Pan-Asia Index Rebalances/ Events/ Delta One, Periscope Analytics

Brian Freitas

Pan-Asia Index Rebalances/ Events/ Delta One

Event-Driven

<p>Earlier today, S&amp;P Dow Jones announced that all the proposals of the latest market consultation would be implemented at the close of trading on 16 April to reduce constituent concentration, ease liquidity limitations, and improve index replication further than would have been achieved from the result of the prior market consultation.</p><p>We expect there will be 37 additions to the index taking the number of index constituents up to 67. This number will increase over the next few rebalances as the target is to get up to at least 100 constituent stocks.</p><p>With index weight dependent on free float market cap and turnover, plus capping of index weight dependent on exposure scores, this is going to be a large rebalance. We expect a one-way turnover of 48.1% with our expected changes.</p><p>Stocks that could see passive buying (sorted in terms of days of ADV) are <a href="https://www.smartkarma.com/entities/drax-group-plc" target="_blank" data-smartkarma-citation="entities:21911:1" rel="noopener">Drax Group PLC (DRX LN)</a>, <a href="https://www.smartkarma.com/entities/enel-americas-sa-c3a67f8a-ad13-45ff-a676-cbc513b8c458" target="_blank" data-smartkarma-citation="entities:25965:1" rel="noopener">Enel Americas Sa (ENIA US)</a>, <a href="https://www.smartkarma.com/entities/fortum-oyj" target="_blank" data-smartkarma-citation="entities:21762:1" rel="noopener">Fortum OYJ (FUM1V FH)</a>, <a href="https://www.smartkarma.com/entities/erg-spa" target="_blank" data-smartkarma-citation="entities:21186:1" rel="noopener">ERG SpA (ERG IM)</a>, <a href="https://www.smartkarma.com/entities/terna-rete-elettrica-nazionale" target="_blank" data-smartkarma-citation="entities:21232:1" rel="noopener">Terna Rete Elettrica Nazionale (TRN IM)</a>, <a href="https://www.smartkarma.com/entities/china-longyuan-power-group-corp-ltd" target="_blank" data-smartkarma-citation="entities:14215:1" rel="noopener">China Longyuan Power Group Corp (916 HK)</a>, <a href="https://www.smartkarma.com/entities/nordex-se" target="_blank" data-smartkarma-citation="entities:21682:1" rel="noopener">Nordex SE (NDX1 GR)</a>, <a href="https://www.smartkarma.com/entities/acciona-sa" target="_blank" data-smartkarma-citation="entities:21248:1" rel="noopener">Acciona SA (ANA SM)</a>, <a href="https://www.smartkarma.com/entities/avista-corp" target="_blank" data-smartkarma-citation="entities:17178:1" rel="noopener">Avista Corp (AVA US)</a> and <a href="https://www.smartkarma.com/entities/idacorp-inc" target="_blank" data-smartkarma-citation="entities:15190:1" rel="noopener">Idacorp Inc (IDA US)</a>.</p><p>Stocks that could see passive selling (sorted in terms of days of ADV) are <a href="https://www.smartkarma.com/entities/meridian-ener-partly-paid-sh" target="_blank" data-smartkarma-citation="entities:4327:1" rel="noopener">Meridian Energy (MEL NZ)</a>, <a href="https://www.smartkarma.com/entities/contact-energy-ltd" target="_blank" data-smartkarma-citation="entities:13136:1" rel="noopener">Contact Energy (CEN NZ)</a>, <a href="https://www.smartkarma.com/entities/verbund-ag" target="_blank" data-smartkarma-citation="entities:22563:1" rel="noopener">Verbund AG (VER AV)</a>, <a href="https://www.smartkarma.com/entities/edp-renovaveis-sa" target="_blank" data-smartkarma-citation="entities:21363:1" rel="noopener">EDP Renovaveis SA (EDPR PL)</a>, <a href="https://www.smartkarma.com/entities/scatec-solar-asa" target="_blank" data-smartkarma-citation="entities:25120:1" rel="noopener">Scatec Solar ASA (SSO NO)</a>, <a href="https://www.smartkarma.com/entities/innergex-renewable-energy-inc" target="_blank" data-smartkarma-citation="entities:25479:1" rel="noopener">Innergex Renewable Energy (INE CN)</a>, <a href="https://www.smartkarma.com/entities/boralex-inc" target="_blank" data-smartkarma-citation="entities:25478:1" rel="noopener">Boralex Inc (BLX CN)</a> and <a href="https://www.smartkarma.com/entities/siemens-gamesa-renewable-energy-s-a" target="_blank" data-smartkarma-citation="entities:21270:1" rel="noopener">Siemens Gamesa Renewable Energy, S.A. (SGRE SM)</a>.</p><p>Among existing constituents, there will be passive inflows on <a href="https://www.smartkarma.com/entities/orsted-a-s" target="_blank" data-smartkarma-citation="entities:24765:1" rel="noopener">Orsted A/S (ORSTED DC)</a>, <a href="https://www.smartkarma.com/entities/vestas-wind-systems-a-s" target="_blank" data-smartkarma-citation="entities:22524:1" rel="noopener">Vestas Wind Systems A/S (VWS DC)</a>, <a href="https://www.smartkarma.com/entities/solaredge-technologies-inc" target="_blank" data-smartkarma-citation="entities:27981:1" rel="noopener">SolarEdge Technologies Inc (SEDG US)</a>, <a href="https://www.smartkarma.com/entities/sunrun-inc" target="_blank" data-smartkarma-citation="entities:19726:1" rel="noopener">Sunrun Inc (RUN US)</a> and <a href="https://www.smartkarma.com/entities/enphase-energy-inc" target="_blank" data-smartkarma-citation="entities:8872:1" rel="noopener">Enphase Energy (ENPH US)</a>. </p>

