South Korea Archives | Page 38 of 125 | Smartkarma

Korea Zinc is launching a 3.21M share buyback (15.5% of total shares) via a KRW 2.66T tender offer at ₩830,000 per share, with Bain Capital involved.
If tendered shares fall short, Korea Zinc and Bain Capital will buy all. If over the target, they’ll buy pro rata. Below 1,215,283 shares, they will opt out.
Should we dive into Korea Zinc’s risky buyback or choose safer, lower-priced MBK? The market vibe favors MBK, reflected in Korea Zinc’s closing price today.

Court Dismisses Injunction; Korea Zinc to Announce Buyback Tender Offer Soon

The court rejected MBK and Young Poong’s injunction to block Korea Zinc’s buyback, allowing Choi’s side to continue using buybacks to defend control.
Korea Zinc plans an emergency board meeting to launch a tender offer, using internal funds, to buy back shares at 800K-850K KRW starting around October 7.
If Choi converts discretionary reserves into distributable profits, Korea Zinc could unlock 2-3 trillion KRW for the buyback, but uncertainty keeps the stock around 700K KRW.

Korea Zinc: Plans to Buy Back and Cancel Shares Worth 2.7 Trillion Won + Team Up with Bain Capital

Korea Zinc plans to repurchase and cancel shares worth 2.663 trillion won. Korea Zinc’s partner Bain Capital also plans to purchase around 430 billion won for a 2.5% stake.
Korea Zinc plans to buy back shares at 830,000 won per share, which is 11% higher than MBK’s revised up tender offer price of 750,000 won.
Choi family/Bain Capital’s efforts to conduct a massive share buyback and cancellation at higher prices than the market price goes against the globally accepted market practices.

KOSPI200 Index Rebalance Preview: 4 Adds, 5 Deletes Likely in December

By Brian Freitas

85% of the way through the review period, there could be 4 adds and 5 deletes for the Korea Stock Exchange KOSPI 200 (KOSPI2 INDEX) in December.
The impact on the potential inclusions ranges from 1.4-17 days of ADV while the impact on the potential deletions varies from 4-8 days of ADV.
The potential adds outperformed the potential deletes early in the review period before giving up all the gains over the following months.

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Oct 02

Daily Brief South Korea: Young Poong Precision, Young Poong, K Bank and more

By Smartkarma Daily Briefs | Daily Briefs, South Korea

In today’s briefing:

Choi Family Launches a Counter Tender Offer for Young Poong Precision
Choi Drops a Counter-Tender for Young Poong Precision at ₩30,000 Before the Market Bell Tomorrow
Young Poong Precision (036560 KS): Choi’s Opening Salvo
Korean Holdcos Vs Opcos Gap Trading Opportunities in 4Q 2024
K Bank IPO – Should Price Below Its Range

Choi Family Launches a Counter Tender Offer for Young Poong Precision

Choi family has launched a counter tender offer for Young Poong Precision at the tender offer price of 30,000 won (20% higher than MBK’s 25,000 won tender offer price).
The tender offer involves a plan to acquire 3,837,500 shares (24.36% of outstanding shares) of Young Poong Precision.
All eyes are on the court’s decision on the injunction application for ‘prohibition of acquisition of treasury stocks by Korea Zinc’, which is expected to be announced on 2 October.

Choi Drops a Counter-Tender for Young Poong Precision at ₩30,000 Before the Market Bell Tomorrow

Choi aims to acquire 3.84 million shares (24.36%) of Young Poong Precision at ₩30,000 each, with a tender period from October 2 to November 1, managed by Hana Securities.
Seoul Economic Daily may not be as prominent, but they reliably scoop this type of news, making it likely Choi will announce their counter-tender for Young Poong Precision tomorrow.
MBK targets the full 49.14% stake, while the Choi family seeks about half, creating proration risk, which may still make MBK’s lower offer more appealing to shareholders.

Young Poong Precision (036560 KS): Choi’s Opening Salvo

The Choi family have launched a Tender Offer to acquire 3.937mn shares (25%) of Young Poong Precision (036560 KS) (YPP) at ₩30,000/share, 20% above MBK/Young Poong (000670 KS)‘s revised terms.
YPP’s key attraction is its 1.85% stake in Korea Zinc (010130 KS), which is the ultimate prize in this tussle between the Choi and Jang families.
Choi’s Offer runs from today (2nd October) to 21 October. There is no minimum acceptance threshold. If successful, the Choi’s stake increases to 60.45% from 35.45% currently.

