Daily BriefsEvent-Driven

Event-Driven: EDP – Energias de Portugal SA, Nanofilm Technologies International, Invesco Office J Reit, Jih Sun Financial, Vedanta Ltd, HMM Co., Ltd., SK Bioscience, SK IE Technology, Groupe Bruxelles Lambert Sa and more

In today’s briefing:

  • Global Clean Energy Index: 52 Adds, 55% Index Turnover, US$12bn to Trade
  • FTSE GEIS June Index Rebalance Preview: IPOs, J-REITs, India FOL
  • Starwood Targets Japan’s First Hostile REIT Full TOB for Invesco Office J-REIT
  • The Squeezeout of the Remaining 46% of Jih Sun Financial
  • Vedanta (VEDL) Offer Coming To A Close: Watch For Antics
  • MSCI Korea Index SAIR: HMM, Big Hit, SKC, & Maybe Green Cross (But Not SK BioS)
  • SK Bioscience IPO: KOSPI200 Fast Entry Guaranteed; SGBC Most Likely Deletion
  • KOSPI 200 Rebalancing: SK BioS/SK IET Fast Entry & LG Corp New Entity (8 Added & 9 Deleted)
  • Selected European Holdcos and DLCs: March Report

Global Clean Energy Index: 52 Adds, 55% Index Turnover, US$12bn to Trade

By Brian Freitas

The changes to the S&P Global Clean Energy Index have been announced. There are 52 additions to the index to take the number of index constituents up to 82. The changes are effective after the close of trading on 16 April.

The 52 additions and capping changes will result in a one-way turnover of close to 55% and will require the ETFs tracking the index to trade US$12bn to rebalance their portfolios.

The largest buying impact in terms of ADV to trade will be on Edp – Energias De Portugal Sa (EDP PL), SSE PLC (SSE LN), Northland Power (NPI CN), Enel Americas SA (ENIA US), Drax Group PLC (DRX LN), Meyer Burger Technology Ag (MBTN SW) and Centrais Eletricas Br-Sp Adr (EBR US).

The largest selling impact will be on Meridian Energy (MEL NZ), Contact Energy (CEN NZ), Verbund AG (VER AV), Innergex Renewable Energy (INE CN), Cia Energetica De-Spon Adr (CIG US), Boralex Inc (BLX CN) and Scatec Solar ASA (SSO NO).

Among the current index constituents, there will be buying on Orsted A/S (ORSTED DC) and Vestas Wind Systems A/S (VWS DC).

We recommend buying the surprise inclusions and unwinding the positions by implementation date. A lot of the stocks that will have a reduction in index weight have been sold off over the last few months and the active positions will be covered leading up to implementation date – we recommend buying these stocks in the days leading up to implementation date since the stocks could rally once the overhang of passive selling has been removed.


FTSE GEIS June Index Rebalance Preview: IPOs, J-REITs, India FOL

By Brian Freitas

FTSE Russell will announce the changes to the Global Equity Index Series (GEIS) as a part of the quarterly review on 21 May and the changes will be effective after the close of trading on 18 June.

The quarterly review is used to include IPOs which did not qualify as an immediate fast entrant to the indices at the time of listing and were not listed for at least 3 months by the following semi-annual review to be included in the indices.

There will be passive buying on the J-REIT’s as part of the tranched inclusion in the GEIS – the inclusion commenced at the September 2020 semi-annual index review and this will be the fourth and final tranche.

The June QIR will also continue with tranche 4 of the implementation of the India Foreign Ownership Limit (FOL) increase which commenced with the review in September 2020 and will conclude at this review.

Stocks that could be included in the FTSE All-World index are Evergrande Property Services (6666 HK), China Resources Mixc Lifestyle Services (1209 HK), Pop Mart International Group Limited (9992 HK), Blue Moon Group Holdings (6993 HK), Remegen Co Ltd (9995 HK), Jinke Smart Services (9666 HK), Shimao Services Holdings Limited (873 HK), PTT Oil and Retail (OR TB), Big Hit Entertainment (352820 KS), SCG Packaging Public Company Limited (SCGP TB), MR D.I.Y. Group (MRDIY MK), Gland Pharma Ltd (GLAND IN) and Indian Railway Finance Corporation (IRFC IN).

