Korea / Special Situations, Clepsydra Capital

Sanghyun Park

Korea / Special Situations

Equity Capital Markets

<p>POSCO Chemical announced a massive rights offering.</p><p>The total offering is 16.5M shares for ₩1T. </p><table class="table table-striped">
<colgroup>
<col width="300">
<col width="300">
</colgroup>
<tbody>
<tr><td colspan="2" rowspan="1" data-sheets-value='{"1":2,"2":"Overview"}'>Overview</td></tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Issuer"}'>Issuer</td>
<td style="text-align: left;" data-sheets-value='{"1":2,"2":"Posco Chemical Co Ltd"}' data-sheets-formula='=googlefinance(R[1]C[0], "name")'>Posco Chemical Co Ltd</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Ticker"}'>Ticker</td>
<td style="text-align: left;" data-sheets-value='{"1":2,"2":"003670"}' data-sheets-formula='="003670"'>003670</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Target"}'>Target</td>
<td style="text-align: left;" data-sheets-value='{"1":2,"2":"Pubic offering of forfeited shares after offering to stockholders"}'>A public offering of forfeited shares after offering to stockholders</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Transferability"}'>Transferability</td>
<td style="text-align: left;" data-sheets-value='{"1":2,"2":"Renounceable"}'>Renounceable</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Volume"}'>Volume</td>
<td style="text-align: left;" data-sheets-value='{"1":3,"3":16475000}' data-sheets-numberformat='{"1":2,"2":"#,##0","3":1}'>16,475,000</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Bonus issue volume"}'>Bonus issue volume</td>
<td style="text-align: left;" data-sheets-value='{"1":3,"3":0}' data-sheets-numberformat='{"1":2,"2":"#,##0","3":1}'>0</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Preliminary price"}'>Preliminary price</td>
<td style="text-align: left;" data-sheets-value='{"1":3,"3":60700}' data-sheets-numberformat='{"1":2,"2":"[$₩-412]#,##0","3":1}'>₩60,700</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Preliminary value"}'>Preliminary value</td>
<td style="text-align: left;" data-sheets-value='{"1":3,"3":1000032500000}' data-sheets-numberformat='{"1":2,"2":"[$₩-412]#,##0","3":1}' data-sheets-formula="=R[-3]C[0]*R[-1]C[0]">₩1,000,032,500,000</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Oversubscription privilege"}'>Oversubscription privilege</td>
<td style="text-align: left;" data-sheets-value='{"1":3,"3":0.2}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}'>20.00%</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Banker"}'>Banker</td>
<td style="text-align: left;" data-sheets-value='{"1":2,"2":"KIS, NH, &amp; KB"}'>KIS, NH, &amp; KB</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":" - Underwriting type"}'>- Underwriting type</td>
<td style="text-align: left;" data-sheets-value='{"1":2,"2":"Standby"}'>Standby</td>
</tr>
<tr><td colspan="2" rowspan="1" data-sheets-value='{"1":2,"2":"Source: DART"}'>Source: DART</td></tr>
</tbody>
</table><p>The offering carries a 27% capital increase with a 21.3% dilution. The ESOP takes 11.8%, putting the shareholder per-share allocation at 0.238.</p><table class="table table-striped">
<colgroup>
<col width="300">
<col width="300">
</colgroup>
<tbody>
<tr><td colspan="2" rowspan="1" data-sheets-value='{"1":2,"2":"Allocation"}'>Allocation</td></tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Common"}'>Common</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":60988220}' data-sheets-numberformat='{"1":2,"2":"#,##0","3":1}'>60,988,220</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Pref (incl. RCPS &amp; CPS)"}'>Pref (incl. RCPS &amp; CPS)</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0}' data-sheets-numberformat='{"1":2,"2":"#,##0","3":1}'>0</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Total shares"}'>Total shares</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":60988220}' data-sheets-numberformat='{"1":2,"2":"#,##0","3":1}' data-sheets-formula="=R[-2]C[0]+R[-1]C[0]">60,988,220</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Treasury shares"}'>Treasury shares</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0}' data-sheets-numberformat='{"1":2,"2":"#,##0","3":1}'>0</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Total shares ex treasury shares"}'>Total