Korean Holdcos Vs Opcos Gap Trading Opportunities in 4Q 2024

In this insight, we highlight the recent pricing gap divergences of the major Korean holdcos and opcos which could provide trading opportunities in 4Q 2024.
Volatility has been high in the Korean stock market in the past several weeks resulting in some interesting widening of some gaps among numerous holdcos and opcos in Korea.
Of the 38 pair trades, 19 of them involved holdcos outperforming opcos in the past six months and the other 19 opcos outperforming holdcos in the same period.

K Bank IPO – Should Price Below Its Range

By Sumeet Singh

K Bank (279570 KS) plans to raise up to US$740m in its upcoming South Korean IPO.
K Bank is one of three Internet-only banks in Korea. It provides a full range of commercial banking products and services.
In our previous note, we have looked at the company’s past performance and undertaken a peer comparison. In this note, we will talk about valuations.

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Oct 01

Daily Brief South Korea: Leeno Industrial, Shinsegae Eng & Construction, Doosan Robotics , Korea Zinc and more

By Smartkarma Daily Briefs | Daily Briefs, South Korea

In today’s briefing:

NPS Cash Inflow Projections for KRX Value-Up Index & Surging Interest in KOSDAQ Stocks
Shinsegae E&C (034300 KS)’s Delisting Offer
End of Mandatory Lock-Up Periods for 39 Companies in Korea in October 2024
(Mostly) Asia M&A, Sep 2024: GTJA/Haitong Sec, Korea Zinc/YPP, Hotel Property, Virgin Money, Raysum

NPS Cash Inflow Projections for KRX Value-Up Index & Surging Interest in KOSDAQ Stocks

NPS will likely use the KRX Value-Up Index as its benchmark, with Long-Term Growth and Value categories likely to adopt it.
When NPS shifts to the Value-Up Index, KOSDAQ stocks will likely drive significant flow impacts due to their lower overlap.
These non-overlapping KOSDAQ stocks, attracting over 1 trillion won, could see significant price impacts as funds gradually flow in.

Shinsegae E&C (034300 KS)’s Delisting Offer

Construction services play Shinsegae E&C (034300 KS) has announced a Tender Offer from E Mart (139480 KS) for 27.33% of shares out, at ₩18,300/share, a 14% premium to undisturbed.
E Mart holds 70.46% – and the company holds 2.21% in treasuries – therefore, E Mart requires ~22% of the remaining ~27% held by minorities to tender and force delisting.
Super clean deal. E Mart will acquire all shares tendered. The Offer kicks off today, and closes on the 29th October. There is no minimum tendering % condition.

End of Mandatory Lock-Up Periods for 39 Companies in Korea in October 2024

We discuss the end of the mandatory lock-up periods for 39 stocks in Korea in October 2024, among which four are in KOSPI and 35 are in KOSDAQ.
These 39 stocks on average could be subject to further selling pressures in October and could underperform relative to the market.
The top three market cap stocks including those of which at least 1% of outstanding shares could be sold in October are Korea Zinc, Doosan Robotics, and Kolon TissueGene.

(Mostly) Asia M&A, Sep 2024: GTJA/Haitong Sec, Korea Zinc/YPP, Hotel Property, Virgin Money, Raysum

For the month of September 2024, 15 new transactions (firm and non-binding) were discussed on Smartkarma with an overall announced deal size of ~US$23bn.
The average premium for the new transactions announced (or first discussed) in September was ~43%. The average premium YTD is ~44%
This compares to the average premium for transactions in 2023 (117 transactions), 2022 (106), 2021 (165), 2020 (158), and 2019 (145 ) of 39%, 41%, 33%, 31%, and 31% respectively.

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Sep 30

Daily Brief South Korea: Shinsegae Eng & Construction, Wonik Ips and more

By Smartkarma Daily Briefs | Daily Briefs, South Korea

In today’s briefing:

Emart’s Tender Offer for Shinsegae Construction: Arb Trading Angles
FnGuide Semiconductor Top10 Index Rebalance Preview: Wonik IPS to Replace ISC
Tender Offer and Taking Private of Shinsegae E&C by E Mart

Emart’s Tender Offer for Shinsegae Construction: Arb Trading Angles

E Mart Inc is launching a tender offer for 27.33% of Shinsegae Eng & Construction, offering ₩18,300 per share, a 14% premium, from September 30 to October 29.
This tender’s got zero cancellation or proration risk since they’re all in to buy every share tendered. That makes it a prime event for close spread tracking and trading opportunities.
Emart needs 95% of Shinsegae Construction’s shares to delist, requiring 22% of the remaining 27%. If they can’t get it, a stock swap with Emart shares is likely.