Stocks that could be included in the FTSE All-Country index are Yidu Tech Inc (2158 HK), Everest Medicines (1952 HK), Kerry Express Thailand (KEX TB), Converge ICT Solutions (CNVRG PM), Nanofilm Technologies International (NANO SP) and Roland Corp (7944 JP)


Starwood Targets Japan’s First Hostile REIT Full TOB for Invesco Office J-REIT

By Travis Lundy

Starwood Capital Group, a well-known real estate investor operating in half a dozen countries around the world, with current global AUM in excess of US$75bn. They manage private REITs globally and also manage the largest commercial real estate investment trust in the United States – Starwood Property Trust (STWD US) 

Together with affiliated investors, on Friday Starwood Capital Group filed that it owned just over 5% of Invesco Office J Reit (3298 JP) (filing attached below) and announced its intention to conduct a Tender Offer to buy out minorities. 

Invesco Office J-REIT, for its part, this morning announced that this was made “unilaterally and with no prior notification.” This classifies the action as hostile.

The Tender Offer Price is to be set at JPY 20,000/unit, which is s 13.3% premium to Friday’s close, and a premium of 14.68% and 23.71% to the 1mo and 3mo closing price averages. 

This appears to have been put together somewhat hastily as the starwood website outlining the Tender Offer – https://www.starwoodjapantob.jp/ – says the website is still being prepped.

This deal comes in well over book and at something like 19x TTM FFO. 

The market’s immediate reaction this morning is to bid the REIT through terms. 

Start Date? Unknown. 
Minimum Threshold? Unknown. 

J-REIT takeovers are rare enough that hostile action is also rare, though not unknown. This will, however, be the first TOB of a Japanese REIT where the goal is to delist the REIT.

Hostile action on J-REITs comes with its own issues and parameters. And it is not as hard as it might be for a corporation. Starwood is counting on it. And that limits the Asset Manager’s ability to defend itself. 


The Squeezeout of the Remaining 46% of Jih Sun Financial

By Travis Lundy

On 23 March, Fubon Financial Holding Co (2881 TT) reported that its Tender Offer for control of Jih Sun Financial (5820 TT) was successful. 

This was, apparently, possibly a surprise, as local media suggested last week that Shinsei Bank (8303 JP) had received an approach to buy their stake in Jih Sun Financial (5820 TT) for NT$15/share – well above the NT$13/share that Fubon had bid. 

A day before the close of the Tender Offer, internal directors at Jih Sun were apparently of the opinion Shinsei would not tender, however it appears the NT$13/share in hand was better than the $15/share which was still only indicative, so they sold. 

That leaves the squeezeout. 

As always, DETAILS MATTER.

If you intend to play the risk arb on the squeezeout of Jih Sun, beware the modalities and the timing.


Vedanta (VEDL) Offer Coming To A Close: Watch For Antics

By Travis Lundy

The promoter’s Open Offer to buy up to 651mm shares (17.51%) of Vedanta Ltd (VEDL IN) at Rs 235/share is coming to a close. 

With two days to go, the shares today closed at Rs. 231.75/share as Hindustan Zinc (HZ IN) closed up 6.07%, briefly touching Rs 300/share intraday. 

As of the close of 5 April, there were just 3,364 Orders (different offers of shares at Rs 235.00 in the system) having offered a total of 112.76mm shares (81.44mm shares confirmed, 31.32mm shares yet to be confirmed). 

Shares may be at a 52-week high, not quite quadruple their covid-crash lows and not quite triple their post-Delisting Offer Failure lows on a dividend-adjusted price basis…

… but as readers may surmise in the charts and tables below the fold, VEDL is not terribly expensive vs peers or its own peer-relative history. 

And that is when it is still loaded with cash from a dividend it is supposed to but has not yet paid out. Given zinc prices, and commodity prices in general, and the dynamics of sooner-rather-than-later sale of the government’s stake in Hindustan Zinc (HZ IN), one might expect a substantial dividend to make the post-sale optics look better/easier (there would be no reason for VEDL to pay a multiple of book of cash or debt in the HZ accounts). 

There may be antics in the next day or two. There have been antics on this stock grouping before which appear to have been aimed at helping undecided investors make a decision about the risk of holding shares. I would not be surprised to see that again. 

