South Korea Archives | Page 41 of 127

Sep 14

Daily Brief South Korea: Korea Zinc, Young Poong and more

By Smartkarma Daily Briefs | Daily Briefs, South Korea

In today’s briefing:

StubWorld: Young Poong & MBK Jostle For Control Of Korea Zinc (010130 KS)
NAV Analysis of Young Poong and Three Potential Scenarios of Choi Family’s Strategy to Fight Back
Clearing up Legal Confusion on Counter Offers and Getting a Clear Read on the Korea Zinc Tender

StubWorld: Young Poong & MBK Jostle For Control Of Korea Zinc (010130 KS)

By David Blennerhassett

MBK has teamed up with Young Poong (000670 KS) to secure control of Korea Zinc (010130 KS) via Partial Tender Offers for Korea Zinc and Young Poong Precision (036560 KS).
Preceding my comments on Young Poong, Korea Zinc, and Young Poong Precision are the current setup/unwind tables for Asia-Pacific Holdcos.
These relationships trade with a minimum liquidity of US$1mn, and a % market capitalisation >20%.

NAV Analysis of Young Poong and Three Potential Scenarios of Choi Family’s Strategy to Fight Back

By Douglas Kim

We have significantly raised the NAV of Young Poong to 965,193 won (up 105% than previously). Our current NAV estimate of the company is 150% higher than current price.
Some traders have been positioning for Young Poong to be deleted from the KOSPI200 in the next round of rebalancing. Young Poong is not likely to be deleted from KOSPI200.
We also provide three potential scenarios of the Choi family’s strategy to fight back to gain control of Korea Zinc.

Clearing up Legal Confusion on Counter Offers and Getting a Clear Read on the Korea Zinc Tender

By Sanghyun Park

Since Choi and his affiliates can’t buy shares directly, his only play is to recruit more white knights to boost his stake.
He needs at least 6% from the 23% free float, costing over ₩800 billion. This hefty price tag is why the stock hasn’t moved much from the tender offer price.
The market isn’t ruling out Hyundai getting aggressive to secure Korea Zinc’s nickel, making this a hot trading point during the tender offer.

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Sep 13

Daily Brief South Korea: Korea Zinc, Young Poong Precision, DL Holdings Co and more

By Smartkarma Daily Briefs | Daily Briefs, South Korea

In today’s briefing:

MBK’s Dual Tenders for Korea Zinc and Youngpoong Precision: The Largest Deal Ever in Korea
MBK Partners and Jang Family Partner to Control Korea Zinc + Tender Offer of 14.6% of Korea Zinc
Tender Offer of 43.4% Stake in Young Poong Precision by MBK
KRX Releases November SSFs and SSOs Reshuffle: Here’s the Breakdown

MBK’s Dual Tenders for Korea Zinc and Youngpoong Precision: The Largest Deal Ever in Korea

By Sanghyun Park

MBK launches a tender offer to acquire 14.6% of Korea Zinc at ₩660,000 per share, a ₩2T deal with an 18.7% premium. Offer runs from September 13 to October 4.
On top of that, MBK’s also rolling out a tender offer for Young Poong Precision at ₩20,000 per share—a hefty 113% premium over yesterday’s close.
Spread action is possible if the Choi family counters, driving volatility. The market’s watching for a higher bid, which could create trading opportunities amid rising spread volatility.

MBK Partners and Jang Family Partner to Control Korea Zinc + Tender Offer of 14.6% of Korea Zinc

By Douglas Kim

After the market close on 12 September, Maekyung Business Daily reported that MBK Partners will become the largest shareholder of Korea Zinc (010130 KS) along with Young Poong (000670 KS).
MBK Partners, along with Youngpoong and advisor Jang Hyung-jin, also plans to conduct a tender offer of 14.6% stake in Korea Zinc.
The tender offer price for Korea Zinc is 660,000 won per share, which is 18.7% higher than the closing price on 12 September.