Earlier today, S&amp;P Dow Jones announced that all the proposals of the latest market consultation would be implemented at the close of trading on 16 April to reduce constituent concentration, ease liquidity limitations, and improve index replication further than would have been achieved from the result of the prior market consultation.We expect there will be 37 additions to the index taking the number of index constituents up to 67. This number will increase over the next few rebalances as the target is to get up to at least 100 constituent stocks.With index weight dependent on free float market cap and turnover, plus capping of index weight dependent on exposure scores, this is going to be a large rebalance. We expect a one-way turnover of 48.1% with our expected changes.Stocks that could see passive buying (sorted in terms of days of ADV) are Drax Group PLC (DRX LN), Enel Americas Sa (ENIA US), Fortum OYJ (FUM1V FH), ERG SpA (ERG IM), Terna Rete Elettrica Nazionale (TRN IM), China Longyuan Power Group Corp (916 HK), Nordex SE (NDX1 GR), Acciona SA (ANA SM), Avista Corp (AVA US) and Idacorp Inc (IDA US).Stocks that could see passive selling (sorted in terms of days of ADV) are Meridian Energy (MEL NZ), Contact Energy (CEN NZ), Verbund AG (VER AV), EDP Renovaveis SA (EDPR PL), Scatec Solar ASA (SSO NO), Innergex Renewable Energy (INE CN), Boralex Inc (BLX CN) and Siemens Gamesa Renewable Energy, S.A. (SGRE SM).Among existing constituents, there will be passive inflows on Orsted A/S (ORSTED DC), Vestas Wind Systems A/S (VWS DC), SolarEdge Technologies Inc (SEDG US), Sunrun Inc (RUN US) and Enphase Energy (ENPH US). 

Global Clean Energy Index: All Proposals to Be Implemented; 48% One-Way Turnover

Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

Equity Capital Markets

Hanwha Solutions / Equity Capital Markets

<p>After the market close on 21 December, <a href="https://www.smartkarma.com/entities/hanwha-solutions" target="_blank" data-smartkarma-citation="entities:8656:1" rel="noopener">Hanwha Solutions (009830 KS)</a> announced that it will conduct a rights offering worth 1.2 trillion won (US$1.1 billion) (3.14 million shares). In terms of shares outstanding, this 3.14 million shares related to rights offering represents 19.6% of total shares outstanding. The initial expected rights offering price is 38,200 won, which is 17% lower than the current price of 46,150 won. Hanwha Solutions plans to use the proceeds to further invest in solar and hydrogen related businesses. </p><p>There have been several large scale rights offerings in Korea in the past six months related to companies such as POSCO Chemical, Doosan Fuelcell, &amp; CS Wind that are trying to expand their businesses in the rechargeable batteries,  fuel cell, and wind power. On average, these three companies' share prices are up 31% from the announcement date of the rights offerings to current date.</p><div class="content-highlight">
<p>Nonetheless, we have a negative view of this rights offering. There are three main reasons why we believe the market is not likely to view this big rights offering of Hanwha Solutions as favorably as compared to the three companies mentioned above:</p>
<p><strong>1) Bad publicity/investment in Nikola Corp</strong> - Investors view the Hanwha Group's investment in Nikola Corp negatively and this reflects a poor track record in investing in a hydrogen based company. </p>
<p><strong>2) Lower ROE</strong> - In general, POSCO Chemical and CS Wind generate higher ROE than Hanwha Solutions and investors prefer to allocate more capital to companies that generate higher ROE and want to reinvest in their own businesses. </p>
<p><strong>3) Late in the cycle/momentum</strong> - This big rights offering announcement by Hanwha Solutions comes a bit later in the overall boom momentum cycle that the stock market has been enjoying since March 2020. The market has been heavily driven by momentum driven investors, especially in the past several months and there are credible concerns that the market momentum could be waning. </p>
</div>

