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

<ul>
<li>Thanks to the Series 196 CB conversions and leftover action, we're seeing a 10%p dip this time around.</li>
<li>The stock will price in the change from around 2 PM Tuesday, Nov 12, with 15 billion KRW outflow, that is roughly -0.74x of the ADTV.</li>
<li>Lately, flow events are getting tipped off more, leading to aggressive pre-positioning. I’ll monitor HMM’s price and volume Monday, then decide if I’ll target Tuesday’s passive outflow.</li>
</ul>


Thanks to the Series 196 CB conversions and leftover action, we're seeing a 10%p dip this time around.
The stock will price in the change from around 2 PM Tuesday, Nov 12, with 15 billion KRW outflow, that is roughly -0.74x of the ADTV.
Lately, flow events are getting tipped off more, leading to aggressive pre-positioning. I’ll monitor HMM’s price and volume Monday, then decide if I’ll target Tuesday’s passive outflow.


Estimating the Passive Impact of HMM’s KOSPI 200 Float Rate Cut, Going into Effect on Nov 13

<ul>
<li>Despite this pattern persisting for years, there has still been a significant price impact each time it surfaces. Therefore, we should pay attention to the upcoming CB conversion schedule.</li>
<li>A consistent observation is that the price impact is most significant at the announcement of early redemption requests.</li>
<li>The anticipated announcement dates for the forthcoming early redemption requests are: around May 20th (195th conversion), around September 20th (196th conversion), and around March 20th of next year (197th conversion).</li>
</ul>


Despite this pattern persisting for years, there has still been a significant price impact each time it surfaces. Therefore, we should pay attention to the upcoming CB conversion schedule.
A consistent observation is that the price impact is most significant at the announcement of early redemption requests.
The anticipated announcement dates for the forthcoming early redemption requests are: around May 20th (195th conversion), around September 20th (196th conversion), and around March 20th of next year (197th conversion).


Find Out When HMM's Upcoming Early Redemption Requests Might Drop

Asian Equities Analyst, Logistics & Transport, Tracking Traffic

Daniel Hellberg

Asian Equities Analyst, Logistics & Transport

Tracking Traffic

Focusing on Asian logistics, transportation, and travel companies

Equity Capital Markets

<ul>
<li>So far in 2023 TS Lines has sold off close to one quarter of its shipping capacity</li>
<li>In the company's core market, Intra-Asia, it appears rates have bottomed out here in Q323</li>
<li>We also review Q2 financial results from TS Lines' main comp, Wan Hai Lines (WHL)</li>
</ul>


So far in 2023 TS Lines has sold off close to one quarter of its shipping capacity
In the company's core market, Intra-Asia, it appears rates have bottomed out here in Q323
We also review Q2 financial results from TS Lines' main comp, Wan Hai Lines (WHL)


TS Lines Pre-IPO | Slimming Down Fleet | Intra-Asia Market Update | Latest From Key Comp Wan Hai

<ul>
<li>In terms of fleet characteristics, market exposure, and recent financial performance, we believe <a href="https://www.smartkarma.com/entities/t-s-lines" target="_blank" data-smartkarma-citation="entities:39795:1" rel="noopener">T.S. Lines (TSL HK)</a> and Taiwan's <a href="https://www.smartkarma.com/entities/wan-hai-lines-ltd" target="_blank" data-smartkarma-citation="entities:14262:1" rel="noopener">Wan Hai Lines (2615 TT)</a> are directly comparable</li>
<li>WHL has more exposure to the Transpacific, but still boasts a much larger Intra-Asia operation owing to its scale advantage (fleet and revenue about four times the size of TSL)</li>
<li>Given the similarities we outline in this insight, we believe TSL's shares should trade at EV/Fleet and EV/Revenue multiples in line with WHL's; no premium is justified, in our view</li>
</ul>


In terms of fleet characteristics, market exposure, and recent financial performance, we believe T.S. Lines (TSL HK) and Taiwan's Wan Hai Lines (2615 TT) are directly comparable
WHL has more exposure to the Transpacific, but still boasts a much larger Intra-Asia operation owing to its scale advantage (fleet and revenue about four times the size of TSL)
Given the similarities we outline in this insight, we believe TSL's shares should trade at EV/Fleet and EV/Revenue multiples in line with WHL's; no premium is justified, in our view


TS Lines Pre-IPO | Like Wan Hai Lines, but Smaller | Intra-Asia Update | Approaches to Valuation

<ul>
<li>A high-ranking official from the local financial regulatory authority has confirmed to several local media outlets that the tax benefits for the value-up program will be unveiled this month.</li>
<li>Corporate tax cuts and separate taxation on dividend income will be included. The short-term impact at the time of the announcement will likely be more significant for corporate tax cuts.</li>
<li>Local market is focused on screening large companies within the KOSPI 200 that have substantial pre-tax profits in anticipation of the corporate tax cut momentum to be announced this month.</li>
</ul>


A high-ranking official from the local financial regulatory authority has confirmed to several local media outlets that the tax benefits for the value-up program will be unveiled this month.
Corporate tax cuts and separate taxation on dividend income will be included. The short-term impact at the time of the announcement will likely be more significant for corporate tax cuts.
Local market is focused on screening large companies within the KOSPI 200 that have substantial pre-tax profits in anticipation of the corporate tax cut momentum to be announced this month.


Value-Up Tax Support Revealed by End of June: Local Market Eyes Corporate Tax Cut Beneficiaries

South Korea

HMM Co., Ltd. provides marine transportation services.  The Company commands different types of vessels including full container vessels, oil tankers, car carriers, LNG carriers, bulk carriers, and tramps.

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HMM Co., Ltd. (011200 KS)

Estimating the Passive Impact of HMM’s KOSPI 200 Float Rate Cut, Going into Effect on Nov 13

This post dives into the passive impact of HMM’s KOSPI 200 float rate cut, effective November 13, and highlights key trading considerations.

Sanghyun Park

Find Out When HMM's Upcoming Early Redemption Requests Might Drop

This post aims to pinpoint the anticipated timing of future early redemption requests by HMM, leveraging insights gleaned from the announcement...

Sanghyun Park

TS Lines Pre-IPO | Slimming Down Fleet | Intra-Asia Market Update | Latest From Key Comp Wan Hai

Intra-Asia container carrier TS Lines filed to list its shares in Hong Kong (again) at the end of May, and its filing included full-year 2023...

Tracking Traffic

TS Lines Pre-IPO | Like Wan Hai Lines, but Smaller | Intra-Asia Update | Approaches to Valuation

Intra-Asia container carrier TS Lines filed to list its shares in Hong Kong (again) at the end of May, and its filing included full-year 2023...

Tracking Traffic

Value-Up Tax Support Revealed by End of June: Local Market Eyes Corporate Tax Cut Beneficiaries

A high-ranking official confirmed that tax cut incentives for the value-up program will be unveiled by the end of this month. This post...

Sanghyun Park

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