Much more below the fold.

Earlier insights in the series, from older to most recent, are at the links below:

The Post Delisting Offer History of Insights on VEDL

DateTitle
11 Oct 2020 Vedanta Delisting Proposal/Offer Fails (We Think) 
13 Oct 2020VEDL Delisting Fail Day1 – Reading Between the Lines of the Trading Data
21 Oct 2020 Vedanta Limited – Caught in Economic Purgatory but Governance Hell? 
9 Dec 2020Vedanta Vaulting Near 2020 Highs On Higher Commods, Higher Forecasts, But Open Offer Remote?
23 Dec 2020Vedanta Promoter Launches Offer to Buy 4.98%
11 Jan 2021Vedanta (VEDL IN) Promoter To Launch an Open Offer To Buy More
19 Feb 2021Vedanta Soars Beyond Indicative Open Offer Level. Not Expensive
13 Mar 2021 Vedanta (VEDL) Awaits Open Offer Revision. Now Less Event-y More Commodity-y 
17 Mar 2021 Vedanta (VEDL) Open Offer Raised in Price and Size! 

MSCI Korea Index SAIR: HMM, Big Hit, SKC, & Maybe Green Cross (But Not SK BioS)

By Sanghyun Park

The requirements for addition in SAIR are as follows:

  • 1.50 × cutoff for MC
  • 0.75 × cutoff for float-adjusted MC
  • FIF: > 0.15
  • Reference date: a randomly selected trading day in the last ten trading days of the previous month (April 19~30, 2021)
  • Announcement date: May 11, 2021
  • Effective date: May 28, 20211

Four names seem to be in the race.

* I used the median float MC for the cutoff MC (₩3,059.3B) as of February 26, 2021.

Additions (₩B)HMM Co LtdBig Hit Entertainment Co LtdSKC Co LtdGreen Cross Corp
Ticker011200352820011790006280
MC9,623.39,404.74,998.63,955.9
Float (FnGuide)83.51%40.01%53.46%46.04%
– Float MC8,036.43,762.82,672.31,821.3
Cutoff MC3,059.33,059.33,059.33,059.3
1.502.10x2.05x1.09x0.86x
0.753.50x1.64x1.16x0.79x
Source: MSCI, KRX, & FnGuide
Characteristics (₩B)
Date2021. 2. 26
Number of constituents106
Index MC1,203,777.7
– Largest394,005.6
– Smallest822.5
– Average11,356.4
– Median (cutoff MC)3,059.3
Source: MSCI

SK Bioscience IPO: KOSPI200 Fast Entry Guaranteed; SGBC Most Likely Deletion

By Brian Freitas

SK Bioscience (302440 KS) is a biopharmaceutical company that focuses on the discovery and production of vaccines. The company was spun off from Sk Chemicals Co Ltd/New (285130 KS) in 2018 and is now 68.65% owned by SK Chemicals.

The company issued stock at KRW 65,000/share in the IPO and the stock closed limit up at KRW 169,000 on listing day. Since then, the stock has dropped 30% and is trading at the lows since listing. The stock has been stable over the last few days as volumes taper off and a lot of flippers have likely exited the stock.

With 2 days to go in the 15 day period that is used to determine Fast Entry for new listings in the Korea Stock Exchange Kospi 200 Index (KOSPI2 INDEX), we take a look at the probability of the stock getting Fast Entry into the index, the lock up expiry schedule and the impact of passive buying on the stock.

If included in the index, passive trackers will need to buy over 4% of the free floating SK Bioscience (302440 KS) stock as of the implementation date. We see Sebang Global Battery (004490 KS) as the most likely deletion to make way for SK Bioscience in the index.


KOSPI 200 Rebalancing: SK BioS/SK IET Fast Entry & LG Corp New Entity (8 Added & 9 Deleted)

By Sanghyun Park

Below is the first batch of the likely candidates based on the November 1~April 5 average market caps.

A total of 195 names make the list.