Tender Offer of 43.4% Stake in Young Poong Precision by MBK

By Douglas Kim

After the market close on 12 September, Hankyung Business Daily reported that MBK Partners plans to conduct a tender offer of 43.43% stake in Young Poong Precision.
The tender offer price is 20,000 won per share (113% higher than the closing price on 12 September).
Choi family currently controls Young Poong Precision. MBK plans to secure a controlling stake and obtain voting rights for the 1.85% stake in Korea Zinc held by Young Poong Precision.

KRX Releases November SSFs and SSOs Reshuffle: Here’s the Breakdown

By Sanghyun Park

With the November reshuffle, single stock futures rise from 222 to 258 (+36) and single stock options increase from 52 to 58 (+6) across KOSPI 200 and KOSDAQ Global.
The main takeaway from this reshuffle is the price impact from a short-term volume spike as market makers jump into newly listed single-stock futures.
The volume surge in spot markets for newly listed assets consistently drives positive price impact, most notably right after listing, rather than waiting until contract expiry.

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Sep 12

Daily Brief South Korea: Samsung Electronics Pref Shares, Hanwha Galleria , The Born Korea and more

By Smartkarma Daily Briefs | Daily Briefs, South Korea

In today’s briefing:

Exploring Why Samsung Electronics’ Pref Discount Narrowing Took a Sharp Turn Yesterday
Hanwha Galleria Tender Results Are in with No Proration Issue Despite a Fat Spread. What’s Next?
The Born Korea IPO Valuation Vs Recent M&A Valuation of Compose Coffee by Jollibee Foods
Kim Dong-Sun Likely to Purchase More Shares of Hanwha Galleria Post Tender Offer

Exploring Why Samsung Electronics’ Pref Discount Narrowing Took a Sharp Turn Yesterday

By Sanghyun Park

Samsung’s preferred shares lagged significantly behind the common shares yesterday, showing the largest daily sigma move we’ve seen in a while.
Samsung’s delayed value-up announcement, despite regulatory pressure, has fueled speculation about a potential Biologics stake purchase from C&T.
It’s time to pause the trade on Samsung’s preferred discount narrowing that I highlighted in early August. The main inflection point will be when Samsung makes its value-up announcement.

Hanwha Galleria Tender Results Are in with No Proration Issue Despite a Fat Spread. What’s Next?

By Sanghyun Park

Hanwha Galleria’s tender offer, led by Kim Dong-sun, closed today with a subscription rate just over 80%, according to the local brokerage after market close.
Retail investors in small caps like Hanwha Galleria often skip tender offers, hoping for price gains. Kim Dong-sun may try to buy the remaining 10-15% soon, possibly via open-market buys.
Watch for signs that Kim Dong-sun might go for a second tender to take Galleria private. He might be aiming to avoid taxes and boost his stake’s value.

The Born Korea IPO Valuation Vs Recent M&A Valuation of Compose Coffee by Jollibee Foods

By Douglas Kim

In this insight, we compare the IPO valuation of The Born Korea (475560 KS) versus the recent M&A valuation of Compose Coffee by Jollibee Foods (JFC PM).
Using the recent M&A multiples of Compose Coffee by Jollibee Foods suggests an attractive upside to The Born Korea (relative to the IPO price range).
No other listed company in Korea has a restaurant business model that is consistently profitable, with strong balance sheet, and solid sales growth as The Born Korea.

Kim Dong-Sun Likely to Purchase More Shares of Hanwha Galleria Post Tender Offer

By Douglas Kim

The tender offer period for Hanwha Galleria ended on 11 September. Its share price closed down 7.4% but still up 8.2% from its price prior to the tender offer announcement.
The local media accounts mentioned today that about 80-90% of the shares targeted in this tender offer have been filled.
If 90% of the tender offer is successful, Kim Dong-Sun’s stake in the company will rise from 2.3% to 18.1%.

