Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

Event-Driven

<div class="content-highlight">
<p>In this insight, we highlight the closing of the pricing gaps between the major Korean common and preferred shares, especially with the upcoming end of the ban on the short selling of shares in Korea in May. In this insight, we highlight 21 pair trades that involve common and preferred shares. Among these 42 stocks (21 pairs), 15 of them had their preferred shares outperforming the common shares in the past year. In six of the remaining pairs, the common shares outperformed the preferred shares in the past year. </p>
<p>In this insight, we focus on the six of the pairs where the common shares outperformed the preferred shares in the past year. Among them, the three pairs involving Hyundai Motor (common &amp; pref), LG H&amp;H (common &amp; pref), and Amorepacific Corp (common &amp; pref) are the most interesting since they have experienced the biggest gaps between common and preferred shares, with the former outperforming the latter in the past year.</p>
</div>


In this insight, we highlight the closing of the pricing gaps between the major Korean common and preferred shares, especially with the upcoming end of the ban on the short selling of shares in Korea in May. In this insight, we highlight 21 pair trades that involve common and preferred shares. Among these 42 stocks (21 pairs), 15 of them had their preferred shares outperforming the common shares in the past year. In six of the remaining pairs, the common shares outperformed the preferred shares in the past year. 
In this insight, we focus on the six of the pairs where the common shares outperformed the preferred shares in the past year. Among them, the three pairs involving Hyundai Motor (common &amp; pref), LG H&amp;H (common &amp; pref), and Amorepacific Corp (common &amp; pref) are the most interesting since they have experienced the biggest gaps between common and preferred shares, with the former outperforming the latter in the past year.


Close the Gap: Korean Pref Vs. Common Shares Post Restart of Allowing Short Selling of 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.

