Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

<ul>
<li>With <strong><a href="https://www.smartkarma.com/entities/hanwha-corporation" target="_blank" data-smartkarma-citation="entities:10619:1" rel="noopener">Hanwha Corporation (000880 KS)</a></strong> trading around a one-year low NAV discount, the Hanwha Group has made a Tender Offer for 8% of shares outstanding at ₩30,000/share.</li>
<li>Preceding my comments on Hanwha 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>


With Hanwha Corporation (000880 KS) trading around a one-year low NAV discount, the Hanwha Group has made a Tender Offer for 8% of shares outstanding at ₩30,000/share.
Preceding my comments on Hanwha 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: Hanwha Corp's Steep Discount & Tender Offer

Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

Douglas Research Advisory

<ul>
<li>On 5 July, Hanwha Energy announced a tender offer of 8% stake in Hanwha Corporation (000880 KS) worth 180 billion won.</li>
<li>The tender offer price is 30,000 won. Hanwha Energy will launch a tender offer for up to 6 million shares of Hanwha Corp, representing 8% of outstanding shares. </li>
<li>Hanwha Corp's 34% stake in Hanwha Aerospace which is worth 4.2 trillion won. (191% of Hanwha Corp's market cap). </li>
</ul>


On 5 July, Hanwha Energy announced a tender offer of 8% stake in Hanwha Corporation (000880 KS) worth 180 billion won.
The tender offer price is 30,000 won. Hanwha Energy will launch a tender offer for up to 6 million shares of Hanwha Corp, representing 8% of outstanding shares. 
Hanwha Corp's 34% stake in Hanwha Aerospace which is worth 4.2 trillion won. (191% of Hanwha Corp's market cap). 


Hanwha Energy Launches Tender Offer of 180 Billion Won Worth of Hanwha Corp

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.

<ul>
<li>Hanwha Energy, wholly owned by the Hanwha Group's owning family, announced a tender offer for an 8% stake in Hanwha Corp at ₩30,000. The tender period is until July 24.</li>
<li>Hanwha Energy will buy all shares if tendered less than planned, otherwise pro-rata. Payment in cash eliminates cancellation risk but poses allocation risk.</li>
<li>Approximately 10-15% of shares are likely to be the potential ceiling for tendering, minimizing allocation risk for the 8% target. A widening spread of 2-3% could offer arbitrage opportunities.</li>
</ul>


Hanwha Energy, wholly owned by the Hanwha Group's owning family, announced a tender offer for an 8% stake in Hanwha Corp at ₩30,000. The tender period is until July 24.
Hanwha Energy will buy all shares if tendered less than planned, otherwise pro-rata. Payment in cash eliminates cancellation risk but poses allocation risk.
Approximately 10-15% of shares are likely to be the potential ceiling for tendering, minimizing allocation risk for the 8% target. A widening spread of 2-3% could offer arbitrage opportunities.


Hanwha Corp Tender Offer Details & Arbitrage Trading Assessment

<ul>
<li>We believe the new restructuring plan of the Hanwha Group is likely to have a positive impact on Hanwha Corp but could negatively impact Hanwha Ocean. </li>
<li>Our NAV analysis of Hanwha Corp suggests NAV of 3.2 trillion won or NAV per share of 43,168 won, which is 50% higher than current share price. </li>
<li>The biggest component of the valuation is Hanwha Corp's 34% stake in Hanwha Aerospace which is worth 4.1 trillion won. (187% of Hanwha Corp's market cap). </li>
</ul>


We believe the new restructuring plan of the Hanwha Group is likely to have a positive impact on Hanwha Corp but could negatively impact Hanwha Ocean. 
Our NAV analysis of Hanwha Corp suggests NAV of 3.2 trillion won or NAV per share of 43,168 won, which is 50% higher than current share price. 
The biggest component of the valuation is Hanwha Corp's 34% stake in Hanwha Aerospace which is worth 4.1 trillion won. (187% of Hanwha Corp's market cap). 


Hanwha Group's Restructuring to Positively Benefit Hanwha Corp but Negatively Impact Hanwha Ocean

<ul>
<li>On 21 February, NPS announced that it will select three domestic asset management companies to manage funds that will be allocated to the "corporate value up" program. </li>
<li>NPS plans to accept proposals from the local asset management and investment advisory companies from 21 to 29 February. NPS is likely to finalize the selected candidates sometime in March. </li>
<li>We provide a list of 34 companies where the NPS has at least 5% ownership stake, with PBR of 0.5x or less, and included in KOSPI 200.</li>
</ul>


On 21 February, NPS announced that it will select three domestic asset management companies to manage funds that will be allocated to the "corporate value up" program. 
NPS plans to accept proposals from the local asset management and investment advisory companies from 21 to 29 February. NPS is likely to finalize the selected candidates sometime in March. 
We provide a list of 34 companies where the NPS has at least 5% ownership stake, with PBR of 0.5x or less, and included in KOSPI 200.


NPS Plans to Select Three Asset Management Companies For "Corporate Value Up" Program

South Korea

Kolon Corp. is an investment holding company. The company, through its subsidiaries, manufactures a variety of chemical fibers, textiles, films, and engineering plastic products.

