Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

Douglas Research Advisory

Event-Driven

Korea Zinc Co., Ltd. specializes in non-ferrous metal smelting industry.  The Company manufactures zinc ingots, electrolytic gold, silver, lead, sulfuric acid, and copper.  Korea Zinc provides its products to domestic and overseas markets.

<ul>
<li>In this insight, we discuss how the Homeplus debacle is causing a major negative sentiment on MBK Partners from both the Korean government and the media.</li>
<li>This negative sentiment has grown so much that it could have a legitimate negative impact in the upcoming proxy vote for the control of Korea Zinc. </li>
<li>The Korean government has targeted MBK for tax probe. Plus, a coalition of securities firms is expected to file a lawsuit against Homeplus and MBK. </li>
</ul>


In this insight, we discuss how the Homeplus debacle is causing a major negative sentiment on MBK Partners from both the Korean government and the media.
This negative sentiment has grown so much that it could have a legitimate negative impact in the upcoming proxy vote for the control of Korea Zinc. 
The Korean government has targeted MBK for tax probe. Plus, a coalition of securities firms is expected to file a lawsuit against Homeplus and MBK. 


Is Homeplus Debacle a Key Negative Tipping Point for MBK?

Cross Asset Strategy

<ul>
<li>On 27 February, the Financial Supervisory Service (FSC) announced that it plans to give greater scrutiny on rights offerings and IPOs in Korea that could potentially destroy shareholder value.</li>
<li>Overall, these attempts to improve the rights offerings and IPOs in Korea appear to be a step in the right direction. </li>
<li>However, these measures are likely to negatively impact new rights offerings and IPOs in 2025. Various trading strategies involving rights offerings and new IPOs may need to be revised.</li>
</ul>


On 27 February, the Financial Supervisory Service (FSC) announced that it plans to give greater scrutiny on rights offerings and IPOs in Korea that could potentially destroy shareholder value.
Overall, these attempts to improve the rights offerings and IPOs in Korea appear to be a step in the right direction. 
However, these measures are likely to negatively impact new rights offerings and IPOs in 2025. Various trading strategies involving rights offerings and new IPOs may need to be revised.


Greater Scrutiny by the FSC on Rights Offerings and IPOs That Could Destroy Shareholder Value

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.

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 Life isn't getting a boost from Samsung Fire, so they need to stay focused on managing equity to maintain their K-ICS ratio.</li>
<li>They’ll use capital securities issuance as a quick fix but must also monitor their Samsung Electronics stake, a major asset, to manage the situation effectively.</li>
<li>Samsung Electronics will likely focus on dividends over buybacks. Watch for a pair trade setup between common and preferred shares, favoring long positions on preferreds.</li>
</ul>


Samsung Life isn't getting a boost from Samsung Fire, so they need to stay focused on managing equity to maintain their K-ICS ratio.
They’ll use capital securities issuance as a quick fix but must also monitor their Samsung Electronics stake, a major asset, to manage the situation effectively.
Samsung Electronics will likely focus on dividends over buybacks. Watch for a pair trade setup between common and preferred shares, favoring long positions on preferreds.


Clarifying Samsung Life’s Position on How Samsung Electronics Structures Its Shareholder Returns

<ul>
<li>The FSS will review the subsidiary approval, with final approval expected from the FSC by early April. Market signals suggest a near-100% chance of Samsung Life getting the green light.</li>
<li>Samsung’s moves post-Lee Jae-yong’s Feb 3rd ruling signal a major pivot, setting up aggressive value-up plays across Samsung Life, Samsung Electronics, and Samsung C&amp;T.</li>
<li>Shoring up Samsung Life’s finances triggers a domino effect, positioning Samsung Electronics and Samsung C&amp;T to follow with their own shareholder-friendly moves.</li>
</ul>


The FSS will review the subsidiary approval, with final approval expected from the FSC by early April. Market signals suggest a near-100% chance of Samsung Life getting the green light.
Samsung’s moves post-Lee Jae-yong’s Feb 3rd ruling signal a major pivot, setting up aggressive value-up plays across Samsung Life, Samsung Electronics, and Samsung C&amp;T.
Shoring up Samsung Life’s finances triggers a domino effect, positioning Samsung Electronics and Samsung C&amp;T to follow with their own shareholder-friendly moves.


Samsung Life’s Official Move to Make Fire a Subsidiary: A Value-Up Play for Samsung's Big Three

<ul>
<li>On 11 February, the Korea Exchange announced eight major incentives for selected excellent Corporate Value Up companies every May starting this year.</li>
<li>Some of the major incentives include preferential tax treatment and preferential inclusion in the Korea Value Up index. </li>
<li>The Korea Exchange plans to select and announce 10 companies that will be included as Excellent Value Up Companies for the first time in May 2025.</li>
</ul>


On 11 February, the Korea Exchange announced eight major incentives for selected excellent Corporate Value Up companies every May starting this year.
Some of the major incentives include preferential tax treatment and preferential inclusion in the Korea Value Up index. 
The Korea Exchange plans to select and announce 10 companies that will be included as Excellent Value Up Companies for the first time in May 2025.


Korea Exchange Announces 8 Major Incentives for Selected Excellent Value-Up Companies

Impact of reforms on South Korea Companies

South Korea Value-Up
Impact of reforms on South Korea Companies

Is Homeplus Debacle a Key Negative Tipping Point for MBK?

In this insight, we discuss how the Homeplus debacle is causing a major negative sentiment on MBK Partners from both the Korean government and the...

Douglas Kim

Greater Scrutiny by the FSC on Rights Offerings and IPOs That Could Destroy Shareholder Value

On 27 February, the Financial Supervisory Service (FSC) announced that it plans to give greater scrutiny on rights offerings and IPOs in Korea that...

Douglas Kim

Clarifying Samsung Life’s Position on How Samsung Electronics Structures Its Shareholder Returns

This post clarifies Samsung Life’s position on how Samsung Electronics structures its shareholder returns in the upcoming value-up disclosure.

Sanghyun Park

Samsung Life’s Official Move to Make Fire a Subsidiary: A Value-Up Play for Samsung's Big Three

Samsung Life's official application to incorporate Samsung Fire as a subsidiary: A value-up play for Samsung's top 3 companies: Samsung Life,...

Sanghyun Park

Korea Exchange Announces 8 Major Incentives for Selected Excellent Value-Up Companies

On 11 February, the Korea Exchange announced eight major incentives for selected excellent Corporate Value Up companies every May starting this year.

Douglas Kim