Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

Event-Driven

<ul>
<li>On 16 September, Hyundai Dept Store and Hyundai Greenfood announced that they will complete equity spin-offs to create holding companies structures.</li>
<li>It appears that the real reason these companies are trying to set up these structures maybe to raise the control by the major shareholders including Ji-Seon Chung and Kyo-Seon Chung.</li>
<li>The spin-off ratio between the two companies is 23.24% for Hyundai Department Store Holdings and 76.76% for Hyundai Department Store. </li>
</ul>


On 16 September, Hyundai Dept Store and Hyundai Greenfood announced that they will complete equity spin-offs to create holding companies structures.
It appears that the real reason these companies are trying to set up these structures maybe to raise the control by the major shareholders including Ji-Seon Chung and Kyo-Seon Chung.
The spin-off ratio between the two companies is 23.24% for Hyundai Department Store Holdings and 76.76% for Hyundai Department Store. 


Hyundai Department Store & Hyundai Greenfood To Conduct Equity Spin-Offs to Create Holdcos & Opcos

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>Hyundai G.F. Holdings will conduct a tender offer to Hyundai Green Food and Hyundai Dept Store shareholders. The tendering period is August 11-September 1.</li>
<li>The target volume is 10,125,700 (Hyundai Green Food) and 4,669,556 (Hyundai Dept Store), corresponding to 29.89% and 19.95% of the outstanding shares, respectively.</li>
<li>We should approach this event trading with caution, taking into account the risk of an unhedged setup while monitoring the potential widening of the spread opening during the tendering period.</li>
</ul>


Hyundai G.F. Holdings will conduct a tender offer to Hyundai Green Food and Hyundai Dept Store shareholders. The tendering period is August 11-September 1.
The target volume is 10,125,700 (Hyundai Green Food) and 4,669,556 (Hyundai Dept Store), corresponding to 29.89% and 19.95% of the outstanding shares, respectively.
We should approach this event trading with caution, taking into account the risk of an unhedged setup while monitoring the potential widening of the spread opening during the tendering period.


Hyundai G.F. Holdings' Stock Swap with Hyundai Green Food & Hyundai Dept Store

<ul>
<li>Applying the T+3 relisting date as the effective date will again lead to noteworthy changes to the timeline of rebalancing flow trading.</li>
<li>It seems unnecessary to concentrate shorting on the trading halt day for Dongkuk Steel. We should aim for price corrections driven by passive flows on the T+2 period before effective.</li>
<li>Despite the Dongkuk Steel shareholders' approval on the 12th, Youlchon Chemical's price experienced a significant decline. The ongoing risk of major shareholder stake sales appears to have overshadowed this event.</li>
</ul>


Applying the T+3 relisting date as the effective date will again lead to noteworthy changes to the timeline of rebalancing flow trading.
It seems unnecessary to concentrate shorting on the trading halt day for Dongkuk Steel. We should aim for price corrections driven by passive flows on the T+2 period before effective.
Despite the Dongkuk Steel shareholders' approval on the 12th, Youlchon Chemical's price experienced a significant decline. The ongoing risk of major shareholder stake sales appears to have overshadowed this event.


KOSPI 200 Ad-Hoc Changes for Dongkuk Steel Spinoff: Discussing Flow Trading Timeline

<ul>
<li>Through the regular rebalancing, Kum Yang and Cosmo Chemical will be included in KOSPI 200, and Youlchon Chemical will be included as an ad-hoc change due to Dongkuk Steel's deletion.</li>
<li>We should prepare for an aggressive long position on Youlchon Chemical from a day trading perspective, targeting May 15th, the day after Dongkuk Steel's general meeting.</li>
<li>If the meeting is scheduled for the morning, we should consider entering the position in the afternoon of the 12th.</li>
</ul>


Through the regular rebalancing, Kum Yang and Cosmo Chemical will be included in KOSPI 200, and Youlchon Chemical will be included as an ad-hoc change due to Dongkuk Steel's deletion.
We should prepare for an aggressive long position on Youlchon Chemical from a day trading perspective, targeting May 15th, the day after Dongkuk Steel's general meeting.
If the meeting is scheduled for the morning, we should consider entering the position in the afternoon of the 12th.


Target May 15th for LONG Youlchon Chemical with Dongkuk Steel's Split Approval

<ul>
<li>In this insight, we discuss the potential new inclusions in KOSPI 200 rebalance in May 2023.</li>
<li>The five stocks that are potential inclusions in KOSPI 200 rebalance in May 2023 include Kumyang, Cosmo Chemical, Dentium, Jeju Air, and Youlchon Chemical. </li>
<li>Kumyang and Cosmo Chemical are up on average 177% YTD. We would not chase these two stocks as their share prices have already risen considerably. </li>
</ul>


In this insight, we discuss the potential new inclusions in KOSPI 200 rebalance in May 2023.
The five stocks that are potential inclusions in KOSPI 200 rebalance in May 2023 include Kumyang, Cosmo Chemical, Dentium, Jeju Air, and Youlchon Chemical. 
Kumyang and Cosmo Chemical are up on average 177% YTD. We would not chase these two stocks as their share prices have already risen considerably. 


Additional Potential Inclusions in KOSPI 200 Rebalance in May 2023

South Korea

BGF Retail Co. Ltd. operates convenience store chains called CU in South Korea. The Company, through company owned stores or franchise, sells general groceries such as food and beverage.  The Company also offers ticketing, parcel pick-up, ATM machine and bill payment service.

CJ Freshway Corp. markets and provides various groceries to food service companies and restaurants.  The Company also caters to company's restaurants, schools, airports, and private restaurants and processes agricultural products.