<p><a href="https://www.smartkarma.com/entities/hyundai-engineering-co-ltd" target="_blank" data-smartkarma-citation="entities:33008:1" rel="noopener">Hyundai Engineering Co Ltd (HEC KS)</a> finally embarks on an IPO.</p><div class="content-highlight"><p><a href="https://biz.chosun.com/site/data/html_dir/2021/04/13/2021041302338.html#:~:text=%ED%98%84%EB%8C%80%EC%97%94%EC%A7%80%EB%8B%88%EC%96%B4%EB%A7%81%EC%9D%98%20%EC%B5%9C%EB%8C%80%20%EC%A3%BC%EC%A3%BC,%EB%B3%B4%EC%9C%A0%ED%95%9C%202%EB%8C%80%20%EC%A3%BC%EC%A3%BC%EB%8B%A4.&amp;text=%ED%98%84%EB%8C%80%EC%97%94%EC%A7%80%EB%8B%88%EC%96%B4%EB%A7%81%EC%9D%B4%20%EC%83%81%EC%9E%A5%ED%95%98%EB%A9%B4,%EC%9C%A0%EC%9A%A9%ED%95%98%EA%B2%8C%20%EC%93%B0%EC%9D%BC%20%EC%88%98%20%EC%9E%88%EB%8B%A4." target="_blank" rel="noopener">Here is the news link. (Source: Chosun Biz)</a></p></div><p>Chung Eui-sun owns an 11.72% stake, while Hyundai E&amp;C retains the major shareholding at 38.62%.</p><p>The current OTC MC sits at ₩8T, giving a 1.11x Sales and a 30.92x OP on FY2020. The CES stake is valued at a little less than ₩1T.</p><p>The target IPO date is before the end of this year.</p><table class="table table-striped">
<colgroup>
<col width="100">
<col width="100">
</colgroup>
<tbody>
<tr><td colspan="2" rowspan="1" data-sheets-value='{"1":2,"2":"Hyundai Engineering shareholding"}'>Hyundai Engineering shareholding</td></tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Hyundai Engineering &amp; Construction Co."}' data-sheets-formula='=googlefinance(R[0]C[3], "name")'>Hyundai Engineering &amp; Construction Co.</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0.3862}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}'>38.62%</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Chung Eui-sun"}'>Chung Eui-sun</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0.1172}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}'>11.72%</td>
</tr>
<tr><td colspan="2" rowspan="1" data-sheets-value='{"1":2,"2":"Source: Chosun Biz"}'>Source: Chosun Biz</td></tr>
</tbody>
</table><table class="table table-striped">
<colgroup>
<col width="100">
<col width="100">
</colgroup>
<tbody>
<tr><td colspan="2" rowspan="1" data-sheets-value='{"1":2,"2":"Hyundai Engineering valuation (₩B)"}'>Hyundai Engineering valuation (₩B)</td></tr>
<tr>
<td data-sheets-value='{"1":2,"2":"OTC MC"}'>OTC MC</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":8000}' data-sheets-numberformat='{"1":2,"2":"#,##0.0","3":1}'>8,000.0</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"x Sales"}'>x Sales</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":1.112904123309777}' data-sheets-numberformat='{"1":2,"2":"#,##0.00","3":1}' data-sheets-formula="=R[-1]C[0]/R[-7]C[3]">1.11</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"x OP"}'>x OP</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":30.923850019327407}' data-sheets-numberformat='{"1":2,"2":"#,##0.00","3":1}' data-sheets-formula="=R[-2]C[0]/R[-7]C[3]">30.92</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Chung Eui-sun stake"}'>Chung Eui-sun stake (11.72%)</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":937.6}' data-sheets-formula="=R[-3]C[0]*R[-22]C[0]">937.6</td>
</tr>
<tr><td colspan="2" rowspan="1" data-sheets-value='{"1":2,"2":"Source: 38 Communication"}'>Source: 38 Communication</td></tr>
</tbody>
</table><table class="table table-striped">
<colgroup>
<col width="100">
<col width="100">
<col width="100">
<col width="100">
<col width="100">
</colgroup>
<tbody>
<tr>
<td data-sheets-value='{"1":2,"2":"Hyundai Engineering financials (₩B)"}'>Hyundai Engineering financials (₩B)</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":2017}'>2017</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":2018}'>2018</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":2019}'>2019</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":2020}'>2020</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Sales"}'>Sales</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":6268.2}' data-sheets-numberformat='{"1":2,"2":"#,##0.0","3":1}'>6,268.2</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":6286.2}' data-sheets-numberformat='{"1":2,"2":"#,##0.0","3":1}'>6,286.2</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":6801.1}' data-sheets-numberformat='{"1":2,"2":"#,##0.0","3":1}'>6,801.1</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":7188.4}' data-sheets-numberformat='{"1":2,"2":"#,##0.0","3":1}'>7,188.4</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"OP"}'>OP</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":514.4}' data-sheets-numberformat='{"1":2,"2":"#,##0.0","3":1}'>514.4</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":453.7}' data-sheets-numberformat='{"1":2,"2":"#,##0.0","3":1}'>453.7</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":408.1}' data-sheets-numberformat='{"1":2,"2":"#,##0.0","3":1}'>408.1</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":258.7}' data-sheets-numberformat='{"1":2,"2":"#,##0.0","3":1}'>258.7</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":" - OPM"}'>- OPM</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0.08206502664241729}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}' data-sheets-formula="=R[-1]C[0]/R[-2]C[0]">8.21%</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0.07217396837517101}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}' data-sheets-formula="=R[-1]C[0]/R[-2]C[0]">7.22%</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0.060004999191307286}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}' data-sheets-formula="=R[-1]C[0]/R[-2]C[0]">6.00%</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0.03598853708752991}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}' data-sheets-formula="=R[-1]C[0]/R[-2]C[0]">3.60%</td>
</tr>
<tr><td colspan="5" rowspan="1" data-sheets-value='{"1":2,"2":"Source: DART"}'>Source: DART</td></tr>
</tbody>
</table>

Hyundai Engineering Co Ltd (HEC KS) finally embarks on an IPO.Here is the news link. (Source: Chosun Biz)Chung Eui-sun owns an 11.72% stake, while Hyundai E&amp;C retains the major shareholding at 38.62%.The current OTC MC sits at ₩8T, giving a 1.11x Sales and a 30.92x OP on FY2020. The CES stake is valued at a little less than ₩1T.The target IPO date is before the end of this year.