Hansol Chemical Co., Ltd. manufactures chemical products such as hydrogen peroxide, benzol peroxide, urea resin, polyacrylamide, trimethylolpropane, and latex.  The Company supplies its products to the paper, textile, and food industries.

Dongjin Semichem Co., Ltd. produces fine chemicals for semiconductor and liquid crystal display (LCD) manufacturing.  The Company's products include photoresist materials and epoxy molding compounds.  In addition, Dongjin Semichem also produces chemical foaming agents for plastic and rubber applications.

OCI Holdings Company Ltd. operates chemical business. The Company manufactures inorganic chemicals, petroleum and coal chemicals, fine chemicals, renewable energy and insulation materials. OCI Holdings markets its products primarily throughout Korea with limited overseas.

Poongsan Corporation manufactures non-ferrous metal and defense-related products.  The Company also makes coin blanks, cans, stainless steel strips, lead frame alloys, tin plated strips, bars, and rods & wires.  It also produces precision products such as lead frames for semiconductors, machinery, and dies & gauges.

Hyosung Advanced Materials Corporation operates as an advanced materials production company. The Company manufactures and sells high-strength industrial yarns, fabric, steel wire materials, and other products. Hyosung Advanced Materials markets its products worldwide.

LOTTE Fine Chemical Co., Ltd. produces general and fine chemicals. The Company produces ammonia, epichlorohydrin, caustic soda, and dimethylformamide. LOTTE Fine Chemical also manufactures chemicals used in pharmaceutical and paint manufacturing areas.

Capro Corporation manufactures and exports caprolactam, a key raw material for nylon.  The Company's customers include nylon manufacturers such as Hyosung Corporation, Kolon Industries, and  Taekwang Industrial.  In addition, Capro also produces ammonia sulfate fertilizer for industrial and agricultural uses.

VT GMP Co.,Ltd. manufactures and markets laminating machines. The Company produces and sells pouch laminators, roll laminators, and other products. VT GMP also produces and sells laminating films.

Lion Chemtech Co., Ltd. manufactures plastics and paint additives for industrial applications.  The Company also produces synthetic and natural waxes with wide variety of grades. Lion Chemtech offers its products to the industrial industry in the United States, Europe and China.

Youngy Co.,Ltd. manufactures lithium battery equipments, and it is also involved in the mining of lithium ore.

Hunan Corun New Energy Co., Ltd. develops, manufactures, and retails continuous nickel foam.

Yunding Technology Co.,Ltd. engages in ore mining business. The Company provides ore mining, processing, and sales services. Yunding Technology also offers mining management consulting services.

Aliaxis SA manufactures plastic plumbing products for the construction, industrial, and public utilities sectors.

Wuhan Xianglong Power Industry Co., Ltd. produces and markets chemical products including PVC (polyvinyl chloride).  The Company also generates and distributes electricity and heat to customers in Wuhan area.

Tien Phong Plastic JSC manufactures a wide range of plastic products for the construction industry. The Company's products include plastic pipes, tubes, and fittings.

Binh Minh Plastics JSC manufactures plastic pipe.

Angang Steel Company Limited produces steel products which include cold rolled sheets, steel rail, pipe billets, wire rods, thick plates, and other steel products.

Fufeng Group Limited manufactures corn-based bio-chemical products utilizing fermentation technology. The Company's products include glutamic acid and xanthan gum.

Lee & Man Paper Manufacturing Limited, through its subsidiaries, produces linerboard and corrugating medium.  The Company's linerboard and corrugating medium are divided into a range of grades with different specifications customized for different industrial and consumer packaging purposes.

Hanwha Corporation imports and exports petrochemicals, machinery, automotives, electronics, and steel.  The Company also produces explosives for the defense and construction industries.  In addition, Hanwha manufactures automotive airbag inflators and telecommunication equipment, such as wireless phones and provides financial services through its subsidiaries.

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Hanwha Corporation (000880 KS)

StubWorld: Hanwha Corp's Steep Discount & Tender Offer

HC is trading cheap. The family thinks so also and seeking majority control. There is also the pro-ration angle attached to the Tender Offer. I'd...

David Blennerhassett

Hanwha Energy Launches Tender Offer of 180 Billion Won Worth of Hanwha Corp

On 5 July, Hanwha Energy announced a tender offer of 8% stake in Hanwha Corporation (000880 KS) worth 180 billion won. The tender offer price is...

Douglas Kim

Hanwha Corp Tender Offer Details & Arbitrage Trading Assessment

This post covers the morning's tender offer announcement to Hanwha Corp shareholders and evaluates arbitrage trading opportunities.

Sanghyun Park

Hanwha Group's Restructuring to Positively Benefit Hanwha Corp but Negatively Impact Hanwha Ocean

We believe the new restructuring plan of the Hanwha Group is likely to have a positive impact on Hanwha Corp but could negatively impact Hanwha Ocean.

Douglas Kim

NPS Plans to Select Three Asset Management Companies For "Corporate Value Up" Program

On 21 February, NPS announced that it will select three domestic asset management companies to manage funds that will be allocated to the...

Douglas Kim

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