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.

Equity Bottom-Up

The biggest gainers this morning are:

Hansol Chemical (014680 KS): +8.00%

DL Co Ltd (000210 KS): +7.78%

Kcc Corp (002380 KS): +7.58%

Hanwha Solutions (009830 KS): +7.56%













Gainers
Daily Δ
Losers
Daily Δ
x Open
Value
TV/DTV (x)
Value


Hansol Chemical Co Ltd
8.00%
Dong Suh Companies Inc
-5.67%
Dongwon Systems Corp
10.87%
KCC Corp
3.26


DL Holdings Co Ltd
7.78%
Chong Kun Dang Pharmaceutical Corp
-3.90%
Hansol Chemical Co Ltd
10.00%
Doosan Infracore Co Ltd
2.96


KCC Corp
7.58%
Dongwon Systems Corp
-3.37%
Dong Suh Companies Inc
8.22%
LOTTE Himart Co Ltd
2.94


SKC Co Ltd
7.56%
Oci Co Ltd
-2.65%
KCC Corp
7.82%
Hanwha Solutions Corp
2.57


Hanwha Solutions Corp
7.11%
Lotte Tour Development Co., Ltd.
-2.48%
SKC Co Ltd
7.52%
CJ Logistics Corp
1.68


LOTTE Himart Co Ltd
6.49%
Green Cross Holdings
-2.46%
LOTTE Himart Co Ltd
6.88%
Samsung Heavy Industries Co.,Ltd
1.63


Doosan Infracore Co Ltd
5.24%
Hanssem Co Ltd
-2.30%
Hanwha Solutions Corp
6.76%
LG HAUSYS, LTD.
1.44


Hyundai Steel Co
4.95%
Green Cross Corp
-2.05%
Hyundai Steel Co
6.49%
Dongwon Systems Corp
1.42


SK Holdings Co Ltd
4.30%
Korea Aerospace Industries Ltd
-2.01%
HMM Co Ltd
6.20%
Doubleu Games Co Ltd
1.42


Samsung C&amp;T Corp
4.22%
Cuckoo Holdings Co Ltd
-2.00%
Chong Kun Dang Pharmaceutical Corp
5.71%
Lotte Chilsung Beverage Co Ltd
1.41


Lotte Shopping Co Ltd
4.13%
Cuckoo Homesys Co Ltd
-1.93%
DL Holdings Co Ltd
5.69%
DL Holdings Co Ltd
1.29


Lotte Chilsung Beverage Co Ltd
4.07%
Ilyang Pharmaceutical Co., Ltd
-1.90%
Kolon Industries Inc
5.59%
SKC Co Ltd
1.23


Posco International Corp
4.01%
Boryung Pharmaceutical Co., Ltd
-1.82%
Handsome Corp
5.51%
Hyundai Steel Co
1.13


Shinsegae Inc
3.89%
CJ Cheiljedang Corp
-1.75%
SK Holdings Co Ltd
5.33%
Kolon Industries Inc
1.08


Handsome Corp
3.76%
NCSoft Corp
-1.60%
Doosan Infracore Co Ltd
5.20%
Hansol Chemical Co Ltd
1.01


KB Financial Group Inc
3.73%
Naver Corp
-1.55%
Shinsegae Inc
5.19%
JW Pharmaceutical Corp
0.94


SK Innovation Co Ltd
2.93%
JW Pharmaceutical Corp
-1.50%
Dongkuk Steel Mill Co., Ltd
5.02%
Ssangyong Cement Industry Co Ltd
0.92


LG International Corp
2.83%
DB HiTek Co Ltd
-1.45%
KB Financial Group Inc
4.92%
KEPCO Plant Service &amp; Engineering Co Ltd
0.91


Shinhan Financial Group Co., Ltd.
2.71%
SK Biopharmaceuticals Co Ltd
-1.41%
Posco International Corp
4.71%
Handsome Corp
0.89