Hyundai Engineering shareholding

Hyundai Engineering &amp; Construction Co.
38.62%


Chung Eui-sun
11.72%

Source: Chosun Biz







Hyundai Engineering valuation (₩B)

OTC MC
8,000.0


x Sales
1.11


x OP
30.92


Chung Eui-sun stake (11.72%)
937.6

Source: 38 Communication











Hyundai Engineering financials (₩B)
2017
2018
2019
2020


Sales
6,268.2
6,286.2
6,801.1
7,188.4


OP
514.4
453.7
408.1
258.7


- OPM
8.21%
7.22%
6.00%
3.60%

Source: DART



Potential Trades on HMG Stocks Amid Hyundai Eng IPO: Loan/Short Int Flow & 20D MA σ

Cross Asset Strategy

<div class="content-highlight">
<p>On 9 April, the <a href="https://www.reuters.com/article/southkorea-nps/update-1-s-koreas-pension-fund-adjusts-rules-to-raise-domestic-equity-allocation-idUSL1N2M20EN" target="_blank" rel="noopener">NPS</a> announced that it will change rules to increase the allocation of Korean stocks, which would be the first time in a decade. This adjustment could be implemented starting next week. This change comes after a lot of pressure by the retail investors.</p>
<p>NPS increased the strategic asset allocation (SAA) limit for domestic equities from the current 2% to 3%, increasing the percentage of Korean stocks it can hold from the current band of 14.8% -18.8% (+/- 2% with 16.8% as base) to 13.8% -19.8% (+/- 3% with 16.8% as base). NPS's target of the domestic equity allocation is 16.8% (of total fund amount). <strong>As a result of this change, the sale of domestic stocks by the NPS is expected to slow down.</strong></p>
</div>


On 9 April, the NPS announced that it will change rules to increase the allocation of Korean stocks, which would be the first time in a decade. This adjustment could be implemented starting next week. This change comes after a lot of pressure by the retail investors.
NPS increased the strategic asset allocation (SAA) limit for domestic equities from the current 2% to 3%, increasing the percentage of Korean stocks it can hold from the current band of 14.8% -18.8% (+/- 2% with 16.8% as base) to 13.8% -19.8% (+/- 3% with 16.8% as base). NPS's target of the domestic equity allocation is 16.8% (of total fund amount). As a result of this change, the sale of domestic stocks by the NPS is expected to slow down.


