
<td style="text-align: right; width: 146.364px;" data-sheets-value='{"1":2,"2":"Cho WT"}'>Cho WT</td>
<td style="text-align: right; width: 142.727px;" data-sheets-value='{"1":2,"2":"Opposition"}'>Opposition</td>
<td style="text-align: right; width: 133.636px;" data-sheets-value='{"1":2,"2":"Casting votes"}'>Casting votes</td>
</tr>
<tr>
<td style="width: 238.182px;" data-sheets-value='{"1":2,"2":"KDB"}'><strong>KDB</strong></td>
<td style="text-align: right; width: 146.364px;" data-sheets-value='{"1":3,"3":0.1066}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}'><strong>10.66%</strong></td>
<td style="text-align: right; width: 142.727px;" data-sheets-value='{"1":2,"2":"-"}'>-</td>
<td style="text-align: right; width: 133.636px;" data-sheets-value='{"1":2,"2":"-"}'>-</td>
</tr>
<tr>
<td style="width: 238.182px;" data-sheets-value='{"1":2,"2":"Cho WT"}'>Cho WT</td>
<td style="text-align: right; width: 146.364px;" data-sheets-value='{"1":3,"3":0.0582}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}'>5.82%</td>
<td style="text-align: right; width: 142.727px;" data-sheets-value='{"1":2,"2":"-"}'>-</td>
<td style="text-align: right; width: 133.636px;" data-sheets-value='{"1":2,"2":"-"}'>-</td>
</tr>
<tr>
<td style="width: 238.182px;" data-sheets-value='{"1":2,"2":"Jeongseok Inha AF (controlled by Cho WT)"}'> - Jeongseok Inha AF (controlled by Cho WT)</td>
<td style="text-align: right; width: 146.364px;" data-sheets-value='{"1":3,"3":0.0191}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}'>1.91%</td>
<td style="text-align: right; width: 142.727px;" data-sheets-value='{"1":2,"2":"-"}'>-</td>
<td style="text-align: right; width: 133.636px;" data-sheets-value='{"1":2,"2":"-"}'>-</td>
</tr>
<tr>
<td style="width: 238.182px;" data-sheets-value='{"1":2,"2":"Jeongseok LAF (controlled by Cho WT)"}'> - Jeongseok LAF (controlled by Cho WT)</td>
<td style="text-align: right; width: 146.364px;" data-sheets-value='{"1":3,"3":0.0096}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}'>0.96%</td>
<td style="text-align: right; width: 142.727px;" data-sheets-value='{"1":2,"2":"-"}'>-</td>
<td style="text-align: right; width: 133.636px;" data-sheets-value='{"1":2,"2":"-"}'>-</td>
</tr>
<tr>
<td style="width: 238.182px;" data-sheets-value='{"1":2,"2":"Cho Hyun-min"}'>Cho Hyun-min</td>
<td style="text-align: right; width: 146.364px;" data-sheets-value='{"1":3,"3":0.0578}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}'>5.78%</td>
<td style="text-align: right; width: 142.727px;" data-sheets-value='{"1":2,"2":"-"}'>-</td>
<td style="text-align: right; width: 133.636px;" data-sheets-value='{"1":2,"2":"-"}'>-</td>
</tr>
<tr>
<td style="width: 238.182px;" data-sheets-value='{"1":2,"2":"Lee Myung-hee"}'>Lee Myung-hee</td>
<td style="text-align: right; width: 146.364px;" data-sheets-value='{"1":3,"3":0.0474}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}'>4.74%</td>
<td style="text-align: right; width: 142.727px;" data-sheets-value='{"1":2,"2":"-"}'>-</td>
<td style="text-align: right; width: 133.636px;" data-sheets-value='{"1":2,"2":"-"}'>-</td>
</tr>
<tr>
<td style="width: 238.182px;" data-sheets-value='{"1":2,"2":"Other special affiliated persons"}'>Other special affiliated persons</td>
<td style="text-align: right; width: 146.364px;" data-sheets-value='{"1":3,"3":0.0084}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}'>0.84%</td>
<td style="text-align: right; width: 142.727px;" data-sheets-value='{"1":2,"2":"-"}'>-</td>
<td style="text-align: right; width: 133.636px;" data-sheets-value='{"1":2,"2":"-"}'>-</td>
</tr>
<tr>