After the market close on 21 December, Hanwha Solutions (009830 KS) announced that it will conduct a rights offering worth 1.2 trillion won (US$1.1 billion) (3.14 million shares). In terms of shares outstanding, this 3.14 million shares related to rights offering represents 19.6% of total shares outstanding. The initial expected rights offering price is 38,200 won, which is 17% lower than the current price of 46,150 won. Hanwha Solutions plans to use the proceeds to further invest in solar and hydrogen related businesses. There have been several large scale rights offerings in Korea in the past six months related to companies such as POSCO Chemical, Doosan Fuelcell, &amp; CS Wind that are trying to expand their businesses in the rechargeable batteries,  fuel cell, and wind power. On average, these three companies' share prices are up 31% from the announcement date of the rights offerings to current date.
Nonetheless, we have a negative view of this rights offering. There are three main reasons why we believe the market is not likely to view this big rights offering of Hanwha Solutions as favorably as compared to the three companies mentioned above:
1) Bad publicity/investment in Nikola Corp - Investors view the Hanwha Group's investment in Nikola Corp negatively and this reflects a poor track record in investing in a hydrogen based company. 
2) Lower ROE - In general, POSCO Chemical and CS Wind generate higher ROE than Hanwha Solutions and investors prefer to allocate more capital to companies that generate higher ROE and want to reinvest in their own businesses. 
3) Late in the cycle/momentum - This big rights offering announcement by Hanwha Solutions comes a bit later in the overall boom momentum cycle that the stock market has been enjoying since March 2020. The market has been heavily driven by momentum driven investors, especially in the past several months and there are credible concerns that the market momentum could be waning. 


Hanwha Solutions - Trading Strategy Post Its Announcement of a Rights Offering of 1.2 Trillion Won

