Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

Equity Bottom-Up

<ul>
<li>Three major positive factors for Samsung C&amp;T include deep discount NAV, capital shifting to value/holdcos, and higher commodity prices boosting trading business earnings. </li>
<li>Shanghai lockdown remains a black box event and there are some increasing concerns that the China COVID induced lockdowns could result in a potential earnings miss for Samsung Electronics.</li>
<li>Samsung C&amp;T (028260 KS) has been outperforming Samsung Electronics (005930 KS). Samsung C&amp;T is flat for the year versus Samsung Electronics which is down 13.6% YTD.</li>
</ul>


Three major positive factors for Samsung C&amp;T include deep discount NAV, capital shifting to value/holdcos, and higher commodity prices boosting trading business earnings. 
Shanghai lockdown remains a black box event and there are some increasing concerns that the China COVID induced lockdowns could result in a potential earnings miss for Samsung Electronics.
Samsung C&amp;T (028260 KS) has been outperforming Samsung Electronics (005930 KS). Samsung C&amp;T is flat for the year versus Samsung Electronics which is down 13.6% YTD.


Samsung C&T: Deep Discount NAV, Capital Shifting to Value/Holdcos, & Trading Business Boost

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.

Equity Capital Markets

Samsung Biologics   / Equity Capital Markets

<ul>
<li>Samsung Biologics (207940 KS) has succeeded in a rights offering worth ₩3.2T to the existing shareholders. The subscription rate of the existing shareholders and the ESOP came out at 100.25%.</li>
<li>The size of immediately floatable shares is estimated at 1 million, representing 1.55% of SO and 22.82x ADTV. It is a size that will significantly impact the short-term flow.</li>
<li>There is a sufficient circumstantial probability that the 1M new stocks, currently at a 20% return, will lead to immediate profit realization after listing.</li>
</ul>


Samsung Biologics (207940 KS) has succeeded in a rights offering worth ₩3.2T to the existing shareholders. The subscription rate of the existing shareholders and the ESOP came out at 100.25%.
The size of immediately floatable shares is estimated at 1 million, representing 1.55% of SO and 22.82x ADTV. It is a size that will significantly impact the short-term flow.
There is a sufficient circumstantial probability that the 1M new stocks, currently at a 20% return, will lead to immediate profit realization after listing.


Samsung Biologics: Post-Offering Trading Dynamics on Potential Overhang

Event-Driven

<ul>
<li>The Samsung Group owner Lee family wants to partially sell their stake in Samsung Sds worth 390 billion won in a block deal.</li>
<li>The block deal sale involves 3.02 million shares of Samsung SDS or 3.9% of outstanding shares.</li>
<li>We would avoid this block deal as the company may face continued overhang sale issue in the next 1-2 years. </li>
</ul>


The Samsung Group owner Lee family wants to partially sell their stake in Samsung Sds worth 390 billion won in a block deal.
The block deal sale involves 3.02 million shares of Samsung SDS or 3.9% of outstanding shares.
We would avoid this block deal as the company may face continued overhang sale issue in the next 1-2 years. 


Block Deal Sale of Samsung SDS by the Lee Family to Pay for Inheritance Taxes

<ul>
<li>Korea has a total of 68 holding companies listed on KOSPI and KOSDAQ. We then have 14 holdcos with a high level of price cointegration with their respective listed subsidiaries.</li>
<li>Three holding companies have sigma below zero on a 20D MA. Hanwha Corp is considered stub tradable as its share price relative to its subsidiaries was relatively flat.</li>
<li>Four holdcos, including SK Square are over 70% NAV discount. Among them, SK Square is of the most interest as the price correlation with SK Hynix has been improving lately.</li>
</ul>


Korea has a total of 68 holding companies listed on KOSPI and KOSDAQ. We then have 14 holdcos with a high level of price cointegration with their respective listed subsidiaries.
Three holding companies have sigma below zero on a 20D MA. Hanwha Corp is considered stub tradable as its share price relative to its subsidiaries was relatively flat.
Four holdcos, including SK Square are over 70% NAV discount. Among them, SK Square is of the most interest as the price correlation with SK Hynix has been improving lately.


Korea Holding Companies: Stub Tradable Names

Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

<ul>
<li>
<a href="https://www.smartkarma.com/entities/hochtief-ag" target="_blank" data-smartkarma-citation="entities:21652:1" rel="noopener">Hochtief AG (HOT GR)</a> has finally launched an unconditional offer for the rest of <a href="https://www.smartkarma.com/entities/cimic-group-ltd" target="_blank" data-smartkarma-citation="entities:20030:1" rel="noopener">CIMIC Group Ltd (CIM AU)</a> (where it already owns 78.58%).</li>
<li>
<a href="https://www.smartkarma.com/entities/sk-square-co-ltd" target="_blank" data-smartkarma-citation="entities:35264:1" rel="noopener">SK Square (402340 KS)</a> was inexpensive after its November listing. Now it's even cheaper. </li>
<li>Canada-Based asset manager <a href="https://www.smartkarma.com/entities/brookfield-asset-manage-cl-a-0483cfb5-71a5-4931-af80-901e5f30aace" target="_blank" data-smartkarma-citation="entities:23741:1" rel="noopener">Brookfield Asset Management (BAM US)</a> and Australian billionaire Mike Cannon-Brookes have combined to purchase all of <a href="https://www.smartkarma.com/entities/agl-energy-ltd" target="_blank" data-smartkarma-citation="entities:554:1" rel="noopener">AGL Energy Ltd (AGL AU)</a> at A$7.50/share</li>
</ul>



Hochtief AG (HOT GR) has finally launched an unconditional offer for the rest of CIMIC Group Ltd (CIM AU) (where it already owns 78.58%).

SK Square (402340 KS) was inexpensive after its November listing. Now it's even cheaper. 
Canada-Based asset manager Brookfield Asset Management (BAM US) and Australian billionaire Mike Cannon-Brookes have combined to purchase all of AGL Energy Ltd (AGL AU) at A$7.50/share


Last Week in Event SPACE: CIMIC, SK Square, AGL Energy, Mapletree, Z Energy, VW/Porsche

South Korea

Samsung C&T Corporation conducts diversified business support services and resort operation activities. The Company offers a range of services in areas including clothing retail, construction, energy, real estate, food service, and resort accommodations. Samsung C&T also operates a resort with amusement rides, a zoo, water park, golf clubs, and restaurants.

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Samsung C&T (028260 KS)

Samsung C&T: Deep Discount NAV, Capital Shifting to Value/Holdcos, & Trading Business Boost

Three major positive factors for Samsung C&T include deep discount NAV, capital shifting to value/holdcos, and higher commodity prices boosting...

Douglas Kim

Samsung Biologics: Post-Offering Trading Dynamics on Potential Overhang

This post discusses Samsung Biologics' post-offering trading dynamics on potential overhang as a little more than 1M new shares, 22x ADTV, will...

Sanghyun Park

Block Deal Sale of Samsung SDS by the Lee Family to Pay for Inheritance Taxes

The Samsung Group owner Lee family wants to partially sell their stake in Samsung Sds worth 390 billion won in a block deal. We would avoid this...

Douglas Kim

Korea Holding Companies: Stub Tradable Names

Korea has a total of 68 holding companies listed on KOSPI and KOSDAQ. Then, there are 14 stub tradable names as they have a high level of price...

Sanghyun Park

Last Week in Event SPACE: CIMIC, SK Square, AGL Energy, Mapletree, Z Energy, VW/Porsche

The weekend is here! Pour yourself a coffee, grab a comfortable seat, and sift through a brief summary of insights on various events discussed...

David Blennerhassett

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