  • Select candidates for each sector in order by avg daily MC (the cumulative cutoff at the 85th percentile)
  • Include the first company that crosses the 85th percentile mark
  • Exclude those whose avg DTV ranking is below the 85th percentile or (only new entrants) whose avg daily MC ranking is above 110%
  • If not 200, then re-select current constituents whose avg daily MC ranking is within 110%
NameTickerSectorKOSPI 200MC CMC RDTV CMC (₩B)
Samsung Electronics Co Ltd005930IT170.08%11.11%1.56%464,170.5
SK Hynix Inc000660IT283.45%22.22%3.13%88,604.8
LG Chem Ltd051910Mat432.19%3.57%0.61%60,426.4
Naver Corp035420Comm331.51%10.00%3.57%54,157.6
Samsung Biologics Co Ltd207940HC2132.83%5.56%9.09%51,686.8
Hyundai Motor Co005380CD621.73%2.78%1.31%46,007.8
Samsung SDI Co Ltd006400IT590.12%33.33%4.69%44,129.1
Celltrion, Inc.068270HC758.34%11.11%1.82%40,166.4
Kakao Corp035720Comm853.67%20.00%7.14%38,080.8
Kia Motors Corporation000270CD1035.70%5.56%0.65%29,596.9
HYUNDAI MOBIS CO., LTD.012330CD1148.57%8.33%3.27%27,238.1
LG Household & Healthcare Ltd051900CS1623.43%3.85%4.17%24,522.4
Samsung C&T Corp028260Ind1811.30%2.04%4.76%24,027.4
POSCO005490Mat944.82%7.14%1.22%23,716.1
LG Electronics Inc.066570CD1358.63%11.11%1.96%21,311.2
SK Innovation Co Ltd096770Energy1958.00%25.00%11.11%20,679.3
NCSoft Corp036570Comm1465.28%30.00%14.29%19,949.1
SK Telecom Co Ltd017670Comm1776.86%40.00%17.86%19,902.7
KB Financial Group Inc105560Fin & RE1212.91%5.56%1.54%19,288.5
SK Holdings Co Ltd034730Ind2319.95%4.08%1.79%18,380.8
Shinhan Financial Group Co., Ltd.055550Fin & RE1524.52%11.11%3.08%17,358.7
LG Corp003550Ind2627.20%6.12%11.90%15,423.2
Korea Electric Power Corporation015760Util2869.74%50.00%7.14%15,144.8
Samsung Life Insurance co., Ltd032830Fin & RE3034.60%16.67%7.69%15,068.4
Samsung SDS Co Ltd018260IT3192.31%44.44%18.75%14,560.3
Samsung Electro-Mechanics Co., Ltd.009150IT2294.35%55.56%6.25%13,493.2
Amorepacific Corp090430CS2735.47%7.69%2.78%12,611.2
SK Biopharmaceuticals Co Ltd326030HC8865.71%16.67%7.27%11,611.6
KT&G Corp033780CS2446.29%11.54%5.56%11,328.1
Hana Financial Group Inc086790Fin & RE2042.04%22.22%6.15%11,109.1
Netmarble Corp251270Comm2583.23%50.00%39.29%10,953.3
Lotte Chemical Corp011170Mat4050.09%10.71%4.88%9,889.1
Hanwha Solutions Corp009830Mat3655.07%14.29%3.66%9,360.3
Samsung Fire & Marine Insurance Co Ltd000810Fin & RE3547.94%27.78%9.23%8,826.8
Hanon Systems018880CD3962.77%13.89%6.54%8,768.3
Korean Air Lines Co Ltd003490Ind3231.24%8.16%5.95%8,573.2
S Oil Corp010950Energy5281.58%50.00%22.22%8,407.1
Korea Zinc Inc010130Mat4959.16%17.86%15.24%7,672.5
Korea Shipbuilding &Offshore Engn Co Ltd009540Ind3334.83%10.20%3.57%7,630.9
Posco Chemical Co Ltd003670Mat4163.16%21.43%4.27%7,505.7
Hyundai Glovis Co Ltd086280Ind4838.22%12.24%8.93%7,212.1
LG Display Co Ltd034220IT3795.43%66.67%9.38%7,123.8
Woori Financial Group Inc316140Fin & RE3852.68%33.33%16.92%7,082.5
Big Hit Entertainment Co Ltd352820Comm6587.26%60.00%21.43%6,929.0
