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.

Event-Driven

<p>The KRX has just released the base prices of the four re-listings from the LG Corp spinoff scheduled for May 27.</p><div class="content-highlight">
<p><em>For your information, we have two regulatory filing websites: 1. DART (operated by the Korea Financial Supervisory Service) and 2. KIND (operated by the KRX). This kind of corporate action filings is only published at the KIND.  Following are the links to the regulatory filings at the KIND.</em></p>
<ul>
<li><a href="https://kind.krx.co.kr/common/disclsviewer.do?method=search&amp;acptno=20210526000318&amp;docno=&amp;viewerhost=&amp;viewerport=" target="_blank" rel="noopener">LG Corp</a></li>
<li><a href="https://kind.krx.co.kr/common/disclsviewer.do?method=search&amp;acptno=20210526000321&amp;docno=&amp;viewerhost=&amp;viewerport=" target="_blank" rel="noopener">LG Corp 1P</a></li>
<li><a href="https://kind.krx.co.kr/common/disclsviewer.do?method=search&amp;acptno=20210526000323&amp;docno=&amp;viewerhost=&amp;viewerport=" target="_blank" rel="noopener">LX Holdings</a></li>
<li><a href="https://kind.krx.co.kr/common/disclsviewer.do?method=search&amp;acptno=20210526000328&amp;docno=&amp;viewerhost=&amp;viewerport=" target="_blank" rel="noopener">LX Holdings 1P</a></li>
</ul>
</div><h2>Base prices</h2><p>The base prices of all four companies haven't changed from the previous closing prices on April 28. It means that the updated split ratio based on the most recent financials (1Q21) was pretty much the same as the previously calculated split ratio based on the 3Q20 financials.</p><table class="table table-striped">
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<col width="100">
<col width="100">
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<col width="100">
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<tbody>
<tr>
<td style="width: 146.364px;" data-sheets-value='{"1":2,"2":"Base prices"}'>Base prices</td>
<td style="text-align: right; width: 107.273px;" data-sheets-value='{"1":2,"2":"LG Corp"}'>LG Corp</td>
<td style="text-align: right; width: 129.091px;" data-sheets-value='{"1":2,"2":"LG Corp 1P"}'>LG Corp 1P</td>
<td style="text-align: right; width: 128.182px;" data-sheets-value='{"1":2,"2":"LX Holdings"}'>LX Holdings</td>
<td style="text-align: right; width: 129.091px;" data-sheets-value='{"1":2,"2":"LX Holdings 1P"}'>LX Holdings 1P</td>
</tr>
<tr>
<td style="width: 146.364px;" data-sheets-value='{"1":2,"2":"Ticker"}'><strong>Ticker</strong></td>
<td style="text-align: right; width: 107.273px;" data-sheets-value='{"1":2,"2":"003550"}' data-sheets-formula='="003550"'><strong>003550</strong></td>
<td style="text-align: right; width: 129.091px;" data-sheets-value='{"1":2,"2":"003555"}' data-sheets-formula='="003555"'><strong>003555</strong></td>
<td style="text-align: right; width: 128.182px;" data-sheets-value='{"1":2,"2":"383800"}' data-sheets-formula='="383800"'><strong>383800</strong></td>
<td style="text-align: right; width: 129.091px;" data-sheets-value='{"1":2,"2":"383805"}' data-sheets-formula='="383805"'><strong>383805</strong></td>
</tr>
<tr>
<td style="width: 146.364px;" data-sheets-value='{"1":2,"2":"Base price"}'><strong>Base price</strong></td>
<td style="text-align: right; width: 107.273px;" data-sheets-value='{"1":3,"3":126500}' data-sheets-numberformat='{"1":4,"2":"[$₩]#,##0"}'><strong>₩126,500</strong></td>
<td style="text-align: right; width: 129.091px;" data-sheets-value='{"1":3,"3":99500}' data-sheets-numberformat='{"1":4,"2":"[$₩]#,##0"}'><strong>₩99,500</strong></td>
<td style="text-align: right; width: 128.182px;" data-sheets-value='{"1":3,"3":25300}' data-sheets-numberformat='{"1":4,"2":"[$₩]#,##0"}'><strong>₩25,300</strong></td>
