Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

Thematic (Sector/Industry)

In our previous report - 2016 Major IPOs Pipeline in Korea, we identified 19 companies that are seeking to complete IPOs in Korea in 2016. In this Part II of our report, we dug deeper and identified 17 more companies that planning to complete IPOs in Korea in 2016. We believe that IPOs of these 36 companies are likely to represent more than 90% of all capital raised through IPOs this year in the Korea Stock Markets.Of these 36 companies planning to complete IPOs, consumer discretionary sector…

In our previous report - 2016 Major IPOs Pipeline in Korea, we identified 19 companies that are seeking to complete IPOs in Korea in 2016. In this Part II of our report, we dug deeper and identified 17 more companies that planning to complete IPOs in Korea in 2016. We believe that IPOs of these 36 companies are likely to represent more than 90% of all capital raised through IPOs this year in the Korea Stock Markets.Of these 36 companies planning to complete IPOs, consumer discretionary sector…

2016 Major IPOs Pipeline in Korea - Part II

This year appears to be an exciting year for IPOs in Korea, barring a dramatic downturn in global equities markets like the one we experienced in 2008. In this report, we highlight some of the major IPOs that are in the pipeline for 2016. Recapping 2015, there were 128 companies in Korea that completed IPOs (including 19 new listings in KOSPI and 109 new listings in KOSDAQ markets). The IPO market in Korea is off to a solid start. JS Corporation (194370KS), a leading ODM (original design…

This year appears to be an exciting year for IPOs in Korea, barring a dramatic downturn in global equities markets like the one we experienced in 2008. In this report, we highlight some of the major IPOs that are in the pipeline for 2016. Recapping 2015, there were 128 companies in Korea that completed IPOs (including 19 new listings in KOSPI and 109 new listings in KOSDAQ markets). The IPO market in Korea is off to a solid start. JS Corporation (194370KS), a leading ODM (original design…

Korea / Special Sits, Pairs, Index Rebalancing, Clepsydra Capital

Sanghyun Park

Korea / Special Sits, Pairs, Index Rebalancing

For now, CJ officially denied to sell CJ O Shopping (035760). Now, the question is why the talk of possible sale of CJ O Shopping came out in the first place. Despite CJ’s denial, it seems to be true that CJ management made some actions for possible sale of CJ O Shopping. Yes, whether CJ is really serious about selling CJ O Shopping remains uncertain at this moment. But what seems certain is that CJ management and Chairman Lee Jay-hyun appear to be quite determined to concentrate their resources…

For now, CJ officially denied to sell CJ O Shopping (035760). Now, the question is why the talk of possible sale of CJ O Shopping came out in the first place. Despite CJ’s denial, it seems to be true that CJ management made some actions for possible sale of CJ O Shopping. Yes, whether CJ is really serious about selling CJ O Shopping remains uncertain at this moment. But what seems certain is that CJ management and Chairman Lee Jay-hyun appear to be quite determined to concentrate their resources…

Clepsydra Capital

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

Event-Driven

I added 3 more single subsidiary holding companies: Doosan Corp, Hwaseung Industries, and Hanil Holdings. I now track a total of 18 local holding companies for a single subsidiary stub trade.Out of these 18 names, 6 holding companies are currently below -0.5σ on a 20-day moving average. Hanil Holdings, one of the three newbies, is in the harshest diversion at -1.44σ relative to its subsidiary, Hanil Cement. Younghone Holdings and Green Cross Holdings follow at -0.99σ and -0.86σ, respectively.







