Daily BriefsIndustrials

Industrials: Doosan Heavy Industries & Construction, Cs Wind Corp and more

In today’s briefing:

  • Doosan Heavy Offering: Subs Rights Trading at a 3+% Spread, Not Adjusting Oversubscription
  • CS Wind Announces A Rights Offering Worth 350 Billion Won: #1 Player in Korea in Wind Towers

Doosan Heavy Offering: Subs Rights Trading at a 3+% Spread, Not Adjusting Oversubscription

By Sanghyun Park

We are not on Day 3 of the DHI’s ₩1.3T rights offering.

Timetable
BOD meetingSeptember 4, 2020
Preliminary pricingOctober 12, 2020
Ex-rights dateOctober 14, 2020
Record dateOctober 15, 2020
Subscription rights trade beginningNovember 18, 2020
Subscription rights trade endingNovember 24, 2020
Final pricingNovember 30, 2020
Stockholder subscriptionDecember 3, 2020
Public subscriptionDecember 8, 2020
PaymentDecember 11, 2020
ListingDecember 24, 2020
Record date – bonus sharesN/A
Listing – bonus sharesN/A
Source: DART
Overview
IssuerDoosan Heavy Industries Constrctn Co Ltd
Ticker034020
TargetPubic-offering of forfeited shares after offering to stockholders
TransferabilityRenounceable
Volume121,495,330
Bonus issue volume0
Preliminary price₩10,700
Preliminary value₩1,300,000,031,000
Oversubscription privilege20.00%
BankerNH & KIS
– Underwriting typeStandby
Source: DART

The 1st round pricing was ₩9,640.

The pricing will get finalized on November 30. At the current price, ₩9,640 will be a likely price for a subscription.

1st round pricing
DateOctober 12, 2020
1st round price₩9,640
Source: DART
2nd round pricing
DateNovember 30, 2020
Close₩14,800
1W VWAP?
Reference price₩14,800
2nd round price₩11,900

Source: DART

Pricing
1st roundRP × (1 – 20%) / [1 + (48% × 20%)]
– Reference price (RP)Min [Close, Avg (Close, 1W VWAP, 1M VWAP)]
– Reference dateOctober 12, 2020
Ex-rights base price[RP + (1st × 48%)] / (1 + 48%)
– Reference price (RP)Previous close
– Reference dateOctober 14, 2020
2nd roundRP × (1 – 20%)
– Reference price (RP)Min [Close, Avg (Close, 1W VWAP)]
– Reference dateNovember 30, 2020
FinalMax [Min (1st, 2nd), 3D VWAP × 60%]
– Reference dateNovember 30, 2020
Discount rate20.00%
Capital increase rate48.00%
Source: DART

CS Wind Announces A Rights Offering Worth 350 Billion Won: #1 Player in Korea in Wind Towers

By Douglas Kim

After the market close on 20 November, Cs Wind Corp (112610 KS) announced a rights offering worth 350 billion won ($307 million). Despite the company’s business firing at all cylinders, we believe that this rights offering will have a negative impact on the company’s share price as the new shares could dilute existing shareholders and the rights offering could act as a major overhang on its share price in the next several weeks.

However, the company has picked a good time in trying to complete its rights offering as it has been one of the best performing stocks in the Korean stock market this year (up 232% YTD). It appears that a lot of the positive factors including the Korean New Green Deal and a solid growth of new wind power installations in 2020 have already been reflected in CS Wind’s stock price. 


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