<td style="text-align: right; width: 129.091px;" data-sheets-value='{"1":3,"3":19900}' data-sheets-numberformat='{"1":4,"2":"[$₩]#,##0"}'><strong>₩19,900</strong></td>
</tr>
<tr>
<td style="width: 146.364px;" data-sheets-value='{"1":2,"2":"Ceiling price at the opening (x 2)"}'>Ceiling price at the opening (base price x 2)</td>
<td style="text-align: right; width: 107.273px;" data-sheets-value='{"1":3,"3":253000}' data-sheets-numberformat='{"1":4,"2":"[$₩]#,##0"}' data-sheets-formula="=R[-1]C[0]*2">₩253,000</td>
<td style="text-align: right; width: 129.091px;" data-sheets-value='{"1":3,"3":199000}' data-sheets-numberformat='{"1":4,"2":"[$₩]#,##0"}' data-sheets-formula="=R[-1]C[0]*2">₩199,000</td>
<td style="text-align: right; width: 128.182px;" data-sheets-value='{"1":3,"3":50600}' data-sheets-numberformat='{"1":4,"2":"[$₩]#,##0"}' data-sheets-formula="=R[-1]C[0]*2">₩50,600</td>
<td style="text-align: right; width: 129.091px;" data-sheets-value='{"1":3,"3":39800}' data-sheets-numberformat='{"1":4,"2":"[$₩]#,##0"}' data-sheets-formula="=R[-1]C[0]*2">₩39,800</td>
</tr>
<tr>
<td style="width: 146.364px;" data-sheets-value='{"1":2,"2":"Floor price at the opening (x 0.5)"}'>Floor price at the opening (base price x 0.5)</td>
<td style="text-align: right; width: 107.273px;" data-sheets-value='{"1":3,"3":63300}' data-sheets-numberformat='{"1":4,"2":"[$₩]#,##0"}' data-sheets-formula="=ceiling(R[-2]C[0]/2, 100)">₩63,300</td>
<td style="text-align: right; width: 129.091px;" data-sheets-value='{"1":3,"3":49750}' data-sheets-numberformat='{"1":4,"2":"[$₩]#,##0"}' data-sheets-formula="=ceiling(R[-2]C[0]/2, 10)">₩49,750</td>
<td style="text-align: right; width: 128.182px;" data-sheets-value='{"1":3,"3":12650}' data-sheets-numberformat='{"1":4,"2":"[$₩]#,##0"}' data-sheets-formula="=ceiling(R[-2]C[0]/2, 10)">₩12,650</td>
<td style="text-align: right; width: 129.091px;" data-sheets-value='{"1":3,"3":9950}' data-sheets-numberformat='{"1":4,"2":"[$₩]#,##0"}' data-sheets-formula="=ceiling(R[-2]C[0]/2, 10)">₩9,950</td>
</tr>
<tr><td colspan="5" rowspan="1" style="width: 723.636px;" data-sheets-value='{"1":2,"2":"Source: KRX"}'>Source: KRX</td></tr>
</tbody>
</table><p>Base price calculation:</p><ul>
<li>A = Market cap at the previous close on April 28</li>
<li>B = Updated split ratio based on the most recent financials (1Q21)</li>
<li>C = Total shares based on the previous split ratio calculated with the 3Q20 financials</li>
<li><strong>Base price for each company = A × B / C</strong></li>
</ul><h2>Market caps</h2><div><p>LG Corp can begin tomorrow as low as ₩9.95T or as high as ₩39.80T. LG Corp opens at a range of ₩150.3~601.3B. LX Holdings can greet its shareholders at a market cap as low as ₩0.97T or as high as ₩3.86T. Lastly, LX Holdings 1P will begin at a range of ₩14.6~58.3B.</p></div><table class="table table-striped">
<colgroup>
<col width="100">
<col width="100">
<col width="100">
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<col width="100">
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<tbody>
<tr>
<td style="width: 136.364px;" data-sheets-value='{"1":2,"2":"Market caps"}'>Market caps</td>
<td style="text-align: right; width: 121.818px;" data-sheets-value='{"1":2,"2":"LG Corp"}'>LG Corp</td>
<td style="text-align: right; width: 126.364px;" data-sheets-value='{"1":2,"2":"LG Corp 1P"}'>LG Corp 1P</td>
<td style="text-align: right; width: 128.182px;" data-sheets-value='{"1":2,"2":"LX Holdings"}'>LX Holdings</td>
<td style="text-align: right; width: 127.273px;" data-sheets-value='{"1":2,"2":"LX Holdings 1P"}'>LX Holdings 1P</td>
</tr>
<tr>
<td style="width: 136.364px;" data-sheets-value='{"1":2,"2":"Shares outstanding"}'>Shares outstanding</td>
<td style="text-align: right; width: 121.818px;" data-sheets-value='{"1":3,"3":157300993}' data-sheets-numberformat='[null,2,"#,##0",1]' data-sheets-formula="=R[31]C[0]">157,300,993</td>