shares ex treasury shares</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":60988220}' data-sheets-numberformat='{"1":2,"2":"#,##0","3":1}' data-sheets-formula="=R[-2]C[0]-R[-1]C[0]">60,988,220</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Offer volume"}'>Offer volume</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":16475000}' data-sheets-numberformat='{"1":2,"2":"#,##0","3":1}' data-sheets-formula="=R[1]C[0]+R[2]C[0]">16,475,000</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":" - Common"}'>- Common</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":16475000}' data-sheets-numberformat='{"1":2,"2":"#,##0","3":1}' data-sheets-formula="=R[-16]C[0]">16,475,000</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":" - Pref"}'>- Pref</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0}' data-sheets-numberformat='{"1":2,"2":"#,##0","3":1}'>0</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Per share allocation"}'>Per-share allocation</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0.23825830627619562}' data-sheets-numberformat='{"1":2,"2":"#,##0.0000000","3":1}' data-sheets-formula="=R[15]C[0]/R[-4]C[0]">0.2382583</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Capital increase"}'>Capital increase</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0.27013413409999504}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}' data-sheets-formula="=R[-4]C[0]/R[-7]C[0]">27.01%</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Dilution"}'>Dilution</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0.212681579722609}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}' data-sheets-formula="=R[-5]C[0]/(R[-8]C[0]+R[-5]C[0])">21.27%</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Total shares after rights offer"}'>Total shares after rights offer</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":77463220}' data-sheets-numberformat='{"1":2,"2":"#,##0","3":1}' data-sheets-formula="=R[1]C[0]+R[2]C[0]">77,463,220</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":" - Common"}'>- Common</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":77463220}' data-sheets-numberformat='{"1":2,"2":"#,##0","3":1}' data-sheets-formula="=R[-12]C[0]+R[-7]C[0]">77,463,220</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":" - Pref"}'>- Pref</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0}' data-sheets-numberformat='{"1":2,"2":"#,##0","3":1}' data-sheets-formula="=R[-12]C[0]">0</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Bonus issue"}'>Bonus issue</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0}' data-sheets-numberformat='{"1":2,"2":"#,##0","3":1}' data-sheets-formula="=R[1]C[0]+R[2]C[0]">0</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":" - Common"}'>- Common</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0}' data-sheets-numberformat='{"1":2,"2":"#,##0","3":1}'>0</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":" - Pref"}'>- Pref</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0}' data-sheets-numberformat='{"1":2,"2":"#,##0","3":1}'>0</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Per share allocation"}'>Per-share allocation</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0}' data-sheets-numberformat='{"1":2,"2":"#,##0.0000000","3":1}' data-sheets-formula="=R[-3]C[0]/(R[-6]C[0]-R[-14]C[0])">0.0000000</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Total shares after bonus issue"}'>Total shares after bonus issue</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":77463220}' data-sheets-numberformat='{"1":2,"2":"#,##0","3":1}' data-sheets-formula="=R[1]C[0]+R[2]C[0]">77,463,220</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":" - Common"}'>- Common</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":77463220}' data-sheets-numberformat='{"1":2,"2":"#,##0","3":1}' data-sheets-formula="=R[-7]C[0]+R[-4]C[0]">77,463,220</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":" - Pref"}'>- Pref</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0}' data-sheets-numberformat='{"1":2,"2":"#,##0","3":1}' data-sheets-formula="=R[-7]C[0]+R[-4]C[0]">0</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"ESOP allocation"}'>ESOP