Korea / Special Sits, Pairs, Index Rebalancing, Clepsydra Capital

Sanghyun Park

Korea / Special Sits, Pairs, Index Rebalancing

<p>Hanwha Solutions became the latest one in Korea to leverage the hyper liquid stock market.</p><p>It announced a ₩1.2T offering at a 19.5% capital increase.</p><p>20% goes to the ESPO, so the per-share allocation for stockholders sits at 0.1565.</p><p>This event has a longer schedule than usual due to two holidays, the new year and Seollal (lunar new year).</p><p>Oversubscription is 20%, and five local bankers will be serving as an underwriter, mainly due to the offering size.</p><table class="table table-striped">
<colgroup>
<col width="300">
<col width="300">
</colgroup>
<tbody>
<tr><td colspan="2" rowspan="1" style="width: 723.636px;" data-sheets-value='{"1":2,"2":"Overview"}'>Overview</td></tr>
<tr>
<td style="width: 351.818px;" data-sheets-value='{"1":2,"2":"Issuer"}'>Issuer</td>
<td style="text-align: left; width: 350.909px;" data-sheets-value='{"1":2,"2":"Hanwha Solutions Corp"}' data-sheets-formula='=googlefinance(R[1]C[0], "name")'>Hanwha Solutions Corp</td>
</tr>
<tr>
<td style="width: 351.818px;" data-sheets-value='{"1":2,"2":"Ticker"}'>Ticker</td>
<td style="text-align: left; width: 350.909px;" data-sheets-value='{"1":2,"2":"009830"}' data-sheets-formula='="009830"'>009830</td>
</tr>
<tr>
<td style="width: 351.818px;" data-sheets-value='{"1":2,"2":"Target"}'>Target</td>
<td style="text-align: left; width: 350.909px;" data-sheets-value='{"1":2,"2":"Pubic offering of forfeited shares after offering to stockholders"}'>A public offering of forfeited shares after offering to stockholders</td>
</tr>
<tr>
<td style="width: 351.818px;" data-sheets-value='{"1":2,"2":"Transferability"}'>Transferability</td>
<td style="text-align: left; width: 350.909px;" data-sheets-value='{"1":2,"2":"Renounceable"}'>Renounceable</td>
</tr>
<tr>
<td style="width: 351.818px;" data-sheets-value='{"1":2,"2":"Volume"}'>Volume</td>
<td style="text-align: left; width: 350.909px;" data-sheets-value='{"1":3,"3":31414000}' data-sheets-numberformat='{"1":2,"2":"#,##0","3":1}'>31,414,000</td>
</tr>
<tr>
<td style="width: 351.818px;" data-sheets-value='{"1":2,"2":"Bonus issue volume"}'>Bonus issue volume</td>
<td style="text-align: left; width: 350.909px;" data-sheets-value='{"1":3,"3":0}' data-sheets-numberformat='{"1":2,"2":"#,##0","3":1}'>0</td>
</tr>
<tr>
<td style="width: 351.818px;" data-sheets-value='{"1":2,"2":"Preliminary price"}'>Preliminary price</td>
<td style="text-align: left; width: 350.909px;" data-sheets-value='{"1":3,"3":38200}' data-sheets-numberformat='{"1":2,"2":"[$₩-412]#,##0","3":1}'>₩38,200</td>
</tr>
<tr>
<td style="width: 351.818px;" data-sheets-value='{"1":2,"2":"Preliminary value"}'>Preliminary value</td>
<td style="text-align: left; width: 350.909px;" data-sheets-value='{"1":3,"3":1200014800000}' data-sheets-numberformat='{"1":2,"2":"[$₩-412]#,##0","3":1}' data-sheets-formula="=R[-3]C[0]*R[-1]C[0]">₩1,200,014,800,000</td>
</tr>
<tr>
<td style="width: 351.818px;" data-sheets-value='{"1":2,"2":"Oversubscription privilege"}'>Oversubscription privilege</td>
<td style="text-align: left; width: 350.909px;" data-sheets-value='{"1":3,"3":0.2}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}'>20.00%</td>
</tr>
<tr>
<td style="width: 351.818px;" data-sheets-value='{"1":2,"2":"Banker"}'>Banker</td>
<td style="text-align: left; width: 350.909px;" data-sheets-value='{"1":2,"2":"NH, KIS, Mirae Asset, KB, &amp; Daishin"}'>NH, KIS, Mirae Asset, KB, &amp; Daishin</td>
</tr>
<tr>
<td style="width: 351.818px;" data-sheets-value='{"1":2,"2":" - Underwriting type"}'>- Underwriting type</td>
<td style="text-align: left; width: 350.909px;" data-sheets-value='{"1":2,"2":"Standby"}'>Standby</td>
</tr>
<tr><td colspan="2" rowspan="1" style="width: 723.636px;" data-sheets-value='{"1":2,"2":"Source: DART"}'>Source: DART</td></tr>
</tbody>
</table><table class="table table-striped">
<colgroup>
<col width="300">
<col width="300">
</colgroup>
<tbody>
<tr><td colspan="2" rowspan="1" data-sheets-value='{"1":2,"2":"Allocation"}'>Allocation</td></tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Common"}'>Common</td>
<td style="text-align: left;" data-sheets-value='{"1":3,"3":159864497}' data-sheets-numberformat='{"1":2,"2":"#,##0","3":1}' data-sheets-formula='=googlefinance(R[-13]C[0], "shares")'>159,864,497</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Pref (incl. RCPS &amp; CPS)"}'>Pref (incl. RCPS &amp; CPS)</td>
<td style="text-align: left;" data-sheets-value='{"1":3,"3":1123737}' data-sheets-numberformat='{"1":2,"2":"#,##0","3":1}'>1,123,737</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Total shares"}'>Total shares</td>
<td style="text-align: left;" data-sheets-value='{"1":3,"3":160988234}' data-sheets-numberformat='{"1":2,"2":"#,##0","3":1}' data-sheets-formula="=R[-2]C[0]+R[-1]C[0]">160,988,234</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Treasury shares"}'>Treasury shares</td>
<td style="text-align: left;" data-sheets-value='{"1":3,"3":400000}' data-sheets-numberformat='{"1":2,"2":"#,##0","3":1}'>400,000</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Total shares ex treasury shares"}'>Total shares ex treasury shares</td>