LG HAUSYS, LTD.
2.57%
Daewoong Pharmaceutical Co., Ltd.
-1.16%
Pan Ocean Co Ltd
4.69%
IS DONGSEO CO., LTD.
0.85

Source: KRX

















Top 20
52WH
52WH Date
MC (₩B)
Daily Δ
x Open
TV/DTV
x 52WL
U Wick
Body
L Wick


Kolon Industries Inc
1.04
3/23/21
1,678.1
1.97%
5.59%
1.08
2.59
-52.94%
41.18%
5.88%


KT Corp
1.02
2/17/21
7,285.0
0.72%
1.62%
0.55
1.45
-11.11%
44.44%
44.44%


Amorepacific Corp
1.02
1/25/21
15,082.3
0.78%
3.15%
0.68
1.73
-37.50%
50.00%
12.50%


Handsome Corp
1.01
3/17/21
1,018.5
3.76%
5.51%
0.89
2.30
-34.09%
65.91%
0.00%


Doosan Bobcat Inc
0.99
3/17/21
3,669.1
1.95%
2.64%
0.43
2.23
-5.26%
63.16%
31.58%


KB Financial Group Inc
0.99
3/11/21
21,996.2
3.73%
4.92%
0.55
1.73
-4.00%
84.00%
12.00%


Cosmax Inc
0.98
10/12/20
1,261.2
2.45%
4.51%
0.46
1.84
-18.18%
63.64%
18.18%


HMM Co Ltd
0.98
3/23/21
9,625.2
-0.17%
6.20%
0.72
11.59
-8.11%
-40.54%
51.35%


KCC Corp
0.97
1/26/21
1,955.0
7.58%
7.82%
3.26
1.86
0.00%
96.88%
3.13%


Seah Besteel Corporation
0.97
3/23/21
615.0
1.48%
3.26%
0.26
2.56
-18.18%
54.55%
27.27%


Lotte Chilsung Beverage Co Ltd
0.97
2/9/21
1,148.8
4.07%
4.03%
1.41
1.54
0.00%
80.00%
20.00%


Kangwon Land, Inc.
0.97
3/18/21
5,658.7
0.57%
1.53%
0.24
1.49
-12.50%
87.50%
0.00%


Shinsegae International Inc
0.96
4/28/20
1,513.7
1.44%
2.90%
0.41
1.58
-16.67%
83.33%
0.00%


Dongkuk Steel Mill Co., Ltd
0.96
3/23/21
1,078.4
2.26%
5.02%
0.30
3.29
-27.27%
63.64%
9.09%


Hotel Shilla Co Ltd
0.96
1/18/21
3,430.3
1.39%
2.21%
0.40
1.33
-10.53%
78.95%
10.53%


MERITZ SECURITIES CO LTD
0.96
3/23/21
2,947.2
0.00%
2.30%
0.49
1.78
-5.00%
20.00%
75.00%


BNK Financial Group Inc
0.96
3/19/21
2,180.5
2.14%
3.37%
0.33
1.66
-9.09%
72.73%
18.18%


Hana Financial Group Inc
0.96
3/19/21
12,294.9
0.00%
3.35%
0.56
1.95
-25.93%
44.44%
29.63%


Hansol Chemical Co Ltd
0.95
2/22/21
2,754.5
8.00%
10.00%
1.01
3.38
-11.11%
80.00%
8.89%


Doosan Infracore Co Ltd
0.95
9/28/20
2,176.5
5.24%
5.20%
2.96
3.50
-10.00%
86.00%
4.00%

Source: KRX



Hanwha S, DL, KCC, & Hansol C Are KOSPI 200 Movers Today: What Happens?

Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

Event-Driven

Company split-offs in Korea can sometimes (but not always) provide interesting investment opportunities. In this report, we provide an analysis of the KCC Corp split-off. KCC Corp’s stock price has been in a multi-years bear market. KCC Corp's stock price has collapsed nearly 70% since its highs in October 2014. KCC Corp’s stock is also down 27% YTD.
How will KCC Corp be Split Up? Post this company split-off, the first son Chung Mong-Jin will likely end up the major owner of KCC Corp. The second son Chung Mong-Ik will likely end up the major shareholder of KCC Glass. The third son Chung Mong-Yeol will likely end up the major shareholder of KCC Construction. 
Overall, we believe there could be some positive changes as a result from this company split-off and giving responsibility and accountability to the three brothers in specific business units of KCC affiliates. As such, we have a positive view on this stock and we believe the scenario I &amp; II are most likely over the next one year. The scenario I suggests NAV of 3.5 trillion won or 335,193 won per share, which is 48% higher than current price. Under scenario I, we have assumed a 20% discount on the value of its cash, short term investments, and long-term investment assets (as of end of 2Q19). We also assumed 8x estimated operating profit of 264 billion won in 2020.

Company split-offs in Korea can sometimes (but not always) provide interesting investment opportunities. In this report, we provide an analysis of the KCC Corp split-off. KCC Corp’s stock price has been in a multi-years bear market. KCC Corp's stock price has collapsed nearly 70% since its highs in October 2014. KCC Corp’s stock is also down 27% YTD.
How will KCC Corp be Split Up? Post this company split-off, the first son Chung Mong-Jin will likely end up the major owner of KCC Corp. The second son Chung Mong-Ik will likely end up the major shareholder of KCC Glass. The third son Chung Mong-Yeol will likely end up the major shareholder of KCC Construction. 
Overall, we believe there could be some positive changes as a result from this company split-off and giving responsibility and accountability to the three brothers in specific business units of KCC affiliates. As such, we have a positive view on this stock and we believe the scenario I &amp; II are most likely over the next one year. The scenario I suggests NAV of 3.5 trillion won or 335,193 won per share, which is 48% higher than current price. Under scenario I, we have assumed a 20% discount on the value of its cash, short term investments, and long-term investment assets (as of end of 2Q19). We also assumed 8x estimated operating profit of 264 billion won in 2020. 

KCC Corp Split-Off - A Breakup for 3 Sons

This post has a summary of KCC Corp's equity spinoff into two companies. This was announced today on July 11 after the market closed. In this post, I also look at mispricing possibilities resulting from this demerger.

This post has a summary of KCC Corp's equity spinoff into two companies. This was announced today on July 11 after the market closed. In this post, I also look at mispricing possibilities resulting from this demerger. 

KCC Corp Equity Spinoff: Summary & Mispricing Checkup

Thematic (Sector/Industry)

<div class="content-highlight">KOSPI was up 0.9% in September but there were some big winners including the telecom sector (as the top three telcos were up on average 9.4% in September). Korea's base interest rate remains at 1.5% while the US Fed raised the benchmark overnight lending rate from 2% to 2.25% in September. This gap of 0.75% between the US and Korean base interest rates is the highest level ever. Samsung is making real efforts to restructure its group structure with Samsung C&amp;T taking a lead role. SK Telecom and the SK Group may be close to finally announcing their major reorganization sometime in 4Q18. </div>The top 10 events impacting the Korean stock market, economy, &amp; politics in September were as follows:<ul>
<li>Block deal sales of Samsung C&amp;T by SEMCO and Samsung F&amp;M </li>
<li>Moon Jae-In &amp; Kim Jong-Un's third summit in Pyeongyang </li>
<li>Strong outperformance of telecom sector in September </li>
<li>MBK sells 5% of Coway </li>
<li>KCC consortium acquires Momentive</li>
<li>Elliott Mgmt's second proposal to Hyundai Motor Group </li>
<li>S-Fuelcell IPO </li>
<li>Outcome of Platform Partners vs. MKIF  </li>
<li>Hanon Systems decides to acquire Magna International Inc. (Canada) for US$1.2 billion</li>
<li>Rate hike by the US Fed widens the gap between the US and Korean base interest rates</li>
</ul><hr>The top three reports we wrote in September related to the Korean market were as follows (in terms of views): <ul>
<li><a href="https://www.smartkarma.com/insights/elliott-mgmt-s-proposal-2-for-the-hyundai-motor-group-timing-trying-to-find-the-middle-ground" target="_blank" data-smartkarma-citation="insights:23921">Elliott Mgmt's Proposal #2 for the Hyundai Motor Group - Timing &amp; Trying to Find the Middle Ground</a></li>
<li><a href="https://www.smartkarma.com/insights/samsung-publishing-pinkfong-rocks-uk" target="_blank" data-smartkarma-citation="insights:23907">Samsung Publishing - Pinkfong Rocks UK</a></li>
<li><a href="https://www.smartkarma.com/insights/block-deal-sales-of-samsung-c-t-stakes-by-semco-and-samsung-f-m" target="_blank" data-smartkarma-citation="insights:24323">Block Deal Sales of Samsung C&amp;T Stakes by SEMCO and Samsung F&amp;M</a></li>
</ul>