<td style="text-align: right; width: 126.364px;" data-sheets-value='{"1":3,"3":3021620.326859276}' data-sheets-numberformat='[null,2,"#,##0",1]' data-sheets-formula="=R[31]C[0]">3,021,620</td>
<td style="text-align: right; width: 128.182px;" data-sheets-value='{"1":3,"3":76280690}' data-sheets-numberformat='[null,2,"#,##0",1]' data-sheets-formula="=R[33]C[-2]">76,280,690</td>
<td style="text-align: right; width: 127.273px;" data-sheets-value='{"1":3,"3":1465285}' data-sheets-numberformat='[null,2,"#,##0",1]' data-sheets-formula="=R[33]C[-2]">1,465,285</td>
</tr>
<tr>
<td style="width: 136.364px;" data-sheets-value='{"1":2,"2":"Base price"}'><strong>Base price</strong></td>
<td style="text-align: right; width: 121.818px;" data-sheets-value='{"1":3,"3":19898.5756145}' data-sheets-numberformat='[null,2,"₩#,##0.0B"]' data-sheets-formula="=R[-7]C[0]*R9C[0]/1000000000"><strong>₩19,898.6B</strong></td>
<td style="text-align: right; width: 126.364px;" data-sheets-value='{"1":3,"3":300.6512225224979}' data-sheets-numberformat='[null,2,"₩#,##0.0B"]' data-sheets-formula="=R[-7]C[0]*R9C[0]/1000000000"><strong>₩300.7B</strong></td>
<td style="text-align: right; width: 128.182px;" data-sheets-value='{"1":3,"3":1929.901457}' data-sheets-numberformat='[null,2,"₩#,##0.0B"]' data-sheets-formula="=R[-7]C[0]*R9C[0]/1000000000"><strong>₩1,929.9B</strong></td>
<td style="text-align: right; width: 127.273px;" data-sheets-value='{"1":3,"3":29.1591715}' data-sheets-numberformat='[null,2,"₩#,##0.0B"]' data-sheets-formula="=R[-7]C[0]*R9C[0]/1000000000"><strong>₩29.2B</strong></td>
</tr>
<tr>
<td style="width: 136.364px;" data-sheets-value='{"1":2,"2":"Ceiling price at the opening (x 2)"}'>Ceiling price at the opening (base price x 2)</td>
<td style="text-align: right; width: 121.818px;" data-sheets-value='{"1":3,"3":39797.151229}' data-sheets-numberformat='[null,2,"₩#,##0.0B"]' data-sheets-formula="=R[-7]C[0]*R9C[0]/1000000000">₩39,797.2B</td>
<td style="text-align: right; width: 126.364px;" data-sheets-value='{"1":3,"3":601.3024450449958}' data-sheets-numberformat='[null,2,"₩#,##0.0B"]' data-sheets-formula="=R[-7]C[0]*R9C[0]/1000000000">₩601.3B</td>
<td style="text-align: right; width: 128.182px;" data-sheets-value='{"1":3,"3":3859.802914}' data-sheets-numberformat='[null,2,"₩#,##0.0B"]' data-sheets-formula="=R[-7]C[0]*R9C[0]/1000000000">₩3,859.8B</td>
<td style="text-align: right; width: 127.273px;" data-sheets-value='{"1":3,"3":58.318343}' data-sheets-numberformat='[null,2,"₩#,##0.0B"]' data-sheets-formula="=R[-7]C[0]*R9C[0]/1000000000">₩58.3B</td>
</tr>
<tr>
<td style="width: 136.364px;" data-sheets-value='{"1":2,"2":"Floor price at the opening (x 0.5)"}'>Floor price at the opening (base price x 0.5)</td>
<td style="text-align: right; width: 121.818px;" data-sheets-value='{"1":3,"3":9957.1528569}' data-sheets-numberformat='[null,2,"₩#,##0.0B"]' data-sheets-formula="=R[-7]C[0]*R9C[0]/1000000000">₩9,957.2B</td>
<td style="text-align: right; width: 126.364px;" data-sheets-value='{"1":3,"3":150.32561126124895}' data-sheets-numberformat='[null,2,"₩#,##0.0B"]' data-sheets-formula="=R[-7]C[0]*R9C[0]/1000000000">₩150.3B</td>
<td style="text-align: right; width: 128.182px;" data-sheets-value='{"1":3,"3":964.9507285}' data-sheets-numberformat='[null,2,"₩#,##0.0B"]' data-sheets-formula="=R[-7]C[0]*R9C[0]/1000000000">₩965.0B</td>
<td style="text-align: right; width: 127.273px;" data-sheets-value='{"1":3,"3":14.57958575}' data-sheets-numberformat='[null,2,"₩#,##0.0B"]' data-sheets-formula="=R[-7]C[0]*R9C[0]/1000000000">₩14.6B</td>
</tr>
<tr><td colspan="5" rowspan="1" style="width: 723.636px;" data-sheets-value='{"1":2,"2":"Source: KRX"}'>Source: KRX</td></tr>
</tbody>
</table>