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Sep 11

Daily Brief South Korea: KT Corp, LG Electronics and more

By Smartkarma Daily Briefs | Daily Briefs, South Korea

In today’s briefing:

Timing a Trade to Capitalize on KT’s November Global Index Deletion and the ETF Recall
LG Electronics India IPO: Potential Big Gains. Booming Demand, Buoyant Valuations

Timing a Trade to Capitalize on KT’s November Global Index Deletion and the ETF Recall

By Sanghyun Park

KT’s foreign room is likely staying below 3.75% for November, setting up an ETF recall play. We’ve seen short-term buying pressure in similar past index reshuffles.
The ETF recall impact peaks right after the announcement. KT’s May downweight saw a 5% spike in two trading days post-announcement.
KT’s price moves more with downweights than SK Telecom’s because of higher overseas borrowing demand. This trend should hold, so setting up a position before the November announcement makes sense.

LG Electronics India IPO: Potential Big Gains. Booming Demand, Buoyant Valuations

By Devi Subhakesan

LG Electronics’s India business IPO could be valued above USD 7 billion, exceeding market expectations, driven by its dominant position in India’s growing home appliances market and strong sector valuations.
Favourable market conditions and robust sector growth make now an ideal time for LG Electronics (066570 KS) to launch its India IPO, securing high investor interest and compelling valuations.
In a recent interview, LG Electronics(066570 KS) CEO William Cho mentioned that an Indian market debut is one of several options being considered to revitalise the company’s consumer electronics business.

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Sep 10

Daily Brief South Korea: K Bank and more

By Smartkarma Daily Briefs | Daily Briefs, South Korea

In today’s briefing:

K Bank IPO – The Biggest IPO in Korea in 2024
The Story Behind K-Bank Leaking Pricing Details Before the IPO Prospectus Dropped

K Bank IPO – The Biggest IPO in Korea in 2024

By Douglas Kim

K Bank is the biggest IPO in Korea in 2024. The IPO price range is from 9,500 won to 12,000 won. It is offering 82 million shares in this IPO.
According to the bankers’ valuation, the expected market cap of the company is from 4.0 trillion won to 5.0 trillion won.
The IPO deal size is 779 billion (US$579 million) to 984 billion won (US$732 million).

The Story Behind K-Bank Leaking Pricing Details Before the IPO Prospectus Dropped

By Sanghyun Park

To justify a higher multiple, K-Bank is comparing itself to international internet banks, with KakaoBank as the only local peer. Differences in market conditions could complicate this comparison.
This might explains why K-Bank is cautiously testing the market by announcing the rights issue first and delaying the prospectus, amid regulatory crackdowns on inflated IPOs.
Controversy over high multiples from overseas peers and KakaoBank’s legal discount will be key in setting K-Bank’s IPO pricing.

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Sep 09

Daily Brief South Korea: Hankook & Company, Hyundai Motor India and more

By Smartkarma Daily Briefs | Daily Briefs, South Korea

In today’s briefing:

KRX Sector Rebalance Shocker: Massive Flow Impact on Hankook & Company
Weekly Consumer Tales: India Festive Season: Hyundai Slows, Toyota Aces. First Cry Fails to Cheer

KRX Sector Rebalance Shocker: Massive Flow Impact on Hankook & Company

By Sanghyun Park

Hankook & Company is unexpectedly entering Autos, the only large-cap inclusion, likely getting a significant weight and facing a massive flow impact.
Like BBIG, this single-day flow event driven by one or two ETFs means smaller front-running impact, but names like Hankook & Company could see early positioning due to massive flows.
I’ll position in big impact names two days before the ETF rebalance trading. I’ll then go long on a basket of those with over 0.5x ADTV at Wednesday’s close.

