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>Maximizing Lee Jae-yong's dividend income is crucial, making Samsung SDS's ₩5.5T cash assets key, thus prompting the merger of Samsung C&amp;T and Samsung SDS's BPO division.</li>
<li>With no legal risks for Lee Jae-yong, Samsung C&amp;T needs the merger to increase assets and avoid forced holding company conversion, making the acquisition of Samsung SDS’s BPO division necessary.</li>
<li>We should target a setup for likely appraisal rights for C&amp;T. Monitor and capture the spread between the stock price and appraisal rights exercise price.</li>
</ul>


Maximizing Lee Jae-yong's dividend income is crucial, making Samsung SDS's ₩5.5T cash assets key, thus prompting the merger of Samsung C&amp;T and Samsung SDS's BPO division.
With no legal risks for Lee Jae-yong, Samsung C&amp;T needs the merger to increase assets and avoid forced holding company conversion, making the acquisition of Samsung SDS’s BPO division necessary.
We should target a setup for likely appraisal rights for C&amp;T. Monitor and capture the spread between the stock price and appraisal rights exercise price.


Examining Market Interest in the Potential Samsung C&T and SDS Restructuring

<ul>
<li>Senior Presidential Secretary said this morning that a tax reform, including reducing inheritance tax rates to the OECD average, will be disclosed in late July with the tax reform plan.</li>
<li>Stocks sensitive to reduced inheritance tax, notably Hyundai Motor Group subsidiaries like Hyundai Glovis and Hyundai Motor, could see significant attention amid governance restructuring efforts under Chung Eui-sun.</li>
<li>Retroactive application and its extent may impact markets, potentially affecting groups like Samsung, influencing diverse investment strategies based on specifics.</li>
</ul>


Senior Presidential Secretary said this morning that a tax reform, including reducing inheritance tax rates to the OECD average, will be disclosed in late July with the tax reform plan.
Stocks sensitive to reduced inheritance tax, notably Hyundai Motor Group subsidiaries like Hyundai Glovis and Hyundai Motor, could see significant attention amid governance restructuring efforts under Chung Eui-sun.
Retroactive application and its extent may impact markets, potentially affecting groups like Samsung, influencing diverse investment strategies based on specifics.


Unexpected Inheritance Tax Rate Reduction Included in July Tax Reform: Impact on Value-Up Trading

Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

Douglas Research Advisory

<ul>
<li>On 11 June, the FSC announced that the restrictions on allocation of treasury shares as new shares post spin-offs is expected to be made into law in 2H 2024.</li>
<li>Meanwhile, starting <strong>1 July,</strong> the financial regulators will make it more difficult for Korean companies to conduct spin-offs that have separate allocation of treasury shares as new shares.</li>
<li>The top five stocks with highest percentage of treasury shares/outstanding shares are up on average 40.5% YTD. </li>
</ul>


On 11 June, the FSC announced that the restrictions on allocation of treasury shares as new shares post spin-offs is expected to be made into law in 2H 2024.
Meanwhile, starting 1 July, the financial regulators will make it more difficult for Korean companies to conduct spin-offs that have separate allocation of treasury shares as new shares.
The top five stocks with highest percentage of treasury shares/outstanding shares are up on average 40.5% YTD. 


Changes in Law for Allocation of Treasury Shares as New Shares Post Spin-Offs in Korea in 2H 2024

<ul>
<li>Today, the Financial Services Commission of Korea announced treasury stock rule improvements: (1) No new share allocation to treasury shares during equity spinoffs. (2) Strengthened disclosure requirements.</li>
<li>No mandatory cancellation may disappoint the market. Nevertheless, the decision not to issue new shares during equity spinoffs amplifies the volume targeted during subsequent tender offers, potentially intensifying price impacts.</li>
<li>Also, enhanced disclosure for treasury stocks, especially for companies with over 10% holdings, may trigger significant trading events based on pre-information about holdings and disposals.</li>
</ul>


Today, the Financial Services Commission of Korea announced treasury stock rule improvements: (1) No new share allocation to treasury shares during equity spinoffs. (2) Strengthened disclosure requirements.
No mandatory cancellation may disappoint the market. Nevertheless, the decision not to issue new shares during equity spinoffs amplifies the volume targeted during subsequent tender offers, potentially intensifying price impacts.
Also, enhanced disclosure for treasury stocks, especially for companies with over 10% holdings, may trigger significant trading events based on pre-information about holdings and disposals.


