Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

Douglas Research Advisory

Equity Bottom-Up

<ul>
<li>Nearly four years have passed since Korean Air first proposed a merger with Asiana Airlines in November 2020. Despite repeated delays, it appears that this merger could finally occur.</li>
<li>There is now a higher probability of Korean Air and Asiana Airlines receiving the final merger approval from the United States Department of Justice. </li>
<li>Combined with attractive valuations, better balance sheet, and improved profitability from the merged entity, we believe that Korean Air shares could continue to outperform KOSPI in the next 12 months. </li>
</ul>


Nearly four years have passed since Korean Air first proposed a merger with Asiana Airlines in November 2020. Despite repeated delays, it appears that this merger could finally occur.
There is now a higher probability of Korean Air and Asiana Airlines receiving the final merger approval from the United States Department of Justice. 
Combined with attractive valuations, better balance sheet, and improved profitability from the merged entity, we believe that Korean Air shares could continue to outperform KOSPI in the next 12 months. 


Korean Air Spearheading the Korean Airline Industry Consolidation

Cross Asset Strategy

<ul>
<li>NPS adjusted holdings of 101 stocks in Korea as of 5 April 2023, of which it reduced ownership in 53 of them and raised ownership in 47 of them.</li>
<li>In this insight, we discuss 39 stocks major stocks in Korea which have experienced changes in their ownerships by the NPS in the past several weeks. </li>
<li>NPS has noticeably increased stakes in reopening related plays and it has also reduced stakes in numerous rechargeable battery related plays in the past several weeks. </li>
</ul>


NPS adjusted holdings of 101 stocks in Korea as of 5 April 2023, of which it reduced ownership in 53 of them and raised ownership in 47 of them.
In this insight, we discuss 39 stocks major stocks in Korea which have experienced changes in their ownerships by the NPS in the past several weeks. 
NPS has noticeably increased stakes in reopening related plays and it has also reduced stakes in numerous rechargeable battery related plays in the past several weeks. 


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>NPS said it would add 50 KOSPI stocks to KOSPI 200 for direct management. However, the key was when this would be implemented and which ones would be included.</li>
<li>SBS, one of Korea's major networks, exclusively reported that NPS finalized the constituent stocks of the NPS-KR250 and started rebalancing trading on the 50 additional KOSPI stocks from January.</li>
<li>Hence, tracing and identifying who these additional 50 KOSPI stocks are is becoming the hottest topic in Korea's local market at this point.</li>
</ul>


NPS said it would add 50 KOSPI stocks to KOSPI 200 for direct management. However, the key was when this would be implemented and which ones would be included.
SBS, one of Korea's major networks, exclusively reported that NPS finalized the constituent stocks of the NPS-KR250 and started rebalancing trading on the 50 additional KOSPI stocks from January.
Hence, tracing and identifying who these additional 50 KOSPI stocks are is becoming the hottest topic in Korea's local market at this point.


Korea NPS Reportedly Finalized Additional 50 KOSPI Stocks in Its BM for Direct Management

<ul>
<li>We believe that Jeju Air is in a sweet spot right now. Jeju Air is one of the major beneficiaries of the travel resurgence in Asia.</li>
<li>Jeju Air is a potential inclusion candidate in the KOSPI 200 index in 2023. There are 42 companies in KOSPI 200 which have lower market cap than Jeju Air. </li>
<li>Outbound travel from Korea recovered strongly with 6.6 million outbound tourists from South Korea in 2022, up 436% YoY. However, this is still 77% lower than the figure in 2019. </li>
</ul>


We believe that Jeju Air is in a sweet spot right now. Jeju Air is one of the major beneficiaries of the travel resurgence in Asia.
Jeju Air is a potential inclusion candidate in the KOSPI 200 index in 2023. There are 42 companies in KOSPI 200 which have lower market cap than Jeju Air. 
Outbound travel from Korea recovered strongly with 6.6 million outbound tourists from South Korea in 2022, up 436% YoY. However, this is still 77% lower than the figure in 2019. 


Jeju Air: A Big Beneficiary of Travel Resurgence in Asia + A Likely Inclusion in KOSPI 200 in 2023

<div class="content-highlight">
<p><strong>On November 16th, Korean Air Lines stated that it will acquire Asiana Airlines for 1.8 trillion won ($1.6 billion) that would create the 10th biggest airline by fleets in the world. </strong>In this deal, the Korean Development Bank (KDB) will help Hanjin Group Chairman Cho Won-Tae &amp; related parties retain control of Hanjin Kal and the Korean Air.</p>
<p>However, things are not so simple as they initially look on paper. This is mainly because in 2021 and beyond, the global air travel industry may not return quickly to the pre-COVID-19 environment. The overall media coverage of this event has been positive. However, we believe that there could be a bigger risk that things may not turn out so rosy for the combined companies. <strong>Rather, there is an increasing likelihood that the combined Korean Air and Asiana Airlines may become another KEPCO (which is controlled by the Korean government).  </strong></p>
</div>


On November 16th, Korean Air Lines stated that it will acquire Asiana Airlines for 1.8 trillion won ($1.6 billion) that would create the 10th biggest airline by fleets in the world. In this deal, the Korean Development Bank (KDB) will help Hanjin Group Chairman Cho Won-Tae &amp; related parties retain control of Hanjin Kal and the Korean Air.
However, things are not so simple as they initially look on paper. This is mainly because in 2021 and beyond, the global air travel industry may not return quickly to the pre-COVID-19 environment. The overall media coverage of this event has been positive. However, we believe that there could be a bigger risk that things may not turn out so rosy for the combined companies. Rather, there is an increasing likelihood that the combined Korean Air and Asiana Airlines may become another KEPCO (which is controlled by the Korean government).  


Korean Air + Asiana Airlines - Is This Becoming Another KEPCO?

South Korea

Jin Air Co.,Ltd. provides air transportation services. The Company offers passenger and freight air transportation services, aviation equipment maintenance, aircraft leasing services, and other services. Jin Air also provides ticket and hotel booking and consulting services.

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Jin Air Co. Ltd (272450 KS)

Korean Air Spearheading the Korean Airline Industry Consolidation

Nearly four years have passed since Korean Air first proposed a merger with Asiana Airlines in November 2020. Despite repeated delays, it appears...

Douglas Kim

Recent NPS Buys and Sells in Korea

In this insight, we discuss 39 stocks major stocks in Korea which have experienced changes in their ownerships by the NPS in the past several weeks.

Douglas Kim

Korea NPS Reportedly Finalized Additional 50 KOSPI Stocks in Its BM for Direct Management

This post investigates the 50 additional KOSPI stocks that Korea NPS has reportedly chosen for its benchmark index for direct management, called...

Sanghyun Park

Jeju Air: A Big Beneficiary of Travel Resurgence in Asia + A Likely Inclusion in KOSPI 200 in 2023

Jeju Air is in a sweet spot right now as it is one of the major beneficiaries of the travel resurgence in Asia. Jeju Air is also a potential...

Douglas Kim

Korean Air + Asiana Airlines - Is This Becoming Another KEPCO?

Perhaps the worst-case scenario is that the combined Korean Air + Asiana Airlines becomes another KEPCO, which would be culminated with KDB taking...

Douglas Kim

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