Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

Event-Driven

It was reported after the market close today that <a href="https://finance.naver.com/item/news_read.nhn?article_id=0004593532&amp;office_id=008&amp;code=003920&amp;page=&amp;sm=title_entity_id.basic" target="_blank" rel="noopener">Hahn &amp; Co</a> (a large private equity firm in Korea) has acquired the controlling stake of <a href="https://www.smartkarma.com/entities/namyang-dairy-products-co" target="_blank" data-smartkarma-citation="entities:16249:1" rel="noopener">Namyang Dairy Products Co (003920 KS) </a>from the founder and related parties. Hahn &amp; Co paid 310.7 billion won for a 52.63% (0.379 million shares) of Namyang Dairy, which currently has a market cap of 316 billion won. Prior to the sale, Namyang Dairy Chairman Hong Won-Sik had a 51.68% stake in the company. <div class="content-highlight">
Over the next 2-3 years, we believe Namyang Dairy Products' shares could rise nearly 100%+ from current levels, which would suggest market cap of 632 billion won or 878,000 won. This represents a P/B multiple of 0.7x, which is at the high end of the P/B multiple for the company in the past four years. 
With Hahn &amp; Co getting rid of the bad corporate governance problems and infusing the company with better professional managers, we believe Namyang Dairy Products could be an excellent turn-around story and the valuation multiples could rise to the historical high levels. 
</div>

It was reported after the market close today that Hahn &amp; Co (a large private equity firm in Korea) has acquired the controlling stake of Namyang Dairy Products Co (003920 KS) from the founder and related parties. Hahn &amp; Co paid 310.7 billion won for a 52.63% (0.379 million shares) of Namyang Dairy, which currently has a market cap of 316 billion won. Prior to the sale, Namyang Dairy Chairman Hong Won-Sik had a 51.68% stake in the company. 
Over the next 2-3 years, we believe Namyang Dairy Products' shares could rise nearly 100%+ from current levels, which would suggest market cap of 632 billion won or 878,000 won. This represents a P/B multiple of 0.7x, which is at the high end of the P/B multiple for the company in the past four years. 
With Hahn &amp; Co getting rid of the bad corporate governance problems and infusing the company with better professional managers, we believe Namyang Dairy Products could be an excellent turn-around story and the valuation multiples could rise to the historical high levels. 


Korea Small Cap Gem #9: Namyang Dairy Products - Chairman Sells & Minority Shareholders Cheer

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

Brian Freitas

Pan-Asia Index Rebalances/ Events/ Delta One

Quantitative Analysis

Short selling has finally resumed in Korea and it has been a busy couple of days on that front with foreign investors piling into stocks that have run up more than their peers over the last year and are potentially overvalued.Long/short pairs could be implemented in Korea during the short sell ban if you had long inventory or if there were listed single stock futures on the short leg.With short selling permitted on constituents of the <a href="https://www.smartkarma.com/entities/korea-stock-exchange-kospi-200-index" target="_blank" data-smartkarma-citation="entities:26021:1" rel="noopener">Korea Stock Exchange Kospi 200 Index (KOSPI2 INDEX)</a>, we take a look at long/short pairs where both stocks are members of the index. These pairs belong to the same GICS sub-industry, are correlated and exhibit mean-reversion. We also use short sale data from the last couple of trading sessions to see which stocks are being targeted by short sellers.

Short selling has finally resumed in Korea and it has been a busy couple of days on that front with foreign investors piling into stocks that have run up more than their peers over the last year and are potentially overvalued.Long/short pairs could be implemented in Korea during the short sell ban if you had long inventory or if there were listed single stock futures on the short leg.With short selling permitted on constituents of the Korea Stock Exchange Kospi 200 Index (KOSPI2 INDEX), we take a look at long/short pairs where both stocks are members of the index. These pairs belong to the same GICS sub-industry, are correlated and exhibit mean-reversion. We also use short sale data from the last couple of trading sessions to see which stocks are being targeted by short sellers.

Korea Pair Trades: High Risk/Reward Names with Short Sell Screen

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.

The last day to be eligible to receive the first quarter dividends is March 29, next Monday.The div payment is May 20.









