South Korea Archives | Page 70 of 126 | Smartkarma

Celltrion Chairman Seo made a public statement, affirming that they are prepared to bear the entire cost, even if it exceeds the ₩1T ceiling, and proceed with the merger.
The relatively substantial cost risk associated with Celltrion Inc. due to the involvement of NPS is causing the merger swap spread to widen once more in comparison to Celltrion Healthcare.
If the prices persist above the appraisal rights exercise prices, the relative cost risk for Celltrion Inc. could escalate, leading to a significant widening of the swap spread.

Merger Arb Mondays (23 Oct) – Eoflow, Celltrion Healthcare, JSR, Origin, Lithium Power, Poly Culture

We summarise the latest spreads and newsflow of merger arb situations we cover across Hong Kong, Australia, New Zealand, Singapore, Japan, Indonesia, Malaysia, Philippines, Thailand and Chinese ADRs.
Highest spreads – 111 Inc (YI US), Eoflow (294090 KS), Hollysys Automation Technologies (HOLI US), JSR Corp (4185 JP), Haitong International Securities Group (665 HK), Lithium Power International (LPI AU).
Lowest spreads – Healius (HLS AU), Pact Group Holdings (PGH AU), Origin Energy (ORG AU), T&K Toka Co Ltd (4636 JP), Kenedix Retail REIT (3453 JP), Chindata Group (CD US).

Seoul Guarantee Insurance Corp IPO – Cancelled

Seoul Guarantee Insurance (031210 KS) stated today that it will cancel its IPO mainly due to low demand.
Despite the company’s emphasis on high dividends and high ROA of 5.8% in 2022 (5x average ROA of the domestic non-life insurance companies), many institutional investors emphasized on the negatives.
The major negatives include high interest rates, lack of growth potential, concerns about additional shares sale overhang, and unattractive valuations.

KOSDAQ150 Index Rebalance Preview: Big Sell Off Among Potential Inclusions as Momentum Fades

By Brian Freitas

With the review period nearly complete, we see 15 potential changes for the KOSDAQ 150 Index (KOSDQ150 INDEX) at the December rebalance.
There could be index changes even before the December rebalance if there are prolonged trading suspensions and stocks migrate from the KOSDAQ Market to the KOSPI Market.
The potential adds have sold off hard over the last six weeks, similar to the performance at the June rebalance.

KOSPI200 Index Rebalance Preview: The Tail End

By Brian Freitas

With the review period nearly complete, we expect 7 changes to the Korea Stock Exchange KOSPI 200 (KOSPI2 INDEX) in December. Couple of changes are low probability though.
The Materials sector could be the biggest gainer at the rebalance while nearly all deletions could come from the Consumer Discretionary sector.
The impact on the potential inclusion ranges from 0.15-15 days of ADV while the impact on the potential deletions varies from 1.7-8.1 days of ADV.

Understanding Kakao Bank’s Overhang Risk from Legal Consequences for Kakao Corp

Financial regulators will likely mandate Kakao Corp to divest all but 10% of its stake in Kakao Bank. The deadline is six months from the date of the order.
If this issue is resolved through the forced sale of the stake, it is anticipated that this stake volume will eventually be released into the market through block deals.
Kakao may proactively divest its Kakao Bank stake to transfer the majority shareholder position to KIS, regardless of the judicial outcome.

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Oct 23

Daily Brief South Korea: Korea Stock Exchange KOSPI 200 and more

By Smartkarma Daily Briefs | Daily Briefs, South Korea

In today’s briefing:

EQD | KOSPI 200 Falling, LONG Support

EQD | KOSPI 200 Falling, LONG Support

By Nico Rosti

The KOSPI 200 INDEX closed down last week (CC=-1) and is going towards the Q2/median support at 314. The index is also OVERSOLD MONTHLY (CC=-3)
One possible scenario is to see the index downtrending into early/mid-November, find a bottom, and then begin a counter-rally from there.
The index could go down more this week, but a LONG trade could begin at 314 support, and if that does not hold, the next support area is at 306.