FnGuide Semiconductor Top10 Index Rebalance Preview: Wonik IPS to Replace ISC

By Brian Freitas

Today is the last trading day in the review period for the October rebalance of the FnGuide Semiconductor Top10 Index.
Wonik Ips (240810 KS) is a high probability add and ISC Co Ltd (095340 KS) is a high probability delete. This will reverse the changes from the April rebalance.
Passive trackers will need to buy over 3.5x ADV in Wonik Ips (240810 KS) and sell nearly 2x ADV in ISC Co Ltd (095340 KS).

Tender Offer and Taking Private of Shinsegae E&C by E Mart

E Mart Inc (139480 KS) is conducting a tender offer of 27.33% of Shinsegae Eng & Construction (034300 KS) (2,126,611 shares) and trying to take the company private afterwards.
The tender offer price is 18,300 won, which is 14% higher than the closing price on Friday (27 September).
Tender offer is likely to result in higher price of Shinsegae E&C in the near term but it could be difficult for E Mart to take it private this year.

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Sep 29

Daily Brief South Korea: Kum Yang and more

By Smartkarma Daily Briefs | Daily Briefs, South Korea

In today’s briefing:

Kumyang’s Capital Raise Drop: Breaking It Down from an Arb Trading Play
Kum Yang: Rights Offering Capital Raise of 450 Billion Won

Kumyang’s Capital Raise Drop: Breaking It Down from an Arb Trading Play

Kumyang’s major shareholders are backing the capital raise, committing ₩160B of the ₩450B total. We’re also likely to see some robust price support for the stock rights in early phases.
Institutional investors still make up about 10% of the SO, with around 8% being active players. These guys could easily start dumping stock rights in bulk.
Retail holds nearly 50% of the SO, increasing volatility and boosting chances for arb spreads. Kumyang’s stock futures have solid liquidity, making it a prime arb trading setup.

Kum Yang: Rights Offering Capital Raise of 450 Billion Won

Kum Yang announced a rights offering capital raise of 450 billion won which will be used for facility investments and debt repayment.
The estimated rights offering price is 38,950 won, which is 31% lower than current price (56,500 won).
We remain negative on Kum Yang. Despite the sharply lower rights offering price relative to current price, we would avoid the rights offering.

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Sep 28

Daily Brief South Korea: Korea Zinc, Hana Financial and more

By Smartkarma Daily Briefs | Daily Briefs, South Korea

In today’s briefing:

Latest Forecast for Korea Zinc’s Tendering Rate
Hana Financial (086790 KS); Error of Omission from the Value-Up Index?

Latest Forecast for Korea Zinc’s Tendering Rate

Overseas institutions might tender around 4%, locals about 6%, giving a realistic max of 10%. MBK may struggle to even reach that minimum of 7%.
Mirae Asset and Samsung Life, holding the largest portion of the targetable stakes, hinted they’ll participate in the tender but won’t tender all their shares.
Allocation risk for the tender is minimal, but cancellation risk remains. MBK may barely exceed the 7% minimum, making predictions tough and reducing chances of a post-tender stock price drop.

Hana Financial (086790 KS); Error of Omission from the Value-Up Index?

By Victor Galliano

Hana Financial, along with KB Financial did not make the cut for the Korea Value-up index announced on the 24th September; Hana apparently fell short of the PBV ratio threshold
Despite being excluded from the Value-up Index, Hana remains our core South Korean bank pick for its attractive valuations, low PEG, solid core capital ratio and strong credit quality credentials
We believe Hana stands out positively on fundamentals and return trends versus its peers, and there is also potential for its inclusion in a planned rebalancing scheduled in December

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Sep 27

Daily Brief South Korea: KB Financial, K Bank and more

By Smartkarma Daily Briefs | Daily Briefs, South Korea

In today’s briefing:

Lowdown from KRX’s Emergency Presser on the Value-Up Index Today
A Special Rebalancing Of Korea Value-Up Index Is Likely in December 2024
K Bank IPO (279570 KS): Index Inclusion Timeline

Lowdown from KRX’s Emergency Presser on the Value-Up Index Today

KRX faces challenges balancing the Value-Up Index as a benchmark while ensuring real disclosures, but passive inflows remain steady with local pension funds still interested.
KRX’s potential December mini rebalancing increases uncertainty but may just lead to minor tweaks, adding KB and Hana while removing a few stocks from Communication Services.
The Value-Up Index resembles the KOSPI 200, using 30-40% GICS stocks and KOSDAQ 150, which may spark trading strategies focused on performance gaps within sectors.

