Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

Event-Driven

<ul>
<li>There are increasing evidence that suggests that the M&amp;A fight Korea Zinc (010130 KS) between the Jang and Choi families is becoming more heightened.</li>
<li>The family of the owners of Hankook Tire and Chosun Refractories have a close relationship with Korea Zinc Vice Chairman Choi and they have become friendly shareholders to Choi.</li>
<li>Our NAV valuation of Young Poong (000670 KS) suggests NAV of 2.2 trillion won or NAV per share of 1,210,644, which represents a 61% upside from current levels.</li>
</ul>


There are increasing evidence that suggests that the M&amp;A fight Korea Zinc (010130 KS) between the Jang and Choi families is becoming more heightened.
The family of the owners of Hankook Tire and Chosun Refractories have a close relationship with Korea Zinc Vice Chairman Choi and they have become friendly shareholders to Choi.
Our NAV valuation of Young Poong (000670 KS) suggests NAV of 2.2 trillion won or NAV per share of 1,210,644, which represents a 61% upside from current levels.


Hankook Tire & Chosun Refractories Enter M&A Fight for Korea Zinc: [Young Poong's Cheap NAV]

Equity Long-Short Analyst

Pyari Menon

Thematic (Sector/Industry)

<ul>
<li>We write about one stock each from the large, mid and small cap portfolios, briefly giving the reasons behind their the innovation scores and inclusion in the portfolio.  </li>
<li>The three companies are <a href="https://www.smartkarma.com/entities/johnson-johnson-831a1ab9-b291-4564-99b0-dc7f8d2b8175" target="_blank" data-smartkarma-citation="entities:26818:1" rel="noopener">Johnson &amp; Johnson (JNJ UN)</a> , <a href="https://www.smartkarma.com/entities/mondelez-international-inc" target="_blank" data-smartkarma-citation="entities:8111:1" rel="noopener">Mondelez International (MDLZ US)</a> and <a href="https://www.smartkarma.com/entities/qorvo-inc" target="_blank" data-smartkarma-citation="entities:11965:1" rel="noopener">Qorvo Inc (QRVO US), which have the highest weighting in each portfolio</a>
</li>
<li>For the week the large cap portfolio was up 1.2%, the midcap was up 1.4% and the small cap was up 0.9%, all in US$ terms.  </li>
</ul>


We write about one stock each from the large, mid and small cap portfolios, briefly giving the reasons behind their the innovation scores and inclusion in the portfolio.  
The three companies are Johnson &amp; Johnson (JNJ UN) , Mondelez International (MDLZ US) and Qorvo Inc (QRVO US), which have the highest weighting in each portfolio

For the week the large cap portfolio was up 1.2%, the midcap was up 1.4% and the small cap was up 0.9%, all in US$ terms.  


How the Portfolios Did for the First Week

<ul>
<li>On 23 November, Korea Zinc announced that it will swap its treasury shares with LG Chem and Hanwha Corp and sell part of its treasury shares to other investors.</li>
<li>Korea Zinc could gain additional dividend payments by exchanging part of its treasury shares with shares of LG Chem and Hanwha Corp. </li>
<li>Potential separation of Young Poong and Korea Zinc between the Choi and Jang families is likely to be an on-going process, although it is difficult to tell the exact timing. </li>
</ul>


On 23 November, Korea Zinc announced that it will swap its treasury shares with LG Chem and Hanwha Corp and sell part of its treasury shares to other investors.
Korea Zinc could gain additional dividend payments by exchanging part of its treasury shares with shares of LG Chem and Hanwha Corp. 
Potential separation of Young Poong and Korea Zinc between the Choi and Jang families is likely to be an on-going process, although it is difficult to tell the exact timing. 