Quarterly div schedule for FY2021
1Q
2Q
3Q
4Q


The last day to be eligible
3/29
6/28
9/28
12/28


Ex-div
3/30
6/29
9/29
12/29


Div record
3/31
6/30
9/30
12/30


Div payment (tentative)
5/20
8/20
11/18
4/20 (2022)

Source: KRX

We have four quarterly div stocks on KOSPI 200: POSCO, Samsung Electronics, Ssangyong Cement Industry, and Hanon Systems.The quarterly div yields range from 0.37% (Hanon Systems) to 1.60% (Ssangyong Cement Industry) based on the FnGuide consensus, which is pretty much in line with the previous year.









1Q dividend stocks
Ticker
1Q div (est.)
Yearly div (est.)
Quarterly div yield


POSCO
005490
₩2,000
₩9,500
0.65%


Samsung Electronics Co Ltd
005930
₩361
₩1,443
0.44%


Ssangyong Cement Industry Co Ltd
003410
₩110
₩440
1.60%


Hanon Systems
018880
₩68
₩320
0.37%


Source: FnGuide



Now, let's check potential short recovering for these div stocks.For this, it is crucial to check the loaned stock balance and 52W performance.On KOSPI, Doosan Infracore is leading at 19.51% of SO.The four div stocks do not carry a lot in their balance: 1.95% POSCO, 1.16% SamE, 0.95% Ssangyong Cement Ind, and 0.89% Hanon Systems.









Loaned stock balance (KOSPI)
Ticker
Balance
% of SO
MC (₩B)


Doosan Infracore Co Ltd
042670
42,246,502
19.51%
2,053.0


Cosmax Inc
192820
1,837,956
18.29%
1,216.0


DL Holdings Co Ltd
000210
2,798,553
18.12%
1,336.8


Lotte Tour Development Co., Ltd.
032350
10,031,962
14.48%
1,305.8


LG HAUSYS, LTD.
108670
1,080,271
12.05%
722.8


LG Display Co Ltd
034220
32,306,260
9.03%
7,961.4


Hotel Shilla Co Ltd
008770
3,527,067
8.99%
3,441.6


Kyeryong Construction Industrial Co.
013580
719,601
8.06%
275.5


Samsung Heavy Industries Co., Ltd
010140
47,943,664
7.61%
4,263.6


Celltrion, Inc.
068270
9,330,378
7.49%
39,968.2


HMM Co Ltd
011200
23,377,269
7.07%
9,724.4


Hana Tour Service Inc
039130
947,217
6.80%
939.5


NS Shopping Co Ltd
138250
2,221,727
6.59%
394.2


Inscobee Inc
006490
6,225,990
6.07%
364.9


Wooridul Pharmaceutical Ltd
004720
838,212
5.70%
134.2


CJ Logistics Corp
000120
1,240,086
5.44%
3,992.2


Netmarble Corp
251270
4,580,308
5.33%
10,656.6


Jahwa Electronics Co Ltd
033240
939,220
5.25%
308.8


GS Retail Co Ltd
007070
3,969,424
5.16%
2,979.9



POSCO
005490
1,699,950
1.95%
26,722.8


Samsung Electronics Co Ltd
005930
69,482,398
1.16%
545,145.9


Ssangyong Cement Industry Co Ltd
003410
4,762,928
0.95%
3,466.6


Hanon Systems
018880
4,751,149
0.89%
9,741.9

Source: KOFIA

Similarly, all of them stay near 52WH. There is no sign of being oversold.









Name
Ticker
MC (₩B)
x 52WH
52WH date


Ssangyong Cement Industry Co Ltd
003410
3,466.6
0.93
12/11/20


POSCO
005490
26,722.8
0.92
3/9/21


Hanon Systems
018880
9,795.2
0.91
1/8/21


Samsung Electronics Co Ltd
005930
485,940.3
0.84
1/11/21

Source: KRX



KOSPI 200 1Q Quarterly Div Stocks: Status Check

<div class="content-highlight"><a href="https://www.smartkarma.com/entities/kia-motors-corp" target="_blank" data-smartkarma-citation="entities:156:1" rel="noopener">Kia Motors Corp (000270 KS)</a> shares increased 9.7% on 3 February to 97,700 won. Kia Motor's stock price has risen 57% YTD. Kia Motors' market share has climbed to 39.6 trillion won ($35.6 billion). It has been reported in the local media that <a href="https://www.smartkarma.com/entities/apple-inc" target="_blank" data-smartkarma-citation="entities:666:1" rel="noopener">Apple Inc (AAPL US)</a> plans to invest 4 trillion won ($3.6 billion) as a part of a collaboration with Kia Motors on making electric vehicles. </div>