Holdco
Subsidiary
Sigma (σ) on a 20-day moving average


Amorepacific Group
Amorepacific Corp
-0.69


BGF Co Ltd
BGF Retail Co Ltd
-0.84


Halla Holdings Corp
Mando Corp
1.35


Hanjin Kal
Korean Air Lines Co Ltd
1.18


Hankook &amp; Company Co Ltd
Hankook Tire &amp; Technology Co Ltd
1.46


HANSAE YES24 HOLDINGS CO., LTD.
Hansae Co., Ltd.
-0.23


HDC Holdings Co Ltd
HDC Hyundai Development Co
0.92


Nexen Corporation
Nexen Tire Corp
2.33


Nongshim Holdings Co Ltd
Nongshim Co Ltd
0.44


ORION Holdings Corp
Orion Corp
-0.49


Poongsan Holdings Corporation
POONGSAN CORPORATION
0.18


Youngone Holdings Co Ltd
Youngone Corporation
-0.99


Green Cross Holdings
Green Cross Corp
-0.86


Hitejinro Holdings Co Ltd
HiteJinro Co Ltd
0.29


Seah Holdings Corp
Seah Besteel Corporation
-1.45


* Doosan Corp
* Doosan Heavy Industries Constrctn Co Ltd
0.63


* HWASEUNG Industries Co Ltd
* Hwaseung Enterprise Co Ltd
-0.81


* Hanil Holdings Co Ltd
* Hanil Cement Co Ltd
-1.44

Source: KRX

Starting with this insight, I made some changes in my calculation of NAV. I estimated each holding company's operating operation based on their latest de-consolidated operating profit. It is mostly brand royalty and office rental income. I used operating profit to exclude dividend income.So, here is the revised NAV discount of each holding company in my monitoring list. Seah Holdings and Halla Holdings have the highest discount to the NAV at 76.65% and 73.29%, respectively. In contrast, Hanjin Kal continues to trade at a premium (11.75%) to the NAV. Amorepacific Group and Hankook &amp; Co are also trading at a relatively low discount to the NAV. 








Discount &amp; weight
NAV discount
Single subsidiary weight in NAV
Single subsidiary weight in GAV


Amorepacific Group
20.18%
88.64%
88.53%


BGF Co Ltd
65.06%
59.17%
67.74%


Halla Holdings Corp
73.29%
53.98%
41.33%


Hanjin Kal
-11.75%
79.03%
79.81%


Hankook &amp; Company Co Ltd
26.04%
75.52%
81.38%


HANSAE YES24 HOLDINGS CO., LTD.
49.69%
58.92%
53.06%


HDC Holdings Co Ltd
50.47%
49.76%
44.85%


Nexen Corporation
62.60%
48.57%
48.66%


Nongshim Holdings Co Ltd
65.63%
60.30%
60.68%


ORION Holdings Corp
50.42%
89.56%
81.83%


Poongsan Holdings Corporation
53.62%
77.10%
81.20%


Youngone Holdings Co Ltd
60.75%
70.04%
74.12%


Green Cross Holdings
65.62%
121.52%
74.74%


Hitejinro Holdings Co Ltd
32.92%
86.35%
71.58%


Seah Holdings Corp
76.65%
40.07%
37.64%


* Doosan Corp
71.00%
70.92%
50.32%


* HWASEUNG Industries Co Ltd
59.62%
78.05%
72.68%


* Hanil Holdings Co Ltd
53.40%
77.85%
67.20%

Source: KRX



Korea Single Subsidiary Stub Trade: 18 in Total with 3 New Ones

South Korea

Youngone Holdings Company, Ltd. manufactures, markets, and exports a line of sports wear on an original equipment manufacturing (OEM) basis. The Company's products include clothes for skiing, mountain climbing, and other sports activities. Youngone Holdings also produces sports accessories, such as gloves, backpacks, and sleeping bags.

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Youngone Holdings (009970 KS)

2016 Major IPOs Pipeline in Korea - Part II

In our previous report - 2016 Major IPOs Pipeline in Korea, we identified 19 companies that are seeking to complete IPOs in Korea in 2016. In this...

Douglas Kim

2016 Major IPOs Pipeline in Korea

This year appears to be an exciting year for IPOs in Korea, barring a dramatic downturn in global equities markets like the one we experienced in...

Douglas Kim

CJ O Shopping (035760) For Sale? Why?

For now, CJ officially denied to sell CJ O Shopping (035760). Now, the question is why the talk of possible sale of CJ O Shopping came out in the...

Sanghyun Park

Korea Single Subsidiary Stub Trade: 18 in Total with 3 New Ones

This insight tracks a total of 18 single subsidiary holding companies in Korea for stub trade. I revised the NAV discounts.

Sanghyun Park

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52-week Range

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