KOSPI was up 0.9% in September but there were some big winners including the telecom sector (as the top three telcos were up on average 9.4% in September). Korea's base interest rate remains at 1.5% while the US Fed raised the benchmark overnight lending rate from 2% to 2.25% in September. This gap of 0.75% between the US and Korean base interest rates is the highest level ever. Samsung is making real efforts to restructure its group structure with Samsung C&amp;T taking a lead role. SK Telecom and the SK Group may be close to finally announcing their major reorganization sometime in 4Q18. The top 10 events impacting the Korean stock market, economy, &amp; politics in September were as follows:
Block deal sales of Samsung C&amp;T by SEMCO and Samsung F&amp;M 
Moon Jae-In &amp; Kim Jong-Un's third summit in Pyeongyang 
Strong outperformance of telecom sector in September 
MBK sells 5% of Coway 
KCC consortium acquires Momentive
Elliott Mgmt's second proposal to Hyundai Motor Group 
S-Fuelcell IPO 
Outcome of Platform Partners vs. MKIF  
Hanon Systems decides to acquire Magna International Inc. (Canada) for US$1.2 billion
Rate hike by the US Fed widens the gap between the US and Korean base interest rates
The top three reports we wrote in September related to the Korean market were as follows (in terms of views): 
Elliott Mgmt's Proposal #2 for the Hyundai Motor Group - Timing &amp; Trying to Find the Middle Ground
Samsung Publishing - Pinkfong Rocks UK
Block Deal Sales of Samsung C&amp;T Stakes by SEMCO and Samsung F&amp;M


Korea Stock Market Monthly Recap #29 (September 2018)

Equity Capital Markets

<ul>
<li>
It was announced after market close today that <a href="https://www.smartkarma.com/entities/511" target="_blank" data-smartkarma-citation="entities:511:1">Samsung Fire &amp; Marine Ins (000810 KS)</a> and <a href="https://www.smartkarma.com/entities/539" target="_blank" data-smartkarma-citation="entities:539:1">Samsung Electro Mechanics Co, Ltd. (009150 KS)</a> (SEMCO) plan to sell their stakes in <a href="https://www.smartkarma.com/entities/481" target="_blank" data-smartkarma-citation="entities:481:1">Samsung C&amp;T (028260 KS)</a> in block deals, reducing the circular shareholding structure of the Samsung affiliates. Samsung F&amp;M plans to sell 2.61m shares (1.4%) of Samsung C&amp;T and SEMCO plans to sell 5.0m shares (2.6%) of Samsung C&amp;T. The indicative deal price is between 118,000 won to 122,000 won (5-8% discount to the last traded price of 128,500 won). </li>
<li>
We would take this deal as it further removes overhang associated with Samsung affiliates selling shares of Samsung C&amp;T and concerns about circular ownership. In addition, we like the business performance improvement of Samsung C&amp;T's core construction and trading businesses so far this year. For further details, see our report, <a href="https://www.smartkarma.com/insights/all-roads-lead-to-samsung-c-t" target="_blank" data-smartkarma-citation="insights:19326">All Roads Lead to Samsung C&amp;T</a>.
</li>
<li>Post these deals, Lee Jae-Yong and his family/relatives/related parties will own about 33% of Samsung C&amp;T. <a href="https://www.smartkarma.com/entities/11109" target="_blank" data-smartkarma-citation="entities:11109:1">Kcc Corp (002380 KS)</a> is another major shareholder with 9% stake in Samsung C&amp;T, which is worth nearly US$2.2 billion. KCC has recently made a major acquisition (see our report, <a href="https://www.smartkarma.com/insights/impact-of-the-kcc-consortium-acquiring-momentive-the-2-player-in-the-global-silicone-market" target="_blank" data-smartkarma-citation="insights:24110">Impact of the KCC Consortium Acquiring Momentive, the #2 Player in the Global Silicone Market</a>). KCC may need to sell its remaining stake in Samsung C&amp;T in the next couple of years in order to improve its balance sheet and finance its aggressive acquisition plans. </li>
</ul>



