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>I first screened those with a sigma below -1.0 on a 20D MA relative to Ords. I then filtered those having underperformed the common shares on a YTD price performance.</li>
<li>As a result, I have the following four preferred shares: Samsung Electronics 1P, Hyundai Motor 1P, Daishin Securities 1P, and Doosan Corp 1P.</li>
<li>As for the pref/ord dividend yield difference, Hyundai Motor 1P's dividend yield difference has widened considerably compared to the past three years.</li>
</ul>


I first screened those with a sigma below -1.0 on a 20D MA relative to Ords. I then filtered those having underperformed the common shares on a YTD price performance.
As a result, I have the following four preferred shares: Samsung Electronics 1P, Hyundai Motor 1P, Daishin Securities 1P, and Doosan Corp 1P.
As for the pref/ord dividend yield difference, Hyundai Motor 1P's dividend yield difference has widened considerably compared to the past three years.


Korea Preferred Shares: Suitable Long/Short Pairs at This Point

<ul>
<li>Doosan Heavy Industries &amp; Construction is currently conducting a rights offering of 82.9M shares. December 28th is the first-round pricing, and the 30th is the ex-rights date.</li>
<li>There is an event waiting for the stock price to undergo a significant correction just before the ex-right, it is likely to become a new factor in our ex-right play.</li>
<li>18.2M shares subscribed by the ESOP in last year's ₩1.2T capital increase will be released on the 27th. This is 3.5% of SO, which is equivalent to 2.3x ADTV.</li>
</ul>


Doosan Heavy Industries &amp; Construction is currently conducting a rights offering of 82.9M shares. December 28th is the first-round pricing, and the 30th is the ex-rights date.
There is an event waiting for the stock price to undergo a significant correction just before the ex-right, it is likely to become a new factor in our ex-right play.
18.2M shares subscribed by the ESOP in last year's ₩1.2T capital increase will be released on the 27th. This is 3.5% of SO, which is equivalent to 2.3x ADTV.


Doosan Heavy Ex-Rights Play Amid the Lockup Release (3.5% of SO) Next Monday

Equity Capital Markets

Doosan Enerbility / Equity Capital Markets

<ul>
<li>Doosan Heavy issues 82.87M new shares at a tentative offering price of ₩18,100, which brings the offering value to ₩1.5T. It is one of the largest offerings in recent years.</li>
<li>The size is massive. ₩1.5T will hit the market. So, the subscription rights that will actually be floated around will be substantial.</li>
<li>I wouldn't want to miss out on the abundant circulation of subscription rights. So, I would approach a little aggressively by entering before the subscription rights trading window.</li>
</ul>


Doosan Heavy issues 82.87M new shares at a tentative offering price of ₩18,100, which brings the offering value to ₩1.5T. It is one of the largest offerings in recent years.
The size is massive. ₩1.5T will hit the market. So, the subscription rights that will actually be floated around will be substantial.
I wouldn't want to miss out on the abundant circulation of subscription rights. So, I would approach a little aggressively by entering before the subscription rights trading window.


Doosan Heavy Industries ₩1.5T Offering Details

Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

Keisei Electric Railway Co / Event-Driven

<ul>
<li>
<a href="https://www.smartkarma.com/entities/keisei-electric-railway-co" target="_blank" data-smartkarma-citation="entities:10876:1" rel="noopener">Keisei Electric Railway Co (9009 JP)</a>, which was already trading with an extreme disconnect with 22%-held <a href="https://www.smartkarma.com/entities/oriental-land-co-ltd" target="_blank" data-smartkarma-citation="entities:13517:1" rel="noopener">Oriental Land (4661 JP)</a>, is now even further out of whack.</li>
<li>
<a href="https://www.smartkarma.com/entities/doosan-co-ltd" target="_blank" data-smartkarma-citation="entities:7423:1" rel="noopener">Doosan Corp (000150 KS)</a> is trading rich to 40%-held <a href="https://www.smartkarma.com/entities/doosan-heavy-industries-construction" target="_blank" data-smartkarma-citation="entities:7389:1" rel="noopener">Doosan Heavy Industries &amp; Construction (034020 KS)</a>.</li>
<li>A holding company structure for <a href="https://www.smartkarma.com/entities/microport-scientific-corp" target="_blank" data-smartkarma-citation="entities:4487:1" rel="noopener">Microport Scientific (853 HK)</a> following the recent listing of <a href="https://www.smartkarma.com/entities/shanghai-microport-medbot-group-co-ltd" target="_blank" data-smartkarma-citation="entities:33485:1" rel="noopener">Shanghai MicroPort MedBot Group (2252 HK)</a>.</li>
</ul>



Keisei Electric Railway Co (9009 JP), which was already trading with an extreme disconnect with 22%-held Oriental Land (4661 JP), is now even further out of whack.

