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

Sanghyun Park

Korea / Special Sits, Pairs, Index Rebalancing

Clepsydra Capital

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

Event-Driven

Samsung Electronics Pref Shares / Event-Driven

Samsung Electronics Co., Ltd. manufactures a wide range of consumer and industrial electronic equipment and products such as semiconductors, personal computers, peripherals, monitors, televisions, and home appliances including air conditioners and microwave ovens. The Company also produces Internet access network systems and telecommunications equipment including mobile phones.

Samsung Electronics Pref Shares (005935 KS)

<ul>
<li>Samsung's preferred shares lagged significantly behind the common shares yesterday, showing the largest daily sigma move we've seen in a while.</li>
<li>Samsung’s delayed value-up announcement, despite regulatory pressure, has fueled speculation about a potential Biologics stake purchase from C&amp;T.</li>
<li>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.</li>
</ul>


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&amp;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.


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

Hyundai Motor Company manufactures, sells, and exports passenger cars, trucks, and commercial vehicles. The Company also sells various auto parts and operates auto repair service centers throughout South Korea. Hyundai Motor provides financial services through its subsidiaries.

<ul>
<li>Hyundai’s TSR target is 35%+ (dividends plus buybacks), up 10 percentage points from previous years. They’ve also set a new annual dividend of ₩10,000, paid evenly quarterly.</li>
<li>Hyundai's Value-Up targets may not fully meet market expectations, but the key is the timing. By aligning early with government policies, Hyundai has reduced risks and secured investment flow.</li>
<li>Hyundai plans a pref-skewed buyback, likely continuing this approach as retiring preferred shares first may boost ROE.</li>
</ul>


Hyundai’s TSR target is 35%+ (dividends plus buybacks), up 10 percentage points from previous years. They’ve also set a new annual dividend of ₩10,000, paid evenly quarterly.
Hyundai's Value-Up targets may not fully meet market expectations, but the key is the timing. By aligning early with government policies, Hyundai has reduced risks and secured investment flow.
Hyundai plans a pref-skewed buyback, likely continuing this approach as retiring preferred shares first may boost ROE.


Hyundai Motor's Value-Up Disclosure: Trading Implications from Release Timing & Pref-Skewed Buyback

Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

Douglas Research Advisory

Equity Capital Markets

STCUBE manufactures and sells synthetic resins such as acrylonitrile butadiene styrene (ABS) resins.  The Company's products have applications for electric and electronic products, computers, telecommunication equipment, and automobiles. STCUBE also produces resins for LG Chem Ltd. on an original equipment manufacturer (OEM) basis.

<ul>
<li>STCube announced it plans to increase capital by 89 billion won (13 billion won through a third party rights offering and 75.7 billion won through shareholder preferred capital increase).</li>
<li>We have a positive view of STCube's capital raise and there could be some alpha generating returns in our view.</li>
<li>The fact that the company's share price surged nearly 5x from the last rights offering in May 2022 (to October 2022) is likely to positively impact capital raise this time. </li>
</ul>


STCube announced it plans to increase capital by 89 billion won (13 billion won through a third party rights offering and 75.7 billion won through shareholder preferred capital increase).
We have a positive view of STCube's capital raise and there could be some alpha generating returns in our view.
The fact that the company's share price surged nearly 5x from the last rights offering in May 2022 (to October 2022) is likely to positively impact capital raise this time. 


STCube: Rights Offering Capital Raise of 89 Billion Won

<ul>
<li>Local traders see interest rate cuts and value-up disclosures as key for timing Samsung Electronics 1P discount narrowing.</li>
<li>Samsung's only realistic value-up goal beyond 50% FCF return is improving ROE, likely through a pref-skewed buyback or cancellation program.</li>
<li>If Samsung announces a value-up plan during the Bank of Korea's rate cuts, local traders expect the 1P discount to reverse, targeting October-November for position entry.</li>
</ul>


Local traders see interest rate cuts and value-up disclosures as key for timing Samsung Electronics 1P discount narrowing.
Samsung's only realistic value-up goal beyond 50% FCF return is improving ROE, likely through a pref-skewed buyback or cancellation program.
If Samsung announces a value-up plan during the Bank of Korea's rate cuts, local traders expect the 1P discount to reverse, targeting October-November for position entry.


Local Market Observations on Timing Samsung Electronics 1P Discount Narrowing

Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

Amorepacific Corporation develops, manufactures, and exports skin care, make-up, and fragrance products. The Company also produces and markets personal care and health-related products, such as shampoos, soaps, toothpastes, and health teas.

<ul>
<li>A double dose of StubWorld this week: both the implied stub for <strong><a href="https://www.smartkarma.com/entities/amorepacific-group" target="_blank" data-smartkarma-citation="entities:12179:1" rel="noopener">Amorepacific Group (002790 KS)</a></strong> and the simple ratio (Group/<strong><a href="https://www.smartkarma.com/entities/amorepacific-corp" target="_blank" data-smartkarma-citation="entities:20854:1" rel="noopener">Amorepacific Corp (090430 KS)</a></strong>) are around lifetime low levels.</li>
<li>Preceding my comments on Amorepacific are the current setup/unwind tables for Asia-Pacific Holdcos.</li>
<li>These relationships trade with a minimum liquidity of US$1mn, and a % market capitalisation &gt;20%.</li>
</ul>


A double dose of StubWorld this week: both the implied stub for Amorepacific Group (002790 KS) and the simple ratio (Group/Amorepacific Corp (090430 KS)) are around lifetime low levels.
Preceding my comments on Amorepacific are the current setup/unwind tables for Asia-Pacific Holdcos.
These relationships trade with a minimum liquidity of US$1mn, and a % market capitalisation &gt;20%.


StubWorld's: Amorepacific's NAV Discount Plumbs New Multi-Year Low

Korea Pref Shares
Insights on Korean Pref Shares

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

This post explores what might have caused the sudden shift in the narrowing of Samsung Electronics' preferred share discount yesterday.

Sanghyun Park

Hyundai Motor's Value-Up Disclosure: Trading Implications from Release Timing & Pref-Skewed Buyback

This post examines Hyundai Motor's Value-Up disclosure released today, focusing on potential trading implications, especially regarding the timing...

Sanghyun Park

STCube: Rights Offering Capital Raise of 89 Billion Won

STCube announced it plans to increase capital by 89 billion won (13 billion won through a third party rights offering and 75.7 billion won through...

Douglas Kim

Local Market Observations on Timing Samsung Electronics 1P Discount Narrowing

Samsung Electronics and Hyundai Motor are expected to announce their value-up plans before the Korea Value-Up Index launches in mid-September....

Sanghyun Park

StubWorld's: Amorepacific's NAV Discount Plumbs New Multi-Year Low

The implied stub - and simple ratio - are currently at extreme levels. Setting up the stub here - long Group, short Corp - is the obvious trade;...

David Blennerhassett