It was announced after market close today that Samsung Fire &amp; Marine Ins (000810 KS) and Samsung Electro Mechanics Co, Ltd. (009150 KS) (SEMCO) plan to sell their stakes in Samsung C&amp;T (028260 KS) in block deals, reducing the circular shareholding structure of the Samsung affiliates. Samsung F&amp;M plans to sell 2.61m shares (1.4%) of Samsung C&amp;T and SEMCO plans to sell 5.0m shares (2.6%) of Samsung C&amp;T. The indicative deal price is between 118,000 won to 122,000 won (5-8% discount to the last traded price of 128,500 won). 

We would take this deal as it further removes overhang associated with Samsung affiliates selling shares of Samsung C&amp;T and concerns about circular ownership. In addition, we like the business performance improvement of Samsung C&amp;T's core construction and trading businesses so far this year. For further details, see our report, All Roads Lead to Samsung C&amp;T.

Post these deals, Lee Jae-Yong and his family/relatives/related parties will own about 33% of Samsung C&amp;T. Kcc Corp (002380 KS) is another major shareholder with 9% stake in Samsung C&amp;T, which is worth nearly US$2.2 billion. KCC has recently made a major acquisition (see our report, Impact of the KCC Consortium Acquiring Momentive, the #2 Player in the Global Silicone Market). KCC may need to sell its remaining stake in Samsung C&amp;T in the next couple of years in order to improve its balance sheet and finance its aggressive acquisition plans. 


Block Deal Sales of Samsung C&T Stakes by SEMCO and Samsung F&M

South Korea

KCC Corp, manufactures paint & related product, building materials such as cement corrugated sheet, glass wool mat, and board & pipe cover, PVC window profile, paints, and ceramic fiber for high temperature applications. The Company also produces various glasses such as glass fiber, float glass, patterned glass, safety tempered glass, and long glass fibers.

Price Gauge
52-week Range	0.00 - 0.00
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Kcc Corp (002380 KS)

Hanwha S, DL, KCC, & Hansol C Are KOSPI 200 Movers Today: What Happens?

This post looks into what may have happened to KOSPI 200 movers today: Hanwha Solutions, DL Corp, KCC, and Hansol Chemical.

Sanghyun Park

KCC Corp Split-Off - A Breakup for 3 Sons

Company split-offs in Korea can sometimes (but not always) provide interesting investment opportunities. In this report, we provide an analysis of...

Douglas Kim

KCC Corp Equity Spinoff: Summary & Mispricing Checkup

This post has a summary of KCC Corp's equity spinoff into two companies. This was announced today on July 11 after the market closed. In this post,...

Sanghyun Park

Korea Stock Market Monthly Recap #29 (September 2018)

KOSPI was up 0.9% in September but there were some big winners including the telecom sector (as the top three telcos were up on average 9.4% in...

Douglas Kim

Block Deal Sales of Samsung C&T Stakes by SEMCO and Samsung F&M

It was announced after market close today that Samsung Fire & Marine Ins (000810 KS) and Samsung Electro Mechanics Co, Ltd. (009150...

Douglas Kim

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