allocation</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":1944050}' data-sheets-numberformat='{"1":2,"2":"#,##0","3":1}'>1,944,050</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":" - %"}'>- %</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0.118}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}' data-sheets-formula="=R[-1]C[0]/R[-17]C[0]">11.80%</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Stockholder allocation"}'>Stockholder allocation</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":14530950}' data-sheets-numberformat='{"1":2,"2":"#,##0","3":1}' data-sheets-formula="=R[-18]C[0]-R[-2]C[0]">14,530,950</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":" - %"}'>- %</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0.882}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}' data-sheets-formula="=R[-1]C[0]/R[-19]C[0]">88.20%</td>
</tr>
<tr><td colspan="2" rowspan="1" data-sheets-value='{"1":2,"2":"Source: DART"}'>Source: DART</td></tr>
</tbody>
</table><p>December 8 is the ex-rights, giving 1st-round pricing on December 4. You can trade subscription rights on December 28~January 5, shortly followed by the final pricing on January 8.</p><p>The subscription falls on January 13, followed by the listing on February 3 next year.</p><table class="table table-striped">
<colgroup>
<col width="300">
<col width="300">
</colgroup>
<tbody>
<tr><td colspan="2" rowspan="1" style="width: 723.636px;" data-sheets-value='{"1":2,"2":"Timetable"}'>Timetable</td></tr>
<tr>
<td style="width: 351.818px;" data-sheets-value='{"1":2,"2":"BOD meeting"}'>BOD meeting</td>
<td style="text-align: right; width: 350.909px;" data-sheets-value='{"1":3,"3":44141}' data-sheets-numberformat='{"1":5,"2":"yyyy. m. d","3":1}'>2020. 11. 6</td>
</tr>
<tr>
<td style="width: 351.818px;" data-sheets-value='{"1":2,"2":"Preliminary pricing"}'>Preliminary pricing</td>
<td style="text-align: right; width: 350.909px;" data-sheets-value='{"1":3,"3":44169}' data-sheets-numberformat='{"1":5,"2":"yyyy. m. d","3":1}'>2020. 12. 4</td>
</tr>
<tr>
<td style="width: 351.818px;" data-sheets-value='{"1":2,"2":"Ex-rights date"}'>Ex-rights date</td>
<td style="text-align: right; width: 350.909px;" data-sheets-value='{"1":3,"3":44173}' data-sheets-numberformat='{"1":5,"2":"yyyy. m. d","3":1}'>2020. 12. 8</td>
</tr>
<tr>
<td style="width: 351.818px;" data-sheets-value='{"1":2,"2":"Record date"}'>Record date</td>
<td style="text-align: right; width: 350.909px;" data-sheets-value='{"1":3,"3":44174}' data-sheets-numberformat='{"1":5,"2":"yyyy. m. d","3":1}'>2020. 12. 9</td>
</tr>
<tr>
<td style="width: 351.818px;" data-sheets-value='{"1":2,"2":"Subscription rights trade beginning"}'>Subscription rights trade beginning</td>
<td style="text-align: right; width: 350.909px;" data-sheets-value='{"1":3,"3":44193}' data-sheets-numberformat='{"1":5,"2":"yyyy. m. d","3":1}'>2020. 12. 28</td>
</tr>
<tr>
<td style="width: 351.818px;" data-sheets-value='{"1":2,"2":"Subscription rights trade ending"}'>Subscription rights trade ending</td>
<td style="text-align: right; width: 350.909px;" data-sheets-value='{"1":3,"3":44201}' data-sheets-numberformat='{"1":5,"2":"yyyy. m. d","3":1}'>2021. 1. 5</td>
</tr>
<tr>
<td style="width: 351.818px;" data-sheets-value='{"1":2,"2":"Final pricing"}'>Final pricing</td>
<td style="text-align: right; width: 350.909px;" data-sheets-value='{"1":3,"3":44204}' data-sheets-numberformat='{"1":5,"2":"yyyy. m. d","3":1}'>2021. 1. 8</td>
</tr>
<tr>
<td style="width: 351.818px;" data-sheets-value='{"1":2,"2":"Stockholder subscription"}'>Stockholder subscription</td>
<td style="text-align: right; width: 350.909px;" data-sheets-value='{"1":3,"3":44209}' data-sheets-numberformat='{"1":5,"2":"yyyy. m. d","3":1}'>2021. 1. 13</td>
</tr>
<tr>
<td style="width: 351.818px;" data-sheets-value='{"1":2,"2":"Public subscription"}'>Public subscription</td>
<td style="text-align: right; width: 350.909px;" data-sheets-value='{"1":3,"3":44214}' data-sheets-numberformat='{"1":5,"2":"yyyy. m. d","3":1}'>2021. 1. 18</td>
</tr>
<tr>
<td style="width: 351.818px;" data-sheets-value='{"1":2,"2":"Payment"}'>Payment</td>
<td style="text-align: right; width: 350.909px;" data-sheets-value='{"1":3,"3":44217}' data-sheets-numberformat='{"1":5,"2":"yyyy. m. d","3":1}'>2021. 1. 21</td>
</tr>
<tr>
<td style="width: 351.818px;" data-sheets-value='{"1":2,"2":"Listing"}'>Listing</td>
