Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

Douglas Research Advisory

Event-Driven

<ul>
<li>In the past week, Binggrae (005180 KS) announced that it plans to split into a holding company and an operating company in May 2025.</li>
<li>As part of this company reorganization, Binggrae announced that it plans to cancel all of its treasury shares (1 million common shares, representing 10.2% of total common shares outstanding).</li>
<li>We are positive on Binggrae due to cheap valuations (1.6x EV/EBITDA in 2025), steady growth in sales and profits, and 10% share cancellation. </li>
</ul>


In the past week, Binggrae (005180 KS) announced that it plans to split into a holding company and an operating company in May 2025.
As part of this company reorganization, Binggrae announced that it plans to cancel all of its treasury shares (1 million common shares, representing 10.2% of total common shares outstanding).
We are positive on Binggrae due to cheap valuations (1.6x EV/EBITDA in 2025), steady growth in sales and profits, and 10% share cancellation. 


Binggrae: Split into Two Companies and A Cancellation of 10% of Outstanding Shares

<ul>
<li>This article discusses the potential inclusions and exclusions of KOSPI 200 rebalance in December 2022 (especially those that are highlighted by the locals). </li>
<li>Stocks that are expected to be included in the KOSPI 200 index include Samyang Foods (003230 KS) and Lotte Confectionery (280360 KS). </li>
<li>Stocks that are expected to be excluded in the KOSPI 200 index include Samyang Holdings (000070 KS) and Boryung Pharmaceutical (003850 KS).</li>
</ul>


This article discusses the potential inclusions and exclusions of KOSPI 200 rebalance in December 2022 (especially those that are highlighted by the locals). 
Stocks that are expected to be included in the KOSPI 200 index include Samyang Foods (003230 KS) and Lotte Confectionery (280360 KS). 
Stocks that are expected to be excluded in the KOSPI 200 index include Samyang Holdings (000070 KS) and Boryung Pharmaceutical (003850 KS).


KOSPI 200 Rebalance in December Highlighted by Locals

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>Lotte Confectionery's screening period for the upcoming rebalancing will be July 20 to October 31, with an increased number of listed shares resulting from the merger.</li>
<li>To fail inclusion, it must fall below Hyundai Greenfood. There is a market cap gap of ₩300B, suggesting the possibility of inclusion in December is quite high.</li>
<li>Lotte Confectionery may benefit from concentrated flow from an early stage, given that the outline of inclusion/exclusion candidates for the upcoming rebalancing is still relatively vague.</li>
</ul>


Lotte Confectionery's screening period for the upcoming rebalancing will be July 20 to October 31, with an increased number of listed shares resulting from the merger.
To fail inclusion, it must fall below Hyundai Greenfood. There is a market cap gap of ₩300B, suggesting the possibility of inclusion in December is quite high.
Lotte Confectionery may benefit from concentrated flow from an early stage, given that the outline of inclusion/exclusion candidates for the upcoming rebalancing is still relatively vague.


Merged Lotte Confectionery: Nearly Guaranteed Early Bird for KOSPI 200 Inclusion

Cross Asset Strategy

<ul>
<li>In this insight, we discuss the recent buying and selling by the Korea National Pension Service (NPS) of Korean stocks.</li>
<li>Of the 176 Korean stocks in which NPS reported changes in ownerships in 2Q 2022, NPS increased its stakes in 115 companies and reduced stakes in 61 companies.</li>
<li>NPS mostly increased stakes in aerospace, defense, construction equipment, and energy sectors while reducing stakes in telecom and tourism related stocks.</li>
</ul>


In this insight, we discuss the recent buying and selling by the Korea National Pension Service (NPS) of Korean stocks.
Of the 176 Korean stocks in which NPS reported changes in ownerships in 2Q 2022, NPS increased its stakes in 115 companies and reduced stakes in 61 companies.
NPS mostly increased stakes in aerospace, defense, construction equipment, and energy sectors while reducing stakes in telecom and tourism related stocks.


NPS Sells SK Bioscience, Naver, & LG Electronics and Buys Kakao Bank, Lotte Corp, & Samyang Foods

<ul>
<li>On 23 March, it was announced that Lotte Confectionery (280360 KS) (market cap of 744 billion won) will merge with Lotte Food (002270 KS) (market cap of 395 billion won).</li>
<li>We believe this merger will have a positive impact on the shares of Lotte Confectionery and Lotte Food.</li>
<li>Lotte Confectionery and Lotte Food are not currently included in the KOSPI200. There will be a growing likelihood that the combined entity could be included in the KOSPI200 index. </li>
</ul>


On 23 March, it was announced that Lotte Confectionery (280360 KS) (market cap of 744 billion won) will merge with Lotte Food (002270 KS) (market cap of 395 billion won).
We believe this merger will have a positive impact on the shares of Lotte Confectionery and Lotte Food.
Lotte Confectionery and Lotte Food are not currently included in the KOSPI200. There will be a growing likelihood that the combined entity could be included in the KOSPI200 index. 


A Merger Between Lotte Confectionery and Lotte Food: An Alpha Generating Event

South Korea

Lotte Food Co., Ltd. is an integrated food manufacturer.  The Company specializes in producing frozen sweets, soft drinks, and dairy products.

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Lotte Food (002270 KS)

Binggrae: Split into Two Companies and A Cancellation of 10% of Outstanding Shares

Binggrae announced a company split. We are positive on Binggrae due to cheap valuations (1.6x EV/EBITDA in 2025), steady growth in sales and...

Douglas Kim

KOSPI 200 Rebalance in December Highlighted by Locals

This article discusses the potential inclusions and exclusions of KOSPI 200 rebalance in December 2022 (especially those that are highlighted by...

Douglas Kim

Merged Lotte Confectionery: Nearly Guaranteed Early Bird for KOSPI 200 Inclusion

This post investigates the merged Lotte Confectionery's inclusion possibility and resulting flow trend in the KOSPI 200 at the upcoming rebalancing...

Sanghyun Park

NPS Sells SK Bioscience, Naver, & LG Electronics and Buys Kakao Bank, Lotte Corp, & Samyang Foods

NPS moves the Korean stock market more than any other investor. In this insight, we discuss the recent buying and selling by the Korea National...

Douglas Kim

A Merger Between Lotte Confectionery and Lotte Food: An Alpha Generating Event

The merger between Lotte Confectionery and Lotte Food is an alpha generating event. There are numerous opportunities to streamline their operations...

Douglas Kim

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