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

<ul>
<li>This is a classic swap arbitrage of shorting the acquirer and using the tendered shares to repay it. However, executing now would be meaningless as the swap ratio isn't finalized.</li>
<li>Nevertheless, we should consider securing a long position in OCI Holdings in advance. The target (45%) is quite substantial, indicating that the practical allocation rate won't plummet dangerously below 1.</li>
<li>Additionally, the likelihood of OCI Holdings' swap price plummeting to completely nullify the 5.6% spread immediately after its determination appears to be low based on the current context.</li>
</ul>


This is a classic swap arbitrage of shorting the acquirer and using the tendered shares to repay it. However, executing now would be meaningless as the swap ratio isn't finalized.
Nevertheless, we should consider securing a long position in OCI Holdings in advance. The target (45%) is quite substantial, indicating that the practical allocation rate won't plummet dangerously below 1.
Additionally, the likelihood of OCI Holdings' swap price plummeting to completely nullify the 5.6% spread immediately after its determination appears to be low based on the current context.


OCI Swap Arbitrage: A Bit More Complex Structure, Still Juicy Spread in Play

Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

<ul>
<li>The Korea Exchange announced today (20 April) the change in index constituents and major dates for the Oci Co Ltd (010060 KS) spin-off. </li>
<li>Oci Co Ltd (010060 KS)'s shares will be suspended from trading from 27 April to 26 May 2023.</li>
<li>After the spin-off and relisting of holdco/opco shares, we believe that there is a greater probability of OCI Co (opco) shares outperforming OCI Holdings (holdco). </li>
</ul>


The Korea Exchange announced today (20 April) the change in index constituents and major dates for the Oci Co Ltd (010060 KS) spin-off. 
Oci Co Ltd (010060 KS)'s shares will be suspended from trading from 27 April to 26 May 2023.
After the spin-off and relisting of holdco/opco shares, we believe that there is a greater probability of OCI Co (opco) shares outperforming OCI Holdings (holdco). 


Update on the Trading Opportunities Post OCI Spin-Off

Global Healthcare Analyst

Tina Banerjee

Equity Bottom-Up

<ul>
<li>In 2023, <a href="https://www.smartkarma.com/entities/hanmi-pharm-co-ltd" target="_blank" data-smartkarma-citation="entities:12476:1" rel="noopener">Hanmi Pharm (128940 KS)</a> reported 12% and 40% growth in revenue and operating profit, respectively, driven by double-digit revenue increase from Rosuzet and improving performance of China subsidiary.</li>
<li>In January, the company has enrolled first patient in phase 3 trial of type 2 diabetes/obesity drug candidate Efpeglenatide. The study is expected to complete in 2026.</li>
<li>Hanmi Science-OCI merger has hit a roadblock. Although merger with OCI will bring synergistic effect, Hanmi Pharm will continue to grow even if the merger does not happen.</li>
</ul>


In 2023, Hanmi Pharm (128940 KS) reported 12% and 40% growth in revenue and operating profit, respectively, driven by double-digit revenue increase from Rosuzet and improving performance of China subsidiary.
In January, the company has enrolled first patient in phase 3 trial of type 2 diabetes/obesity drug candidate Efpeglenatide. The study is expected to complete in 2026.
Hanmi Science-OCI merger has hit a roadblock. Although merger with OCI will bring synergistic effect, Hanmi Pharm will continue to grow even if the merger does not happen.


OCI Or No OCI, Hanmi Pharm (128940 KS) Will Continue to Roar on Strong Base Business and Pipeline

<ul>
<li>After the market close on 26 March, it was reported that NPS has decided it will side with Chairwoman Young-Sook Song (mother) and her daughter Ju-Hyun Lim. </li>
<li>As a result, Chairwoman Young-Sook Song (mother) and Ju-Hyun Lim have secured 40.86% of the shares, which is slightly higher than the ownership of her two sons (38.4%). </li>
<li>In the near term, this battle for the control of the company could have a positive impact on Hanmi Science's share price. </li>
</ul>


After the market close on 26 March, it was reported that NPS has decided it will side with Chairwoman Young-Sook Song (mother) and her daughter Ju-Hyun Lim. 
As a result, Chairwoman Young-Sook Song (mother) and Ju-Hyun Lim have secured 40.86% of the shares, which is slightly higher than the ownership of her two sons (38.4%). 
In the near term, this battle for the control of the company could have a positive impact on Hanmi Science's share price. 