<td style="text-align: left;" data-sheets-value='{"1":3,"3":160588234}' data-sheets-numberformat='{"1":2,"2":"#,##0","3":1}' data-sheets-formula="=R[-2]C[0]-R[-1]C[0]">160,588,234</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Offer volume"}'>Offer volume</td>
<td style="text-align: left;" data-sheets-value='{"1":3,"3":31414000}' data-sheets-numberformat='{"1":2,"2":"#,##0","3":1}' data-sheets-formula="=R[1]C[0]+R[2]C[0]">31,414,000</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":" - Common"}'>- Common</td>
<td style="text-align: left;" data-sheets-value='{"1":3,"3":31414000}' data-sheets-numberformat='{"1":2,"2":"#,##0","3":1}' data-sheets-formula="=R[-16]C[0]">31,414,000</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":" - Pref"}'>- Pref</td>
<td style="text-align: left;" data-sheets-value='{"1":3,"3":0}' data-sheets-numberformat='{"1":2,"2":"#,##0","3":1}'>0</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Per-share allocation"}'>Per-share allocation</td>
<td style="text-align: left;" data-sheets-value='{"1":3,"3":0.15649465327578108}' data-sheets-numberformat='{"1":2,"2":"#,##0.00000"}' data-sheets-formula="=R[8]C[0]/R[-4]C[0]">0.15649</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Capital increase"}'>Capital increase</td>
<td style="text-align: left;" data-sheets-value='{"1":3,"3":0.19513227283429918}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}' data-sheets-formula="=R[-4]C[0]/R[-7]C[0]">19.51%</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Dilution"}'>Dilution</td>
<td style="text-align: left;" data-sheets-value='{"1":3,"3":0.16327253248005427}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}' data-sheets-formula="=R[-5]C[0]/(R[-8]C[0]+R[-5]C[0])">16.33%</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Total shares after rights offer"}'>Total shares after rights offer</td>
<td style="text-align: left;" data-sheets-value='{"1":3,"3":192402234}' data-sheets-numberformat='{"1":2,"2":"#,##0","3":1}' data-sheets-formula="=R[1]C[0]+R[2]C[0]">192,402,234</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":" - Common"}'>- Common</td>
<td style="text-align: left;" data-sheets-value='{"1":3,"3":191278497}' data-sheets-numberformat='{"1":2,"2":"#,##0","3":1}' data-sheets-formula="=R[-12]C[0]+R[-7]C[0]">191,278,497</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":" - Pref"}'>- Pref</td>
<td style="text-align: left;" data-sheets-value='{"1":3,"3":1123737}' data-sheets-numberformat='{"1":2,"2":"#,##0","3":1}' data-sheets-formula="=R[-12]C[0]">1,123,737</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"ESOP allocation"}'>ESOP allocation</td>
<td style="text-align: left;" data-sheets-value='{"1":3,"3":6282800}' data-sheets-numberformat='{"1":2,"2":"#,##0","3":1}'>6,282,800</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":" - %"}'>- %</td>
<td style="text-align: left;" data-sheets-value='{"1":3,"3":0.2}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}' data-sheets-formula="=R[-1]C[0]/R[-10]C[0]">20.00%</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Stockholder allocation"}'>Stockholder allocation</td>
<td style="text-align: left;" data-sheets-value='{"1":3,"3":25131200}' data-sheets-numberformat='{"1":2,"2":"#,##0","3":1}' data-sheets-formula="=R[-11]C[0]-R[-2]C[0]">25,131,200</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":" - %"}'>- %</td>
<td style="text-align: left;" data-sheets-value='{"1":3,"3":0.8}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}' data-sheets-formula="=R[-1]C[0]/R[-12]C[0]">80.00%</td>
</tr>
<tr><td colspan="2" rowspan="1" data-sheets-value='{"1":2,"2":"Source: DART"}'>Source: DART</td></tr>
</tbody>
</table><table class="table table-striped">
<colgroup>
<col width="300">
<col width="300">
</colgroup>
<tbody>
<tr><td colspan="2" rowspan="1" data-sheets-value='{"1":2,"2":"Timetable"}'>Timetable</td></tr>
<tr>
<td data-sheets-value='{"1":2,"2":"BOD meeting"}'>BOD meeting</td>
<td style="text-align: left;" data-sheets-value='{"1":3,"3":44186}' data-sheets-numberformat='{"1":5,"2":"yyyy. m. d","3":1}'>2020. 12. 21</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Preliminary pricing"}'><strong>Preliminary pricing</strong></td>
<td style="text-align: left;" data-sheets-value='{"1":3,"3":44210}' data-sheets-numberformat='{"1":5,"2":"yyyy. m. d","3":1}'><strong>2021. 1. 14</strong></td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Ex-rights date"}'><strong>Ex-rights date</strong></td>
<td style="text-align: left;" data-sheets-value='{"1":3,"3":44214}' data-sheets-numberformat='{"1":5,"2":"yyyy. m. d","3":1}'><strong>2021. 1. 18</strong></td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Record date"}'>Record date</td>
<td style="text-align: left;" data-sheets-value='{"1":3,"3":44215}' data-sheets-numberformat='{"1":5,"2":"yyyy. m. d","3":1}'>2021. 1. 19</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Subscription rights trade beginning"}'>Subscription rights trade beginning</td>
