Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

Event-Driven

Ssangyong Cement Industrial / Event-Driven

<ul>
<li>On 4 February, the local media reported that Hahn &amp; Co private equity firm is launching a tender offer on the remaining shares of Ssangyong Cement Industrial (003410 KS) (Ssangyong C&amp;E).</li>
<li>Tender offer price is 7,000 won (9.2% higher than the closing price on 2 February) and the tender offer amount is 702 billion won. </li>
<li>We believe Ssangyong C&amp;E's shares are likely close to the tender offer price today. We believe there is higher probability of Hahn &amp; Co successfully completing this tender offer. </li>
</ul>


On 4 February, the local media reported that Hahn &amp; Co private equity firm is launching a tender offer on the remaining shares of Ssangyong Cement Industrial (003410 KS) (Ssangyong C&amp;E).
Tender offer price is 7,000 won (9.2% higher than the closing price on 2 February) and the tender offer amount is 702 billion won. 
We believe Ssangyong C&amp;E's shares are likely close to the tender offer price today. We believe there is higher probability of Hahn &amp; Co successfully completing this tender offer. 


Hahn & Co Launches a Tender Offer on Remaining Shares of Ssangyong C&E

Douglas Research Advisory

<ul>
<li>After the market close today (17 July), Hanil Cement Co Ltd/New (300720 KS) and Hanil Hyundai Cement (006390 KS) announced that they will merge.</li>
<li>Through this merger, Hanil Cement (on a combined basis with pro-forma sales of 1.74 trillion won in 2024) will become the largest cement company in Korea after Ssangyong Cement Industrial.</li>
<li>We expect this merger to have a positive impact on both companies and they are likely to outperform the market and other local cement producers this year. </li>
</ul>


After the market close today (17 July), Hanil Cement Co Ltd/New (300720 KS) and Hanil Hyundai Cement (006390 KS) announced that they will merge.
Through this merger, Hanil Cement (on a combined basis with pro-forma sales of 1.74 trillion won in 2024) will become the largest cement company in Korea after Ssangyong Cement Industrial.
We expect this merger to have a positive impact on both companies and they are likely to outperform the market and other local cement producers this year. 


A Merger Between Hanil Cement and Hanil Hyundai Cement to Become the #1 Cement Player in Korea

<ul>
<li>In this insight, we review the major equity indices in Korea in 2024 including KOSPI 200 and Korea Value Up Index. </li>
<li>Some alpha generating performances continue in terms of adding stocks to be included in the KOSPI 200 and reducing stocks that could be excluded.</li>
<li>Korea Value Up Index has been heavily promoted by the Korean Exchange this year. Korea Exchange plans to make special changes to the Korea Value-Up Index constituents on 20 December. </li>
</ul>


In this insight, we review the major equity indices in Korea in 2024 including KOSPI 200 and Korea Value Up Index. 
Some alpha generating performances continue in terms of adding stocks to be included in the KOSPI 200 and reducing stocks that could be excluded.
Korea Value Up Index has been heavily promoted by the Korean Exchange this year. Korea Exchange plans to make special changes to the Korea Value-Up Index constituents on 20 December. 


A Review of Major Equity Indices in Korea in 2024

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.

Lotte Non Life Insurance Co / Event-Driven

<ul>
<li>There is a high likelihood of information leaking through the lead securities firm when the tender offer prospectus is provided to branches about three days before the disclosure.</li>
<li>With the FSS's stricter stance, tender offer candidates may act swiftly before new regulations, prompting attention to potential surges in tender offers.</li>
<li>Our approach is clear: identify short-term tender offer candidates, monitor trading volumes for spikes, and use the three-day pre-disclosure surge to time our positions effectively.</li>
</ul>


There is a high likelihood of information leaking through the lead securities firm when the tender offer prospectus is provided to branches about three days before the disclosure.
With the FSS's stricter stance, tender offer candidates may act swiftly before new regulations, prompting attention to potential surges in tender offers.
Our approach is clear: identify short-term tender offer candidates, monitor trading volumes for spikes, and use the three-day pre-disclosure surge to time our positions effectively.


