Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

Event-Driven

<ul>
<li>On 14 March, NPS announced that it has decided to vote against the re-appointment of the CEO Cho Won-tae as the executive director of Korean Air Lines.</li>
<li>It was also announced on 14 March that GS Retail purchased a 1% stake in Hanjin Kal. In addition, Korean Air Lines also purchased a 1.2% stake in GS Retail.</li>
<li>One of the growing probabilities of the changing shareholding structures is that KDB may be interested in selling its 10.6% stake in Hanjin Kal.</li>
</ul>


On 14 March, NPS announced that it has decided to vote against the re-appointment of the CEO Cho Won-tae as the executive director of Korean Air Lines.
It was also announced on 14 March that GS Retail purchased a 1% stake in Hanjin Kal. In addition, Korean Air Lines also purchased a 1.2% stake in GS Retail.
One of the growing probabilities of the changing shareholding structures is that KDB may be interested in selling its 10.6% stake in Hanjin Kal.


Another Brewing Fight for the Controlling Shareholding of Hanjin Kal?

Equity Bottom-Up

<ul>
<li>In this insight, we highlight the recent pricing gap divergences of the major Korean holdcos and opcos which could provide trading opportunities in 1Q 2024. </li>
<li>We highlight 38 pair trades that involve Korean holdcos and opcos.</li>
<li>Of the 38 pair trades, 26 of them involved holdcos outperforming opcos in the past six months and 12 of them involved opcos outperforming holdcos in the same period.</li>
</ul>


In this insight, we highlight the recent pricing gap divergences of the major Korean holdcos and opcos which could provide trading opportunities in 1Q 2024. 
We highlight 38 pair trades that involve Korean holdcos and opcos.
Of the 38 pair trades, 26 of them involved holdcos outperforming opcos in the past six months and 12 of them involved opcos outperforming holdcos in the same period.


Korean Holdcos Vs Opcos Gap Trading Opportunities in 1Q 2024

Global Mobility/Transport, Equity Long-Short

Mohshin Aziz

Thematic (Sector/Industry)

<ul>
<li>FT article uncovers other contributors to surging air freight rates—Chinese online brands Temu and Shein are flooding Western nations with fast fashion and inexpensive e-commerce goods  </li>
<li>The biggest beneficiaries are Chinese carriers with significant air cargo exposure, and Cathay Pacific. This presents a potential catalyst for an earnings beat and a boost to the share price.</li>
<li>Carriers from Taiwan and South Korea will benefit from supply tightness to the U.S.. Logistics providers are unlikely to benefit much due to tight margins and volatile high freight rates </li>
</ul>


FT article uncovers other contributors to surging air freight rates—Chinese online brands Temu and Shein are flooding Western nations with fast fashion and inexpensive e-commerce goods  
The biggest beneficiaries are Chinese carriers with significant air cargo exposure, and Cathay Pacific. This presents a potential catalyst for an earnings beat and a boost to the share price.
Carriers from Taiwan and South Korea will benefit from supply tightness to the U.S.. Logistics providers are unlikely to benefit much due to tight margins and volatile high freight rates 


<ul>
<li>
<a href="https://www.smartkarma.com/entities/fedex-corp" target="_blank" data-smartkarma-citation="entities:14577:1" rel="noopener">FedEx Corp (FDX US)</a> (FedEx) will release its 2QFY24 results on 19 Dec after market close. Closely watched as it is the bellwether for global trade and commerce  </li>
<li>Cost reduction initiatives has delivered, and resurgence in e-commerce activities across Asia Pacific could potentially provide positive earnings surprise    </li>
<li>Target price US$299 (7% UPSIDE) based on 15x CY2024 PE (FedEx's historical mean). Our recommendation is to give FedEx a miss, too little upside for the risk </li>
</ul>



FedEx Corp (FDX US) (FedEx) will release its 2QFY24 results on 19 Dec after market close. Closely watched as it is the bellwether for global trade and commerce  
Cost reduction initiatives has delivered, and resurgence in e-commerce activities across Asia Pacific could potentially provide positive earnings surprise    
Target price US$299 (7% UPSIDE) based on 15x CY2024 PE (FedEx's historical mean). Our recommendation is to give FedEx a miss, too little upside for the risk 