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

Brian Freitas

Pan-Asia Index Rebalances/ Events/ Delta One

Quantitative Analysis

<div><p>The Asia Short Interest weekly looks at moves in market wide short interest and highlights movements in stock specific short interest across Hong Kong, Japan, Korea and Taiwan using the last available data published by the relevant authorities.</p></div><div><p>For the week from 22-26 March, Hong Kong saw shorts rise on <a href="https://www.smartkarma.com/entities/baidu-inc-a55ca720-5968-48f0-8194-ac94390d065c" target="_blank" data-smartkarma-citation="entities:32212:1" rel="noopener">Baidu (9888 HK)</a>, <a href="https://www.smartkarma.com/entities/tencent-holdings-ltd" target="_blank" data-smartkarma-citation="entities:26:1" rel="noopener">Tencent Holdings (700 HK)</a>, <a href="https://www.smartkarma.com/entities/yihai-int-l-holding-ltd" target="_blank" data-smartkarma-citation="entities:22803:1" rel="noopener">Yihai Int’L Holding (1579 HK)</a>, <a href="https://www.smartkarma.com/entities/beijing-kuaishou-technology-co-ltd" target="_blank" data-smartkarma-citation="entities:29725:1" rel="noopener">Kuaishou Technology (1024 HK)</a> and <a href="https://www.smartkarma.com/entities/lenovo-group-ltd" target="_blank" data-smartkarma-citation="entities:13359:1" rel="noopener">Lenovo (992 HK)</a> while there was short covering on <a href="https://www.smartkarma.com/entities/meituan-dianping" target="_blank" data-smartkarma-citation="entities:26970:1" rel="noopener">Meituan (3690 HK)</a>, <a href="https://www.smartkarma.com/entities/sino-biopharmaceutical" target="_blank" data-smartkarma-citation="entities:230:1" rel="noopener">Sino Biopharmaceutical (1177 HK)</a>, <a href="https://www.smartkarma.com/entities/haier-smart-home-co-ltd-b3ef445f-0f54-4586-8c58-9073de98d60e" target="_blank" data-smartkarma-citation="entities:31105:1" rel="noopener">Haier Smart Home Co Ltd (6690 HK)</a>, <a href="https://www.smartkarma.com/entities/jd-com-inc" target="_blank" data-smartkarma-citation="entities:29043:1" rel="noopener">JD.com Inc. (9618 HK)</a> and <a href="https://www.smartkarma.com/entities/china-literature-ltd" target="_blank" data-smartkarma-citation="entities:24388:1" rel="noopener">China Literature (772 HK)</a>. Shorts increased in the Communication Services, Financials, Information Technology and Consumer Discretionary sectors.</p></div><div><p>In Japan, stocks that saw the most shorts were <a href="https://www.smartkarma.com/entities/yaskawa-electric-corp" target="_blank" data-smartkarma-citation="entities:2458:1" rel="noopener">Yaskawa Electric (6506 JP)</a>, <a href="https://www.smartkarma.com/entities/base-inc" target="_blank" data-smartkarma-citation="entities:28353:1" rel="noopener">BASE Inc (4477 JP)</a>, <a href="https://www.smartkarma.com/entities/toshiba-corp" target="_blank" data-smartkarma-citation="entities:637:1" rel="noopener">Toshiba Corp (6502 JP)</a>, <a href="https://www.smartkarma.com/entities/aeon-co-ltd" target="_blank" data-smartkarma-citation="entities:3:1" rel="noopener">Aeon Co Ltd (8267 JP)</a> and <a href="https://www.smartkarma.com/entities/peptidream-inc" target="_blank" data-smartkarma-citation="entities:13514:1" rel="noopener">Peptidream Inc (4587 JP)</a> while shorts decreased on <a href="https://www.smartkarma.com/entities/takeda-pharmaceutical-co-ltd" target="_blank" data-smartkarma-citation="entities:11747:1" rel="noopener">Takeda Pharmaceutical (4502 JP)</a>, <a href="https://www.smartkarma.com/entities/monex-group-inc" target="_blank" data-smartkarma-citation="entities:14211:1" rel="noopener">Monex Group Inc (8698 JP)</a>, <a href="https://www.smartkarma.com/entities/pan-pacific-international-holdings-corporation" target="_blank" data-smartkarma-citation="entities:13475:1" rel="noopener">Pan Pacific International Holdings (7532 JP)</a>, <a href="https://www.smartkarma.com/entities/nexon-co-ltd" target="_blank" data-smartkarma-citation="entities:16032:1" rel="noopener">Nexon (3659 JP)</a> and <a href="https://www.smartkarma.com/entities/mizuho-financial-group-inc" target="_blank" data-smartkarma-citation="entities:219:1" rel="noopener">Mizuho Financial Group (8411 JP)</a>. Shorts increased in the Industrials sectors, and decreased in the Financials, Communication Services and Health Care sectors.</p></div><div><p>In Korea, shorts decreased on <a href="https://www.smartkarma.com/entities/celltrion-inc" target="_blank" data-smartkarma-citation="entities:991:1" rel="noopener">Celltrion Inc (068270 KS)</a>, <a href="https://www.smartkarma.com/entities/samsung-biologics-co-ltd" target="_blank" data-smartkarma-citation="entities:22932:1" rel="noopener">Samsung Biologics Co., (207940 KS)</a>, <a href="https://www.smartkarma.com/entities/samsung-electronics-co-ltd" target="_blank" data-smartkarma-citation="entities:191:1" rel="noopener">Samsung Electronics (005930 KS)</a>, <a href="https://www.smartkarma.com/entities/sk-hynix-inc" target="_blank" data-smartkarma-citation="entities:16955:1" rel="noopener">SK Hynix (000660 KS)</a> and <a href="https://www.smartkarma.com/entities/hyundai-motor-co" target="_blank" data-smartkarma-citation="entities:155:1" rel="noopener">Hyundai Motor Co (005380 KS)</a> during the week. </p></div><div><p>Stocks in Taiwan that saw the highest increase in shorts were <a href="https://www.smartkarma.com/entities/largan-precision-co-ltd" target="_blank" data-smartkarma-citation="entities:9126:1" rel="noopener">Largan Precision (3008 TT)</a>, <a href="https://www.smartkarma.com/entities/pegatron-corp" target="_blank" data-smartkarma-citation="entities:12852:1" rel="noopener">Pegatron Corp (4938 TT)</a>, <a href="https://www.smartkarma.com/entities/yageo-corporation" target="_blank" data-smartkarma-citation="entities:13212:1" rel="noopener">Yageo Corporation (2327 TT)</a> and <a href="https://www.smartkarma.com/entities/novatek-microelectronics-corp" target="_blank" data-smartkarma-citation="entities:10904:1" rel="noopener">Novatek Microelectronics Corp (3034 TT)</a> while shorts were covered on <a href="https://www.smartkarma.com/entities/unimicron-technology-corp" target="_blank" data-smartkarma-citation="entities:18778:1" rel="noopener">Unimicron Technology (3037 TT)</a>, <a href="https://www.smartkarma.com/entities/elite-semiconductor-memory" target="_blank" data-smartkarma-citation="entities:9373:1" rel="noopener">Elite Semiconductor Memory (3006 TT)</a>, <a href="https://www.smartkarma.com/entities/au-optronics-corp" target="_blank" data-smartkarma-citation="entities:6704:1" rel="noopener">AU Optronics (2409 TT)</a> and <a href="https://www.smartkarma.com/entities/taiwan-semiconductor-manufacturing-company" target="_blank" data-smartkarma-citation="entities:11230:1" rel="noopener">TSMC (2330 TT)</a>. </p></div>