The KRX has just released the base prices of the four re-listings from the LG Corp spinoff scheduled for May 27.
For your information, we have two regulatory filing websites: 1. DART (operated by the Korea Financial Supervisory Service) and 2. KIND (operated by the KRX). This kind of corporate action filings is only published at the KIND.  Following are the links to the regulatory filings at the KIND.

LG Corp
LG Corp 1P
LX Holdings
LX Holdings 1P

Base pricesThe base prices of all four companies haven't changed from the previous closing prices on April 28. It means that the updated split ratio based on the most recent financials (1Q21) was pretty much the same as the previously calculated split ratio based on the 3Q20 financials.









Base prices
LG Corp
LG Corp 1P
LX Holdings
LX Holdings 1P


Ticker
003550
003555
383800
383805


Base price
₩126,500
₩99,500
₩25,300
₩19,900


Ceiling price at the opening (base price x 2)
₩253,000
₩199,000
₩50,600
₩39,800


Floor price at the opening (base price x 0.5)
₩63,300
₩49,750
₩12,650
₩9,950

Source: KRX

Base price calculation:
A = Market cap at the previous close on April 28
B = Updated split ratio based on the most recent financials (1Q21)
C = Total shares based on the previous split ratio calculated with the 3Q20 financials
Base price for each company = A × B / C
Market capsLG Corp can begin tomorrow as low as ₩9.95T or as high as ₩39.80T. LG Corp opens at a range of ₩150.3~601.3B. LX Holdings can greet its shareholders at a market cap as low as ₩0.97T or as high as ₩3.86T. Lastly, LX Holdings 1P will begin at a range of ₩14.6~58.3B.









Market caps
LG Corp
LG Corp 1P
LX Holdings
LX Holdings 1P


Shares outstanding
157,300,993
3,021,620
76,280,690
1,465,285


Base price
₩19,898.6B
₩300.7B
₩1,929.9B
₩29.2B


Ceiling price at the opening (base price x 2)
₩39,797.2B
₩601.3B
₩3,859.8B
₩58.3B


Floor price at the opening (base price x 0.5)
₩9,957.2B
₩150.3B
₩965.0B
₩14.6B

Source: KRX



LG Corp/LX Holdings: Official Base Prices & Index Calculation Timeline & Treatment Clarification

Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

<div class="content-highlight">
<p>Our NAV valuation of LX Holdings suggests NAV of 1.0 trillion won (13,556 won per share). Our NAV valuation of the company is based on the current market values for the three listed companies including Silicon Works, LG International, and LG Hausys. For MMA, we have used a 50% of its book value at the end of 2020. We have also assumed net cash of 179 billion won which is 0.088 x net cash of LG Corp (Consolidated at End of 1Q 2021). We have also assumed a 35% holdco discount. </p>
<p>We believe there are many investors who purchased Silicon Works, LG International, and LG Hausys ahead of the actual split date and the NAV (post holdco discount) of LX Holdings could be much less than the initial market cap of LX Holdings once it starts trading. Given that our base case value of LX Holdings is 13,556 won and if the final base price is confirmed at above 20,000 won to 25,000 won, for example, we believe in reducing to positions to lower levels. </p>
</div>


Our NAV valuation of LX Holdings suggests NAV of 1.0 trillion won (13,556 won per share). Our NAV valuation of the company is based on the current market values for the three listed companies including Silicon Works, LG International, and LG Hausys. For MMA, we have used a 50% of its book value at the end of 2020. We have also assumed net cash of 179 billion won which is 0.088 x net cash of LG Corp (Consolidated at End of 1Q 2021). We have also assumed a 35% holdco discount. 
We believe there are many investors who purchased Silicon Works, LG International, and LG Hausys ahead of the actual split date and the NAV (post holdco discount) of LX Holdings could be much less than the initial market cap of LX Holdings once it starts trading. Given that our base case value of LX Holdings is 13,556 won and if the final base price is confirmed at above 20,000 won to 25,000 won, for example, we believe in reducing to positions to lower levels. 


LX Holdings - NAV Analysis Suggests A Big Downside Risk

South Korea

LX Holdings Corp operates as an investment holding company. The company operates coal and mine supply business. LX Holdings also invests in combines heat and power hydroelectric plants.

Price Gauge
52-week Range	0.00 - 0.00
Market Cap (USDm)	0.00
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LX Holdings (383800 KS)

LG Corp/LX Holdings: Official Base Prices & Index Calculation Timeline & Treatment Clarification

This post has the official base prices for LG Corp/LX Holdings relisting and clarifies the index calculation timeline and treatment, including...

Sanghyun Park

LX Holdings - NAV Analysis Suggests A Big Downside Risk

Our NAV value of LX Holdings suggests NAV of 1.0 trillion won (13,556 won per share). If the final base price is confirmed at above 20,000 won to...

Douglas Kim

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52-week Range

Market Cap (USDm)

P/E

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