Korea Zinc: Treasury Shares Swap with LG Chem & Hanwha Corp + Treasury Share Sale

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>LG Energy's virtually locked-up shares rise to nearly 95%. This should at least partially explain why its price has substantially outperformed the KOSPI in recent months, showing strong downward rigidity.</li>
<li>Additional long-term money equivalent to 2-3% of SO can come in for 5% float shares. There is no precedent for a float crunch of this magnitude among top-cap local stocks.</li>
<li>It seems necessary to reconsider taking a shorting position for LG Energy even after the 9th of next month when the short-term passives inflow situation is completed.</li>
</ul>


LG Energy's virtually locked-up shares rise to nearly 95%. This should at least partially explain why its price has substantially outperformed the KOSPI in recent months, showing strong downward rigidity.
Additional long-term money equivalent to 2-3% of SO can come in for 5% float shares. There is no precedent for a float crunch of this magnitude among top-cap local stocks.
It seems necessary to reconsider taking a shorting position for LG Energy even after the 9th of next month when the short-term passives inflow situation is completed.


Assessing LG Energy Solution's Flow Imbalance Situation

Equity Bottom-Up

<ul>
<li>This past week, I had an interview with Lee Sanghyun, the founder and CEO of Flashlight Capital Partners (FCP) which is currently an activist investor on KT&amp;G Corporation (033780 KS).</li>
<li>Our interview focused on five key issues including valuation, buyback &amp; dividends, ginseng business spin-off, investment horizon, and aligning management's interests with those of its shareholders.</li>
<li>FCP's shareholder return plan is to 3x higher than the one currently proposed by the company. For further details, see FCP's website https://flashlightcap.com/. </li>
</ul>


This past week, I had an interview with Lee Sanghyun, the founder and CEO of Flashlight Capital Partners (FCP) which is currently an activist investor on KT&amp;G Corporation (033780 KS).
Our interview focused on five key issues including valuation, buyback &amp; dividends, ginseng business spin-off, investment horizon, and aligning management's interests with those of its shareholders.
FCP's shareholder return plan is to 3x higher than the one currently proposed by the company. For further details, see FCP's website https://flashlightcap.com/. 


An Interview with Flashlight Capital Partners CEO Lee Sanghyun on KT&G

South Korea

LG Chem Ltd. is a chemical manufacturer.  The Company's products include petrochemicals, plastic resins, and engineering plastics.  LG Chem also produces industrial and electronic materials.

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LG Chem Ltd (051910 KS)

Hankook Tire & Chosun Refractories Enter M&A Fight for Korea Zinc: [Young Poong's Cheap NAV]

There are increasing evidence that suggests that the M&A fight Korea Zinc (010130 KS) between the Jang and Choi families is becoming more heightened.

Douglas Kim

How the Portfolios Did for the First Week

We assess how the three portfolios did for the first week and discuss about one stock each from the large, mid and small cap portfolios, briefly...

Pyari Menon

Assessing LG Energy Solution's Flow Imbalance Situation

This post assesses LG Energy Solution's flow imbalance situation, which seems to lead to pricing independent of fundamentals.

Sanghyun Park

An Interview with Flashlight Capital Partners CEO Lee Sanghyun on KT&G

This past week, I had an interview with Lee Sanghyun, the founder and CEO of Flashlight Capital Partners (FCP) which is currently an activist...

Douglas Kim

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

Hankook Tire & Chosun Refractories Enter M&A Fight for Korea Zinc: [Young Poong's Cheap NAV]

There are increasing evidence that suggests that the M&A fight Korea Zinc (010130 KS) between the Jang and Choi families is becoming more heightened.

Douglas Kim

How the Portfolios Did for the First Week

We assess how the three portfolios did for the first week and discuss about one stock each from the large, mid and small cap portfolios, briefly...

Pyari Menon

Korea Zinc: Treasury Shares Swap with LG Chem & Hanwha Corp + Treasury Share Sale

On 23 November, Korea Zinc announced that it will swap its treasury shares with LG Chem and Hanwha Corp and sell part of its treasury shares to...

Douglas Kim

Assessing LG Energy Solution's Flow Imbalance Situation

This post assesses LG Energy Solution's flow imbalance situation, which seems to lead to pricing independent of fundamentals.

Sanghyun Park

An Interview with Flashlight Capital Partners CEO Lee Sanghyun on KT&G

This past week, I had an interview with Lee Sanghyun, the founder and CEO of Flashlight Capital Partners (FCP) which is currently an activist...

Douglas Kim