<td style="text-align: right; width: 350.909px;" data-sheets-value='{"1":3,"3":44230}' data-sheets-numberformat='{"1":5,"2":"yyyy. m. d","3":1}'>2021. 2. 3</td>
</tr>
<tr>
<td style="width: 351.818px;" data-sheets-value='{"1":2,"2":"Record date for bonus shares"}'>Record date - bonus shares</td>
<td style="text-align: right; width: 350.909px;" data-sheets-value='{"1":2,"2":"N/A"}'>N/A</td>
</tr>
<tr>
<td style="width: 351.818px;" data-sheets-value='{"1":2,"2":"Listing - bonus shares"}'>Listing - bonus shares</td>
<td style="text-align: right; width: 350.909px;" data-sheets-value='{"1":2,"2":"N/A"}'>N/A</td>
</tr>
<tr><td colspan="2" rowspan="1" style="width: 723.636px;" data-sheets-value='{"1":2,"2":"Source: DART"}'>Source: DART</td></tr>
</tbody>
</table><p>Pricing is nothing unusual at a 20% discount.</p><table class="table table-striped">
<colgroup>
<col width="300">
<col width="400">
</colgroup>
<tbody>
<tr><td colspan="2" rowspan="1" data-sheets-value='{"1":2,"2":"Pricing"}'>Pricing</td></tr>
<tr>
<td data-sheets-value='{"1":2,"2":"1st round"}'>1st round</td>
<td data-sheets-value='{"1":2,"2":"RP × (1 - 20%) / [1 + (27.01% × 20%)]"}' data-sheets-formula='="RP × (1 - "&amp;(R[11]C[0]*100&amp;"%")&amp;") / [1 + ("&amp;(R[12]C[0]*100&amp;"%"&amp;" × "&amp;(R[11]C[0]*100&amp;"%"&amp;")]"))'>RP × (1 - 20%) / [1 + (27.01% × 20%)]</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":" - Reference price (RP)"}'>- Reference price (RP)</td>
<td data-sheets-value='{"1":2,"2":"Min [Close, Avg (Close, 1W VWAP, 1M VWAP)]"}'><strong>Min [Close, Avg (Close, 1W VWAP, 1M VWAP)]</strong></td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":" - Reference date"}'>- Reference date</td>
<td data-sheets-value='{"1":3,"3":44169}' data-sheets-numberformat='{"1":5,"2":"yyyy. m. d","3":1}' data-sheets-formula="=Terms!R[41]C[0]">2020. 12. 4</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Ex-rights base price"}'>Ex-rights base price</td>
<td data-sheets-value='{"1":2,"2":"[RP + (1st × 27.01%)] / (1 + 27.01%)"}' data-sheets-formula='="[RP + (1st × "&amp;R[9]C[0]*100&amp;"%"&amp;")] / (1 + "&amp;R[9]C[0]*100&amp;"%"&amp;")"'>[RP + (1st × 27.01%)] / (1 + 27.01%)</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":" - Reference price (RP)"}'>- Reference price (RP)</td>
<td data-sheets-value='{"1":2,"2":"Previous close"}'>Previous close</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":" - Reference date"}'>- Reference date</td>
<td data-sheets-value='{"1":3,"3":44173}' data-sheets-numberformat='{"1":5,"2":"yyyy. m. d","3":1}' data-sheets-formula="=Terms!R[39]C[0]">2020. 12. 8</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"2nd round"}'>2nd round</td>
<td data-sheets-value='{"1":2,"2":"RP × (1 - 20%)"}' data-sheets-formula='="RP × (1 - "&amp;(R[5]C[0]*100&amp;"%")&amp;")"'>RP × (1 - 20%)</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":" - Reference price (RP)"}'>- Reference price (RP)</td>
<td data-sheets-value='{"1":2,"2":"Min [Close, Avg (Close, 1W VWAP)]"}'><strong>Min [Close, Avg (Close, 1W VWAP)]</strong></td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":" - Reference date"}'>- Reference date</td>
<td data-sheets-value='{"1":3,"3":44204}' data-sheets-numberformat='{"1":5,"2":"yyyy. m. d","3":1}' data-sheets-formula="=Terms!R[40]C[0]">2021. 1. 8</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Final"}'>Final</td>
<td data-sheets-value='{"1":2,"2":"Max [Min (1st, 2nd), 3D VWAP × 60%]"}'>Max [Min (1st, 2nd), 3D VWAP × 60%]</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":" - Reference date"}'>- Reference date</td>
<td data-sheets-value='{"1":3,"3":44204}' data-sheets-numberformat='{"1":5,"2":"yyyy. m. d","3":1}' data-sheets-formula="=Terms!R[38]C[0]">2021. 1. 8</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Discount rate"}'>Discount rate</td>
<td data-sheets-value='{"1":3,"3":0.2}' data-sheets-numberformat='[null,3,"0.00%",1]'>20.00%</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Capital increase rate"}'>Capital increase rate</td>
<td data-sheets-value='{"1":3,"3":0.2701}' data-sheets-numberformat='[null,3,"0.00%",1]' data-sheets-formula="=LEFT(Terms!R[11]C[0],6)*100/100">27.01%</td>
</tr>
<tr><td colspan="2" rowspan="1" data-sheets-value='{"1":2,"2":"Source: DART"}'>Source: DART</td></tr>
</tbody>
</table>

