Korea / Special Sits, Pairs, Index Rebalancing, Clepsydra Capital

Sanghyun Park

I investigate special situations, pairs, and index rebalancing trades in Korea.

Korea / Special Sits, Pairs, Index Rebalancing

Doosan Fuelcell: Block Deals Outcome on Rights Offer

Doosan Fuel Cell - The Expected Return Of The Remaining Big Block

Doosan Fuelcell Rights Offer: Terms & Situation

Doosan Fuel Cell Big Block Deal Placement

Clepsydra Capital

Investigate special situations, pairs, and index rebalancing trades in Korea.

Event-Driven

<p><strong>An opportunity to short sell Doosan Fuel Cell, a flagship stock in Korea's hydrogen sector, is emerging.</strong></p><hr><p>Doosan Fuel Cell has recently rebounded as investor sentiment in the local hydrogen sector has improved again.</p><section class="figure"><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/228/435/original/Screen+Shot+2021-09-07+at+8.59.31+PM.png?1631062787" class="editor-image img-responsive" data-smartkarma-image-id="228435"></figure></section><p>However, the valuation is still overvalued with a 12M forward PER of over 100x. The current valuation is clearly at a level that has been substantially corrected compared to a year ago. Nevertheless, expected earnings growth, at least for the next several years, is still insufficient to justify the current valuation.</p><section class="figure"><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/228/433/original/Screen+Shot+2021-09-07+at+8.55.49+PM.png?1631062695" class="editor-image img-responsive" data-smartkarma-image-id="228433"></figure></section><p>Now, we will likely see a catalyst on the short side that may lead to a short-term decline in Doosan Fuel Cell's share price. Doosan Fuel Cell's current butter-and-bread business is fuel cells for power generation. However, this does not contribute much to the current overvalued valuation. The reason why it still exceeds the 12M forward PER of 100x is the presence of new businesses such as tri-gen for hydrogen charging and fuel cell for water electrolysis.</p>

An opportunity to short sell Doosan Fuel Cell, a flagship stock in Korea's hydrogen sector, is emerging.Doosan Fuel Cell has recently rebounded as investor sentiment in the local hydrogen sector has improved again.However, the valuation is still overvalued with a 12M forward PER of over 100x. The current valuation is clearly at a level that has been substantially corrected compared to a year ago. Nevertheless, expected earnings growth, at least for the next several years, is still insufficient to justify the current valuation.Now, we will likely see a catalyst on the short side that may lead to a short-term decline in Doosan Fuel Cell's share price. Doosan Fuel Cell's current butter-and-bread business is fuel cells for power generation. However, this does not contribute much to the current overvalued valuation. The reason why it still exceeds the 12M forward PER of 100x is the presence of new businesses such as tri-gen for hydrogen charging and fuel cell for water electrolysis.

Doosan Fuel Cell

Shorting Opportunity on Doosan Fuel Cell