Doosan Corp (000150 KS) is trading rich to 40%-held Doosan Heavy Industries &amp; Construction (034020 KS).
A holding company structure for Microport Scientific (853 HK) following the recent listing of Shanghai MicroPort MedBot Group (2252 HK).


StubWorld: Keisei/Oriental Land, Doosan Corp/Doosan Heavy, Microport Scientific

An opportunity to short sell Doosan Fuel Cell, a flagship stock in Korea's hydrogen sector, is emerging.<hr>Doosan Fuel Cell has recently rebounded as investor sentiment in the local hydrogen sector has improved again.<section class="figure"><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/228/435/original/Screen+Shot+2021-09-07+at+8.59.31+PM.png?1631062787" class="editor-image img-responsive" data-smartkarma-image-id="228435"></figure></section>However, the valuation is still overvalued with a 12M forward PER of over 100x. The current valuation is clearly at a level that has been substantially corrected compared to a year ago. Nevertheless, expected earnings growth, at least for the next several years, is still insufficient to justify the current valuation.<section class="figure"><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/228/433/original/Screen+Shot+2021-09-07+at+8.55.49+PM.png?1631062695" class="editor-image img-responsive" data-smartkarma-image-id="228433"></figure></section>Now, we will likely see a catalyst on the short side that may lead to a short-term decline in Doosan Fuel Cell's share price. Doosan Fuel Cell's current butter-and-bread business is fuel cells for power generation. However, this does not contribute much to the current overvalued valuation. The reason why it still exceeds the 12M forward PER of 100x is the presence of new businesses such as tri-gen for hydrogen charging and fuel cell for water electrolysis.

An opportunity to short sell Doosan Fuel Cell, a flagship stock in Korea's hydrogen sector, is emerging.Doosan Fuel Cell has recently rebounded as investor sentiment in the local hydrogen sector has improved again.However, the valuation is still overvalued with a 12M forward PER of over 100x. The current valuation is clearly at a level that has been substantially corrected compared to a year ago. Nevertheless, expected earnings growth, at least for the next several years, is still insufficient to justify the current valuation.Now, we will likely see a catalyst on the short side that may lead to a short-term decline in Doosan Fuel Cell's share price. Doosan Fuel Cell's current butter-and-bread business is fuel cells for power generation. However, this does not contribute much to the current overvalued valuation. The reason why it still exceeds the 12M forward PER of 100x is the presence of new businesses such as tri-gen for hydrogen charging and fuel cell for water electrolysis.

South Korea

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.

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Doosan Corp (000150 KS)

Korea Preferred Shares: Suitable Long/Short Pairs at This Point

This post screens suitable long/short pairs among Korea's local preferred shares relative to their respective ordinary shares.

Sanghyun Park

Doosan Heavy Ex-Rights Play Amid the Lockup Release (3.5% of SO) Next Monday

This post discusses the ex-rights trading approaches for Doosan Heavy's ₩1.5T rights offering with the major lockup release waiting right before...

Sanghyun Park

Doosan Heavy Industries ₩1.5T Offering Details

This post details Doosan Heavy Industries' ₩1.5T rights offering, announced last Friday. It issues 82.87M new shares at a tentative offering price...

Sanghyun Park

StubWorld: Keisei/Oriental Land, Doosan Corp/Doosan Heavy, Microport Scientific

Keisei Electric Railway Co (9009 JP), which was already trading with an extreme disconnect with Oriental Land (4661 JP), is now even further out of...

David Blennerhassett

Shorting Opportunity on Doosan Fuel Cell

This post examines a short-selling opportunity on Doosan Fuel Cell with the news that Doosan Fuel Cell's hydrogen business will likely be...

Sanghyun Park

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