POSCO Chemical announced a massive rights offering.The total offering is 16.5M shares for ₩1T. 





Overview

Issuer
Posco Chemical Co Ltd


Ticker
003670


Target
A public offering of forfeited shares after offering to stockholders


Transferability
Renounceable


Volume
16,475,000


Bonus issue volume
0


Preliminary price
₩60,700


Preliminary value
₩1,000,032,500,000


Oversubscription privilege
20.00%


Banker
KIS, NH, &amp; KB


- Underwriting type
Standby

Source: DART

The offering carries a 27% capital increase with a 21.3% dilution. The ESOP takes 11.8%, putting the shareholder per-share allocation at 0.238.





Allocation

Common
60,988,220


Pref (incl. RCPS &amp; CPS)
0


Total shares
60,988,220


Treasury shares
0


Total shares ex treasury shares
60,988,220


Offer volume
16,475,000


- Common
16,475,000


- Pref
0


Per-share allocation
0.2382583


Capital increase
27.01%


Dilution
21.27%


Total shares after rights offer
77,463,220


- Common
77,463,220


- Pref
0


Bonus issue
0


- Common
0


- Pref
0


Per-share allocation
0.0000000


Total shares after bonus issue
77,463,220


- Common
77,463,220


- Pref
0


ESOP allocation
1,944,050


- %
11.80%


Stockholder allocation
14,530,950


- %
88.20%

Source: DART

December 8 is the ex-rights, giving 1st-round pricing on December 4. You can trade subscription rights on December 28~January 5, shortly followed by the final pricing on January 8.The subscription falls on January 13, followed by the listing on February 3 next year.





Timetable

BOD meeting
2020. 11. 6


Preliminary pricing
2020. 12. 4


Ex-rights date
2020. 12. 8


Record date
2020. 12. 9


Subscription rights trade beginning
2020. 12. 28


Subscription rights trade ending
2021. 1. 5


Final pricing
2021. 1. 8


Stockholder subscription
2021. 1. 13


Public subscription
2021. 1. 18


Payment
2021. 1. 21


Listing
2021. 2. 3


Record date - bonus shares
N/A


Listing - bonus shares
N/A

Source: DART

Pricing is nothing unusual at a 20% discount.





Pricing

1st round
RP × (1 - 20%) / [1 + (27.01% × 20%)]


- Reference price (RP)
Min [Close, Avg (Close, 1W VWAP, 1M VWAP)]


- Reference date
2020. 12. 4


Ex-rights base price
[RP + (1st × 27.01%)] / (1 + 27.01%)


- Reference price (RP)
Previous close


- Reference date
2020. 12. 8


2nd round
RP × (1 - 20%)


- Reference price (RP)
Min [Close, Avg (Close, 1W VWAP)]


- Reference date
2021. 1. 8


Final
Max [Min (1st, 2nd), 3D VWAP × 60%]


- Reference date
2021. 1. 8


Discount rate
20.00%


Capital increase rate
27.01%

Source: DART



POSCO Chemical Rights Offer: Terms & Trade Approach

Technical Analyst, Vermilion Research

Joe Jasper

Technical Analyst

Technical and Quantitative Research

Vermilion Research

Vermilion’s objective is to deliver timely, actionable, and unique technical research to professional investors through the application of our various technical indicators.

Our research strategists seek to highlight securities which we believe are at major inflection points, based on our various technical and quantitative indicators, and offer asymmetric risk/return profiles. Our unique research methodology, centered on relative strength, enables our strategists to deliver superior investment recommendations.

Our process begins by organizing the universe of actively traded stocks into discrete sectors, then into industry groups. We then apply our technical and quantitative tools to identify developing price trends. Once attractive trends are identified within a selected sector or group, we screen for individual stocks which we believe offer the best risk/reward profile. We provide a historical perspective that often reveals, through our long-term charts, how price patterns often repeat themselves over time.