Chronic Insider Trading in the Korean Tender Offer Market & Time Positions for Short-Term Targets

Pan-Asia Index Rebalances/ Events/ Delta One, Periscope Analytics

Brian Freitas

Pan-Asia Index Rebalances/ Events/ Delta One

Periscope Analytics

Periscope Analytics focuses on event-driven trades across Asia Pacific and provides comprehensive, timely and systematic coverage of index changes to major Asia Pacific indices in a structured manner.

The analysis includes forecasted inclusions and exclusions to all major Asian indices that have significant amount of tracking assets, including estimates of passive buy/sell flow on the stocks. The service also provides commentary and impact of market consultations, ground rule changes, and other events (IPOs, spin-offs, M&A) that could lead to index changes and passive flow.

Periscope Analytics works with multi-strategy hedge funds, proprietary trading firms, stat arb trading groups and long-only investors that invest and trade in the Asia Pacific region with the data being used to trade index rebalances, avoid pre-positioning and passive flow, and to time entry into and exit from stocks.

Event-Driven Trades Across Asia Pacific

Index Rebalance

<ul>
<li>There will be 6 additions and 6 deletions for the <a href="https://www.smartkarma.com/entities/korea-stock-exchange-kospi-200" target="_blank" data-smartkarma-citation="entities:26021:1" rel="noopener">Korea Stock Exchange KOSPI 200 (KOSPI2 INDEX)</a> at the June rebalance that will be implemented on 13 June.</li>
<li>The index committee has used a boatload of discretion in the inclusion of <a href="https://www.smartkarma.com/entities/cosmoam-t-co-ltd" target="_blank" data-smartkarma-citation="entities:10360:1" rel="noopener">CosmoAM&amp;T (005070 KS)</a> and the deletion of some of the stocks.</li>
<li>The adds and deletes from the Information Technology sector will also have passive flow from the sector ETF and will increase the impact of the changes.</li>
</ul>


There will be 6 additions and 6 deletions for the Korea Stock Exchange KOSPI 200 (KOSPI2 INDEX) at the June rebalance that will be implemented on 13 June.
The index committee has used a boatload of discretion in the inclusion of CosmoAM&amp;T (005070 KS) and the deletion of some of the stocks.
The adds and deletes from the Information Technology sector will also have passive flow from the sector ETF and will increase the impact of the changes.


KOSPI200 Index Rebalance: Index Committee Knows Best; Cosmo AM&T the Winner

South Korea

Ssangyong Cement Industrial Co., Ltd. produces cement and ready-mixed concrete. The Company also manufactures fine ceramics for industrial uses and ferrite magnets for components used in audio equipment.  In addition, Ssangyong Cement Industrial develops housing, plant engineering, environmental resources, and leisure businesses.

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Ssangyong Cement Industrial (003410 KS)

Hahn & Co Launches a Tender Offer on Remaining Shares of Ssangyong C&E

The deadline period for the tender offer of Ssangyong C&E ends on 6 March. Tender offer price is 7,000 won. Current price is 6,970 won. Even if the...

Douglas Kim

A Merger Between Hanil Cement and Hanil Hyundai Cement to Become the #1 Cement Player in Korea

Hanil Cement Co Ltd/New (300720 KS) and Hanil Hyundai Cement (006390 KS) announced that they will merge. Through this merger, the combined entity...

Douglas Kim

A Review of Major Equity Indices in Korea in 2024

We review the major equity indices in Korea in 2024 including KOSPI 200 and Korea Value Up Index. KRX plans to make special changes to the Korea...

Douglas Kim

Chronic Insider Trading in the Korean Tender Offer Market & Time Positions for Short-Term Targets

This post examines the persistent issue of insider trading in the Korean tender offer market and discusses how we should time positions for short...

Sanghyun Park

KOSPI200 Index Rebalance: Index Committee Knows Best; Cosmo AM&T the Winner

The KOSPI200 rebalance takes place at the close tomorrow. Cosmo AM&T is up ~25% since the surprise inclusion and there could be a reversal in the...

Brian Freitas

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