In today’s briefing:
- Today’s HMM Tender Follow-Up Disclosure and Hedge Ratio Setup
- Hanon Systems Announces a Major Potential Rights Offering
- FnGuide Semiconductor Top10 Index Rebalance Preview: Two Changes Likely in September
- Real-Time Read on Korea’s Top Market Narrative — Tax Reform Play
- Aurora World – Palm Pals and YooHoo or Chairman’s Love of Golf?
- Classys (214150 KS): Equipment Sale Boosts 2Q Result; New Device Approval to Drive 2H Performance
Today’s HMM Tender Follow-Up Disclosure and Hedge Ratio Setup
- KOBC’s core mission hinges on HMM; without it, no real mandate. Structural incentive to hold remains, so its active tender participation is still questionable.
- Still, max proration risk seems base case, with weak Q2, soft Q3 freight outlook, and post-tender skew pointing bearish for HMM.
- Spread >10% makes this too good to pass, but should also watch policy risk — better to lock futures hedge early as flows show players scrambling for cover.
Hanon Systems Announces a Major Potential Rights Offering
- On 14 August, Hanon Systems (018880 KS) announced a potential rights offering capital raise. The exact amount will be finalized at the EGM next month.
- The significant size of the rights offering is expected to burden its largest shareholder Hankook Tire & Technology (161390 KS) which owns a 54.8% stake in Hanon Systems.
- We believe the potential rights offering is likely to continue to negatively impact Hanon Systems by diluting its existing shareholders.
FnGuide Semiconductor Top10 Index Rebalance Preview: Two Changes Likely in September
- With the averaging period for the October rebalance starting in two weeks, we forecast 2 changes for the FnGuide Semiconductor Top10 Index at the upcoming rebalance.
- Based on the passive assets tracking the index, there will be between 1.5-4.7x ADV to trade in the forecast changes.
- On average, the forecast adds have outperformed the forecast deletes by a wide margin over the last 3 months and could reverse some of the changes from the April rebalance.
Real-Time Read on Korea’s Top Market Narrative — Tax Reform Play
- Even the revised draft is facing possible first-ever presidential non-approval, which acts like a de facto veto between Cabinet approval and National Assembly submission.
- The admin aims to make stocks outperform real estate, with a dividend tax cut under separate taxation as the key lever, fully recognized by the Presidential Office.
- Local markets are pulling back on Presidential Office delays, but signals point to a clear reform direction — time to build mid-term positions in banks and holdcos.
Aurora World – Palm Pals and YooHoo or Chairman’s Love of Golf?
- Aurora World reported excellent results in 2Q 2025. It had sales of 77.1 billion won (up 26.5% YoY) and operating profit of 8.8 billion won (up 86.7% YoY).
- The company’s excellent results in 2Q 2025 was driven by the continued strong demand for its character toys (Palm Pals, YooHoo & Friends, and Rolly Pets) in key overseas markets.
- If we attach a 10x P/E on estimated net profit of 30.1 billion won, it would suggest a market cap of 301 billion won (2026E) (37% upside from current levels).
Classys (214150 KS): Equipment Sale Boosts 2Q Result; New Device Approval to Drive 2H Performance
- Classys (214150 KS) has reported strong 2Q25 result, with record high quarterly sales, gross profit, and operating profit. In fact, revenue hit sixth consecutive quarterly record high.
- During 2Q25, revenue from device increased 47% YoY and 30% QoQ to KRW46B, mainly driven by strong global sales, which increased 36% YoY and 27% QoQ to KRW33B.
- Classys reaffirmed 2025 revenue guidance of KRW340–360B, up 39–48% YoY. In 1H25, the company has achieved 46% of annual revenue target, thereby enhancing guidance visibility.
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