Technical Analysis

<p>While a more cautious outlook is appropriate, as long as $77 holds (the September lows) we are constructive and would be buyers on a pullback. A move below $77 would start to get very concerning, and would leave $75 and the 200-day MA as last-ditch support. Considering the recent pullback we want to be sticking with areas that have continued to outperform in spite of recent broad market weakness. For that we look to the following leadership Sectors: <strong>Technology, Consumer Discretionary, Manufacturing, Materials, and Transportation</strong></p>

While a more cautious outlook is appropriate, as long as $77 holds (the September lows) we are constructive and would be buyers on a pullback. A move below $77 would start to get very concerning, and would leave $75 and the 200-day MA as last-ditch support. Considering the recent pullback we want to be sticking with areas that have continued to outperform in spite of recent broad market weakness. For that we look to the following leadership Sectors: Technology, Consumer Discretionary, Manufacturing, Materials, and Transportation

Event-Driven

Out of Korea's eight ADRs, POSCO ADR is currently at a 6.5% discount to the underlying share, whose price is up 3.14% today.The discount began to widen since yesterday to 3.2%, and now further gone down to 6.5%.POSCO ADRs account for 9.1% of the SO, making the DR market cap ₩1.47T. The ADR 30D DTV is ₩7.4B (US$6.3M), the second-highest behind SK Telecom. 











Status
US price (₩)
DR price ($)
US/DR
BER (₩)
DR price (₩)
DR prem


KB Financial Group, Inc.
37,450
31.86
1 to 1
1,165
37,148
-0.81%


LG Display Co Ltd.
15,800
6.94
1 to 2
1,165
16,184
2.37%


SK Telecom Co Ltd
237,500
22.63
1 to 9
1,165
237,477
-0.01%


Shinhan Financial Group Co., Ltd.
27,550
23.64
1 to 1
1,165
27,564
0.05%


Woori Financial Group Inc
8,320
21.53
3 to 1
1,165
8,368
0.57%


KT Corp
22,950
9.82
1 to 2
1,165
22,900
-0.22%


POSCO
197,500
39.76
1 to 4
1,165
185,439
-6.50%


Korea Electric Power Corporation
20,350
8.59
1 to 2
1,165
20,032
-1.59%

Source: KSD Seibro &amp; Google Finance













Premium
Today
T-1
T-2
T-3
T-4
T-5


KB Financial Group, Inc.
-0.81%
-1.56%
-0.49%
0.52%
0.08%
-0.32%


LG Display Co Ltd.
2.37%
-0.61%
0.58%
1.66%
1.62%
0.56%


SK Telecom Co Ltd
-0.01%
-1.48%
-0.24%
-0.21%
-0.05%
-0.27%


Shinhan Financial Group Co., Ltd.
0.05%
-2.34%
-1.09%
-0.25%
-0.30%
-1.62%


Woori Financial Group Inc
0.57%
-0.47%
0.62%
0.89%
0.80%
1.28%


KT Corp
-0.22%
-1.96%
-0.65%
0.79%
0.39%
0.07%


POSCO
-6.50%
-3.21%
-0.83%
1.47%
-0.04%
-0.32%


Korea Electric Power Corporation
-1.59%
-3.55%
-2.23%
0.33%
0.43%
-0.04%

Source: KSD Seibro &amp; Google Finance













Ticker, bourse, &amp; custodian
US ticker
US type
DR category
DR ticker
DR bourse
Custodian


KB Financial Group, Inc.
105560
Common
ADR
KB
NYSE
JPM


LG Display Co Ltd.
034220
Common
ADR
LPL
NYSE
Citi


SK Telecom Co Ltd
017670
Common
ADR
SKM
NYSE
Citi


Shinhan Financial Group Co., Ltd.
055550
Common
ADR
SHG
NYSE
Citi


Woori Financial Group Inc
316140
Common
ADR
WF
NYSE
Citi


KT Corp
030200
Common
ADR
KT
NYSE
Citi


POSCO
005490
Common
ADR
PKX
NYSE
Citi


Korea Electric Power Corporation
015760
Common
ADR
KEP
NYSE
Citi

Source: KSD Seibro













DR, % of cap &amp; SO
SO
US
DR
DR cap
% of cap
% of SO


KB Financial Group, Inc.
415,807,920
389,316,893
26,491,027
116,583,985
22.72%
6.37%


LG Display Co Ltd.
357,815,700
347,671,755
10,143,945
68,095,700
14.90%
2.83%


SK Telecom Co Ltd
80,745,711
72,763,690
7,982,021
24,321,893
32.82%
9.89%


Shinhan Financial Group Co., Ltd.
477,396,835
464,431,936
12,964,899
40,432,628
32.07%
2.72%


Woori Financial Group Inc
722,267,683
714,306,515
7,961,168
676,278,371
1.18%
1.10%


