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>Local traders are betting SK Inc will preemptively announce a treasury share cancellation before the June election, positioning it as the center of the regime change momentum play.</li>
<li>From a trading perspective, SK Inc could rally as a "buyback stock" and offer NAV gap trading opportunities.</li>
<li>Another option could be an event-driven hedge strategy: go long on SK and short index futures post-election. If Lee Jae-myung wins, SK could outperform, but the broader market may drop.</li>
</ul>


Local traders are betting SK Inc will preemptively announce a treasury share cancellation before the June election, positioning it as the center of the regime change momentum play.
From a trading perspective, SK Inc could rally as a "buyback stock" and offer NAV gap trading opportunities.
Another option could be an event-driven hedge strategy: go long on SK and short index futures post-election. If Lee Jae-myung wins, SK could outperform, but the broader market may drop.


Next Target After Hanwha for Regime Change Momentum Play: SK Inc's Share Cancellation

Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

Douglas Research Advisory

Equity Bottom-Up

<ul>
<li><em><strong>Lee Jae-Myung (who is leading in most election polls) has mentioned cancellation of treasury shares as one of the key campaign pledges to improve the corporate governance in Korea.</strong></em></li>
<li>If the cancellation of these shares becomes mandatory, the SK Group and Lotte Group will be most affected. </li>
<li>We provide a list of 21 stocks in KOSPI200 that have the highest ratios for treasury shares/total outstanding shares. These stocks could receive more attention in the next several months. </li>
</ul>


Lee Jae-Myung (who is leading in most election polls) has mentioned cancellation of treasury shares as one of the key campaign pledges to improve the corporate governance in Korea.
If the cancellation of these shares becomes mandatory, the SK Group and Lotte Group will be most affected. 
We provide a list of 21 stocks in KOSPI200 that have the highest ratios for treasury shares/total outstanding shares. These stocks could receive more attention in the next several months. 


Lee Jae-Myung's Campaign Pledge - Cancellation of Treasury Shares

<ul>
<li>In this insight, we discuss about SK Inc (034730 KS) which is considering on selling the controlling stake of SK Siltron.</li>
<li>If SK is successful in selling 70.6% stake in SK Siltron for about 5 trillion won, it could result in more than 3 trillion won cash inflow for SK Inc. </li>
<li>Our base case valuation of SK Inc is NAV of 13.9 trillion won (NAV per share of 192,217 won), representing a 61% upside from current levels.</li>
</ul>


In this insight, we discuss about SK Inc (034730 KS) which is considering on selling the controlling stake of SK Siltron.
If SK is successful in selling 70.6% stake in SK Siltron for about 5 trillion won, it could result in more than 3 trillion won cash inflow for SK Inc. 
Our base case valuation of SK Inc is NAV of 13.9 trillion won (NAV per share of 192,217 won), representing a 61% upside from current levels.


Potential Sale of a Controlling Stake in SK Siltron to Hahn & Co

<ul>
<li>SK Inc is selling SK Siltron to cut its 68% debt-to-equity ratio. The sale could reduce borrowings below ₩5T and lower debt ratio to 30-40%.</li>
<li>Chey Tae-won's divorce lawsuit risks his majority stake in SK Inc. Selling Siltron helps raise ₩1T for alimony without touching his SK Inc shares, potentially reducing the holding company discount.</li>
<li>SK Inc-SK Square merger is unlikely soon, despite asset sales and preparation on both sides, as SK Square recently reaffirmed no current merger plans. Setting a position now seems premature.</li>
</ul>


SK Inc is selling SK Siltron to cut its 68% debt-to-equity ratio. The sale could reduce borrowings below ₩5T and lower debt ratio to 30-40%.
Chey Tae-won's divorce lawsuit risks his majority stake in SK Inc. Selling Siltron helps raise ₩1T for alimony without touching his SK Inc shares, potentially reducing the holding company discount.
SK Inc-SK Square merger is unlikely soon, despite asset sales and preparation on both sides, as SK Square recently reaffirmed no current merger plans. Setting a position now seems premature.