Weekly Consumer Tales: India Festive Season: Hyundai Slows, Toyota Aces. First Cry Fails to Cheer

By Devi Subhakesan

Welcome to Consumer Tales & Trends, your weekly roundup of the latest corporate developments, investment reports and sector events in the consumer industry.
Hyundai Motor India’s August dispatch volumes were down 8% versus previous year – mostly due to sluggish demand for hatchback segment amd intense competition in the SUV segment.
Toyota Motor (7203 JP) is on a fast track in India recording high double digit volume growth thanks mainly to successful launch of rebadged Suzuki models.

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Sep 08

Daily Brief South Korea: The Born Korea and more

By Smartkarma Daily Briefs | Daily Briefs, South Korea

In today’s briefing:

The Born Korea IPO Valuation Analysis

The Born Korea IPO Valuation Analysis

By Douglas Kim

According to our valuation analysis, it suggests an implied price of 34,365 won, which is 27% higher than the high end of the IPO price range.
We estimate The Born Korea to generate sales of 467.7 billion won (up 13.1% YoY) and operating profit of 31.4 billion won (up 22.8% YoY) in 2024.
We believe a premium to comps’ valuation is appropriate for The Born Korea mainly due to its higher sales growth, higher ROE, stronger balance sheet, and higher profit margins.

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Sep 07

Daily Brief South Korea: SK Biopharmaceuticals , Kangwon Land, Korea Stock Exchange KOSPI 200 and more

By Smartkarma Daily Briefs | Daily Briefs, South Korea

In today’s briefing:

Key Flow Trading Opportunities After KRX Suddenly Added POSCO Holdings to the BBIG Battery Mix
Kangwon Land: Regulatory Improvements to Result in Higher Earnings and Valuation Multiples Expansion
EQD | KOSPI 200 OVERSOLD, It Could Bounce This Week

Key Flow Trading Opportunities After KRX Suddenly Added POSCO Holdings to the BBIG Battery Mix

By Sanghyun Park

Got surprised by KRX adding POSCO Holdings to the Battery Index. Normally predictable rebalancing went off-script with this unexpected move.
POSCO Holdings, not Posco Future M, replaced Ecopro BM. Plus, Alteogen Inc is replacing SK Biopharmaceuticals in the BBIG, driving notable flow.
Consider a day trading long POSCO Holdings and short Ecopro BM. Also, a long-short futures basket could be worth exploring for names with big passive flows.

Kangwon Land: Regulatory Improvements to Result in Higher Earnings and Valuation Multiples Expansion

By Douglas Kim

Kangwon Land has received approval to expand its total casino area from 14,512 square metres previously to 20,260 square metres (up 40%).
The betting limits in the foreign players only zone will increase significantly from 300,000 won (about US$225) to 300 million won (about US$225,000). This represents a 1000x increase.
We would argue that there is a high probability of Kangwon Land benefiting not just from higher sales and profits but also from higher valuation multiples.

EQD | KOSPI 200 OVERSOLD, It Could Bounce This Week

By Nico Rosti

The KOSPI 200 has corrected for 3 weeks in a row, reaching a low at 340.08 last week. It is WEEKLY OVERSOLD, according to our models.
In a previous insight we theorized the index could go higher (but only for 1 week), however the rally never materialized. From there it went downhill, now it can bounce.
The support area between the last Close and 320 offers strong support, according to our WEEKLY pattern models.

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Sep 06

Daily Brief South Korea: Kangwon Land, The Born Korea and more

By Smartkarma Daily Briefs | Daily Briefs, South Korea

In today’s briefing:

KOSPI Size Index Reshuffle Results Out Late Today: Early Positioning Delivered Big Gains
The Born Korea IPO Preview

KOSPI Size Index Reshuffle Results Out Late Today: Early Positioning Delivered Big Gains

By Sanghyun Park

For this September reshuffle, fewer factors affected price impact, so outlier chances were low. Biggest price moves typically occur 30 days before the effective date, especially during LARGE↔MID transitions.
Early positioning for this reshuffle paid off. Past trends suggest price action fades before the effective date, so consider exiting positions by tomorrow or early next week.
Small→Mid migrants historically show weak price impacts, with no clear correlation observed in this September reshuffle either. I’m avoiding those plays targeting the effective date for now.