<td style="text-align: left;" data-sheets-value='{"1":3,"3":44232}' data-sheets-numberformat='{"1":5,"2":"yyyy. m. d","3":1}'>2021. 2. 5</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Subscription rights trade ending"}'>Subscription rights trade ending</td>
<td style="text-align: left;" data-sheets-value='{"1":3,"3":44242}' data-sheets-numberformat='{"1":5,"2":"yyyy. m. d","3":1}'>2021. 2. 15</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Final pricing"}'><strong>Final pricing</strong></td>
<td style="text-align: left;" data-sheets-value='{"1":3,"3":44246}' data-sheets-numberformat='{"1":5,"2":"yyyy. m. d","3":1}'><strong>2021. 2. 19</strong></td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Stockholder subscription"}'>Stockholder subscription</td>
<td style="text-align: left;" data-sheets-value='{"1":3,"3":44251}' data-sheets-numberformat='{"1":5,"2":"yyyy. m. d","3":1}'>2021. 2. 24</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Public subscription"}'>Public subscription</td>
<td style="text-align: left;" data-sheets-value='{"1":3,"3":44257}' data-sheets-numberformat='{"1":5,"2":"yyyy. m. d","3":1}'>2021. 3. 2</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Payment"}'>Payment</td>
<td style="text-align: left;" data-sheets-value='{"1":3,"3":44260}' data-sheets-numberformat='{"1":5,"2":"yyyy. m. d","3":1}'>2021. 3. 5</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Listing"}'>Listing</td>
<td style="text-align: left;" data-sheets-value='{"1":3,"3":44273}' data-sheets-numberformat='{"1":5,"2":"yyyy. m. d","3":1}'>2021. 3. 18</td>
</tr>
<tr><td colspan="2" rowspan="1" data-sheets-value='{"1":2,"2":"Source: DART"}'>Source: DART</td></tr>
</tbody>
</table><p>The discount is 15%, less than the usual 20%.</p><table class="table table-striped">
<colgroup>
<col width="300">
<col width="400">
</colgroup>
<tbody>
<tr><td colspan="2" rowspan="1" data-sheets-value='{"1":2,"2":"Pricing"}'>Pricing</td></tr>
<tr>
<td data-sheets-value='{"1":2,"2":"1st round"}'>1st round</td>
<td data-sheets-value='{"1":2,"2":"RP × (1 - 15%) / [1 + (19.51% × 15%)]"}' data-sheets-formula='="RP × (1 - "&amp;(R[11]C[0]*100&amp;"%")&amp;") / [1 + ("&amp;(R[12]C[0]*100&amp;"%"&amp;" × "&amp;(R[11]C[0]*100&amp;"%"&amp;")]"))'>RP × (1 - 15%) / [1 + (19.51% × 15%)]</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":" - Reference price (RP)"}'>- Reference price (RP)</td>
<td data-sheets-value='{"1":2,"2":"Min [Close, Avg (Close, 1W VWAP, 1M VWAP)]"}'>Min [Close, Avg (Close, 1W VWAP, 1M VWAP)]</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":" - Reference date"}'>- Reference date</td>
<td data-sheets-value='{"1":3,"3":44210}' data-sheets-numberformat='{"1":5,"2":"yyyy. m. d","3":1}' data-sheets-formula="=Terms!R[34]C[0]">2021. 1. 14</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Ex-rights base price"}'>Ex-rights base price</td>
<td data-sheets-value='{"1":2,"2":"[RP + (1st × 19.51%)] / (1 + 19.51%)"}' data-sheets-formula='="[RP + (1st × "&amp;R[9]C[0]*100&amp;"%"&amp;")] / (1 + "&amp;R[9]C[0]*100&amp;"%"&amp;")"'>[RP + (1st × 19.51%)] / (1 + 19.51%)</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":" - Reference price (RP)"}'>- Reference price (RP)</td>
<td data-sheets-value='{"1":2,"2":"Previous close"}'>Previous close</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":" - Reference date"}'>- Reference date</td>
<td data-sheets-value='{"1":3,"3":44214}' data-sheets-numberformat='{"1":5,"2":"yyyy. m. d","3":1}' data-sheets-formula="=Terms!R[32]C[0]">2021. 1. 18</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"2nd round"}'>2nd round</td>
<td data-sheets-value='{"1":2,"2":"RP × (1 - 15%)"}' data-sheets-formula='="RP × (1 - "&amp;(R[5]C[0]*100&amp;"%")&amp;")"'>RP × (1 - 15%)</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":" - Reference price (RP)"}'>- Reference price (RP)</td>
<td data-sheets-value='{"1":2,"2":"Min [Close, Avg (Close, 1W VWAP)]"}'>Min [Close, Avg (Close, 1W VWAP)]</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":" - Reference date"}'>- Reference date</td>
<td data-sheets-value='{"1":3,"3":44246}' data-sheets-numberformat='{"1":5,"2":"yyyy. m. d","3":1}' data-sheets-formula="=Terms!R[33]C[0]">2021. 2. 19</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Final"}'>Final</td>
<td data-sheets-value='{"1":2,"2":"Max [Min (1st, 2nd), 3D VWAP × 60%]"}'>Max [Min (1st, 2nd), 3D VWAP × 60%]</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":" - Reference date"}'>- Reference date</td>
<td data-sheets-value='{"1":3,"3":44246}' data-sheets-numberformat='{"1":5,"2":"yyyy. m. d","3":1}' data-sheets-formula="=Terms!R[31]C[0]">2021. 2. 19</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Discount rate"}'><strong>Discount rate</strong></td>
<td data-sheets-value='{"1":3,"3":0.15}' data-sheets-numberformat='[null,3,"0.00%",1]'><strong>15.00%</strong></td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Capital increase rate"}'>Capital increase rate</td>
<td data-sheets-value='{"1":3,"3":0.19509999999999997}' data-sheets-numberformat='[null,3,"0.00%",1]' data-sheets-formula="=LEFT(Terms!R[11]C[0],6)*100/100">19.51%</td>
</tr>
<tr><td colspan="2" rowspan="1" data-sheets-value='{"1":2,"2":"Source: DART"}'>Source: DART</td></tr>
</tbody>
</table>