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

Dongsuh Companies Inc. imports, manufactures, processes, markets and distributes general food products such as vegetable cooking oils. The Company also produces packaging materials and ceramic products including food and oil containers. Dongsuh has a cooperative relationship with Kraft Foods Inc.

BGF Retail Co., Ltd. operates convenience stores. The Company retails delicatessen, sweets, snacks, beverages, tobacco, and other related products. BGF Retail markets its products throughout South Korea.

GS Retail Co., Ltd. operates a chain of retail stores. The Company provides beauty and skincare products, candles, gifts, perfumes, ornaments, bathroom accessories, and other products. GS Retail serves its customers in the Republic of South Korea.

Naturecell Co Ltd manufactures fruit beverages, canned beverage, and health functional foods. The Company's prodcuts are tomato juices, peach juice, pineapple juice, orange juice, organic health conscious beverage, and canned yellow peach.  The Company was established in 1971, and its headquarters are located in Korea.

Sajodaerim Corporation specializes in deep sea fishing of pollack, cod, tuna, mackerel, and squid.  The Company's fishing territories cover domestic coastal areas, the North Pacific, South Atlantic, Western Africa, and Southeast Asia. Sajodaerim also manufactures, wholesales, and resells raw fish and processed frozen seafood.

Binggrae Co., Ltd. manufactures dairy food products.  The Company has cold-storage and frozen divisions.  Bonggrae's main items include Banana Flavoured Milk, yogurts, snacks and various types of ice cream.

Dongwon F&B Co., Ltd. manufactures various processed food products. The Company' s products include agricultural and marine products, beverages, dairy products, processed meat, fast food, frozen food, and ginseng. The company's main product in early stage was canned tuna and expanded their business into a variety of food production.

SHOEI FOODS CORPORATION trades foodstuff materials.  The Company trades milk-based products, canned foods, dried fruits, and confectionery.

7-Eleven Malaysia Holdings Berhad owns, operates, and franchises a chain of convenience stores under the 7-Eleven brand name.

Mammy Mart Corporation operates supermarkets in Saitama Prefecture.  The Company mainly operates small scale stores.

RETAIL PARTNERS CO., LTD. operates regional supermarket chain based in Yamaguchi Prefecture.  The Company also sells household utensils, appliances, and clothing.

Cosco Capital, Inc. operates as a retail holding company. The Company owns a diverse portfolio of real estate holdings that includes retail outlets, pharmacy chains, restaurants, wine and liquor distribution businesses, and unibanks. Cosco Capital focuses on the retail, real estate, liquor distribution and oil and mineral exploration industries in the Philippines.

Natural Grocers by Vitamin Cottage Inc through its subsidiary operates in the food industry. The Company provides healthy foods, vitamins, and supplements including allergy, aloe products, amino acids,  antioxidants, animal products, beverages, medical, cleansing and clearance, weight loss,  electrolytes, energy, cosmetics, natural, minerals, vitamins, pain relief, and supplements.

Natural Grocers By Vitamin Cottage (NGVC US)

ITOCHU-SHOKUHIN Co., Ltd. is a wholesaler of alcoholic beverages, general foods, and frozen foods.  The Company's products include beer, sake, distilled spirits, seasonings, canned goods, noodles, dried foodstuffs, confectionery, and processed foods.  Itochu-Shokuhin also plans, develops, and sells gift products.

Taiwan Tea Corporation imports and sells motorcycles, building materials, frozen meats, and copper wires.  The Company also produces tea and operates in the commercial building leasing business.

New Huadu Supercenter Co., Ltd. engages in chain operations in marketplaces, sup ermarkets, department stores.

Cawachi Ltd. operates a chain of drug stores in the Tohoku and Chubu regions. The Company's stores sell products such as pharmaceuticals, cosmetics, health products, foodstuffs, and household consumable goods.  Cawachi also operates a chain of pharmacies.

Hyundai G.F. Holdings Co., Ltd. operates as a office furniture distribution company. The Company produces built in furniture, upcycling waste materials bottles furniture, wood furniture, and other related products. Hyundai G.F. Holdings also offers food, information and technology, groceries sale, and food materials distribution services.

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Hyundai G.F. Holdings (005440 KS)

Hyundai Department Store & Hyundai Greenfood To Conduct Equity Spin-Offs to Create Holdcos & Opcos

Last week, Hyundai Dept Store Group announced that it will establish a single holding company structure with Hyundai G.F. Holdings controlling all...

Douglas Kim

Hyundai G.F. Holdings' Stock Swap with Hyundai Green Food & Hyundai Dept Store

This post details Hyundai G.F. Holdings' two-way stock swap event with Hyundai Green Food and Hyundai Dept Store and assesses potential arbitrage...

Sanghyun Park

KOSPI 200 Ad-Hoc Changes for Dongkuk Steel Spinoff: Discussing Flow Trading Timeline

This post details the KOSPI 200 corporate actions for Dongkuk Steel spinoff, which involves the addition of Youlchon Chemical, and discusses the...

Sanghyun Park

Target May 15th for LONG Youlchon Chemical with Dongkuk Steel's Split Approval

This post investigates the potential ad-hoc change in KOSPI 200 due to Dongkuk Steel's split and examines the Long position entry timing for the...

Sanghyun Park

Additional Potential Inclusions in KOSPI 200 Rebalance in May 2023

The five stocks that are potential inclusions in KOSPI 200 rebalance in May 2023 include Kumyang, Cosmo Chemical, Dentium, Jeju Air, and Youlchon...

Douglas Kim

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