A Special Rebalancing Of Korea Value-Up Index Is Likely in December 2024

On 26 September, the Korea Exchange announced that it is considering a “special rebalancing” of the Korea Value-Up Index in December 2024.
In our view, the probability of this special rebalancing occurring by the end of this year is high at about 85%+.
If there is a special rebalancing, KB Financial, Hana Financial, Samsung Life Insurance, SK Telecom, and KT could be considered the top candidates for inclusion.

K Bank IPO (279570 KS): Index Inclusion Timeline

By Brian Freitas

K Bank (279570 KS) is looking to raise up to KRW 984bn (US$738m), valuing the company at KRW 5tn (US$3.75bn) at the top end of the IPO price range.
Close peer KakaoBank (323410 KS) and regional peer SBI Sumishin Net Bank (7163 JP) have been trading lower recently and the IPO could price lower than the top end.
The change in KOSPI2 INDEX Fast Entry rules will leave the stock out of the index till June 2025. Inclusion in global indices will have to wait a while too.

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Sep 26

Daily Brief South Korea: Huchems Fine Chemical, Korea Zinc, Samsung C&T and more

By Smartkarma Daily Briefs | Daily Briefs, South Korea

In today’s briefing:

Crunching Passive Impact Numbers for KRX Value-Up Index Names, Based on KRX’s Free-Float Rate Data
MBK Raises Tender Prices: ₩750,000 for Korea Zinc & ₩25,000 for Young Poong Precision
MBK Raises Tender Offer Price on Korea Zinc by 13.6% to 750,000 Won
NPS Sues Samsung’s Lee Jae-Yong
MBK Bumps Offers For Both Korea Zinc and Young Poong Precision

Crunching Passive Impact Numbers for KRX Value-Up Index Names, Based on KRX’s Free-Float Rate Data

KRX 300 hit 1 trillion won AUM fast, but with local pensions more aggressive, the value-up’s early AUM could top 1 trillion, hitting up to 3 trillion in six months.
Hanjin KAL, S1 Corp, Hyundai Elevator, Nice Info, and Huchems are set for strong price action. The financial sector also stands out, seeing the biggest impact compared to other sectors.
Small caps under 1 trillion won see little passive impact, but solid plays exist under 3 trillion, so splitting large and small caps won’t limit target options much.

MBK Raises Tender Prices: ₩750,000 for Korea Zinc & ₩25,000 for Young Poong Precision

Hankyung reports MBK will raise Korea Zinc’s tender offer to ₩750,000 (14%) and Young Poong Precision’s to ₩25,000 (25%) before today’s market opens.
Hankyung and Maeil are top sources for market scoops, so it’s almost certain MBK leaked the tender price hike ahead of today’s trading.
MBK leaves Choi just five trading days to respond. Korea Zinc plans to raise ₩400 billion, but it’s still not enough for a counter-bid.

MBK Raises Tender Offer Price on Korea Zinc by 13.6% to 750,000 Won

MBK announced that it will raise the tender offer prices on Korea Zinc by 13.6% to 750,000 won and Young Poong Precision by 25% to 25,000 won.
If 100% of the 3,024,881 shares of Korea Zinc tender offer is completed, at the revised tender offer price of 750,000 won, this would be 2.27 trillion won in amount.
In term of probabilities, we would put a 80-85% probability that MBK/Jang family successfully completes the tender offers and takes over the controlling stakes of these two companies.

NPS Sues Samsung’s Lee Jae-Yong

NPS has filed a lawsuit against Samsung Group Chairman Lee Jae-Yong and others involved in the merger of Samsung C&T (028260 KS) and Cheil Industries nearly nine years ago.
NPS is trying to recover damages estimated at up to 675 billion won.
If NPS is able to win in this lawsuit, it could result in other minority shareholders launching their own lawsuits which could further raise concerns on Samsung C&T.

MBK Bumps Offers For Both Korea Zinc and Young Poong Precision

MBK Partners has increased the Tender Offer prices for Korea Zinc (010130 KS) by 13.6% to ₩750,000 and Young Poong Precision (036560 KS) by 25% to ₩25,000.
All other terms remain the same. IF MBK secures the maximum 14.61% in KZ, this will be Korea’s largest-ever Tender Offer.
MBK made a public offering correction announcement today. The Choi family now has 5 business days in which to respond with a counteroffer.