<td style="width: 238.182px;" data-sheets-value='{"1":2,"2":"Delta Air Lines, Inc."}'>Delta Air Lines, Inc.</td>
<td style="text-align: right; width: 146.364px;" data-sheets-value='{"1":3,"3":0.1331}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}'>13.31%</td>
<td style="text-align: right; width: 142.727px;" data-sheets-value='{"1":2,"2":"-"}'>-</td>
<td style="text-align: right; width: 133.636px;" data-sheets-value='{"1":2,"2":"-"}'>-</td>
</tr>
<tr>
<td style="width: 238.182px;" data-sheets-value='{"1":2,"2":"Korean Air ESOP (incl. self-ins. &amp; CFA)"}'>Korean Air ESOP (incl. self-ins. &amp; CFA)</td>
<td style="text-align: right; width: 146.364px;" data-sheets-value='{"1":3,"3":0.0339}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}'>3.39%</td>
<td style="text-align: right; width: 142.727px;" data-sheets-value='{"1":2,"2":"-"}'>-</td>
<td style="text-align: right; width: 133.636px;" data-sheets-value='{"1":2,"2":"-"}'>-</td>
</tr>
<tr>
<td style="width: 238.182px;" data-sheets-value='{"1":2,"2":"KCGI"}'>The KCGI (activist fund)</td>
<td style="text-align: right; width: 146.364px;" data-sheets-value='{"1":2,"2":"-"}'>-</td>
<td style="text-align: right; width: 142.727px;" data-sheets-value='{"1":3,"3":0.1754}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}'>17.54%</td>
<td style="text-align: right; width: 133.636px;" data-sheets-value='{"1":2,"2":"-"}'>-</td>
</tr>
<tr>
<td style="width: 238.182px;" data-sheets-value='{"1":2,"2":"Bando"}'>Bando</td>
<td style="text-align: right; width: 146.364px;" data-sheets-value='{"1":2,"2":"-"}'>-</td>
<td style="text-align: right; width: 142.727px;" data-sheets-value='{"1":3,"3":0.1715}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}'>17.15%</td>
<td style="text-align: right; width: 133.636px;" data-sheets-value='{"1":2,"2":"-"}'>-</td>
</tr>
<tr>
<td style="width: 238.182px;" data-sheets-value='{"1":2,"2":"Cho Hyun-a"}'>Cho Hyun-a</td>
<td style="text-align: right; width: 146.364px;" data-sheets-value='{"1":2,"2":"-"}'>-</td>
<td style="text-align: right; width: 142.727px;" data-sheets-value='{"1":3,"3":0.0571}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}'>5.71%</td>
<td style="text-align: right; width: 133.636px;" data-sheets-value='{"1":2,"2":"-"}'>-</td>
</tr>
<tr>
<td style="width: 238.182px;" data-sheets-value='{"1":2,"2":"Other"}'>Other</td>
<td style="text-align: right; width: 146.364px;" data-sheets-value='{"1":2,"2":"-"}'>-</td>
<td style="text-align: right; width: 142.727px;" data-sheets-value='{"1":2,"2":"-"}'>-</td>
<td style="text-align: right; width: 133.636px;" data-sheets-value='{"1":3,"3":0.1219}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}'>12.19%</td>
</tr>
<tr>
<td style="width: 238.182px;" data-sheets-value='{"1":2,"2":"- Total"}'><strong>- Total</strong></td>
<td style="text-align: right; width: 146.364px;" data-sheets-value='{"1":3,"3":0.4741}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}' data-sheets-formula="=sum(R[-13]C[0]:R[-5]C[0])"><strong>47.41%</strong></td>
<td style="text-align: right; width: 142.727px;" data-sheets-value='{"1":3,"3":0.40399999999999997}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}' data-sheets-formula="=sum(R[-4]C[0]:R[-2]C[0])"><strong>40.40%</strong></td>
<td style="text-align: right; width: 133.636px;" data-sheets-value='{"1":3,"3":0.12190000000000006}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}' data-sheets-formula="=1-R[0]C[-2]-R[0]C[-1]"><strong>12.19%</strong></td>
</tr>
<tr><td colspan="4" rowspan="1" style="width: 723.636px;" data-sheets-value='{"1":2,"2":"Source: DART &amp; FnGuide"}'>Source: DART &amp; FnGuide</td></tr>
</tbody>
</table>