Industrial Bank of Korea024110Fin & RE7157.07%38.89%15.38%6,567.4
KT Corp030200Comm3491.05%70.00%28.57%6,520.2
Mirae Asset Daewoo Co Ltd006800Fin & RE5161.19%44.44%23.08%6,152.8
CJ Cheiljedang Corp097950CS5752.10%15.38%11.11%6,079.0
Shinpoong Pharmaceutical Co Ltd019170HC5969.51%22.22%3.64%5,984.0
Kumho Petro Chemical Co Ltd011780Mat4266.23%25.00%1.83%5,764.3
HMM Co Ltd011200Ind2940.88%14.29%0.60%5,647.8
Hyundai Steel Co004020Mat4369.07%28.57%6.10%5,329.4
LG Uplus Corp032640Comm5094.11%80.00%35.71%5,250.8
Coway Co Ltd021240CD4565.22%16.67%15.69%5,186.1
Kangwon Land, Inc.035250CD5467.66%19.44%10.46%5,174.7
Hankook Tire & Technology Co Ltd161390CD4770.09%22.22%16.34%5,137.1
Doosan Heavy Industries Constrctn Co Ltd034020Ind6643.21%16.33%13.69%4,972.0
Orion Corp271560CS6056.81%19.23%16.67%4,931.9
Amorepacific Group002790CS8461.42%23.08%20.83%4,820.9
E-Mart Inc139480CS4665.84%26.92%6.94%4,628.0
Korea Investment Holdings Co., Ltd.071050Fin & RE4464.28%50.00%12.31%4,618.5
Yuhan Corp000100HC5672.42%27.78%21.82%4,585.7
Hanmi Science Co Ltd008930HC10575.31%33.33%38.18%4,544.1
Green Cross Corp006280HC8678.19%38.89%10.91%4,541.7
LG Innotek Co., Ltd.011070IT5896.10%77.78%12.50%4,460.1
Hyundai Engineering & Construction Co.000720Ind5345.28%18.37%14.88%4,391.7
SK Chemicals Co Ltd285130Mat8171.40%32.14%5.49%4,373.1
Hanjin Kal180640Ind13047.31%20.41%47.62%4,322.3
Hyundai Heavy Industries Holdings Co Ltd267250Ind6449.33%22.45%22.02%4,293.2
Samsung Heavy Industries Co.,Ltd010140Ind5551.31%24.49%2.98%4,196.7
HanmiPharm128940HC6980.78%44.44%20.00%4,076.1
SKC Co Ltd011790Mat6373.52%35.71%10.37%3,983.3
CJ Logistics Corp000120Ind7453.12%26.53%26.79%3,853.7
Samsung Card Co Ltd029780Fin & RE13769.58%61.11%47.69%3,830.2
Lotte Corp004990Ind14654.80%28.57%46.43%3,569.5
GS Holdings Corp078930Energy8791.55%75.00%33.33%3,553.4
Samsung Securities Co Ltd016360Fin & RE6871.94%66.67%20.00%3,527.5
KIWOOM Securities Co., Ltd.039490Fin & RE9374.24%72.22%13.85%3,439.5
Ssangyong Cement Industry Co Ltd003410Mat14775.34%39.29%17.07%3,416.4
Doosan Fuel Cell Co Ltd336260Ind11356.39%30.61%11.31%3,388.2
Doosan Bobcat Inc241560Ind8357.95%32.65%22.62%3,303.2
Dong Suh Companies Inc026960CS12368.98%30.77%18.06%3,285.4
Hotel Shilla Co Ltd008770CD6171.62%25.00%5.23%3,248.8
GS Engineering & Construction Corp006360Ind6759.46%34.69%8.33%3,208.9
NH Investment & Securities Co Ltd005940Fin & RE8976.38%77.78%36.92%3,198.3
S1 Corp012750Ind7860.95%36.73%51.79%3,170.8
Lotte Shopping Co Ltd023530CD11073.11%27.78%13.73%3,142.2
DB Insurance Co Ltd005830Fin & RE7678.44%83.33%24.62%3,072.1
Cs Wind Corp112610Ind11262.39%38.78%5.36%3,068.0
Korea Aerospace Industries Ltd047810Ind6263.77%40.82%9.52%2,934.3
Korea Gas Corp036460Util11883.14%100.00%14.29%2,910.8
Mando Corp204320CD7274.46%30.56%5.88%2,874.0
Daewoo Shipbuilding & Marine Engineering042660Ind10465.11%42.86%31.55%2,848.2
GS Retail Co Ltd007070CS12571.59%34.62%19.44%2,730.8
