Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

Event-Driven

<ul>
<li>More than 20 trillion won (US$16 billion) worth of deals are up for M&amp;As in 2023.</li>
<li>However, due to high interest rates and differences on valuations among buyers and sellers, the M&amp;A market in Korea is likely to continue to be weak in 2023.</li>
<li>In this insight, we discuss 24 companies that are up for M&amp;As this year in Korea, including Hanon Systems, SK Shieldus, and K Car.</li>
</ul>


More than 20 trillion won (US$16 billion) worth of deals are up for M&amp;As in 2023.
However, due to high interest rates and differences on valuations among buyers and sellers, the M&amp;A market in Korea is likely to continue to be weak in 2023.
In this insight, we discuss 24 companies that are up for M&amp;As this year in Korea, including Hanon Systems, SK Shieldus, and K Car.


Korea M&A Outlook in 2023: What's for Sale?

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.

<ul>
<li>The target is those who purchase 25% or more of the shares of a listed company and become the largest shareholder with management rights.</li>
<li>The minimum volume of a mandatory offer is [(50% of total shares + 1 share) - the management right purchase volume].</li>
<li>We will be exposed to pro-rata risk, so it will be essential to figure out the nature and propensity of the shareholder composition to estimate the tendering rate in advance.</li>
</ul>


The target is those who purchase 25% or more of the shares of a listed company and become the largest shareholder with management rights.
The minimum volume of a mandatory offer is [(50% of total shares + 1 share) - the management right purchase volume].
We will be exposed to pro-rata risk, so it will be essential to figure out the nature and propensity of the shareholder composition to estimate the tendering rate in advance.


Mandatory Offer Arrives in Korea: Detailed Rules & Trading Ramifications

Equity Bottom-Up

<ul>
<li>On 17 October, the Korean government made a final official decision to have the BTS members serve in the mandatory military service.</li>
<li>We believe this will have a major negative impact on the sales and profits of HYBE in the next several years.</li>
<li>As a result of the Korean government formalizing the BTS members to enlist in the military, we believe that HYBE's share price could fall more than 50% from current levels.</li>
</ul>


On 17 October, the Korean government made a final official decision to have the BTS members serve in the mandatory military service.
We believe this will have a major negative impact on the sales and profits of HYBE in the next several years.
As a result of the Korean government formalizing the BTS members to enlist in the military, we believe that HYBE's share price could fall more than 50% from current levels.


HYBE: Korean Govt Mandates BTS Members to Enlist in Military - 50% Further Downside Risk Ahead

<ul>
<li>This past week, I had a discussion with Changhwan Lee, the founder and CEO of Align Partners which is currently an activist investor on S.M.Entertainment Co (041510 KS).</li>
<li>This insight provides the details of why Align Partners is going activist on SM Entertainment. </li>
<li>Through more successful proxy fights such as SM Entertainment, there could be greater value that could be unlocked from many listed companies in Korea with poor corporate governance. </li>
</ul>


This past week, I had a discussion with Changhwan Lee, the founder and CEO of Align Partners which is currently an activist investor on S.M.Entertainment Co (041510 KS).
This insight provides the details of why Align Partners is going activist on SM Entertainment. 
Through more successful proxy fights such as SM Entertainment, there could be greater value that could be unlocked from many listed companies in Korea with poor corporate governance. 


A Discussion with Align Partners' CEO on SM Entertainment

<ul>
<li>After the market close today, S.M.Entertainment announced that its Chairman Lee Soo Man will end the contract with Like Planning, a contents producing company owned by Lee Soo Man.</li>
<li>We estimate that S.M.Entertainment has paid more than 160 billion won to Like Planning in the past 10 years.</li>
<li>By ending the relationship between Chairman Lee Soo Man and Like Planning, this should have a major positive impact on S.M.Entertainment shares in the coming weeks. </li>
</ul>


After the market close today, S.M.Entertainment announced that its Chairman Lee Soo Man will end the contract with Like Planning, a contents producing company owned by Lee Soo Man.
We estimate that S.M.Entertainment has paid more than 160 billion won to Like Planning in the past 10 years.
By ending the relationship between Chairman Lee Soo Man and Like Planning, this should have a major positive impact on S.M.Entertainment shares in the coming weeks. 


S.M.Entertainment - Chairman Lee Soo Man to End Contract with Like Planning (A Big Catalyst!)

South Korea

S.M.Entertainment Co. plans, produces, promotes, and markets Korean rock and roll music in several formats, such as compact discs (CD), concert tours, television productions, and music videos.  The Company also operates artist management business as well as licensing and copyright business from the company's music records.

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S.M.Entertainment Co (041510 KS)

Korea M&A Outlook in 2023: What's for Sale?

In this insight, we discuss 24 companies that are up for M&As this year in Korea, including Hanon Systems, SK Shieldus, and K Car.

Douglas Kim

Mandatory Offer Arrives in Korea: Detailed Rules & Trading Ramifications

This post details the newly introduced mandatory offer rules tabled by Korea FSC yesterday and discusses trading ramifications, including pro-rata...

Sanghyun Park

HYBE: Korean Govt Mandates BTS Members to Enlist in Military - 50% Further Downside Risk Ahead

As a result of the Korean government formalizing the BTS members to enlist in the military, we believe that HYBE's share price could fall more than...

Douglas Kim

A Discussion with Align Partners' CEO on SM Entertainment

This past week, I had a discussion with Changhwan Lee, the founder and CEO of Align Partners which is currently an activist investor on...

Douglas Kim

S.M.Entertainment - Chairman Lee Soo Man to End Contract with Like Planning (A Big Catalyst!)

By ending the relationship between Chairman Lee Soo Man and Like Planning, this should have a major positive impact on S.M.Entertainment shares in...

Douglas Kim

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