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Sep 25

Daily Brief South Korea: Woori Financial Group , Samsung Electronics, K Bank, Korea Stock Exchange KOSPI 200, Green Cross and more

By Smartkarma Daily Briefs | Daily Briefs, South Korea

In today’s briefing:

All the Scoop on the Korea Value-Up Index
Korea Exchange Announces The Korea Value Up Index
New Fast Entry Rule for KOSPI 200 & KOSDAQ 150: Post-IPO Price Swings Ramping Up
K Bank IPO: Valuation Insights
EQD | A Very Weak KOSPI 200 Is Ready to Pull Back Again
Green Cross (006280 KS): Alyglo Is Accelerating U.S. Market Entry; Base Business Shows Strength

All the Scoop on the Korea Value-Up Index

The index focuses on qualitative factors like capital efficiency and shareholder returns, but efforts to impose sector balance may have overextended its market benchmark role.
Some companies not fitting the ‘value-up’ narrative got included, while market favorites were sidelined by sector rankings, which is puzzling given the index’s original goal.
Still, with rebalancing cut down to once a year, we should expect the flow impact on the index names to hit harder than initially thought compared to their sector peers.

Korea Exchange Announces The Korea Value Up Index

Korea Exchange announced the long awaited Korea Value Up Index (“K Value Up Index”) (composed of 100 stocks) today.
Korea Exchange used a 5-step screening process to select the 100 companies in this index including market cap, profitability, shareholder returns, market evaluation, and capital efficiency.
This Value Up index is part of the bigger “Corporate Value Up ” program in Korea. These efforts to improve Korea’s corporate governance policies is a marathon, not a sprint.

New Fast Entry Rule for KOSPI 200 & KOSDAQ 150: Post-IPO Price Swings Ramping Up

Besides ranking in the top 50 by market cap, it must also meet a minimum float-adjusted cap for K200 fast entry: at least 50% of the 50th-ranked stock’s market cap.
Even if new stocks meet KRX’s float cap, their actual float share volume may still be low, risking inflation from local pension funds’ preemptive passive inflows post-listing.
This could reduce predictability for KOSPI 200 fast entry, increasing price swings post-listing and forcing traders to develop new volatility strategies after IPOs.

K Bank IPO: Valuation Insights

By Arun George

K Bank (279570 KS) is a Korean internet bank. It has launched an IPO to raise up to US$734 million.
We previously discussed the IPO in K Bank IPO: The Bear Case and K Bank IPO: The Bull Case.
We examine the syndicate’s valuation methodology. Our analysis suggests that K Bank is unattractively valued in the IPO price range. We would pass on the IPO.

EQD | A Very Weak KOSPI 200 Is Ready to Pull Back Again

By Nico Rosti

The last 2 weeks have been painful for investors that were LONG the KOSPI 200 INDEX, and this week is not very promising either.
The index has advanced less than 3% since its last WEEKLY negative Close on September 6th.
The index is in its 3rd consecutive week up (to be confirmed this Friday at the Close) but the current pattern usually ends on the third week up and reverses.

Green Cross (006280 KS): Alyglo Is Accelerating U.S. Market Entry; Base Business Shows Strength

By Tina Banerjee

Green Cross (006280 KS) has gained access to 80% of privately insured members in the U.S. for blood product Alyglo, which has been included in formularies of three major insurers.
Green Cross targets to generate $50M revenue from Alyglo this year. The target seems to be conservative. The company further aims to sustain annual growth of 50%+, which is achievable.
The company reported sequential improvement in 2Q24, with 17% QoQ revenue growth and significant improvement in gross margin. Revenue growth of 7–8% is expected during 2024–2026.

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Sep 24

Daily Brief South Korea: SK Inc, Korea Zinc, K Bank and more

By Smartkarma Daily Briefs | Daily Briefs, South Korea

In today’s briefing:

Why MBK’s Move into Local Hostile Takeover Scene Matters: Focus on SK Inc and Lotte Corp
What Are Locals Saying About Potential Allies to Choi Family in Fight for Korea Zinc?
K Bank IPO – Peer Comparison – Lags Its Main Peer on Most Fronts

Why MBK’s Move into Local Hostile Takeover Scene Matters: Focus on SK Inc and Lotte Corp

The new 100% mandatory tender offer rule could push buyers to lower premiums for major shareholders, potentially increasing hostile takeover attempts as costs get shared with minority shareholders.
It looks like MBK is eyeing this situation as a chance to redefine their strategy. This really shows how serious MBK is about the Korea Zinc deal.
Watch for top-tier assets available via hostile takeovers, particularly companies like SK Inc and Lotte Corp, where low shareholder stakes may lead to management conflicts.

What Are Locals Saying About Potential Allies to Choi Family in Fight for Korea Zinc?