In today’s briefing:
- Hanwha Aerospace’s Monster Raise: Checking Key Angles
- Hanwha Aerospace: Rights Offering of 3.6 Trillion Won (Negative on Entire Korean Defense Sector)
- Dalton Investments Going Activist on Kolmar Holdings and NAV Valuation
Hanwha Aerospace’s Monster Raise: Checking Key Angles
- Market sees this as an M&A play, not just de-leveraging. Sentiment’s split, and despite a tight discount, uncertainty on take-up could spark major dislocations in stock and rights.
- Hanwha’s ₩3.6T raise drops just a week after Samsung SDI’s ₩2T—₩5.5T back-to-back. Absorption looks brutal, setting up serious volatility and prime trading opps if liquidity tightens.
- The FSC fast-tracked this, flagging it instantly but also hinting approval. With regulator risk off, any cash market snapback tomorrow should stay in check.
Hanwha Aerospace: Rights Offering of 3.6 Trillion Won (Negative on Entire Korean Defense Sector)
- Hanwha Aerospace (012450 KS) announced a rights offering capital raise of 3.6 trillion won (US$2.5 billion), which is the largest ever rights offering capital raise in Korea.
- We believe this capital raise is likely to result in higher concerns about shares dilution at Hanwha Aerospace and negatively impact its share price.
- It is also likely to have a significant negative impact on the entire Korean defense stocks, as it signals a top on this sector.
Dalton Investments Going Activist on Kolmar Holdings and NAV Valuation
- In this insight, we discuss Dalton Investments which recently started to go activist on Kolmar Korea Holdings (024720 KS) and NAV valuation of this company.
- Our base case valuation of Kolmar Holdings is NAV of 475 billion won or NAV per share of 13,836 won, representing a 46% upside from current levels.
- Dalton Investments is likely to pressure Kolmar Holdings to increase share buyback and cancellations.
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