Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

Douglas Research Advisory

Event-Driven

<ul>
<li>Despite Shinsegae Group's to officially separate into two main business operations (E-Mart vs Shinsegae), this separation has already been in place essentially in the past several years.</li>
<li>Valuations remain compelling for both companies as they are trading at near historical low valuations.</li>
<li>Going forward, expect more management shakeups, especially at E-Mart as the company tries to stage a major turnaround of its operations, especially in terms of profitability. </li>
</ul>


Despite Shinsegae Group's to officially separate into two main business operations (E-Mart vs Shinsegae), this separation has already been in place essentially in the past several years.
Valuations remain compelling for both companies as they are trading at near historical low valuations.
Going forward, expect more management shakeups, especially at E-Mart as the company tries to stage a major turnaround of its operations, especially in terms of profitability. 


Shinsegae Officially Reorganizes Its Group Structure Into Two Different Subgroups

Equity Bottom-Up

<ul>
<li>One of the biggest stories in the Korean e-commerce sector this week has been TMON and WeMakePrice filing for court receivership due to liquidity crisis. </li>
<li>Singapore's Qoo10 is the controlling shareholder of TMON and WeMakePrice. Young-Bae Ku is the largest shareholder of Qoo10 with a 42.77% stake, followed by KKR with a 25.65% stake. </li>
<li>Competitors such as E-Mart and Coupang are most to benefit. PG companies such as KG Inicis and NHP KCP are negatively impacted. </li>
</ul>


One of the biggest stories in the Korean e-commerce sector this week has been TMON and WeMakePrice filing for court receivership due to liquidity crisis. 
Singapore's Qoo10 is the controlling shareholder of TMON and WeMakePrice. Young-Bae Ku is the largest shareholder of Qoo10 with a 42.77% stake, followed by KKR with a 25.65% stake. 
Competitors such as E-Mart and Coupang are most to benefit. PG companies such as KG Inicis and NHP KCP are negatively impacted. 


TMON and WeMakePrice File for Court Receivership - Impact on the Korean E-Commerce and PG Sectors

<ul>
<li>E Mart Inc (139480 KS) has been a strong outperformer this year (up 5.6% YTD) versus KOSPI which is down 5.8% in the same period. </li>
<li>We expect E Mart to outperform the market in the rest of 2024 driven by two major factors including "open on Sundays" policy and focus on low P/B stocks. </li>
<li>E Mart is trading at P/B of 0.2x versus Coupang which is trading at P/B of 8.3x. E Mart is more attractive than Coupang, especially considering the recent catalysts. </li>
</ul>


E Mart Inc (139480 KS) has been a strong outperformer this year (up 5.6% YTD) versus KOSPI which is down 5.8% in the same period. 
We expect E Mart to outperform the market in the rest of 2024 driven by two major factors including "open on Sundays" policy and focus on low P/B stocks. 
E Mart is trading at P/B of 0.2x versus Coupang which is trading at P/B of 8.3x. E Mart is more attractive than Coupang, especially considering the recent catalysts. 


Emart: Double Catalysts Of "Open on Sundays" + Focus on Low P/B Stocks

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.

Thematic (Sector/Industry)

<ul>
<li>Korea’s impeachment drama hit a tipping point, with the second motion against Yoon set for a vote on the 14th, and the market pricing in a 100% chance of approval.</li>
<li>The market’s all-in on a Democratic Party win in May, as public sentiment against the president makes the ruling party’s chances virtually non-existent.</li>
<li>Target stocks impacted by corporate law changes, then focus on sector-specific plays, particularly the energy policy shift and growing support for virtual assets.</li>
</ul>


Korea’s impeachment drama hit a tipping point, with the second motion against Yoon set for a vote on the 14th, and the market pricing in a 100% chance of approval.
The market’s all-in on a Democratic Party win in May, as public sentiment against the president makes the ruling party’s chances virtually non-existent.
Target stocks impacted by corporate law changes, then focus on sector-specific plays, particularly the energy policy shift and growing support for virtual assets.


Yoon’s Impeachment a Lock, Regime Change Trade Set for May

Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

<ul>
<li>The bigger question for investors is whether <a href="https://www.smartkarma.com/entities/denso-corp" target="_blank" data-smartkarma-citation="entities:18703:1" rel="noopener">Denso Corp (6902 JP)</a> will keep up with global auto market needs or will they suffer as Toyota may suffer?</li>
<li>The FSS may put the breaks on <a href="https://www.smartkarma.com/entities/korea-zinc-co-ltd" target="_blank" data-smartkarma-citation="entities:17944:1" rel="noopener">Korea Zinc (010130 KS)</a>'s massive capital raise. </li>
<li>Murakami-San has won <a href="https://www.smartkarma.com/entities/exedy-corp" target="_blank" data-smartkarma-citation="entities:6516:1" rel="noopener">Exedy Corp (7278 JP)</a>. The company has decided to up its dividend payout and future dividend payout ratio and buy back a boatload of shares. </li>
</ul>


The bigger question for investors is whether Denso Corp (6902 JP) will keep up with global auto market needs or will they suffer as Toyota may suffer?
The FSS may put the breaks on Korea Zinc (010130 KS)'s massive capital raise. 
Murakami-San has won Exedy Corp (7278 JP). The company has decided to up its dividend payout and future dividend payout ratio and buy back a boatload of shares. 


Last Week in Event SPACE: Denso/Toyota, Korea Zinc, Exedy, Good Drinks, Shinsegae

South Korea

E-MART Inc. operates E-Mart discount stores. The Company retails food, clothing, household goods, electronics, and other items through several branch stores.

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E Mart Inc (139480 KS)

Shinsegae Officially Reorganizes Its Group Structure Into Two Different Subgroups

Going forward, expect more management shakeups, especially at E-Mart as the company tries to stage a major turnaround of its operations, especially...

Douglas Kim

TMON and WeMakePrice File for Court Receivership - Impact on the Korean E-Commerce and PG Sectors

TMON and WeMakePrice filing for court receivership is likely to benefit competitors such as E-Mart and Coupang. Payment Gateway (PG) companies such...

Douglas Kim

Emart: Double Catalysts Of "Open on Sundays" + Focus on Low P/B Stocks

We expect E Mart to outperform the market in the rest of 2024 driven by two major factors including "open on Sundays" policy and focus on low P/B...

Douglas Kim

Yoon’s Impeachment a Lock, Regime Change Trade Set for May

Yoon’s impeachment is pretty much a lock, with the market pricing in a 100% chance. We should get ready for theme trading plays aiming at the...

Sanghyun Park

Last Week in Event SPACE: Denso/Toyota, Korea Zinc, Exedy, Good Drinks, Shinsegae

It’s Sunday! Pour yourself a coffee, grab a comfortable seat, and sift through a brief summary of insights on various events discussed during the...

David Blennerhassett

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