The Born Korea IPO Preview

By Douglas Kim

The Born Korea is getting ready to complete its IPO in Korea in November. The total IPO offering is expected to range from 69 billion won to 84 billion won.
Based on the bankers’ valuation, the expected market cap of the company ranges from 357 billion won to 419 billion won.
The Born Korea was founded by Baek Jong-Won, the most famous celebrity chef in Korea.

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Sep 05

Daily Brief South Korea: Ecopro HN, Hojeon, POSCO Holdings, Hyundai Motor India and more

By Smartkarma Daily Briefs | Daily Briefs, South Korea

In today’s briefing:

Key Things to Watch in Ecopro HN’s Big Rights Offering
Ecopro HN: Rights Offering of 200 Billion Won
Hojeon: Activist Minority Investors Threaten to Sell Their Shares to a Competitor in a Block Deal
POSCO’s Early EB Payoff and Post-Value-Up Pivot Trading Angles
Hyundai Motor India: Feeling the Heat as SUV Rivals Surge

Key Things to Watch in Ecopro HN’s Big Rights Offering

By Sanghyun Park

Ecopro HN announced a ₩200 billion rights issue, offering 5.67 million shares (a 40% capital increase) with a stockholder allocation rate of 0.3 per share.
The extended timeline likely results from the issuer’s 20% discount push, with Daishin, an underdog banker, extending it to boost subscriptions despite risking price stability.
The strategy is to time entry when the stock rights and subscription costs create a solid spread versus the spot price, despite increased volatility making price predictions harder.

Ecopro HN: Rights Offering of 200 Billion Won

By Douglas Kim

On 4 September, Ecopro HN announced that it plans to conduct a rights offering capital raise of about 200 billion won.
The company plans to issue 5.67 million new shares and the expected rights offering price is 35,300 won (23% lower than current price).
We would not subscribe to this rights offering mainly due to lofty valuations, declining sales and profit growth, continued negative free cash flow, and concerns about excessive shares dilution.

Hojeon: Activist Minority Investors Threaten to Sell Their Shares to a Competitor in a Block Deal

By Douglas Kim

A group of minority investors started to go activist on Hojeon (111110 KS), demanding that the company increase its treasury share buybacks/cancellations, dividends, and cut CEO’s salary.
This coalition of minority investors has threatened to sell their shares to a competitor (Hansae) if the company does not abide by their demands.
Hojeon has attractive valuations and are trading at low multiples. It had P/E of 5x, EV/EBITDA of 3.4x, and P/B of 0.5x in 2023.

POSCO’s Early EB Payoff and Post-Value-Up Pivot Trading Angles

By Sanghyun Park

Key watchpoints: Will POSCO cancel the 3.4% treasury shares in Q4 and how will they replenish cash reserves after paying ₩1.5 trillion? Their moves could set trends.
POSCO might cancel these shares to boost their value-up index weight. This could drive up the stock price, giving them an opening to improve their cash position through equity financing.
Expect a short-term stock pivot with value-up index and ETFs driving inflows and price pops. After this, equity financing may signal stock peaks, with POSCO and others leading the trend.

Hyundai Motor India: Feeling the Heat as SUV Rivals Surge

By Devi Subhakesan

Hyundai Motor India reported an 8% decline in monthly dispatch volumes ahead of India’s festive season, coinciding with a sharp increase in shipments by competitors in the SUV space.
Mahindra & Mahindra (MM IN) , Toyota Kirloskar Motor ( Toyota Motor (7203 JP) JV), and Kia Corp (000270 KS) each posted high double-digit volume growth in August.
Overall, India’s domestic Passenger Vehicle sales growth for the April-August period has slowed year-on-year after two years of strong post-COVID momentum.

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South Korea Archives | Page 41 of 127 | Smartkarma

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