Kia Motors Corp (000270 KS) shares increased 9.7% on 3 February to 97,700 won. Kia Motor's stock price has risen 57% YTD. Kia Motors' market share has climbed to 39.6 trillion won ($35.6 billion). It has been reported in the local media that Apple Inc (AAPL US) plans to invest 4 trillion won ($3.6 billion) as a part of a collaboration with Kia Motors on making electric vehicles. 

Apple to Invest $3.6 Billion in Kia Motors: HMC Group Has Come a Long Way from the Sir Charles Ads

In this insight, we highlight 26 Korean companies that are/may be seeking to find new owners through M&amp;As in 2021. Key sectors of M&amp;A in Korea in 2021 include consumer and industrial. We also provide a review of our M&amp;A research in 2020. We wrote 29 reports about the M&amp;As in 2020. The M&amp;A market in Korea is estimated to be about 35 trillion won in 2020, down 8% YoY. The local media have mentioned that the M&amp;A market in Korea could be nearly <a href="https://finance.naver.com/news/news_read.nhn?article_id=0004711778&amp;office_id=009&amp;mode=LSS2D&amp;type=0&amp;section_id=101&amp;section_id2=258&amp;section_id3=&amp;date=20201207&amp;page=3" target="_blank" rel="noopener">45 trillion won</a> in 2021, up 29% YoY, which would surpass the all-time high of 38 trillion won in 2019.

In this insight, we highlight 26 Korean companies that are/may be seeking to find new owners through M&amp;As in 2021. Key sectors of M&amp;A in Korea in 2021 include consumer and industrial. We also provide a review of our M&amp;A research in 2020. We wrote 29 reports about the M&amp;As in 2020. The M&amp;A market in Korea is estimated to be about 35 trillion won in 2020, down 8% YoY. The local media have mentioned that the M&amp;A market in Korea could be nearly 45 trillion won in 2021, up 29% YoY, which would surpass the all-time high of 38 trillion won in 2019.  

Review of Our M&A Research in 2020 & Korea M&A Market Outlook in 2021: What’s For Sale?

South Korea

Hanon Systems manufactures a variety of automotive air control equipment.  The Company's products include air conditioners, heaters, cooling modules, compressors, radiators, fans, evaporators, and condensers. Hanon Systems distributes its products on an original equipment manufacturing (OEM) basis.

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Hanon Systems (018880 KS)

Korea Small Cap Gem #9: Namyang Dairy Products - Chairman Sells & Minority Shareholders Cheer

Chairman Hong sold the controlling stake of Namyang Dairy to Hahn & Co. Over the next 2-3 years, we believe Namyang Dairy Products' shares could...

Douglas Kim

Korea Pair Trades: High Risk/Reward Names with Short Sell Screen

With the resumption of short selling in Korea, we highlight correlated pairs from the same GICS sub-industry that are near reversion points and...

Brian Freitas

KOSPI 200 1Q Quarterly Div Stocks: Status Check

This post examines potential short recovering and spot/futures arb entry points of the four 1Q dividend stocks on KOSPI 200.

Sanghyun Park

Apple to Invest $3.6 Billion in Kia Motors: HMC Group Has Come a Long Way from the Sir Charles Ads

It has been reported in the local media that Apple Inc (AAPL US) plans to invest 4 trillion won ($3.6 billion) as a part of a collaboration with...

Douglas Kim

Review of Our M&A Research in 2020 & Korea M&A Market Outlook in 2021: What’s For Sale?

In this insight, we highlight 26 Korean companies that are/may be seeking to find new owners through M&As in 2021. We also provide a review of our...

Douglas Kim

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