KT Corp
261,111,808
175,576,463
85,535,345
100,597,667
85.03%
32.76%


POSCO
87,186,835
79,241,995
7,944,840
27,000,000
29.43%
9.11%


Korea Electric Power Corporation
641,964,077
614,346,977
27,617,100
80,153,810
34.46%
4.30%

Source: KSD Seibro













DR MC &amp; DTV
DTV
SO
% of SO
MC (₩ B)
DTV (₩B)
DTV ($M)


KB Financial Group, Inc.
152,370
26,491,027
0.58%
984.1
5.7
4.9


LG Display Co Ltd.
203,724
10,143,945
2.01%
164.2
3.3
2.8


SK Telecom Co Ltd
34,823
7,982,021
0.44%
1,895.5
8.3
7.1


Shinhan Financial Group Co., Ltd.
138,292
12,964,899
1.07%
357.4
3.8
3.3


Woori Financial Group Inc
93,960
7,961,168
1.18%
66.6
0.8
0.7


KT Corp
255,059
85,535,345
0.30%
1,958.8
5.8
5.0


POSCO
39,859
7,944,840
0.50%
1,473.3
7.4
6.3


Korea Electric Power Corporation
59,769
27,617,100
0.22%
553.2
1.2
1.0

Source: KSD Seibro



POSCO ADR Is Now at a Hefty Discount (6.5%): Trading Dynamics

Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

Equity Bottom-Up

<p>In this insight, we highlight <strong>seven major trading companies in Korea </strong>that could receive a greater positive boost from the global institutional investors who seek to find similar companies to the Japanese trading companies invested by Warren Buffett. The seven Korean trading companies mentioned in this insight have an average P/B multiple of 0.5x in 2020, which is 23% lower than the average P/B multiple of 0.7x for the five Japanese trading companies invested by Warren Buffett. These companies are as follows:</p><ul>
<li><strong>Samsung C&amp;T</strong></li>
<li><strong>GS Corp</strong></li>
<li><strong>Hanwha Corp</strong></li>
<li><strong>POSCO International</strong></li>
<li><strong>SK Networks</strong></li>
<li><strong>LG International</strong></li>
<li><strong>Hyundai Corp</strong></li>
</ul>

In this insight, we highlight seven major trading companies in Korea that could receive a greater positive boost from the global institutional investors who seek to find similar companies to the Japanese trading companies invested by Warren Buffett. The seven Korean trading companies mentioned in this insight have an average P/B multiple of 0.5x in 2020, which is 23% lower than the average P/B multiple of 0.7x for the five Japanese trading companies invested by Warren Buffett. These companies are as follows:
Samsung C&amp;T
GS Corp
Hanwha Corp
POSCO International
SK Networks
LG International
Hyundai Corp


Buffett's Investments in Japanese Trading Companies - Positive Boost to Korean Trading Companies?

Independent Asian Credit Research, Bondcritic

Warut Promboon

Independent Asian Credit Research

Asian Fixed Income/Frontier Market Research

Bondcritic

Bondcritic, established in 2009, is designed to be an independent credit research voice that helps investors gain insights and unbiased analyses on Asian fixed income market. Our mission is to discover deep-value Asian high-yield and distressed bonds with a bottom-up approach, together with the help of our proprietary ESG (Environmental, Social Development, and Governance) model. At the same time, we focus on bringing investment cases of unrated and unloved issuers to the general public.

Thematic (Sector/Industry)

<p style="text-align: justify;">In this Smartkarma Original, we seek to study how diversity and incentives influence stock performance and profitability. We tallied diversity and incentive data related to the board of directors, management, and employees across major economies in Asia and picked top 10 companies of each country in terms of market capitalization. We chose to exclude major companies listed in exchanges of other economies such as Tencent and Alibaba to limit our sample size.</p>
<p style="text-align: justify;">Then we devised diversity and incentive scores to assign to those companies and compare those scores against a 5-year trend of their return on shareholders’ equity (ROE) ratios and 1-year stock performance from 1-July-19 to 30-June-20 over its corresponding exchange indices.</p>
<p style="text-align: justify;">The report covers diversity vs. incentives in Asia, diversity score vs. 1-year stock performance and ROE trend, incentives vs. 1-year stock performance and ROE trend, diversity + incentives scores vs. 1-year stock performance and ROE trend, companies with top and bottom diversity + incentive scores, countries with top and bottom average diversity + incentive scores, and incentive score vs. staffing cost trend. </p>
<p style="text-align: justify;">The results show that companies with high diversity scores do perform well. A high diversity score also has a positive impact on the ROE trend, based on our regression analysis at 95% confidence level. We found that employee incentives are not significant as staff diversity but they can still have an influence on company performances at a lower 90% confidence level.</p>
<p style="text-align: justify;">We note that this study is at the preliminary stage and stock performance is a function of many factors, not only the diversity scores that we concluded. Needless to say, our diversity and incentive scores also reflect the level of disclosures by selected companies, not necessarily the actual practice within each company. Our diversity and incentive scores are also not a credit rating or ranking with peers and, hence, do not reflect default probability of selected companies.</p>
<p style="text-align: justify;">We caution that in Asia, many diversity trends in the West may not apply. The fact that many Asian business communities may remain less sensitive to equal opportunities for females, disabled persons, or LGBTQ communities could make returns of Asian companies less correlated to diversity than in the West. Likewise, additional incentives in some countries in Asia may not be necessary as employees’ strong performance (i.e. in Japan) is a norm, according to the prevalent work culture.</p>
<p style="text-align: justify;">Bondcritic is developing a scoring model, which includes environment, social development, and corporate governance; the last of which cover diversity and incentives. This report is the first of the series to uncover shenanigans in the Asian corporate sector.</p>