Iljin Materials Co Ltd020150IT9296.99%100.00%17.19%2,728.8
Pan Ocean Co Ltd028670Ind10066.36%44.90%1.19%2,666.6
CJ Corp001040Ind10267.61%46.94%39.29%2,655.6
Fila Holdings Corp081660CD7775.72%33.33%16.99%2,651.2
MERITZ SECURITIES CO LTD008560Fin & RE9980.18%88.89%29.23%2,603.8
Samsung Engineering Co Ltd028050Ind7968.83%48.98%17.26%2,591.3
BGF Retail Co Ltd282330CS10174.04%38.46%29.17%2,563.9
Shinsegae Inc004170CD8076.88%36.11%7.19%2,462.7
HiteJinro Co Ltd000080CS11576.33%42.31%9.72%2,405.3
Hanssem Co Ltd009240CD11478.01%38.89%24.18%2,398.2
Cheil Worldwide Inc030000Comm9495.50%90.00%57.14%2,385.8
Hanwha Life Insurance Co Ltd088350Fin & RE12681.74%94.44%10.77%2,334.8
Daewoong Co., Ltd.003090HC14882.25%50.00%34.55%2,306.8
Oci Co Ltd010060Mat7376.56%42.86%7.93%2,295.5
DL E&C Ord Shs375500Ind8269.90%51.02%10.12%2,272.4
Hansol Chemical Co Ltd014680Mat7077.75%46.43%15.85%2,236.9
Hanwha Corp000880Ind9670.93%53.06%32.14%2,195.4
LS Corp.006260Ind12071.96%55.10%25.00%2,171.2
Daewoo Engineering & Construction Co Ltd047040Ind10372.98%57.14%10.71%2,171.0
Posco International Corp047050Ind13673.99%59.18%7.74%2,161.4
Ottogi Corp007310CS15478.32%46.15%38.89%2,083.9
Hyundai Marine & Fire Insurance Co., Ltd001450Fin & RE9883.11%100.00%27.69%2,038.9
Hyundai Rotem Co064350Ind10874.95%61.22%17.86%2,037.1
Chong Kun Dang Pharmaceutical Corp185750HC12183.54%55.56%12.73%2,030.8
Hyundai Mipo Dockyard Co., Ltd.010620Ind9175.89%63.27%13.10%1,986.9
BNK Financial Group Inc138930Fin & RE8584.42%105.56%21.54%1,958.0
Hyundai Wia Corp011210CD10978.91%41.67%9.80%1,894.7
Doosan Infracore Co Ltd042670Ind9076.76%65.31%2.38%1,850.5
Hanwha Systems Co Ltd272210Ind14277.62%67.35%6.55%1,838.4
Korea Petro Chemical Ind Co Ltd006650Mat13378.73%50.00%14.63%1,830.6
Green Cross Holdings005250HC14184.70%61.11%29.09%1,828.6
Hyundai Department Store Co Ltd069960CD10779.77%44.44%9.15%1,822.3
LS Electric Co Ltd010120Ind12778.47%69.39%38.10%1,804.2
Nongshim Co Ltd004370CS13580.01%50.00%27.78%1,765.2
Hanwha Aerospace Co Ltd012450Ind9579.29%71.43%18.45%1,743.7
Hyundai Elevator Co Ltd017800Ind9780.11%73.47%27.98%1,735.5
KCC Corp002380Mat11679.65%53.57%23.78%1,731.4
HDC Hyundai Development Co294870Ind10680.92%75.51%23.81%1,721.2
Hyosung Corp004800Ind14381.72%77.55%34.52%1,711.7
F&F Co., Ltd007700CD14080.55%47.22%18.95%1,667.5
Bukwang Pharm Co Ltd003000HC11185.73%66.67%5.45%1,616.9
Hanall Biopharma Co Ltd009420HC12986.75%72.22%43.64%1,609.5
Daewoong Pharmaceutical Co., Ltd.069620HC14987.76%77.78%23.64%1,594.5
IS DONGSEO CO., LTD.010780Ind14482.47%79.59%50.60%1,586.3
Hankook & Company Co Ltd000240CD17581.29%50.00%23.53%1,566.5
Youngone Corporation111770CD13882.02%52.78%29.41%1,543.1
Lotte Fine Chemical Co Ltd004000Mat11980.41%57.14%28.66%1,429.7
Hyosung TNC Corp298020CD#N/A82.68%55.56%4.58%1,380.9
Yungjin Pharm Co Ltd003520HC17288.59%83.33%58.18%1,313.4
KEPCO Plant Service & Engineering Co Ltd051600Ind14583.08%81.63%30.95%1,295.2
