In today’s briefing:
- Gap Trade Opportunities in Korean Prefs Vs Common Share Pairs in 1Q 2025
- Palantir’s Influence on the Political Rallies in Korea & HD Hyundai’s 34% Stake in Palantir Korea
- EQD | KOSPI 200 Index – Buy January Straddle
- LG CNS IPO: The Bear Case
- China Slaps ADD On Japanese & S Korean Nitrile Rubber
Gap Trade Opportunities in Korean Prefs Vs Common Share Pairs in 1Q 2025
- In this insight, we discuss numerous gap trade opportunities involving Korean preferred and common shares in 1Q 2025.
- Among the 27 major pair trades (prefs vs. common shares), 20 of the pref stocks outperformed their common shares counterparts in 2024.
- The 27 Korean preferred stocks’ average prices declined by 1% from end of 2023 to end of 2024 (excluding dividends), outperforming their common counterparts which were down on average 3.7%.
Palantir’s Influence on the Political Rallies in Korea & HD Hyundai’s 34% Stake in Palantir Korea
- In this insight, we discuss the increasing importance of Palantir Technologies (PLTR US) on influencing the political rallies in Korea.
- In addition, we discuss how HD Hyundai’s 34% ownership of Palantir Korea is likely to improve the positive sentiment on HD Hyundai.
- Our sum-of-the-parts valuation analysis of HD Hyundai suggests implied market cap of 11 trillion won or target price of 139,845 won per share (63% upside from current levels).
EQD | KOSPI 200 Index – Buy January Straddle
- The implied move for January is less than what has been historically experienced. Sixteen of the last 26 years have had price movement > current implied move.
- January punches above its weight in terms of both historic volatility (most volatile month) and the amount of price movement relative to that historic volatility.
- Trades at the current implied move historically would have been winners 61.5% of the time with the average winner being more than double the average loser.
LG CNS IPO: The Bear Case
- LG CNS (LGCNSZ KS), the IT service unit of LG Corp (003550 KS), seeks to raise up to US$837 million through a primary/secondary offering.
- In LG CNS IPO: The Bull Case, we highlighted the key elements of the bull case. In this note, we outline the bear case.
- The bear case rests on fading growth momentum, mid-tier revenue growth, weak non-AI growth, high contract assets, bottom-tier FCF margin and large share overhang.
China Slaps ADD On Japanese & S Korean Nitrile Rubber
- ADD on NBR imports from Japan, South Korea extended to five years
- Chinese companies beef up domestic carbon black production
- ZC Rubber unveils US$259 million and Longxing US$405 million projects
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