Hanwha Solutions became the latest one in Korea to leverage the hyper liquid stock market.It announced a ₩1.2T offering at a 19.5% capital increase.20% goes to the ESPO, so the per-share allocation for stockholders sits at 0.1565.This event has a longer schedule than usual due to two holidays, the new year and Seollal (lunar new year).Oversubscription is 20%, and five local bankers will be serving as an underwriter, mainly due to the offering size.





Overview

Issuer
Hanwha Solutions Corp


Ticker
009830


Target
A public offering of forfeited shares after offering to stockholders


Transferability
Renounceable


Volume
31,414,000


Bonus issue volume
0


Preliminary price
₩38,200


Preliminary value
₩1,200,014,800,000


Oversubscription privilege
20.00%


Banker
NH, KIS, Mirae Asset, KB, &amp; Daishin


- Underwriting type
Standby

Source: DART







Allocation

Common
159,864,497


Pref (incl. RCPS &amp; CPS)
1,123,737


Total shares
160,988,234


Treasury shares
400,000


Total shares ex treasury shares
160,588,234


Offer volume
31,414,000


- Common
31,414,000


- Pref
0


Per-share allocation
0.15649


Capital increase
19.51%


Dilution
16.33%


Total shares after rights offer
192,402,234


- Common
191,278,497


- Pref
1,123,737


ESOP allocation
6,282,800


- %
20.00%


Stockholder allocation
25,131,200


- %
80.00%

Source: DART







Timetable

BOD meeting
2020. 12. 21


Preliminary pricing
2021. 1. 14


Ex-rights date
2021. 1. 18


Record date
2021. 1. 19


Subscription rights trade beginning
2021. 2. 5


Subscription rights trade ending
2021. 2. 15


Final pricing
2021. 2. 19


Stockholder subscription
2021. 2. 24


Public subscription
2021. 3. 2


Payment
2021. 3. 5


Listing
2021. 3. 18

Source: DART

The discount is 15%, less than the usual 20%.





Pricing

1st round
RP × (1 - 15%) / [1 + (19.51% × 15%)]


- Reference price (RP)
Min [Close, Avg (Close, 1W VWAP, 1M VWAP)]


- Reference date
2021. 1. 14


Ex-rights base price
[RP + (1st × 19.51%)] / (1 + 19.51%)


- Reference price (RP)
Previous close


- Reference date
2021. 1. 18


2nd round
RP × (1 - 15%)


- Reference price (RP)
Min [Close, Avg (Close, 1W VWAP)]


- Reference date
2021. 2. 19


Final
Max [Min (1st, 2nd), 3D VWAP × 60%]