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Oct 20

Daily Brief South Korea: Eugene Technology, Kolmar Korea and more

By Smartkarma Daily Briefs | Daily Briefs, South Korea

In today’s briefing:

Another Hidden Passive Flow Trading Opportunity Is Captured in Korea: SOL Semicon ETF December Rebal
A Merger Share Swap Between Kolmar Korea and Yonwoo

Another Hidden Passive Flow Trading Opportunity Is Captured in Korea: SOL Semicon ETF December Rebal

For the impending December rebalancing, the effective date is set for December 18th, while the ETF rebalancing trading will take place on December 15th.
Jusung Engineering and Eugene Technology are likely to be added, while Lake Materials and SFA Semicon are expected to exit the index.
Aside from constituent changes, Hansol Chemical is anticipated to significantly benefit from the passive impact as the primary beneficiary of the ceiling reversion.

A Merger Share Swap Between Kolmar Korea and Yonwoo

On 19 October, Kolmar Korea announced that it will conduct a merger share swap with Yonwoo early next year to make it into a 100% wholly owned subsidiary.
We believe the merger share swap agreement between Kolmar Korea and Yonwoo is likely to have positive impact on both Kolmar Korea and Yonwoo.
After this share swap is completed, Yonwoo will be delisted. This merger is aimed at improving the inefficient governance structure caused by duplicate listings and improve management efficiency.

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Oct 19

Daily Brief South Korea: KB Financial, Youngpoong Paper Mfg, DL E&C , Douzone Bizon, Korea Stock Exchange KOSPI 200 and more

By Smartkarma Daily Briefs | Daily Briefs, South Korea

In today’s briefing:

A Shift in TIGER Top 10 ETF December Rebalancing: KB Financial Newly In But Not Ecopro Co
Youngpoong Paper Mfg: Concerns About CFD Related Selling – Another Margin Call?
Small Scale Share Swap Between DL E&C and DL Construction + Delisting
Douzone Bizon: Cooperating with Amazon Web Services to Enter the Global SaaS Market
EQD | KOSPI 200 Frail WEEKLY Rally Is Ending

A Shift in TIGER Top 10 ETF December Rebalancing: KB Financial Newly In But Not Ecopro Co

While Ecopro Co’s stock has undergone significant corrections since August, KB Financial has sustained an upward trajectory, leading to a significant reversal in float-adjusted market cap.
The current disparity between the two exceeds ₩2T, making it challenging to anticipate another reversal until the screening period.
Ecopro Co and LG Energy Solution also warrant attention due to the narrow gap in their float-adjusted market capitalization. We should monitor any changes in their market capitalization moving forward.

Youngpoong Paper Mfg: Concerns About CFD Related Selling – Another Margin Call?

Youngpoong Paper Mfg’s shares declined sharply by 30% to 33,900 won today, trading only 190k shares (3% of ADTV).
There is high probability that this sell-off could be related to CFD related margin call.
Daiyang Metal, the largest shareholder of Youngpoong Paper Mfg, also dropped limit down today. The Korea Exchange has temporarily suspended trading of both Youngpoong Paper and Daiyang Metal.

Small Scale Share Swap Between DL E&C and DL Construction + Delisting

On 18 October, DL E&C announced that it will conduct a small scale share swap with DL Construction to make it into a 100% wholly owned subsidiary.
We believe this merger share swap will have a positive impact on both DL E&C (375500 KS) and DL Construction (001880 KS) shares.
To prevent shares dilution, DL E&C plans to cancel the same number of treasury shares of common stock as the number of newly issued shares of DL E&C common stock.

Douzone Bizon: Cooperating with Amazon Web Services to Enter the Global SaaS Market

On 16 October, Douzone Bizon (012510 KS) announced that it is entering the global software-as-a service (SaaS) market in cooperation with Amazon Web Services (AWS).
The agreement stipulates that Douzone Bizon will develop global SaaS through AWS support and enter overseas markets.
We believe shares of Douzone Bizon have been oversold. Valuations have become more attractive and its cooperation with AWS is also likely to improve the company’s overseas sales and profits.

EQD | KOSPI 200 Frail WEEKLY Rally Is Ending

By Nico Rosti

The KOSPI 200 Index is currently rising for the 3rd week in a row and approaching the Q2 WEEKLY resistance level, but it’s a very weak rally.
Between 329 and 331 there id a good area to go SHORT, the index could fall for 2-3 weeks from here, into early November.
A negative close in October would be =3 months down in a row (CC=-3), November in that case would have good odds for a rebound and close up.

