Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

Douglas Research Advisory

Event-Driven

<ul>
<li>After the market close on 24 July, Hanwha Corporation (000880 KS) announced that Hanwha Energy secured an additional 5.2% stake in Hanwha Corp through a tender offer.</li>
<li>A total of 3.9 million shares have been applied for the tender offer as of 24 July (65% of targeted amount). </li>
<li>We believe that the Hanwha Group is likely to grab more shares in Hanwha Corp through an additional tender offer sometime in the next 6-12 months. </li>
</ul>


After the market close on 24 July, Hanwha Corporation (000880 KS) announced that Hanwha Energy secured an additional 5.2% stake in Hanwha Corp through a tender offer.
A total of 3.9 million shares have been applied for the tender offer as of 24 July (65% of targeted amount). 
We believe that the Hanwha Group is likely to grab more shares in Hanwha Corp through an additional tender offer sometime in the next 6-12 months. 


Hanwha Energy Acquires An Additional 5.2% of Hanwha Corp Through a Tender Offer

Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

<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

Equity Bottom-Up

<ul>
<li>In this insight, we highlight the recent pricing gap divergences of the major Korean holdcos and opcos which could provide trading opportunities in 3Q 2024.</li>
<li>Of the 38 pair trades, 21 of them involved holdcos outperforming opcos in the past six months, suggesting increased capital allocation to Korean holdcos relative to their opcos.</li>
<li>These pairs could generate trading opportunities in terms of their pricing gaps closing reversal (Doosan Corp vs. Doosan Enerbility; Hyundai Mobis vs Hyundai Motor).</li>
</ul>


In this insight, we highlight the recent pricing gap divergences of the major Korean holdcos and opcos which could provide trading opportunities in 3Q 2024.
Of the 38 pair trades, 21 of them involved holdcos outperforming opcos in the past six months, suggesting increased capital allocation to Korean holdcos relative to their opcos.
These pairs could generate trading opportunities in terms of their pricing gaps closing reversal (Doosan Corp vs. Doosan Enerbility; Hyundai Mobis vs Hyundai Motor).


Korean Holdcos Vs Opcos Gap Trading Opportunities in 3Q 2024

<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

HDC Hyundai Development Co-Engineering & Construction / Equity Bottom-Up

HDC Hyundai Development Co-Engineering & Construction

<ul>
<li>In this insight, we highlight the recent pricing gap divergences of the major Korean holdcos and opcos which could provide trading opportunities in 2Q 2024.</li>
<li>Of the 38 pair trades, 26 of them involved holdcos outperforming opcos in the past six months, suggesting increased capital allocation to Korean holdcos relative to their opcos.  </li>
<li>These pairs could generate trading opportunities in terms of their pricing gaps closing reversal. [CJ Corp vs CJ Cheiljedang &amp; Hanjin KAL Corp vs Korean Air Lines].</li>
</ul>


In this insight, we highlight the recent pricing gap divergences of the major Korean holdcos and opcos which could provide trading opportunities in 2Q 2024.
Of the 38 pair trades, 26 of them involved holdcos outperforming opcos in the past six months, suggesting increased capital allocation to Korean holdcos relative to their opcos.  
These pairs could generate trading opportunities in terms of their pricing gaps closing reversal. [CJ Corp vs CJ Cheiljedang &amp; Hanjin KAL Corp vs Korean Air Lines].


Korean Holdcos Vs Opcos Gap Trading Opportunities in 2Q 2024

South Korea

Hanwha Solution Corporation is a chemical manufacturer.  The Company's products include a line of chlorine alkali chemicals, such as caustic soda, chlorine, and hydrochloric acid.  Hanwha also produces resins including low density polyethylene (LDPE) and polyvinyl chloride (PVC).

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Hanwha Solutions (009830 KS)

Hanwha Energy Acquires An Additional 5.2% of Hanwha Corp Through a Tender Offer

After the market close on 24 July, Hanwha Corporation (000880 KS) announced that Hanwha Energy secured an additional 5.2% stake in Hanwha Corp...

Douglas Kim

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

Korean Holdcos Vs Opcos Gap Trading Opportunities in 3Q 2024

In this insight, we highlight the recent pricing gap divergences of the major Korean holdcos and opcos which could provide trading opportunities in...

Douglas Kim

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

Korean Holdcos Vs Opcos Gap Trading Opportunities in 2Q 2024

In this insight, we highlight the recent pricing gap divergences of the major Korean holdcos and opcos which could provide trading opportunities in...

Douglas Kim

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