The three-party opposition, the KCGI (activist fund), Bando Group, and Cho Hyun-ah (the eldest sibling of the Hanjin owner family), ended their joint ownership of their stakes in Hanjin Kal.The regulatory filings by all of the three parties were posted on DART last Thursday.(Source: DART)They signed the joint ownership agreement a year ago, and they appear to have agreed not to renew it.Of course, it is no surprise. Ever since KDB came into the scene, the proxy fight must have been pretty much over. With the help of KDB, the Cho WT side now controls 47.41%, whereas the opposition remains at 40.40%.The casting votes amount to 12.19%, but local retail has only about 4%. The other 8% are held by local institutions, many of which are pro-Cho WT.








Hanjin Kal proxy fight
Cho WT
Opposition
Casting votes


KDB
10.66%
-
-


Cho WT
5.82%
-
-


 - Jeongseok Inha AF (controlled by Cho WT)
1.91%
-
-


 - Jeongseok LAF (controlled by Cho WT)
0.96%
-
-


Cho Hyun-min
5.78%
-
-


Lee Myung-hee
4.74%
-
-


Other special affiliated persons
0.84%
-
-


Delta Air Lines, Inc.
13.31%
-
-


Korean Air ESOP (incl. self-ins. &amp; CFA)
3.39%
-
-


The KCGI (activist fund)
-
17.54%
-


Bando
-
17.15%
-


Cho Hyun-a
-
5.71%
-


Other
-
-
12.19%


- Total
47.41%
40.40%
12.19%

Source: DART &amp; FnGuide



Hanjin Kal Shorting Opportunity: Opposition Disbands, Loan Balance, & NAV Discount

Chart based progressive global trading strategies, Chart Partners

Thomas Schroeder

Chart based progressive global trading strategies

Chart Partners

Chart Partners objective is to discover medium-term cycle turns and profit opportunities before they unfold, within structural trends while preserving capital with clear degrees of risk. We have real return ideas. 

Markets are dynamic and trading systems must reflect this. It is crucial to determine underlying correlations and lead-lag relationships within global markets and the impact on linked instruments. Our weekly Chartonics product gives you short-term trading strategies that can be applied within the medium and longer term macro trends that are mapped out in our strategy updates. 

Our methodology fuses global market variables and isolates drivers in trends. We specialize in FX, index trade in NY and Asia with a focus on Asian stocks. 

Technical Analysis

<p><a href="https://www.smartkarma.com/entities/korean-air-lines-co-ltd" target="_blank" data-smartkarma-citation="entities:11048:1" rel="noopener">Korean Air Lines (003490 KS)</a> breakout above the old highs from 2017-19 calls for a new uptrend to take hold as long as 22k support is maintained on any noise below the 25k pivot level. MACD is also showing a breakout that signal a new and higher trading range for KA's share price.</p><p>Pullback pressure from the Kospi and global cycle will weigh on KA and see a re test of the 25k breakout point where we like getting involved.</p>

Korean Air Lines (003490 KS) breakout above the old highs from 2017-19 calls for a new uptrend to take hold as long as 22k support is maintained on any noise below the 25k pivot level. MACD is also showing a breakout that signal a new and higher trading range for KA's share price.Pullback pressure from the Kospi and global cycle will weigh on KA and see a re test of the 25k breakout point where we like getting involved.

Korean Air Breakout Re Test as Long Support

Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

<p>In this insight, we discuss the impact of a potential big selling in the shares of <a href="https://www.smartkarma.com/entities/hanjin-kal-corp" target="_blank" data-smartkarma-citation="entities:19086:1" rel="noopener">Hanjin KAL Corp (180640 KS)</a>, the holding company of Korean Air and the Hanjin Group. The lock-up period of 46.7% of shares of Hanjin Kal ends towards the end of this month. That is a lot of shares! The 46.7% of the shares of Hanjin Kal are related to the KCGI consortium including KCGI, Bando Construction, and Cho Hyun-Ah.</p><p>One of the likely scenarios of the changing shareholdings of Hanjin Kal post the additional capital injection by KDB is for<a href="http://news.heraldcorp.com/view.php?ud=20201118000257" target="_blank" rel="noopener"> KDB's stake</a> to increase from 0% to 10.7%, KCGI consortium stake to decline from 46.7% to 41.7%, and Chairman Cho and related parties' stake to decline from 41.1% to 37.7%. Investors are pushing down the share price of Hanjin Kal as many of them now believe an M&amp;A fight between the KCGI consortium and Chairman Cho/related parties is less likely.</p><p>Our base case NAV analysis suggests a base price of 39,830 won for Hanjin Kal shares, down 41% from the current price.</p>

In this insight, we discuss the impact of a potential big selling in the shares of Hanjin KAL Corp (180640 KS), the holding company of Korean Air and the Hanjin Group. The lock-up period of 46.7% of shares of Hanjin Kal ends towards the end of this month. That is a lot of shares! The 46.7% of the shares of Hanjin Kal are related to the KCGI consortium including KCGI, Bando Construction, and Cho Hyun-Ah.One of the likely scenarios of the changing shareholdings of Hanjin Kal post the additional capital injection by KDB is for KDB's stake to increase from 0% to 10.7%, KCGI consortium stake to decline from 46.7% to 41.7%, and Chairman Cho and related parties' stake to decline from 41.1% to 37.7%. Investors are pushing down the share price of Hanjin Kal as many of them now believe an M&amp;A fight between the KCGI consortium and Chairman Cho/related parties is less likely.Our base case NAV analysis suggests a base price of 39,830 won for Hanjin Kal shares, down 41% from the current price.