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Oct 18

Daily Brief South Korea: Pan Ocean and more

By Smartkarma Daily Briefs | Daily Briefs, South Korea

In today’s briefing:

Pan Ocean To Sell 5.8% Stake in Hanjin Kal To Secure Funds to Acquire HMM

Pan Ocean To Sell 5.8% Stake in Hanjin Kal To Secure Funds to Acquire HMM

On 17 October, Pan Ocean (028670 KS) announced that it will sell its 3.9 million shares (5.85% stake) in Hanjin KAL Corp (180640 KS) for about 163 billion won.
The main purpose of this stake sale is to secure more funds for Pan Ocean to potentially acquire HMM Co., Ltd. (011200 KS).
As evidenced by the recent increase in Baltic Dry Index, the potential expansion of the war in Israel could benefit major bulk shipping companies such as Pan Ocean.

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Oct 17

Daily Brief South Korea: Kumho Petro Chemical, Bluemtec and more

By Smartkarma Daily Briefs | Daily Briefs, South Korea

In today’s briefing:

Attractive Yield of Kumho Petrochem Pref Shares Amid 100 Billion Won of Common Shares Cancellation
Bluemtec IPO Preview

Attractive Yield of Kumho Petrochem Pref Shares Amid 100 Billion Won of Common Shares Cancellation

On 16 October, Kumho Petrochem (011780 KS) announced that it will cancel 0.77 million shares on 23 October, representing 2.6% of its outstanding shares or about 100 billion won.
We particularly like Kumho Petrochem preferred shares which provide a dividend yield of nearly 6.7% which is 2x the dividend yield of the common shares.
Foreigners have been net buyers of Kumho Petrochem preferred shares this year while they have been net sellers of its common shares this year.

Bluemtec IPO Preview

Bluemtec is getting ready to complete its IPO in KOSDAQ in the next several weeks. Bluemtec operates the number one pharmaceutical e-commerce platform in Korea.
The company is offering 1.4 million shares in this IPO. The IPO price range is from 15,000 won to 19,000 won.
The company sales and gross profit growth increased impressively in the past several years. The company’s sales increased at a CAGR of 60.5% from 2020 to 2022.

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Oct 16

Daily Brief South Korea: Eoflow , Hanwha Ocean, EcoPro Materials and more

By Smartkarma Daily Briefs | Daily Briefs, South Korea

In today’s briefing:

EOFLOW/Medtronic Tender: Pretrial Timetable and Latest Court Filings
Trading Angles Using Severely Backwardated Hanwha Ocean’s SSFs Ahead of the Rights Trading
EcoPro Materials IPO: Valuation Insights

EOFLOW/Medtronic Tender: Pretrial Timetable and Latest Court Filings

Latest filings on Insulet Corp (PODD US)’s voluntary dismissal without prejudice only to Flex (FLEX US), Eoflow (294090 KS)’s motion to restart Korean sales, dismiss a count and a timetable.
Examining the court filings suggests Medtronic Plc (MDT US)’s access to court unredacted documents is restricted. Medtronic’s limited access makes evaluating the transaction’s potential litigation risk challenging.
Eoflow’s defence in the court documents is based on reverse engineering and procedural arguments. The KRX will rule on Eoflow’s share trading suspension by 1 November.

Trading Angles Using Severely Backwardated Hanwha Ocean’s SSFs Ahead of the Rights Trading

First, we can take on some risk and build up a short position using SSFs from now, aiming for an aggressively low price (likely Day 1) during the rights trading.
If this approach seems somewhat risky, the second is to wait until the rights trading and, although accepting some sacrifice in the spread, build positions relatively risk-free.
We can also actively build up a long position in the significantly backwardated SSFs from now and, instead, set up an aggressive short on the underlying shares.

EcoPro Materials IPO: Valuation Insights

EcoPro Materials (ECO123 KS) is a leading player in the electrode material industry. It is seeking to raise up to US$470 million in a KRX IPO.
We previously discussed the IPO in EcoPro Materials IPO: The Bull Case and EcoPro Materials IPO: The Bear Case.
In this note, we look at the syndicate’s valuation methodology. Our valuation analysis suggests that the IPO price range is unattractive, and we would pass on the IPO.

