Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

Event-Driven

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It is not often that a Korean company goes activist on another publicly listed company so it pays attention to this new development where HYK Partners (with major investment backing from <a href="https://www.smartkarma.com/entities/kyungbang-ltd" target="_blank" data-smartkarma-citation="entities:16840:1" rel="noopener">Kyungbang Ltd (000050 KS)</a>) has publicly declared that it is going activist on <a href="https://www.smartkarma.com/entities/hanjin-transportation-co" target="_blank" data-smartkarma-citation="entities:12583:1" rel="noopener">Hanjin Transportation Co (002320 KS)</a>. 
<a href="https://www.smartkarma.com/entities/hanjin-transportation-co" target="_blank" data-smartkarma-citation="entities:12583:1" rel="noopener">Hanjin Transportation Co (002320 KS)</a> is an interesting stock right now. Its fundamentals are improving as evidenced by higher sales and profits of its delivery/parcel, shipping, and unloading services. Plus, HYK Partners is going activist on Hanjin Transportation. Another hedge fund (KCGI) has been reducing its stake in Hanjin Transportation (down to 9.79% as of 6 November). There may be an increasing possibility that HYK Partners could partner with KCGI in trying to improve corporate governance of Hanjin Transportation. Meanwhile, Hanjin Transportation is trading at only 0.7x P/B. Overall, we think that there are numerous positive catalysts with Hanjin Transportation and it is a stock that we believe could outperform the market over the next 6-12 months. 
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It is not often that a Korean company goes activist on another publicly listed company so it pays attention to this new development where HYK Partners (with major investment backing from Kyungbang Ltd (000050 KS)) has publicly declared that it is going activist on Hanjin Transportation Co (002320 KS). 
Hanjin Transportation Co (002320 KS) is an interesting stock right now. Its fundamentals are improving as evidenced by higher sales and profits of its delivery/parcel, shipping, and unloading services. Plus, HYK Partners is going activist on Hanjin Transportation. Another hedge fund (KCGI) has been reducing its stake in Hanjin Transportation (down to 9.79% as of 6 November). There may be an increasing possibility that HYK Partners could partner with KCGI in trying to improve corporate governance of Hanjin Transportation. Meanwhile, Hanjin Transportation is trading at only 0.7x P/B. Overall, we think that there are numerous positive catalysts with Hanjin Transportation and it is a stock that we believe could outperform the market over the next 6-12 months. 


HYK Partners (Kyungbang) Goes Activist on Hanjin Transportation

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

Sanghyun Park

Korea / Special Sits, Pairs, Index Rebalancing

<a href="https://www.smartkarma.com/entities/991" target="_blank" data-smartkarma-citation="entities:991:1">Celltrion Inc (068270 KS)</a> said in a regulatory filing that it will have EGM at 10 AM on Aug 29 to decide whether it will move to KOSPI.<div class="content-highlight">Below is the link of this regulatory filing in DART.<a href="http://dart.fss.or.kr/dsaf001/main.do?rcpNo=20170821900093" target="_blank">http://dart.fss.or.kr/dsaf001/main.do?rcpNo=20170821900093</a></div>Apparently, a majority of Celltrion shareholders will approve KOSPI move. So, it now seems that this is almost a done deal. Of course, KOSPI move itself won't make much difference in terms of short trade volume. But what is important is that there is a very high possibility that Celltrion will be included in KOSPI200.Yes, KOSPI200 inclusion is a big thing. So, any trading opportunity here? Alright, let's find it out.

Celltrion Inc (068270 KS) said in a regulatory filing that it will have EGM at 10 AM on Aug 29 to decide whether it will move to KOSPI.Below is the link of this regulatory filing in DART.http://dart.fss.or.kr/dsaf001/main.do?rcpNo=20170821900093Apparently, a majority of Celltrion shareholders will approve KOSPI move. So, it now seems that this is almost a done deal. Of course, KOSPI move itself won't make much difference in terms of short trade volume. But what is important is that there is a very high possibility that Celltrion will be included in KOSPI200.Yes, KOSPI200 inclusion is a big thing. So, any trading opportunity here? Alright, let's find it out.

More Discussions on Impacts of Celltrion's KOSPI200 Inclusion

Thematic (Sector/Industry)

On February 23rd, the Korean government announced numerous domestic consumption boosting measures. Among them included a discount of 30-50% on KTX (high speed rail in Korea) if the tickets are purchased 25 days in advance. This discount on high speed rail is effective starting August. This annoucement is likely to negatively impact the domestic low cost airlines such as Jeju Airlines as well as major airlines such as <a href="https://www.smartkarma.com/entities/1896" target="_blank" data-smartkarma-citation="entities:1896:1">Asiana Airlines (020560 KS)</a> since there will likely be more people that will…

On February 23rd, the Korean government announced numerous domestic consumption boosting measures. Among them included a discount of 30-50% on KTX (high speed rail in Korea) if the tickets are purchased 25 days in advance. This discount on high speed rail is effective starting August. This annoucement is likely to negatively impact the domestic low cost airlines such as Jeju Airlines as well as major airlines such as Asiana Airlines (020560 KS) since there will likely be more people that will…