Hanmi Science: NPS Sides With Mother (Chairwoman) And Daughter

<ul>
<li>We discuss the surging share cancellations in Korea in 2024. As of 8 February 2024, Korean companies have announced 3.3 trillion won worth of shares to be completed this year. </li>
<li>At current blistering pace, it is likely that the share cancellations in Korea could jump at least 100% YoY to jump more than 10 trillion won in 2024. </li>
<li>Some of the leading Korean companies including Samsung C&amp;T and KT&amp;G that have announced share cancellations this year continue to outperform the market on average. </li>
</ul>


We discuss the surging share cancellations in Korea in 2024. As of 8 February 2024, Korean companies have announced 3.3 trillion won worth of shares to be completed this year. 
At current blistering pace, it is likely that the share cancellations in Korea could jump at least 100% YoY to jump more than 10 trillion won in 2024. 
Some of the leading Korean companies including Samsung C&amp;T and KT&amp;G that have announced share cancellations this year continue to outperform the market on average. 


Korea: Surging Share Cancellations in 2024

South Korea

OCI Holdings Company Ltd. operates chemical business. The Company manufactures inorganic chemicals, petroleum and coal chemicals, fine chemicals, renewable energy and insulation materials. OCI Holdings markets its products primarily throughout Korea with limited overseas.

OCI Holdings (010060 KS)

OCI Swap Arbitrage: A Bit More Complex Structure, Still Juicy Spread in Play

This post dissects the OCI swap event, which was announced last Friday, from an arbitrage trading perspective, discussing the trading angles we...

Sanghyun Park

Update on the Trading Opportunities Post OCI Spin-Off

The Korea Exchange announced today (20 April) the change in index constituents and major dates for the Oci Co Ltd (010060 KS) spin-off.

Douglas Kim

OCI Or No OCI, Hanmi Pharm (128940 KS) Will Continue to Roar on Strong Base Business and Pipeline

Hanmi Pharm has submitted phase 1 clinical trial application for its next-generation obesity drug candidate HM15275 in the U.S., with an aim to...

Tina Banerjee

Hanmi Science: NPS Sides With Mother (Chairwoman) And Daughter

After the market close on 26 March, it was reported that NPS has decided it will side with Chairwoman Young-Sook Song (mother) and her daughter Ju...

Douglas Kim

OCI Swap Arbitrage: A Bit More Complex Structure, Still Juicy Spread in Play

This post dissects the OCI swap event, which was announced last Friday, from an arbitrage trading perspective, discussing the trading angles we...

Sanghyun Park

Update on the Trading Opportunities Post OCI Spin-Off

The Korea Exchange announced today (20 April) the change in index constituents and major dates for the Oci Co Ltd (010060 KS) spin-off.

Douglas Kim

OCI Or No OCI, Hanmi Pharm (128940 KS) Will Continue to Roar on Strong Base Business and Pipeline

Hanmi Pharm has submitted phase 1 clinical trial application for its next-generation obesity drug candidate HM15275 in the U.S., with an aim to...

Tina Banerjee

Hanmi Science: NPS Sides With Mother (Chairwoman) And Daughter

After the market close on 26 March, it was reported that NPS has decided it will side with Chairwoman Young-Sook Song (mother) and her daughter Ju...

Douglas Kim

Korea: Surging Share Cancellations in 2024

We discuss the surging share cancellations in Korea in 2024. As of 8 February 2024, Korean companies have announced 3.3 trillion won worth of...

Douglas Kim