The Asia Short Interest weekly looks at moves in market wide short interest and highlights movements in stock specific short interest across Hong Kong, Japan, Korea and Taiwan using the last available data published by the relevant authorities.For the week from 22-26 March, Hong Kong saw shorts rise on Baidu (9888 HK), Tencent Holdings (700 HK), Yihai Int’L Holding (1579 HK), Kuaishou Technology (1024 HK) and Lenovo (992 HK) while there was short covering on Meituan (3690 HK), Sino Biopharmaceutical (1177 HK), Haier Smart Home Co Ltd (6690 HK), JD.com Inc. (9618 HK) and China Literature (772 HK). Shorts increased in the Communication Services, Financials, Information Technology and Consumer Discretionary sectors.In Japan, stocks that saw the most shorts were Yaskawa Electric (6506 JP), BASE Inc (4477 JP), Toshiba Corp (6502 JP), Aeon Co Ltd (8267 JP) and Peptidream Inc (4587 JP) while shorts decreased on Takeda Pharmaceutical (4502 JP), Monex Group Inc (8698 JP), Pan Pacific International Holdings (7532 JP), Nexon (3659 JP) and Mizuho Financial Group (8411 JP). Shorts increased in the Industrials sectors, and decreased in the Financials, Communication Services and Health Care sectors.In Korea, shorts decreased on Celltrion Inc (068270 KS), Samsung Biologics Co., (207940 KS), Samsung Electronics (005930 KS), SK Hynix (000660 KS) and Hyundai Motor Co (005380 KS) during the week. Stocks in Taiwan that saw the highest increase in shorts were Largan Precision (3008 TT), Pegatron Corp (4938 TT), Yageo Corporation (2327 TT) and Novatek Microelectronics Corp (3034 TT) while shorts were covered on Unimicron Technology (3037 TT), Elite Semiconductor Memory (3006 TT), AU Optronics (2409 TT) and TSMC (2330 TT). 

