Equity Analyst focused on Korea Stock Market

Thomas Yi

Equity Bottom-Up

<a href="https://www.smartkarma.com/entities/1726" target="_blank" data-smartkarma-citation="entities:1726:1">Huchems Fine Chemical (069260 KS)</a>, one of the largest basic chemicals company in Korea has suffered from share price plunge during last 2 months, due to the market’s concerns over earnings deterioration. Especially, due to large size TDI capacity expansion in 4Q18, investors concern over the TDI-Toluene spread, which impacts on the company’s earnings. However, the spread impact on the earnings is less than 30% of total earnings. And we believe the spread trend should be milder than expected, considering an old TDI plant shutdown (estimated 80,000 tonne/year) in 2019, significantly declined TDI inventory level, and required period for the first start-up. The company’s share price has plummeted enough to near historical trough, and offers now higher than 6% of dividend yield. While the company may not be the best stock, we believe it is a good one for long-term investor’s portfolio.<ul><li>
Stock Information (2018/ 9/ 20) Share price: KRW 23,950/ Market Cap: KRW 979bn, Trading Volume (@60 days): 111,885 shares, Historical price (52 weeks: Highest/Lowest) KRW 32,700/KRW 22,600, Absolute Return (3 month) -15.96%, Major shareholders: Taekwang Ind and others 43.5%/ National Pension Service (NPS) 10.2%/ Nonghyup Agribusiness 8.3%/ Treasury stock 0.5%
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Huchems Fine Chemical (069260 KS), one of the largest basic chemicals company in Korea has suffered from share price plunge during last 2 months, due to the market’s concerns over earnings deterioration. Especially, due to large size TDI capacity expansion in 4Q18, investors concern over the TDI-Toluene spread, which impacts on the company’s earnings. However, the spread impact on the earnings is less than 30% of total earnings. And we believe the spread trend should be milder than expected, considering an old TDI plant shutdown (estimated 80,000 tonne/year) in 2019, significantly declined TDI inventory level, and required period for the first start-up. The company’s share price has plummeted enough to near historical trough, and offers now higher than 6% of dividend yield. While the company may not be the best stock, we believe it is a good one for long-term investor’s portfolio.
Stock Information (2018/ 9/ 20) Share price: KRW 23,950/ Market Cap: KRW 979bn, Trading Volume (@60 days): 111,885 shares, Historical price (52 weeks: Highest/Lowest) KRW 32,700/KRW 22,600, Absolute Return (3 month) -15.96%, Major shareholders: Taekwang Ind and others 43.5%/ National Pension Service (NPS) 10.2%/ Nonghyup Agribusiness 8.3%/ Treasury stock 0.5%


Huchems (069260 KS) “Shares near Trough and Offer High Dividend”

Korea / Special Sits, Pairs, Index Rebalancing, Clepsydra Capital

Sanghyun Park

Korea / Special Sits, Pairs, Index Rebalancing

Thematic (Sector/Industry)

Don't forget that this year's ex-dividend date for the Korean companies whose fiscal year ends Dec 31 is Dec 27. This means you have to own (or buy) shares until Dec 26 (next Tuesday) to get dividends. Yes, this means it is again time to make a move on dividend arbitrage. Buy them in baskets and short the futures? Surely, we have various ways of doing arbitrage on high yield dividend stocks, but in this insight I will just take a look at individual stocks and I will leave specifics of arbitrage strategy up to you. That is, I will try to examine the most basic thing, price-dividend yield of each individual stock that I think worth our attention, and then compare it with the opening price of each individual stock on the ex-dividend day.<table class="table table-striped"><tbody><tr><td colspan="2" style="width: 731px;">Important dates for high yield dividend stock hunters in Korea for the companies whose FY ends Dec 31</td></tr><tr><td style="width: 403.7364196777344px;">Last day to buy high yield dividend stocks in 2017</td><td style="text-align: right; width: 327.2635803222656px;">Dec 26, 2017</td></tr><tr><td style="width: 403.7364196777344px;">Ex-dividend date in 2017</td><td style="text-align: right; width: 327.2635803222656px;">Dec 27, 2017</td></tr><tr><td colspan="2" style="text-align: right; width: 731px;"><hr></td></tr><tr><td style="width: 403.7364196777344px;">Last day to buy high yield dividend stocks in 2016</td><td style="text-align: right; width: 327.2635803222656px;">Dec 27, 2016</td></tr><tr><td style="width: 403.7364196777344px;">Ex-dividend date in 2016</td><td style="text-align: right; width: 327.2635803222656px;">Dec 28, 2016</td></tr><tr><td colspan="2" style="width: 731px;">Source: KRX</td></tr></tbody></table>

Don't forget that this year's ex-dividend date for the Korean companies whose fiscal year ends Dec 31 is Dec 27. This means you have to own (or buy) shares until Dec 26 (next Tuesday) to get dividends. Yes, this means it is again time to make a move on dividend arbitrage. Buy them in baskets and short the futures? Surely, we have various ways of doing arbitrage on high yield dividend stocks, but in this insight I will just take a look at individual stocks and I will leave specifics of arbitrage strategy up to you. That is, I will try to examine the most basic thing, price-dividend yield of each individual stock that I think worth our attention, and then compare it with the opening price of each individual stock on the ex-dividend day.Important dates for high yield dividend stock hunters in Korea for the companies whose FY ends Dec 31Last day to buy high yield dividend stocks in 2017Dec 26, 2017Ex-dividend date in 2017Dec 27, 2017Last day to buy high yield dividend stocks in 2016Dec 27, 2016Ex-dividend date in 2016Dec 28, 2016Source: KRX

Year-End Dividend Arbitrage - 5 High Conviction Stocks in KOSPI

South Korea

KPX Chemical Co., Ltd. produces polypropylene glycol (PPG), ethoxylates (EOA), polyurethane resin, and ethanol amines (ETA).  The Company supplies its products to the automobile, construction, and fine chemical industries.

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KPX Chemical (025000 KS)

Huchems (069260 KS) “Shares near Trough and Offer High Dividend”

Huchems Fine Chemical (069260 KS), one of the largest basic chemicals company in Korea has suffered from share price plunge during last 2 months,...

Thomas Yi

Year-End Dividend Arbitrage - 5 High Conviction Stocks in KOSPI

Don't forget that this year's ex-dividend date for the Korean companies whose fiscal year ends Dec 31 is Dec 27. This means you have to own (or...

Sanghyun Park

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