SK Networks Co Ltd001740Ind15983.68%83.67%32.74%1,276.0
Zinus Inc013890CD16083.28%58.33%37.25%1,274.1
Kolon Industries Inc120110Mat11781.08%60.71%11.59%1,259.6
Shinsegae International Inc031430CD15783.87%61.11%20.92%1,249.3
SK Discovery Co Ltd006120Energy15895.01%100.00%44.44%1,234.7
Lotte Tour Development Co., Ltd.032350CD15384.43%63.89%14.38%1,186.6
Kolmar Korea Co Ltd161890CS13281.13%53.85%15.28%1,176.0
KG DongbuSteel Co Ltd016380Mat18281.69%64.29%22.56%1,137.5
Kumho Tire Co Inc073240CD15284.96%66.67%57.52%1,125.4
Doubleu Games Co Ltd192080CD15085.48%69.44%20.26%1,111.1
Cosmax Inc192820CS12882.15%57.69%12.50%1,064.2
Dongwon Systems Corp014820Mat19182.25%67.86%39.02%1,044.9
Ilyang Pharmaceutical Co., Ltd007570HC17989.92%94.44%25.45%1,041.5
Lotte Chilsung Beverage Co Ltd005300CS17083.13%61.54%33.33%1,023.7
Taihan Electric Wire Co Ltd001440Ind#N/A84.16%85.71%19.05%1,021.5
Youngpoong Corp000670Mat18782.79%71.43%63.41%1,015.4
Hyosung Advanced Materials Corp298050Mat#N/A83.33%75.00%6.71%1,015.0
Boryung Pharmaceutical Co., Ltd003850HC17490.56%100.00%27.27%1,007.5
Foosung Co Ltd093370Mat16383.86%78.57%23.17%1,002.0
Sebang Global Battery Co Ltd004490CD15685.96%72.22%18.30%1,001.2
TY Holdings Co Ltd363280Ind#N/A84.63%87.76%52.98%1,000.4
GRAND KOREA LEISURE CO LTD114090CD16486.42%75.00%28.10%984.3
Huchems Fine Chemical Corporation069260Mat16684.38%82.14%21.34%977.1
LG International Corp001120Ind13485.08%89.80%26.19%969.4
Taekwang Industrial Co., Ltd.003240Mat19784.89%85.71%69.51%956.2
HYUNDAI HOME SHOPPING NETWORK CORP057050CD15187.33%80.56%53.59%945.4
Cuckoo Homesys Co Ltd284740CD18987.77%83.33%43.14%938.6
Daesang Corp001680CS16283.99%65.38%37.50%900.1
Dongwon Industries Co., Ltd006040CS#N/A84.83%69.23%69.44%881.6
Hwaseung Enterprise Co Ltd241590CD17888.19%86.11%24.84%877.4
Hyundai Green Food Co Ltd005440CS16785.66%73.08%22.22%871.0
SNT MOTIV Co Ltd064960CD17188.59%88.89%38.56%861.4
ORION Holdings Corp001800CS19586.48%76.92%41.67%853.9
Doosan Corp000150Ind19285.48%91.84%59.52%847.9
POONGSAN CORPORATION103140Mat15585.34%89.29%17.68%840.6
LOTTE Himart Co Ltd071840CD18388.99%91.67%41.83%836.5
Dongkuk Steel Mill Co., Ltd001230Mat12485.78%92.86%12.20%835.4
Handsome Corp020000CD16589.38%94.44%33.33%822.8
Asiana Airlines Inc020560Ind13985.86%93.88%33.33%809.2
Cuckoo Holdings Co Ltd192400CD19890.12%100.00%69.28%769.9
LIG Nex1 Co Ltd079550Ind16986.95%100.00%41.67%762.8
DL Holdings Co Ltd000210Ind12287.30%102.04%15.48%754.2
Samyang Foods Co Ltd003230CS18587.87%84.62%44.44%723.3
Hansae Co., Ltd.105630CD17690.47%102.78%26.80%722.3
Dongwon F&B Co Ltd049770CS19088.55%88.46%48.61%710.3
Samyang Holdings Corp000070CS18689.20%92.31%47.22%685.3
HDC Holdings Co Ltd012630Mat17786.90%103.57%44.51%659.0
Aekyung Industrial Co Ltd018250CS18889.83%96.15%56.94%657.0
Nexen Tire Corp002350CD19490.77%105.56%44.44%652.5
Lock&Lock Co Ltd115390CD19391.08%108.33%46.41%641.1
SPC Samlip Co Ltd005610CS20191.04%103.85%75.00%623.5
Source: KRX

