Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

<ul>
<li>Both the implied stub for <strong><a href="https://www.smartkarma.com/entities/amorepacific-group" target="_blank" data-smartkarma-citation="entities:12179:1" rel="noopener">Amorepacific Group (002790 KS)</a></strong> and the simple ratio (Group/<strong><a href="https://www.smartkarma.com/entities/amorepacific-corp" target="_blank" data-smartkarma-citation="entities:20854:1" rel="noopener">Amorepacific Corp (090430 KS)</a></strong>) are around lifetime low levels. </li>
<li>Preceding my comments on Amorepacific are the current setup/unwind tables for Asia-Pacific Holdcos.</li>
<li>These relationships trade with a minimum liquidity of US$1mn, and a % market capitalisation &gt;20%.</li>
</ul>


Both the implied stub for Amorepacific Group (002790 KS) and the simple ratio (Group/Amorepacific Corp (090430 KS)) are around lifetime low levels. 
Preceding my comments on Amorepacific are the current setup/unwind tables for Asia-Pacific Holdcos.
These relationships trade with a minimum liquidity of US$1mn, and a % market capitalisation &gt;20%.


StubWorld's: Amorepacific's Multi-Year Lows

Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

Equity Bottom-Up

Samsung Electronics Pref Shares / Equity Bottom-Up

<ul>
<li>In this insight, we discuss numerous gap trades involving Korean preferred and common shares in 4Q 2023. Typically, fourth quarter is when pref stocks are emphasized the most in Korea.</li>
<li>The excessive gaps in the preferred and common shares of Samsung Electronics (005930 KS), Hotel Shilla (008770 KS), and Amorepacific Corp (090430 KS) could reverse in the next several months.</li>
<li>We see some attractive longer-term opportunities for Amorepacific, Doosan Fuel Cell, LG Electronics, and Hyundai Motor which have especially high discounts for the preferred shares versus their counterpart common shares.</li>
</ul>


In this insight, we discuss numerous gap trades involving Korean preferred and common shares in 4Q 2023. Typically, fourth quarter is when pref stocks are emphasized the most in Korea.
The excessive gaps in the preferred and common shares of Samsung Electronics (005930 KS), Hotel Shilla (008770 KS), and Amorepacific Corp (090430 KS) could reverse in the next several months.
We see some attractive longer-term opportunities for Amorepacific, Doosan Fuel Cell, LG Electronics, and Hyundai Motor which have especially high discounts for the preferred shares versus their counterpart common shares.


Gap Trades in Korean Prefs Vs Common Share Pairs in 4Q 2023

<ul>
<li>In this insight, we highlight the pricing gap divergences of the major Korean holdcos and opcos in 4Q 2023.</li>
<li>Of the 38 pair trades, 18 of them involved holdcos outperforming opcos YTD and 20 of them involved opcos outperforming holdcos in the same period.</li>
<li>We highlight 38 pair trades that involve Korean holdcos and opcos.</li>
</ul>


In this insight, we highlight the pricing gap divergences of the major Korean holdcos and opcos in 4Q 2023.
Of the 38 pair trades, 18 of them involved holdcos outperforming opcos YTD and 20 of them involved opcos outperforming holdcos in the same period.
We highlight 38 pair trades that involve Korean holdcos and opcos.


Korean Holdcos Vs Opcos Gap Trading Opportunities in 4Q 2023

<ul>
<li>About a week ago, it was announced that Chairman's elder daughter Min-Jung Suh will take a long one year leave of absence.</li>
<li>Chairman Suh is very dissatisfied with the company's results in the past three years and wants to shake up the company to improve its operations, in our view. </li>
<li>Our base case NAV valuation of Amorepacific Group (002790 KS) is 39,611 won, which is 29% higher than current price.</li>
</ul>


About a week ago, it was announced that Chairman's elder daughter Min-Jung Suh will take a long one year leave of absence.
Chairman Suh is very dissatisfied with the company's results in the past three years and wants to shake up the company to improve its operations, in our view. 
Our base case NAV valuation of Amorepacific Group (002790 KS) is 39,611 won, which is 29% higher than current price.


Amorepacific Group: SoTP Valuation and Meaning of Min-Jung Suh Taking One Year Leave of Absence

<ul>
<li>Amorepacific Corp (090430 KS) is likely to be one of the biggest beneficiaries of the return of Chinese group tours in Korea.</li>
<li>Now that the Chinese government is allowing group tours to South Korea, this will likely lead to a sharp improvement in the company's sales and profits in 2023-2024.</li>
<li>We expect the consensus to raise sales estimates of Amorepacific Corp by about 3-5%+ and operating profit estimates by 20-30%+ in 2023 and 2024. </li>
</ul>


Amorepacific Corp (090430 KS) is likely to be one of the biggest beneficiaries of the return of Chinese group tours in Korea.
Now that the Chinese government is allowing group tours to South Korea, this will likely lead to a sharp improvement in the company's sales and profits in 2023-2024.
We expect the consensus to raise sales estimates of Amorepacific Corp by about 3-5%+ and operating profit estimates by 20-30%+ in 2023 and 2024. 


Amorepacific Corp: Return of the Korean Cosmetics King With End of Ban on Chinese Group Tours

South Korea

Amorepacific Corporation develops, manufactures, and exports skin care, make-up, and fragrance products. The Company also produces and markets personal care and health-related products, such as shampoos, soaps, toothpastes, and health teas.

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Amorepacific Corp (090430 KS)

StubWorld's: Amorepacific's Multi-Year Lows

Both the implied stub for Group and the simple ratio (Group/Corp) are at lifetime low levels. Look to set up the stub here - long Group, short...

David Blennerhassett

Korean Holdcos Vs Opcos Gap Trading Opportunities in 4Q 2023

In this insight, we highlight the pricing gap divergences of the major Korean holdcos and opcos in 4Q 2023. We highlight 38 pair trades that...

Douglas Kim

Amorepacific Group: SoTP Valuation and Meaning of Min-Jung Suh Taking One Year Leave of Absence

Amorepacific Group Chairman's elder daughter is taking a long one year leave of absence. Chairman Suh is very dissatisfied with the company's...

Douglas Kim

Amorepacific Corp: Return of the Korean Cosmetics King With End of Ban on Chinese Group Tours

We expect the consensus to raise sales estimates of Amorepacific Corp by about 3-5%+ and operating profit estimates by 20-30%+ in 2023 and 2024.

Douglas Kim

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

StubWorld's: Amorepacific's Multi-Year Lows

Both the implied stub for Group and the simple ratio (Group/Corp) are at lifetime low levels. Look to set up the stub here - long Group, short...

David Blennerhassett

Gap Trades in Korean Prefs Vs Common Share Pairs in 4Q 2023

In this insight, we discuss numerous gap trades involving Korean preferred and common shares in 4Q 2023. Typically, fourth quarter is when pref...

Douglas Kim

Korean Holdcos Vs Opcos Gap Trading Opportunities in 4Q 2023

In this insight, we highlight the pricing gap divergences of the major Korean holdcos and opcos in 4Q 2023. We highlight 38 pair trades that...

Douglas Kim

Amorepacific Group: SoTP Valuation and Meaning of Min-Jung Suh Taking One Year Leave of Absence

Amorepacific Group Chairman's elder daughter is taking a long one year leave of absence. Chairman Suh is very dissatisfied with the company's...

Douglas Kim

Amorepacific Corp: Return of the Korean Cosmetics King With End of Ban on Chinese Group Tours

We expect the consensus to raise sales estimates of Amorepacific Corp by about 3-5%+ and operating profit estimates by 20-30%+ in 2023 and 2024.

Douglas Kim