Asia Short Interest: Baidu, Kuaishou, Smoore, Yaskawa, BASE, Toshiba, Celltrion, Samsung, Largan

<p>What's going on at Hyundai Mobis (and Glovis)?</p><p>Once again, the same old rumor emerged in the local market yesterday.</p><div class="content-highlight"><h2><strong>Chung Eui-sun will sell 10% of his Glovis stake in block deals. Then, he will use the proceeds to buy Mobis shares.</strong></h2></div><p><strong>Why do we keep hearing this rumor?</strong></p><p>For this, we need to know the Korea FTC's intra-group transaction restrictions.</p><p>If the owner family's shareholding in a chaebol affiliate exceeds the threshold, the affiliate will become subject to the intra-group transaction restrictions.</p><p>A company under the intra-group transaction restrictions isn't allowed to exceed intra-group deals for more than ₩20B (or 12% of total sales).</p><p><strong>Currently, Hyundai Glovis is the problem within the Hyundai Motor Group. The intra-group deals account for 69.8% (₩9.8T) of the total revenue last year (₩14.5T).</strong></p><p>The shareholding threshold is 30% for listed companies and 20% for unlisted companies.</p><p>Glovis has been able to escape the restrictions as the Chung family (Chung Mong-koo and Chung Eui-sun combined) have slightly less than 30%.</p><table class="table table-striped">
<colgroup>
<col width="100">
<col width="100">
<col width="100">
<col width="100">
</colgroup>
<tbody>
<tr>
<td data-sheets-value='{"1":2,"2":"Hyundai Glovis"}'>Hyundai Glovis</td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"Shares"}' data-sheets-numberformat='{"1":4,"2":"[$₩-412]#,##0"}'>Shares</td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"%"}'>%</td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"Value (₩B)"}'>Value (₩B)</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Chung Eui-sun"}'>Chung Eui-sun</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":8732290}' data-sheets-numberformat='{"1":2,"2":"#,##0"}'>8,732,290</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0.2329}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}'>23.29%</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":1563.34125}' data-sheets-numberformat='{"1":2,"2":"#,##0.0"}' data-sheets-formula="=R[0]C[-1]*R10C5">1,563.3</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Den Norske Amerikalinje AS"}'>Den Norske Amerikalinje AS</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":4125000}' data-sheets-numberformat='{"1":2,"2":"#,##0"}'>4,125,000</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0.11}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}'>11.00%</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":738.375}' data-sheets-numberformat='{"1":2,"2":"#,##0.0"}' data-sheets-formula="=R[0]C[-1]*R10C5">738.4</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Chung Mong-koo"}'>Chung Mong-koo</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":2517701}' data-sheets-numberformat='{"1":2,"2":"#,##0"}'>2,517,701</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0.0671}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}'>6.71%</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":450.40875000000005}' data-sheets-numberformat='{"1":2,"2":"#,##0.0"}' data-sheets-formula="=R[0]C[-1]*R10C5">450.4</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Hyundai Motor"}'>Hyundai Motor</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":1830939}' data-sheets-numberformat='{"1":2,"2":"#,##0"}'>1,830,939</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0.0488}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}'>4.88%</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":327.57}' data-sheets-numberformat='{"1":2,"2":"#,##0.0"}' data-sheets-formula="=R[0]C[-1]*R10C5">327.6</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"HM CMK Foundation"}'>HM CMK Foundation</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":1671018}' data-sheets-numberformat='{"1":2,"2":"#,##0"}'>1,671,018</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0.0446}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}'>4.46%</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":299.3775}' data-sheets-numberformat='{"1":2,"2":"#,##0.0"}' data-sheets-formula="=R[0]C[-1]*R10C5">299.4</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Chung Eui-sun+Chung Mong-koo"}'><strong>Chung Eui-sun+Chung Mong-koo</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":11249991}' data-sheets-numberformat='{"1":2,"2":"#,##0"}' data-sheets-formula="=R[-3]C[0]+R[-5]C[0]"><strong>11,249,991</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0.2999}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}'><strong>29.99%</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":2013.07875}' data-sheets-numberformat='{"1":2,"2":"#,##0.0"}' data-sheets-formula="=R[0]C[-1]*R10C5"><strong>2,013.1</strong></td>
</tr>
<tr><td colspan="4" rowspan="1" data-sheets-value='{"1":2,"2":"Source: FnGuide"}'>Source: FnGuide</td></tr>
</tbody>
</table><p>But starting next year, the threshold for listed companies will also become 20%.</p><p>This is exactly why we keep hearing this rumor because Chung Eui-sun has to reduce his stake by 10%p so that the family-owned combined stake falls below 20%.</p><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/199/625/original/image?1617927547" class="editor-image img-responsive" data-smartkarma-image-id="199625"></figure>