FedEx (FDX US, BUY, TP:$299): 2QFY24 Will Shed Light on E-Commerce Resurgence

<ul>
<li>
<a href="https://www.smartkarma.com/entities/japan-airlines-co-ltd" target="_blank" data-smartkarma-citation="entities:1184:1" rel="noopener">Japan Airlines (9201 JP)</a> (JAL) is making a positive recovery on strong domestic and international demand</li>
<li>Weak JPY is a big headwind and so is its 40% fuel hedge cover locked in at higher than-market price. These factors should reverse and unwind next year </li>
<li>Target price JPY3,150 based on 1.65x FY24 P/BV - one standard deviation above its mean. Borderline attractive with 12% UPSIDE, and 2.3% dividend yield  </li>
</ul>



Japan Airlines (9201 JP) (JAL) is making a positive recovery on strong domestic and international demand
Weak JPY is a big headwind and so is its 40% fuel hedge cover locked in at higher than-market price. These factors should reverse and unwind next year 
Target price JPY3,150 based on 1.65x FY24 P/BV - one standard deviation above its mean. Borderline attractive with 12% UPSIDE, and 2.3% dividend yield  


Japan Airlines (9201 JP, BUY, TP: JPY3150): Slow, Steady, Stable Recovery

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)

Another Brewing Fight for the Controlling Shareholding of Hanjin Kal?

On 14 March, NPS announced that it has decided to vote against the re-appointment of the CEO Cho Won-tae as the executive director of Korean Air....

Douglas Kim

Korean Holdcos Vs Opcos Gap Trading Opportunities in 1Q 2024

In this insight, we highlight the recent pricing gap divergences of the major Korean holdcos and opcos which could provide trading opportunities in...

Douglas Kim

There's Something About Air Cargo

Chinese e-commerce platforms are driving up air freight rates, benefiting Chinese carriers and other North Asian carriers. This can be a catalyst...

Mohshin Aziz

FedEx (FDX US, BUY, TP:$299): 2QFY24 Will Shed Light on E-Commerce Resurgence

FedEx's 2QFY24 results will be released on Dec 19. The company's cost reduction efforts have been successful, and a boost in e-commerce in Asia...

Mohshin Aziz

Japan Airlines (9201 JP, BUY, TP: JPY3150): Slow, Steady, Stable Recovery

Japan Airlines is recovering with steady domestic and international demand despite headwinds from a weak JPY against the USD. the company is...

Mohshin Aziz

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

Another Brewing Fight for the Controlling Shareholding of Hanjin Kal?

On 14 March, NPS announced that it has decided to vote against the re-appointment of the CEO Cho Won-tae as the executive director of Korean Air....

Douglas Kim

Korean Holdcos Vs Opcos Gap Trading Opportunities in 1Q 2024

In this insight, we highlight the recent pricing gap divergences of the major Korean holdcos and opcos which could provide trading opportunities in...

Douglas Kim

There's Something About Air Cargo

​Chinese e-commerce platforms are driving up air freight rates, benefiting Chinese carriers and other North Asian carriers. This can be a catalyst...

Mohshin Aziz

FedEx (FDX US, BUY, TP:$299): 2QFY24 Will Shed Light on E-Commerce Resurgence

​FedEx's 2QFY24 results will be released on Dec 19. The company's cost reduction efforts have been successful, and a boost in e-commerce in Asia...

Mohshin Aziz

Japan Airlines (9201 JP, BUY, TP: JPY3150): Slow, Steady, Stable Recovery

​Japan Airlines is recovering with steady domestic and international demand despite headwinds from a weak JPY against the USD. the company is...

Mohshin Aziz

Chinese e-commerce platforms are driving up air freight rates, benefiting Chinese carriers and other North Asian carriers. This can be a catalyst...

FedEx's 2QFY24 results will be released on Dec 19. The company's cost reduction efforts have been successful, and a boost in e-commerce in Asia...

Japan Airlines is recovering with steady domestic and international demand despite headwinds from a weak JPY against the USD. the company is...