Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

Event-Driven

<ul>
<li>On 5 February, SK Innovation (096770 KS) announced a large-scale shares cancellation of 4.92 million shares, representing 4.9% of outstanding shares. </li>
<li>This is the first ever large scale shares cancellation for SK Innovation since it was first established in 2011.</li>
<li>All in all, despite the company's disappointing results in 2023, the large scale share cancellation should help to support SK Innovation's share price in the coming weeks. </li>
</ul>


On 5 February, SK Innovation (096770 KS) announced a large-scale shares cancellation of 4.92 million shares, representing 4.9% of outstanding shares. 
This is the first ever large scale shares cancellation for SK Innovation since it was first established in 2011.
All in all, despite the company's disappointing results in 2023, the large scale share cancellation should help to support SK Innovation's share price in the coming weeks. 


SK Innovation: Announces Share Cancellation of Nearly 4.92 Million Shares

<ul>
<li>On 13 September, SK Innovation announced that the subscription rate for the rights offering allocated to ESOA and existing shareholders was 87.66%.</li>
<li>The rights offering price is 139,600 won, which is 12.7% lower than current price of 159,900 won. </li>
<li>There is likely to be a strong demand for the subscription of rights offering forfeited shares for the general investors scheduled to take place on 14 to 15 September.</li>
</ul>


On 13 September, SK Innovation announced that the subscription rate for the rights offering allocated to ESOA and existing shareholders was 87.66%.
The rights offering price is 139,600 won, which is 12.7% lower than current price of 159,900 won. 
There is likely to be a strong demand for the subscription of rights offering forfeited shares for the general investors scheduled to take place on 14 to 15 September.


SK Innovation: Update on Its Rights Offering Subscription Allocation

Founder/CEO of ROK Advisory, ROK Advisory LLC

Ken S. Kim

Founder/CEO of ROK Advisory

ROK Advisory LLC

ROK is an independent research advisory firm. We guide you to minimize the information gap between foreign and local investors in Northeast Asia with a focus in Korea, Taiwan and Japan.

Independent Research Advisory Firm

Equity Bottom-Up

<ul>
<li>Has SK Innovation raised enough money for its longer term ambitions? </li>
<li>What is the stock pricing in that is not apparent on the balance sheet? </li>
<li>It seems really given their capex outlet, dilutive cap raising is the only solution</li>
</ul>


Has SK Innovation raised enough money for its longer term ambitions? 
What is the stock pricing in that is not apparent on the balance sheet? 
It seems really given their capex outlet, dilutive cap raising is the only solution


Equity Capital Markets

<ul>
<li>After the market close on 23 June, SK Innovation (096770 KS) announced that the company will conduct a rights offering worth 1.2 trillion won. </li>
<li>We have a positive view on SK Innovation's rights offering of 1.2 trillion won. The expected rights offering price is 143,800 won which is 21% discount to current price. </li>
<li>Although we have a positive view of SK Innovation over the next 12 months, its share price could face some weakness in the near term due to this capital increase. </li>
</ul>


After the market close on 23 June, SK Innovation (096770 KS) announced that the company will conduct a rights offering worth 1.2 trillion won. 
We have a positive view on SK Innovation's rights offering of 1.2 trillion won. The expected rights offering price is 143,800 won which is 21% discount to current price. 
Although we have a positive view of SK Innovation over the next 12 months, its share price could face some weakness in the near term due to this capital increase. 


SK Innovation: Rights Offering of 1.2 Trillion Won at a 21% Discount to Current Price

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.

<ul>
<li>We should seize the arbitrage trading opportunities between SSF and subscription rights during the rights trading window. SK Innovation's SSF is highly liquid, being traded at nearly 0.5x spot.</li>
<li>The key is to catch the timing of basis widening. SK Innovation traditionally experiences significant intraday basis fluctuations, making it a crucial factor in maximizing our profitability.</li>
<li>The ex-date play, betting on the tendency for prices to close above the base price on the ex-date, may not hold significant appeal. This pattern has become less pronounced recently.</li>
</ul>


We should seize the arbitrage trading opportunities between SSF and subscription rights during the rights trading window. SK Innovation's SSF is highly liquid, being traded at nearly 0.5x spot.
The key is to catch the timing of basis widening. SK Innovation traditionally experiences significant intraday basis fluctuations, making it a crucial factor in maximizing our profitability.
The ex-date play, betting on the tendency for prices to close above the base price on the ex-date, may not hold significant appeal. This pattern has become less pronounced recently.


What Arb Trading Opportunities Should We Target in SK Innovation's Rights Offering?

South Korea

SK Innovation Co., Ltd. refines, markets, and distributes oil.  The Company produces a variety of petroleum products, such as gasoline, kerosene, liquefied petroleumgas (LPG), and diesel oil.  SK Energy also manufactures petrochemical p roducts, including paraxylene, synthetic resins, styrene monomer, and ethylene.

SK Innovation (096770 KS)

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