Korean FSC's Official Disclosure of New Treasury Share Regulations & Potential Trading Dynamics

<ul>
<li>This insight is a book review of 주주 권리가 없는 나라 (A Country Without Shareholder Rights), which is one of the best books on the corporate governance in Korea.</li>
<li>There are so much wisdom that are included in this book. The author really goes into details about numerous corporate governance problems in Korea and ways to fix them.</li>
<li>This book was published in January 2024 and it was written by a famous Korean retail investor called Park Young-Ok.</li>
</ul>


This insight is a book review of 주주 권리가 없는 나라 (A Country Without Shareholder Rights), which is one of the best books on the corporate governance in Korea.
There are so much wisdom that are included in this book. The author really goes into details about numerous corporate governance problems in Korea and ways to fix them.
This book was published in January 2024 and it was written by a famous Korean retail investor called Park Young-Ok.


A Country Without Shareholder Rights (주주 권리가 없는 나라) - A Book Review

South Korea

LG Corp. is a holding company, which operates subsidiaries including LG Electronics, LG Household & Health Care, LG Chem Ltd., and Dacom Corp. The Company's main business areas are electronics, chemicals, and household products manufacturing and telecommunications services.

CJ Corp. is an investment holding company.  The Company, through its subsidiaries, manufactures processed food products.  The subsidiaries' products include refined sugar, monosodium glutamate (MSG), condiment, wheat powder, flour, cooking oil, processed meats, and animal feed.

Doosan Co., Ltd operates as a diversified manufacturing and service company. The Company conducts electronic components production, logistics equipment manufacturing, information technology consulting, and other businesses. Doosan provides services worldwide.

ALUKO Co., Ltd. manufactures window frames, balconies, and ventilators made of aluminum.  The Company provides various colors and types of aluminum window frames and sashes.  ALUKO also produces steel furniture.

Hanwha Aerospace Co., Ltd. operates as an aircraft parts manufacturing company. The Company produces and sells aircraft gas turbine engine products, aircraft compressors, low pressure turbines, and other products. Hanwha Aerospace markets its products worldwide.

HD Korea Shipbuilding & Offshore Engineering Co., Ltd. operates as a shipbuilding and offshore company. The Company provides industrial plant engineering, special and naval shipbuilding, marine engine and machinery, industrial machinery and energy services. HD Korea Shipbuilding & Offshore Engineering markets its products worldwide.

HD Korea Shipbuilding & Offshore Engineering (009540 KS)

HD Korea Shipbuilding & Offshore Engineering

Ecopro BM Co.,Ltd develops and manufactures advanced materials. The Company produces and sells high-nickel cathode materials and other products. Ecopro BM markets its products throughout Korea.

Samsung Heavy Industries Co., Ltd. manufactures crude oil tankers, container vessels, bulk carriers, cruisers, and passenger ferries.  The Company also produces steel and bridge structures, and material handling equipment.  In addition, Samsung Heavy Industries provides civil engineering, architectural, and plant construction services.

LS Electric Co., Ltd. manufactures and distributes electrical power equipment. The Company produces smart power equipment, smart automation equipment, smart railway equipment, and other related products. LS Electric also develops smart grid, micro grid, energy storage systems, and metal products.

Posco International Corporation is a general trading company.  The Company exports and imports steel, cement, crude oil, heavy machinery, automobile parts, and textiles.  Daewoo also manufactures synthetic fabrics for footwear, garments, and car seats, and operates a department store in Masan.

Posco International Corporation (047050 KS)

Keppel Corporation Limited's core businesses are offshore and marine, infrastructure, property investment and development, telecommunications and transportation, energy, and engineering.

CK Hutchison Holdings Limited holds all of the non-property businesses of the Cheung Kong Group and the Hutchison Group, including ports and related services, telecommunications, retail, infrastructure, energy, and movable assets leasing operations.

Toshiba Corporation manufactures and markets electrical and electronic products. The Company's products include digital products such as PCs and televisions, NAND flash memories, and system LSIs (large-scale integrated), as well as social infrastructures such as power generators, medical equipment, and home appliances.