In this Smartkarma Original, we seek to study how diversity and incentives influence stock performance and profitability. We tallied diversity and incentive data related to the board of directors, management, and employees across major economies in Asia and picked top 10 companies of each country in terms of market capitalization. We chose to exclude major companies listed in exchanges of other economies such as Tencent and Alibaba to limit our sample size.
Then we devised diversity and incentive scores to assign to those companies and compare those scores against a 5-year trend of their return on shareholders’ equity (ROE) ratios and 1-year stock performance from 1-July-19 to 30-June-20 over its corresponding exchange indices.
The report covers diversity vs. incentives in Asia, diversity score vs. 1-year stock performance and ROE trend, incentives vs. 1-year stock performance and ROE trend, diversity + incentives scores vs. 1-year stock performance and ROE trend, companies with top and bottom diversity + incentive scores, countries with top and bottom average diversity + incentive scores, and incentive score vs. staffing cost trend. 
The results show that companies with high diversity scores do perform well. A high diversity score also has a positive impact on the ROE trend, based on our regression analysis at 95% confidence level. We found that employee incentives are not significant as staff diversity but they can still have an influence on company performances at a lower 90% confidence level.
We note that this study is at the preliminary stage and stock performance is a function of many factors, not only the diversity scores that we concluded. Needless to say, our diversity and incentive scores also reflect the level of disclosures by selected companies, not necessarily the actual practice within each company. Our diversity and incentive scores are also not a credit rating or ranking with peers and, hence, do not reflect default probability of selected companies.
We caution that in Asia, many diversity trends in the West may not apply. The fact that many Asian business communities may remain less sensitive to equal opportunities for females, disabled persons, or LGBTQ communities could make returns of Asian companies less correlated to diversity than in the West. Likewise, additional incentives in some countries in Asia may not be necessary as employees’ strong performance (i.e. in Japan) is a norm, according to the prevalent work culture.
Bondcritic is developing a scoring model, which includes environment, social development, and corporate governance; the last of which cover diversity and incentives. This report is the first of the series to uncover shenanigans in the Asian corporate sector.

Asian Governance: Diversity & Incentives Through the Cultural Lens

South Korea

POSCO manufactures various types of steel products.  The Company produces hot rolled steel, cold rolled steel, stainless steel, and other forms of steel. The products are mainly used for automobile, construction, and shipbuilding industries.

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

Posco ADR (PKX US)

POSCO Chemical Rights Offer: Terms & Trade Approach

POSCO C offers ₩1T worth of new shares. It will likely address much of the recent concern that led to an 18% correction. So, an offering-triggered...

Sanghyun Park

Cautiously Optimistic on Global Equities

We are constructive on global equities and would be buyers on a pullback. A move below $77 would start to get very concerning, and would leave $75...

Vermilion Research

POSCO ADR Is Now at a Hefty Discount (6.5%): Trading Dynamics

???

Sanghyun Park

Buffett's Investments in Japanese Trading Companies - Positive Boost to Korean Trading Companies?

This is a follow up to Mio Kato's insight, A Quick Look at the Buffet Trade and the Most Obvious Follow-Ons. For many decades, Warren Buffett chose...

Douglas Kim

Asian Governance: Diversity & Incentives Through the Cultural Lens

In this Smartkarma Original, we seek to study how diversity and incentives influence stock performance and profitability. We tallied diversity and...

Bondcritic

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)