Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

Equity Bottom-Up

<ul>
<li>On 3 November, KT&amp;G announced that it will buy back 350 billion won worth of common shares (3.7 million shares).</li>
<li>KT&amp;G has mentioned that it could increase its DPS by at least 200 won in 2022. Assuming DPS of 5,000 won in 2022 would suggest a dividend yield of 5.3%. </li>
<li>KT&amp;G had another solid results in 3Q 2022 slightly beating the consensus sales and operating profit estimates.</li>
</ul>


On 3 November, KT&amp;G announced that it will buy back 350 billion won worth of common shares (3.7 million shares).
KT&amp;G has mentioned that it could increase its DPS by at least 200 won in 2022. Assuming DPS of 5,000 won in 2022 would suggest a dividend yield of 5.3%. 
KT&amp;G had another solid results in 3Q 2022 slightly beating the consensus sales and operating profit estimates.


KT&G Announces a Share Buyback Worth 350 Billion Won

Event-Driven

<ul>
<li>On 26 October, a Singaporean private equity firm called Flashlight Capital Partners started to go activist on KT&amp;G demanding that the company spin-off its ginseng business to improve shareholder value.</li>
<li>While a spin-off of the ginseng business is not likely near term, the company could buyback more shares and sell more non-core assets which could soothe Flashlight Capital Partners.</li>
<li>Back in June 2022, we wrote a prescient insight called<em> KT&amp;G Is a Prime Candidate for Corporate Activism in Korea. </em>
</li>
</ul>


On 26 October, a Singaporean private equity firm called Flashlight Capital Partners started to go activist on KT&amp;G demanding that the company spin-off its ginseng business to improve shareholder value.
While a spin-off of the ginseng business is not likely near term, the company could buyback more shares and sell more non-core assets which could soothe Flashlight Capital Partners.
Back in June 2022, we wrote a prescient insight called KT&amp;G Is a Prime Candidate for Corporate Activism in Korea. 



Flashlight Capital Partners Goes Activist on KT&G

<ul>
<li>In this insight, we discuss the major reasons why KT&amp;G Corporation (033780 KS) is a prime candidate for corporate activism in Korea.</li>
<li>KT&amp;G shares are up 0.6% YTD, outperforming KOSPI which is down 16.3%. We believe KT&amp;G shares are well poised to continue to outperform the market in the next 6-12 months. </li>
<li>Corporate activists may be looking to force KT&amp;G to cancel treasury shares. Also, there can be a case made to separate the non-tobacco businesses (including ginseng) from KT&amp;G. </li>
</ul>


In this insight, we discuss the major reasons why KT&amp;G Corporation (033780 KS) is a prime candidate for corporate activism in Korea.
KT&amp;G shares are up 0.6% YTD, outperforming KOSPI which is down 16.3%. We believe KT&amp;G shares are well poised to continue to outperform the market in the next 6-12 months. 
Corporate activists may be looking to force KT&amp;G to cancel treasury shares. Also, there can be a case made to separate the non-tobacco businesses (including ginseng) from KT&amp;G. 


KT&G Is a Prime Candidate for Corporate Activism in Korea

Korea / Special Sits, Pairs, Index Rebalancing, Clepsydra Capital

Sanghyun Park

Korea / Special Sits, Pairs, Index Rebalancing

Clepsydra Capital

Investigate special situations, pairs, and index rebalancing trades in Korea.

<ul>
<li>Despite time until screening, predictions likely hold due to market cap gaps; all candidates are banks, benefiting from recent momentum.</li>
<li>Historical patterns show profit-taking selling affecting price impact, particularly on additions with significant pre-inclusion price rises. Monitor banks' pre-June 14th price appreciation to anticipate impact distortions.</li>
<li>Shorting LG Chem and LG Energy Solution based on high price cointegration, consider basket-trading them before the rebalancing, using the battery sector as a long hedge.</li>
</ul>


Despite time until screening, predictions likely hold due to market cap gaps; all candidates are banks, benefiting from recent momentum.
Historical patterns show profit-taking selling affecting price impact, particularly on additions with significant pre-inclusion price rises. Monitor banks' pre-June 14th price appreciation to anticipate impact distortions.
Shorting LG Chem and LG Energy Solution based on high price cointegration, consider basket-trading them before the rebalancing, using the battery sector as a long hedge.


Underexposed Flow Trading Opportunity: LONG Banks & SHORT LG Chem/Energy on June 14

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 short interest of KRX Stocks as of May 3rd which has an aggregated short interest worth USD6.4bn.</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 highlight short interest changes in Samsung Electronics, Sk Hynix, Hyundai Motor, Kb Financial.</li>
</ul>


We analyzed the changes in short interest of KRX Stocks as of May 3rd which has an aggregated short interest worth USD6.4bn.
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 highlight short interest changes in Samsung Electronics, Sk Hynix, Hyundai Motor, Kb Financial.


KRX Short Interest Weekly (May 3rd): Samsung Electronics, Sk Hynix, Hyundai Motor, Kb Financial

South Korea

KT&G Corporation processes, produces, and sells cigarettes and other tobacco products.  The Company, through its subsidiaries, manufactures ginseng products such as red ginseng tea and herbal medicines.  KT&G is also involved in real estate development of its former factory sites.

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KT&G Corporation (033780 KS)

Flashlight Capital Partners Goes Activist on KT&G

On 26 October, a Singaporean firm called Flashlight Capital Partners started to go activist on KT&G demanding that the company spin-off its ginseng...

Douglas Kim

KT&G Is a Prime Candidate for Corporate Activism in Korea

In this insight, we discuss the major reasons why KT&G Corporation (033780 KS) is a prime candidate for corporate activism in Korea.

Douglas Kim

Underexposed Flow Trading Opportunity: LONG Banks & SHORT LG Chem/Energy on June 14

This post highlights an upcoming flow trading event on June 14th, stemming from the annual rebalancing of Korea's two largest sector ETFs.

Sanghyun Park

KRX Short Interest Weekly (May 3rd): Samsung Electronics, Sk Hynix, Hyundai Motor, Kb Financial

We analyzed KRX short interest report for the past week and highlighted short interest changes in Samsung Electronics, Sk Hynix, Hyundai Motor, Kb...

Ke Yan, CFA, FRM

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

KT&G Announces a Share Buyback Worth 350 Billion Won

On 3 November, KT&G announced that it will buy back 350 billion won worth of common shares (3.7 million shares). KT&G had another solid results in...

Douglas Kim

Flashlight Capital Partners Goes Activist on KT&G

On 26 October, a Singaporean firm called Flashlight Capital Partners started to go activist on KT&G demanding that the company spin-off its ginseng...

Douglas Kim

KT&G Is a Prime Candidate for Corporate Activism in Korea

In this insight, we discuss the major reasons why KT&G Corporation (033780 KS) is a prime candidate for corporate activism in Korea.

Douglas Kim

Underexposed Flow Trading Opportunity: LONG Banks & SHORT LG Chem/Energy on June 14

This post highlights an upcoming flow trading event on June 14th, stemming from the annual rebalancing of Korea's two largest sector ETFs.

Sanghyun Park

KRX Short Interest Weekly (May 3rd): Samsung Electronics, Sk Hynix, Hyundai Motor, Kb Financial

We analyzed KRX short interest report for the past week and highlighted short interest changes in Samsung Electronics, Sk Hynix, Hyundai Motor, Kb...

Ke Yan, CFA, FRM