Korean Govt Measures To Invigorate Domestic Consumption

Virtual Reality (VR) is not really taking off. We had and we are still having high expectations on VR, but the actual sales numbers are quite disappointing. VR was one of the items that went flop in the recent year-end hot sales period. In fact, no VR company seems to have actually turned profits. So, many of us are questioning about the survival (or sustainability) of VR business.For instance,Sony’s PlayStations VR (PS VR) created a huge hype, but Sony achieved only less than 30% of its initial sales target for FY16. Google’s Daydream is no exception. Google initially aimed to sell 450k units of Daydream for FY16, but the actual sales number was estimated at about 260k units. Well, Samsung’s Gear VR showed a relatively better result, but we should note that most of Samsung’s Gear VRs were given to Galaxy Smartphone buyers for free. So, Samsung Gear VR’s sales number is not really relevant. Another examples are Oculus’ Rift and HTC’s Vive. Both were expected to record 300-400k units in sales, but neither has so far achieved this target. It is estimated that the sales number of both devices was only around 100k.These numbers may not be accurate. But what seems certain is that the growth rate of VR market is not meeting our high expectations.

Virtual Reality (VR) is not really taking off. We had and we are still having high expectations on VR, but the actual sales numbers are quite disappointing. VR was one of the items that went flop in the recent year-end hot sales period. In fact, no VR company seems to have actually turned profits. So, many of us are questioning about the survival (or sustainability) of VR business.For instance,Sony’s PlayStations VR (PS VR) created a huge hype, but Sony achieved only less than 30% of its initial sales target for FY16. Google’s Daydream is no exception. Google initially aimed to sell 450k units of Daydream for FY16, but the actual sales number was estimated at about 260k units. Well, Samsung’s Gear VR showed a relatively better result, but we should note that most of Samsung’s Gear VRs were given to Galaxy Smartphone buyers for free. So, Samsung Gear VR’s sales number is not really relevant. Another examples are Oculus’ Rift and HTC’s Vive. Both were expected to record 300-400k units in sales, but neither has so far achieved this target. It is estimated that the sales number of both devices was only around 100k.These numbers may not be accurate. But what seems certain is that the growth rate of VR market is not meeting our high expectations.

Stark Reality of VR Market - Telcos Are Pushing VR for 5G in Korea

Glenwood Private Equity and NH Private Equity selected a shortlist of seven bidders who had made it to the second round of bidding for Tongyang Magic. <a href="https://www.smartkarma.com/entities/23567" target="_blank" data-smartkarma-citation="entities:23567">AJ Networks Co., Ltd. (095570 KS)</a> and <a href="https://www.smartkarma.com/entities/20578" target="_blank" data-smartkarma-citation="entities:20578">Sk Networks Co Ltd (001740 KS)</a> are now thought to be favored by Tongyang Magic's management. <a href="https://www.smartkarma.com/entities/13964" target="_blank" data-smartkarma-citation="entities:13964">CJ Corp (001040 KS)</a> had also made it to the second round. But CJ is believed to be lagging behind AJ Networks and SK Networks in the race. The final round of bidding is expected to be held in the middle of September…

Glenwood Private Equity and NH Private Equity selected a shortlist of seven bidders who had made it to the second round of bidding for Tongyang Magic. AJ Networks Co., Ltd. (095570 KS) and Sk Networks Co Ltd (001740 KS) are now thought to be favored by Tongyang Magic's management. CJ Corp (001040 KS) had also made it to the second round. But CJ is believed to be lagging behind AJ Networks and SK Networks in the race. The final round of bidding is expected to be held in the middle of September…

Who Is AJ Networks (095570)? Most Favored Bidder for Tongyang Magic

South Korea

Kyungbang Ltd. is a textile manufacturer that produces cotton, polyester, various yarn products, and woven fabrics.  Kyungbang also operates a department store through a subsidiary.

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Kyungbang Ltd (000050 KS)

HYK Partners (Kyungbang) Goes Activist on Hanjin Transportation

HYK Partners (with major investment backing from Kyungbang Ltd (000050 KS)) has publicly declared that it is going activist on Hanjin...

Douglas Kim

More Discussions on Impacts of Celltrion's KOSPI200 Inclusion

Celltrion Inc (068270 KS) said in a regulatory filing that it will have EGM at 10 AM on Aug 29 to decide whether it will move to KOSPI. Below is...

Sanghyun Park

Korean Govt Measures To Invigorate Domestic Consumption

On February 23rd, the Korean government announced numerous domestic consumption boosting measures. Among them included a discount of 30-50% on KTX...

Douglas Kim

Stark Reality of VR Market - Telcos Are Pushing VR for 5G in Korea

Virtual Reality (VR) is not really taking off. We had and we are still having high expectations on VR, but the actual sales numbers are quite...

Sanghyun Park

Who Is AJ Networks (095570)? Most Favored Bidder for Tongyang Magic

Glenwood Private Equity and NH Private Equity selected a shortlist of seven bidders who had made it to the second round of bidding for Tongyang...

Sanghyun Park

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