Carlisle Companies Incorporated manufactures and distributes construction materials, transportation products, and general industry products.  The Company manufactures a variety of products for the roofing, real estate, construction, trucking, food-service, aircraft manufacturing, lawn and garden, and other industries.

Jardine Matheson Holdings Limited is a multinational enterprise with a portfolio of businesses focused on the Asia-Pacific region. The Group's activities include financial services, supermarkets, consumer marketing, engineering and construction, automobile trading, insurance broking, property investment, and hotels.

SM Investments Corporation is an investment holding company. The Company operates retail business and develops shopping mall and other real estate property.  The Company also provides tourism services.

Koninklijke Philips NV is a health technology company focused on improving people's health across the health continuum from healthy living and prevention, to diagnosis, treatment, and home care. The Company offers products and services in diagnostic imaging, image-guided therapy, patient monitoring and health informatics, as well as in consumer health and home care.

Rheinmetall AG is an automotive, electronics, defense, and engineering group. The Company produces automotive pumps and components to supply air, reduce emissions, and supply fuel, pistons for gasoline and diesel vehicle and stationary engines, bearings for engines and other applications and aluminum engine blocks, and offers aftermarket service to engine repair shops.

Lifco AB operates as a holding company. The Company, through its subsidiaries, provides dental products, machinery and tools, sawmill equipment, contract manufacturing, vehicle interiors, and environmental technology. Lifco offers its products through a network of subsidiaries and partnerships worldwide.

Grupo Carso SAB de CV is a holding company with subsidiaries in the construction ,retail and industrial materials industries. The Company's products and services include: oil platform construction; shoping centers, industrial facilities and corporate buildings construction; highway construction; dam and aqueduct construction; steel tubes; and housing.

Samsung C&T Corporation conducts diversified business support services and resort operation activities. The Company offers a range of services in areas including clothing retail, construction, energy, real estate, food service, and resort accommodations. Samsung C&T also operates a resort with amusement rides, a zoo, water park, golf clubs, and restaurants.

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Samsung C&T (028260 KS)

Examining Market Interest in the Potential Samsung C&T and SDS Restructuring

This post examines the growing market interest and trading angles in the potential restructuring involving Samsung C&T and Samsung SDS.

Sanghyun Park

Unexpected Inheritance Tax Rate Reduction Included in July Tax Reform: Impact on Value-Up Trading

Senior Presidential Secretary Seong Tae-yoon confirmed this morning on KBS that reducing inheritance tax rates to 30% will be disclosed in late...

Sanghyun Park

Changes in Law for Allocation of Treasury Shares as New Shares Post Spin-Offs in Korea in 2H 2024

On 11 June, the FSC announced that the restrictions on allocation of treasury shares as new shares post spin-offs is expected to be made into law...

Douglas Kim

A Country Without Shareholder Rights (주주 권리가 없는 나라) - A Book Review

This insight is a book review of 주주 권리가 없는 나라 (A Country Without Shareholder Rights), which is one of the best books on the corporate governance in...

Douglas Kim

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

Examining Market Interest in the Potential Samsung C&T and SDS Restructuring

This post examines the growing market interest and trading angles in the potential restructuring involving Samsung C&T and Samsung SDS.

Sanghyun Park

Unexpected Inheritance Tax Rate Reduction Included in July Tax Reform: Impact on Value-Up Trading

Senior Presidential Secretary Seong Tae-yoon confirmed this morning on KBS that reducing inheritance tax rates to 30% will be disclosed in late...

Sanghyun Park

Changes in Law for Allocation of Treasury Shares as New Shares Post Spin-Offs in Korea in 2H 2024

On 11 June, the FSC announced that the restrictions on allocation of treasury shares as new shares post spin-offs is expected to be made into law...

Douglas Kim

Korean FSC's Official Disclosure of New Treasury Share Regulations & Potential Trading Dynamics

Korea FSC announced today that it will issue a legislative change notice regarding the Capital Markets Act amendment, following the January...

Sanghyun Park

A Country Without Shareholder Rights (주주 권리가 없는 나라) - A Book Review

This insight is a book review of 주주 권리가 없는 나라 (A Country Without Shareholder Rights), which is one of the best books on the corporate governance in...

Douglas Kim