Now, we have the second batch based on the second filter.

We have 5 names here.

  • If still not 200, then select additional names among the unselected current constituents in order by avg. MC, regardless of classification
NameTickerSectorKOSPI 200MC CMC RDTV CMC (₩B)
DB HiTek Co Ltd000990IT7597.69%122.22%10.94%2,214.0
Innocean Worldwide Inc214320Comm13197.03%110.00%75.00%1,217.7
CJ CGV Co Ltd079160Comm16197.55%120.00%50.00%904.8
KEPCO Engineering & Construction Co Inc052690Ind18189.63%116.33%36.31%692.4
JW Pharmaceutical Corp001060HC18093.58%133.33%70.91%681.7
Source: KRX

Selected European Holdcos and DLCs: March Report

By Jesus Rodriguez Aguilar

Discounts to NAV for our selected European holdcos and DLCs have generally tightened in March. The report incorporates the results for GBL, and several SOTP valuations.

  • The current premium of BHP Group (BHP AU) vs.  Bhp Billiton (BLT LN) at close of March was 19.5% (vs. 24.6% as of 31 December and 19.5% as of the end of February), against a 10-year average of 14.5%. I would rather be long the UK plc and short the Aussie Ltd. through US listings.
  • Corp Financiera Alba Sa (ALB SM) is trading at a 46% discount to NAV, partly because of its low liquidity. The discount does not seem to be arbitraged lately. Naturgy Energy Group SA (NTGY SM), one of its portfolio main assets, is being the object of a partial takeover bid; Euskaltel is the object of a full takeover bid, as it has been previously flagged here. Alba has some quality assets and is fundamentally cheap, in my view.
  • The discount of Groupe Bruxelles Lambert Sa (GBLB BB) has tightened to 31.7% as of end of March (vs. 34.2% as of 26 February). I recommend Long GBL / Short main listed assets (LafargeHolcim, SGS, Pernod Ricard, Adidas and Umicore, which represent c. 70% of NAV).
  • The discount in Heineken Holdings relative to Heineken has tightened to 12.6% (vs. 15.4% at the end of January) vs. an average of 10.5% for the last 15 years, and 7.9% for the last five years. Recommendation is long Heineken Holdings, short Heineken.
  • Industrivarden AB (INDUA SS) C shares are trading at a 3.3% discount to NAV (vs. 7.8% at the end of February), the lowest over the last twelve months. I would wait for the discount to widen before entering the trade again.
  • The discount to NAV of Investor AB (INVEB SS) B shares has tightened to 14.4% (vs. 17.1% at the end of February). Long Investor B, short main assets.
  • From my SOTP valuation, Investment Ab Kinnevik (KINVB SS) B shares are trading at a c. 7% premium to NAV. Post the Zalando distribution (together with the Millicom distribution), Kinnevik will transform itself in a listed VC, investing mainly in tech.
  • Royal Dutch Shell PLC (RDS/B US) “B” shares closed March in New York at a discount of  6.1% (vs. 4.4% as of 31 December and 5.2% as of end of February) with respect to the Royal Dutch Shell Plc (Adr) (RDS/A US) “A” shares. Trade: LONG RDSB ADR/SHORT RDSA ADR. Target: 2% premium.

Before it’s here, it’s on Smartkarma