Key Implications of SK Inc's Disposal of SK Siltron

Asia Real Estate News Tracker, Asia Real Estate Tracker

Asia Real Estate Tracker

Asia Real Estate News Tracker

Tracking developments across Asia's regional real estate markets

<ul><li>Cambridge, a Singapore-based firm, purchases a Sydney office block for $70M from a former Tysan boss, expanding its real estate portfolio</li><li>Hong Kong Land reports a significant increase in losses, totaling $1.4B, attributed to challenges within its Central Portfolio</li><li>M&amp;G Real Estate invests $62M in student housing in Melbourne, Australia, highlighting their focus on the Australian real estate market. Warburg Pincus forms a partnership with SK Group to develop Korean senior living facilities, tapping into the growing demand for elderly care in South Korea.</li></ul>

Cambridge, a Singapore-based firm, purchases a Sydney office block for $70M from a former Tysan boss, expanding its real estate portfolioHong Kong Land reports a significant increase in losses, totaling $1.4B, attributed to challenges within its Central PortfolioM&amp;G Real Estate invests $62M in student housing in Melbourne, Australia, highlighting their focus on the Australian real estate market. Warburg Pincus forms a partnership with SK Group to develop Korean senior living facilities, tapping into the growing demand for elderly care in South Korea.

Asia Real Estate Tracker (11-Mar-2025): Singapore buying Sydney office for $70M.

South Korea

SK Holdings Co., Ltd. is a holdings company that is engaged in various industries including energy, chemicals, information technology, semiconductors, marketing, and services businesses in South Korea and internationally.

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SK Inc (034730 KS)

Lee Jae-Myung's Campaign Pledge - Cancellation of Treasury Shares

Lee Jae-Myung (who is leading in most election polls) has mentioned cancellation of treasury shares as one of the key campaign pledges to improve...

Douglas Kim

Potential Sale of a Controlling Stake in SK Siltron to Hahn & Co

If SK is successful in selling 70.6% stake in SK Siltron for about 5 trillion won, it could result in more than 3 trillion won cash inflow for SK Inc.

Douglas Kim

Key Implications of SK Inc's Disposal of SK Siltron

This post explores the key implications of SK Inc's decision to dispose of its stake in SK Siltron, a move that made waves in the local market late...

Sanghyun Park

Asia Real Estate Tracker (11-Mar-2025): Singapore buying Sydney office for $70M.

Real estate deals in Asia-Pacific: Singapore's Cambridge buys Sydney office block, Hong Kong Land's losses double, M&G Real Estate acquires student...

Asia Real Estate Tracker

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

Next Target After Hanwha for Regime Change Momentum Play: SK Inc's Share Cancellation

This post investigates the movements in Korea's local trading scene as traders target the next play after Hanwha: SK Inc's treasury share...

Sanghyun Park

Lee Jae-Myung's Campaign Pledge - Cancellation of Treasury Shares

Lee Jae-Myung (who is leading in most election polls) has mentioned cancellation of treasury shares as one of the key campaign pledges to improve...

Douglas Kim

Potential Sale of a Controlling Stake in SK Siltron to Hahn & Co

If SK is successful in selling 70.6% stake in SK Siltron for about 5 trillion won, it could result in more than 3 trillion won cash inflow for SK Inc.

Douglas Kim

Key Implications of SK Inc's Disposal of SK Siltron

This post explores the key implications of SK Inc's decision to dispose of its stake in SK Siltron, a move that made waves in the local market late...

Sanghyun Park

Asia Real Estate Tracker (11-Mar-2025): Singapore buying Sydney office for $70M.

Real estate deals in Asia-Pacific: Singapore's Cambridge buys Sydney office block, Hong Kong Land's losses double, M&G Real Estate acquires student...

Asia Real Estate Tracker