- Reference date
2021. 2. 19


Discount rate
15.00%


Capital increase rate
19.51%

Source: DART



Hanwha Solutions ₩1.2T Rights Offer: Terms & Trade Approach

Equity Bottom-Up

<p>In this insight, we provide our thoughts on the resignation of <a href="https://www.smartkarma.com/entities/nikola-corp" target="_blank" data-smartkarma-citation="entities:29029:1" rel="noopener">Nikola Corp (NKLA US)</a> founder Trevor Milton, who will be replaced by Stephen Girsky, a former GM executive who already sits on Nikola Corp's board. On 10 September, a firm called  Hindenburg Research published a<a href="https://hindenburgresearch.com/nikola/" target="_blank" rel="noopener"> report</a> that harshly criticized the company. We are interested in Nikola mainly because a Korean company called <a href="https://www.smartkarma.com/entities/hanwha-solutions" target="_blank" data-smartkarma-citation="entities:8656:1" rel="noopener">Hanwha Solutions (009830 KS)'s </a>stock price has been highly impacted by Nikola's share price recently.</p><p>In our view, Hindenburg Research makes legitimate criticism of Nikola Corp and its founder Trevor Milton. Nikola Corp has come out with a rebuttal but we do not believe this is enough to calm investors and customers. Regarding Nikola Corp, it all comes down to whether or not the company has its own unique hydrogen-based technology which it claims it does. Nikola Corp needs to hire a well-respected third party agent and give sufficient proof that its technology really works. </p><p>Investors are waiting for the confirmation of an independent third party test of its technology. If the company is unwilling to provide such tests and continues to delay such tests, we believe this could have a further negative impact on Nikola Corp and its major investors including Hanwha Solutions. </p>

In this insight, we provide our thoughts on the resignation of Nikola Corp (NKLA US) founder Trevor Milton, who will be replaced by Stephen Girsky, a former GM executive who already sits on Nikola Corp's board. On 10 September, a firm called  Hindenburg Research published a report that harshly criticized the company. We are interested in Nikola mainly because a Korean company called Hanwha Solutions (009830 KS)'s stock price has been highly impacted by Nikola's share price recently.In our view, Hindenburg Research makes legitimate criticism of Nikola Corp and its founder Trevor Milton. Nikola Corp has come out with a rebuttal but we do not believe this is enough to calm investors and customers. Regarding Nikola Corp, it all comes down to whether or not the company has its own unique hydrogen-based technology which it claims it does. Nikola Corp needs to hire a well-respected third party agent and give sufficient proof that its technology really works. Investors are waiting for the confirmation of an independent third party test of its technology. If the company is unwilling to provide such tests and continues to delay such tests, we believe this could have a further negative impact on Nikola Corp and its major investors including Hanwha Solutions. 

Nikola's Founder Resigns - The Next Enron?

Cross Asset Strategy

<div class="content-highlight"><p><strong>It has been reported in the past few days that <a href="http://www.koreaninvestors.com/?p=12175" target="_blank" rel="noopener">NPS</a> is likely to put a greater emphasis on ESG (environmental, social, &amp; governance) based investing for Korean stocks and bonds starting 2021. </strong>NPS has currently given a mandate to a company to help NPS to apply ESG based investment system. The ESG evaluations are expected to aid NPS to actively exercise shareholder rights and also to carry out negative screening of stocks.</p></div><h3>Implications of NPS Incorporating More ESG Criteria on Domestic Investments (Bonds &amp; Stocks)</h3><ul>
<li>Negative Impact on VICE industries </li>
<li>Positive Impact on Renewable Energy Industries</li>
<li>Negative Impact on Coal &amp; Oil Industries</li>
<li>Greater Representation of Women in Senior Management Team/BOD</li>
</ul>

It has been reported in the past few days that NPS is likely to put a greater emphasis on ESG (environmental, social, &amp; governance) based investing for Korean stocks and bonds starting 2021. NPS has currently given a mandate to a company to help NPS to apply ESG based investment system. The ESG evaluations are expected to aid NPS to actively exercise shareholder rights and also to carry out negative screening of stocks.Implications of NPS Incorporating More ESG Criteria on Domestic Investments (Bonds &amp; Stocks)
Negative Impact on VICE industries 
Positive Impact on Renewable Energy Industries
Negative Impact on Coal &amp; Oil Industries
Greater Representation of Women in Senior Management Team/BOD


NPS - Greater Emphasis of ESG Based Investing for Korean Stocks & Bonds Starting 2021

South Korea

Hanwha Solution Corporation is a chemical manufacturer.  The Company's products include a line of chlorine alkali chemicals, such as caustic soda, chlorine, and hydrochloric acid.  Hanwha also produces resins including low density polyethylene (LDPE) and polyvinyl chloride (PVC).

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Hanwha Solutions (009830 KS)

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Hanwha Solutions ₩1.2T Rights Offer: Terms & Trade Approach

This insight has the terms and trade approach of Hanwha Solutions' ₩1.2T rights offering, which features a 19.5% capital increase.

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