A Big Potential Selling in Hanjin Kal Once Lock-Up Period Ends & The Collapse of Warrant Price

<div class="content-highlight">
<p><strong>On November 16th, Korean Air Lines stated that it will acquire Asiana Airlines for 1.8 trillion won ($1.6 billion) that would create the 10th biggest airline by fleets in the world. </strong>In this deal, the Korean Development Bank (KDB) will help Hanjin Group Chairman Cho Won-Tae &amp; related parties retain control of Hanjin Kal and the Korean Air.</p>
<p>However, things are not so simple as they initially look on paper. This is mainly because in 2021 and beyond, the global air travel industry may not return quickly to the pre-COVID-19 environment. The overall media coverage of this event has been positive. However, we believe that there could be a bigger risk that things may not turn out so rosy for the combined companies. <strong>Rather, there is an increasing likelihood that the combined Korean Air and Asiana Airlines may become another KEPCO (which is controlled by the Korean government).  </strong></p>
</div>


On November 16th, Korean Air Lines stated that it will acquire Asiana Airlines for 1.8 trillion won ($1.6 billion) that would create the 10th biggest airline by fleets in the world. In this deal, the Korean Development Bank (KDB) will help Hanjin Group Chairman Cho Won-Tae &amp; related parties retain control of Hanjin Kal and the Korean Air.
However, things are not so simple as they initially look on paper. This is mainly because in 2021 and beyond, the global air travel industry may not return quickly to the pre-COVID-19 environment. The overall media coverage of this event has been positive. However, we believe that there could be a bigger risk that things may not turn out so rosy for the combined companies. Rather, there is an increasing likelihood that the combined Korean Air and Asiana Airlines may become another KEPCO (which is controlled by the Korean government).  


Korean Air + Asiana Airlines - Is This Becoming Another KEPCO?

<p>Hanjin Kal and KDB are currently in talks over an Asiana Airlines takeover.</p><p>The widely reported deal structure is quite similar to the previous one proposed to the HDC Group.</p><p>The KDB will make a capital injection (in the form of 3rd party allocation rights offer) to Hanjin Kal, which will then use the money to buy a 30.77% stake in Asiana.</p>

Hanjin Kal and KDB are currently in talks over an Asiana Airlines takeover.The widely reported deal structure is quite similar to the previous one proposed to the HDC Group.The KDB will make a capital injection (in the form of 3rd party allocation rights offer) to Hanjin Kal, which will then use the money to buy a 30.77% stake in Asiana.

Hanjin Kal Buying Asiana? KDB Dilution-Adj. Shareholding & Likely Market Impact

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.

Price Gauge
52-week Range	0.00 - 0.00
Market Cap (USDm)	0.00
P/E	0.00
Dividend (Yield)	0.00

Korean Air Lines (003490 KS)

Hanjin Kal Shorting Opportunity: Opposition Disbands, Loan Balance, & NAV Discount

This post examines the shorting opportunity on Hanjin Kal as the opposition side disbands. It also looks into the current loan balance and NAV...

Sanghyun Park

Korean Air Breakout Re Test as Long Support

Korean Air Lines breakout above the old highs from 2017-19 calls for a new uptrend to take hold. MACD is also showing a breakout that signals a...

Thomas Schroeder

A Big Potential Selling in Hanjin Kal Once Lock-Up Period Ends & The Collapse of Warrant Price

The lock-up period of 46.7% of shares of Hanjin Kal related to the KCGI consortium including KCGI, Bando Construction, and Cho Hyun-Ah. ends...

Douglas Kim

Korean Air + Asiana Airlines - Is This Becoming Another KEPCO?

Perhaps the worst-case scenario is that the combined Korean Air + Asiana Airlines becomes another KEPCO, which would be culminated with KDB taking...

Douglas Kim

Hanjin Kal Buying Asiana? KDB Dilution-Adj. Shareholding & Likely Market Impact

Hanjin Kal and KDB are reportedly in talks over taking over Asiana Airlines. This insight examines KDB fund injection-adjusted shareholding % and...

Sanghyun Park

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)