What's going on at Hyundai Mobis (and Glovis)?Once again, the same old rumor emerged in the local market yesterday.Chung Eui-sun will sell 10% of his Glovis stake in block deals. Then, he will use the proceeds to buy Mobis shares.Why do we keep hearing this rumor?For this, we need to know the Korea FTC's intra-group transaction restrictions.If the owner family's shareholding in a chaebol affiliate exceeds the threshold, the affiliate will become subject to the intra-group transaction restrictions.A company under the intra-group transaction restrictions isn't allowed to exceed intra-group deals for more than ₩20B (or 12% of total sales).Currently, Hyundai Glovis is the problem within the Hyundai Motor Group. The intra-group deals account for 69.8% (₩9.8T) of the total revenue last year (₩14.5T).The shareholding threshold is 30% for listed companies and 20% for unlisted companies.Glovis has been able to escape the restrictions as the Chung family (Chung Mong-koo and Chung Eui-sun combined) have slightly less than 30%.








Hyundai Glovis
Shares
%
Value (₩B)


Chung Eui-sun
8,732,290
23.29%
1,563.3


Den Norske Amerikalinje AS
4,125,000
11.00%
738.4


Chung Mong-koo
2,517,701
6.71%
450.4


Hyundai Motor
1,830,939
4.88%
327.6


HM CMK Foundation
1,671,018
4.46%
299.4


Chung Eui-sun+Chung Mong-koo
11,249,991
29.99%
2,013.1

Source: FnGuide

But starting next year, the threshold for listed companies will also become 20%.This is exactly why we keep hearing this rumor because Chung Eui-sun has to reduce his stake by 10%p so that the family-owned combined stake falls below 20%.

Glovis Block Deals by Chung & Buy Mobis Shares: Unlikely to Happen

South Korea

Hyundai Motor Company manufactures, sells, and exports passenger cars, trucks, and commercial vehicles. The Company also sells various auto parts and operates auto repair service centers throughout South Korea. Hyundai Motor provides financial services through its subsidiaries.

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Hyundai Motor (005380 KS)

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