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Oct 15

Daily Brief South Korea: Eoflow , Hanall Biopharma and more

By Smartkarma Daily Briefs | Daily Briefs, South Korea

In today’s briefing:

Last Week In Event SPACE: EOFlow, Fast Retailing, JMDC, Origin Energy
Hanall Biopharma (009420 KS): Pipeline Progress and New Deal Depict Brighter Outlook

Last Week In Event SPACE: EOFlow, Fast Retailing, JMDC, Origin Energy

By David Blennerhassett

Should the nominated directors, to be voted on by EOFlow (294090 KS)‘s shareholders at the November EGM, include Medtronic Plc (MDT US) executives, then game on.
Fast Retailing (9983 JP) STILL has a Nikkei 225 problem, which means it probably has to underperform Nikkei 225 slightly between now and the Base Date (31 July 2024).
JMDC (4483 JP) has been one of the more annoying partial tenders out there. Even post-facto, it is tough to know what the disposition was. This is extraordinarily vexing.

Hanall Biopharma (009420 KS): Pipeline Progress and New Deal Depict Brighter Outlook

By Tina Banerjee

Hanall Biopharma (009420 KS)‘s licensed partner Harbour BioMed announced that the China’s NMPA has officially accepted the Biologics License Application for batoclimab for the treatment of generalized myasthenia gravis.
Immunovant announced positive initial result from the single-ascending dose portion of the Phase 1 trial of IMVT-1402. Initial data from the multiple-ascending dose cohorts are expected in October/ November 2023.
Hanall and Daewoong have initiated phase 1 clinical trial of HL192 for the treatment of Parkinson’s disease, and dosed the first subject. The initial results are expected in 2H24.

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Oct 14

Daily Brief South Korea: Eoflow , Koentec Co Ltd and more

By Smartkarma Daily Briefs | Daily Briefs, South Korea

In today’s briefing:

What EOflow Insiders Are Saying on the Current Situation & An Objective Interpretation of It
Asian Dividend Gems: Koentec

What EOflow Insiders Are Saying on the Current Situation & An Objective Interpretation of It

They said that EOflow has made a strategic decision not to raise any objections to the court’s injunction to temporarily suspend the sale and marketing activities of EOPATCH.
They stated their commitment to making efforts to actively prove that they are not subject to KRX’s substantive delisting examination. Hence, they aim to resume trading from November 1st.
They subtly hinted at a degree of caution, suggesting that the final agreement with Medtronic might undergo slight modifications to align with the outcome of this preliminary injunction.

Asian Dividend Gems: Koentec

We are starting a new series called “Asian Dividend Gems.” We plan to write about outstanding companies in Asia with high dividend yields (5% to 20%).
The first company in this series is Koentec. From 2018 to 2022, its dividend yield averaged 5.2% and its dividend payout averaged 80.8%. The current dividend yield is 7%.
Koentec is a leading Korean company that provides industrial waste incineration, steam production (utility), and waste landfill services.

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Oct 13

Daily Brief South Korea: Korea Stock Exchange Kospi Index, EcoPro Materials and more

By Smartkarma Daily Briefs | Daily Briefs, South Korea

In today’s briefing:

Korea Finally Offers Reliable Data Channel on Companies with Improved Dividend Procedures
Ecopro Materials: Reduces IPO Price Range
EcoPro Materials IPO: The Bear Case

Korea Finally Offers Reliable Data Channel on Companies with Improved Dividend Procedures

The Obligatory Corporate Governance Report Disclosure System will stand as the only source for furnishing trustworthy data on the proportion of listed companies that have genuinely adopted enhanced dividend procedures.
From a dividend strategy perspective, the companies of primary interest for strategic trading are predominantly those falling under the scope of this disclosure obligation.
Next year, it’s anticipated that with dependable data, we will have the means to craft dividend strategies aimed at this specific group.

Ecopro Materials: Reduces IPO Price Range

Ecopro Materials reduced the upper end of the IPO price range from 46,000 won to 44,000 won.
The bankers reduced the IPO discount, EV/EBITDA valuation multiple, and outstanding shares.
We maintain our Bearish view of the Ecopro Materials IPO. Our base case valuation of 37,436 won per share is towards to lower end of the IPO price range.

EcoPro Materials IPO: The Bear Case