Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

Douglas Research Advisory

Cross Asset Strategy

<ul>
<li>In this insight, we compare the outstanding shares changes in the Korean stock market (KOSPI and KOSDAQ) relative to M7 (Magnificent 7) companies. </li>
<li>In Korea, there are more companies such as Samsung C&amp;T, KB Financial, and KT&amp;G that are actively reducing their outstanding shares and investors are rewarding them with higher share prices.</li>
<li>Top 10 companies in KOSPI that reduced their outstanding shares (from end of 2019 to 5 Sept 24) experienced average share price increase of 116% on average in this period.</li>
</ul>


In this insight, we compare the outstanding shares changes in the Korean stock market (KOSPI and KOSDAQ) relative to M7 (Magnificent 7) companies. 
In Korea, there are more companies such as Samsung C&amp;T, KB Financial, and KT&amp;G that are actively reducing their outstanding shares and investors are rewarding them with higher share prices.
Top 10 companies in KOSPI that reduced their outstanding shares (from end of 2019 to 5 Sept 24) experienced average share price increase of 116% on average in this period.


Corporate Value Up in Korea - Focus On Reducing Outstanding Shares and Comparison to M7

Korea / Special Situations, Clepsydra Capital

Sanghyun Park

Korea / Special Situations

Korea / Special Sits, Pairs, Index Rebalancing

Clepsydra Capital

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

Event-Driven

<ul>
<li>Key watchpoints: Will POSCO cancel the 3.4% treasury shares in Q4 and how will they replenish cash reserves after paying ₩1.5 trillion? Their moves could set trends.</li>
<li>POSCO might cancel these shares to boost their value-up index weight. This could drive up the stock price, giving them an opening to improve their cash position through equity financing.</li>
<li>Expect a short-term stock pivot with value-up index and ETFs driving inflows and price pops. After this, equity financing may signal stock peaks, with POSCO and others leading the trend.</li>
</ul>


Key watchpoints: Will POSCO cancel the 3.4% treasury shares in Q4 and how will they replenish cash reserves after paying ₩1.5 trillion? Their moves could set trends.
POSCO might cancel these shares to boost their value-up index weight. This could drive up the stock price, giving them an opening to improve their cash position through equity financing.
Expect a short-term stock pivot with value-up index and ETFs driving inflows and price pops. After this, equity financing may signal stock peaks, with POSCO and others leading the trend.


POSCO’s Early EB Payoff and Post-Value-Up Pivot Trading Angles

<ul>
<li>On 29 August, the three major POSCO Group companies including POSCO Holdings announced that they plan to provide detailed explanations of their Corporate Value Up plans in 4Q 2024. </li>
<li>In general, the companies that have provided more detailed plans for their Corporate Value Up plans have done better recently. </li>
<li>However, now there are cases such as the three main POSCO Group companies whose share prices are rising just by announcing that they will provide Corporate Value Up plans later.</li>
</ul>


On 29 August, the three major POSCO Group companies including POSCO Holdings announced that they plan to provide detailed explanations of their Corporate Value Up plans in 4Q 2024. 
In general, the companies that have provided more detailed plans for their Corporate Value Up plans have done better recently. 
However, now there are cases such as the three main POSCO Group companies whose share prices are rising just by announcing that they will provide Corporate Value Up plans later.


POSCO Group Corporate Value Pre-Announcements: Trading Angle

<ul>
<li>Today's surge in Korean battery stocks stems from sector rotation and improved fundamentals, with SK On’s healthier balance sheet and Samsung SDI’s new U.S. plant fueling optimism.</li>
<li>But with POSCO affiliates showing standout performance relative to their peers., the value-up factor is once again shaking things up and driving those differences in relative performance.</li>
<li>Today's price action suggests using the value-up factor for long-short strategies, especially with KRX hinting at sector quotas in the value-up index.</li>
</ul>


Today's surge in Korean battery stocks stems from sector rotation and improved fundamentals, with SK On’s healthier balance sheet and Samsung SDI’s new U.S. plant fueling optimism.
But with POSCO affiliates showing standout performance relative to their peers., the value-up factor is once again shaking things up and driving those differences in relative performance.
Today's price action suggests using the value-up factor for long-short strategies, especially with KRX hinting at sector quotas in the value-up index.


Today's Battery Rally Offers a Great Angle for Sector Pair Trading with Value-Up Stocks

<ul>
<li>Construction and semiconductors are key targets due to their low value-up representation. For shareholder returns, keep an eye on Samsung C&amp;T and SK Square.</li>
<li>Expect announcements before the mid-September value-up index, with early September releases mirroring LG Electronics' prior notices and detailed plans arriving by Q4.</li>
<li>Even with prior notices, details will leak. Samsung C&amp;T and SK Square are likely to prioritize short-term shareholder returns over long-term growth, potentially leading to a bigger price impact.</li>
</ul>


Construction and semiconductors are key targets due to their low value-up representation. For shareholder returns, keep an eye on Samsung C&amp;T and SK Square.
Expect announcements before the mid-September value-up index, with early September releases mirroring LG Electronics' prior notices and detailed plans arriving by Q4.
Even with prior notices, details will leak. Samsung C&amp;T and SK Square are likely to prioritize short-term shareholder returns over long-term growth, potentially leading to a bigger price impact.


Keep an Eye on Samsung C&T & SK Square as the Next Hot Picks for Value-Up Announcements

South Korea

POSCO Holdings Inc. manufactures and distributes steel products. The Company produces crude steel, hot rolled steel, cold rolled steel, stainless steel, steel plates, wire rods, galvanized steel, electrical steel, and other related products. POSCO Holdings markets its products worldwide.

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POSCO Holdings (005490 KS)

Corporate Value Up in Korea - Focus On Reducing Outstanding Shares and Comparison to M7

Top 10 companies in KOSPI (ranked by market cap) that reduced their outstanding shares (from end of 2019 to 5 Sept 24) experienced average share...

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POSCO’s Early EB Payoff and Post-Value-Up Pivot Trading Angles

This post updates POSCO Holdings' early repayment of ₩1.5T EBs and explores potential pivot trading opportunities following the value-up wave.

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POSCO Group Corporate Value Pre-Announcements: Trading Angle

There could be some interesting trading angles for POSCO Holdings, POSCO Future M, and POSCO International in the next several months, ahead of the...

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Today's Battery Rally Offers a Great Angle for Sector Pair Trading with Value-Up Stocks

This post explores the potential for sector pair trading opportunities suggested by today's rally in the Korean battery sector.

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Keep an Eye on Samsung C&T & SK Square as the Next Hot Picks for Value-Up Announcements

This post dives into the potential for Samsung C&T and SK Square to be the next big players in value-up announcements and explores the likely price...

Sanghyun Park

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