Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

Douglas Research Advisory

Event-Driven

<ul>
<li>In this insight, we discuss a new catalyst on the share price of LS Corp (006260 KS) which is the purchase of its shares by the Hoban Group. </li>
<li>Hoban Group has recently purchased shares of LS Corp. Although the exact percentage of shares has yet to be made public, it is estimated to be less than 3%. </li>
<li>LS Corp could improve shareholder returns. Plus, the ongoing litigation between Taihan Electric Wire and LS Cable may be the real reason why Hoban decided to invest in LS Corp. </li>
</ul>


In this insight, we discuss a new catalyst on the share price of LS Corp (006260 KS) which is the purchase of its shares by the Hoban Group. 
Hoban Group has recently purchased shares of LS Corp. Although the exact percentage of shares has yet to be made public, it is estimated to be less than 3%. 
LS Corp could improve shareholder returns. Plus, the ongoing litigation between Taihan Electric Wire and LS Cable may be the real reason why Hoban decided to invest in LS Corp. 


Hoban Group Purchases LS Corp Shares - Is This a Hanjin Kal 2.0?

Equity Bottom-Up

<ul>
<li>On 6 March, LS Group Chairman Koo Ja-Eun publicly stated <em>"If you think duplicate listings are a problem, then just don’t buy the stocks after the listing.” </em>
</li>
<li>Chairman Koo's comment was not in the best interest of the major LS Group companies including LS Electric and LS Corp that are publicly traded.</li>
<li>LS Group is preparing to list at least five unlisted affiliates including LS E-Link, Essex Solutions, LS Cable, LS MnM, and KOC Electric  in the next 1-3 years. </li>
</ul>


On 6 March, LS Group Chairman Koo Ja-Eun publicly stated "If you think duplicate listings are a problem, then just don’t buy the stocks after the listing.” 

Chairman Koo's comment was not in the best interest of the major LS Group companies including LS Electric and LS Corp that are publicly traded.
LS Group is preparing to list at least five unlisted affiliates including LS E-Link, Essex Solutions, LS Cable, LS MnM, and KOC Electric  in the next 1-3 years. 


LS Corp: Chairman's Words Have Big Impact on Share Price

<ul>
<li>In this insight, we discuss a pair trade between Korean Air Lines (003490 KS) (go long) and Hanjin KAL Corp (180640 KS) (go short). </li>
<li>In the past three months as well as 12 months, there has been a sharp increase in the gap of Korean Air Lines and Hanjin KAL Corp. </li>
<li>It is uncertain how much longer Hoban Group will maintain its stake in Hanjin Kal. Hoban could reduce its stake in Hanjin Kal but increase its stake in LS Corp. </li>
</ul>


In this insight, we discuss a pair trade between Korean Air Lines (003490 KS) (go long) and Hanjin KAL Corp (180640 KS) (go short). 
In the past three months as well as 12 months, there has been a sharp increase in the gap of Korean Air Lines and Hanjin KAL Corp. 
It is uncertain how much longer Hoban Group will maintain its stake in Hanjin Kal. Hoban could reduce its stake in Hanjin Kal but increase its stake in LS Corp. 


A Pair Trade Between Korean Air and Hanjin Kal

<ul>
<li>Starting January 2025, there will be a major change in the regulation regarding the use of treasury shares during a company spinoff process.</li>
<li>The main change involves the practice of allocating newly issued shares to existing treasury shares held by companies during corporate spinoffs. </li>
<li>This practice will now be banned which should help to reduce the wrongful use of treasury shares and improve minority shareholders' rights. </li>
</ul>


Starting January 2025, there will be a major change in the regulation regarding the use of treasury shares during a company spinoff process.
The main change involves the practice of allocating newly issued shares to existing treasury shares held by companies during corporate spinoffs. 
This practice will now be banned which should help to reduce the wrongful use of treasury shares and improve minority shareholders' rights. 


Change in Regulation of Treasury Shares Allocation Post Spinoffs Starting January 2025

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

Brian Freitas

Pan-Asia Index Rebalances/ Events/ Delta One

Periscope Analytics

Periscope Analytics focuses on event-driven trades across Asia Pacific and provides comprehensive, timely and systematic coverage of index changes to major Asia Pacific indices in a structured manner.

The analysis includes forecasted inclusions and exclusions to all major Asian indices that have significant amount of tracking assets, including estimates of passive buy/sell flow on the stocks. The service also provides commentary and impact of market consultations, ground rule changes, and other events (IPOs, spin-offs, M&A) that could lead to index changes and passive flow.

Periscope Analytics works with multi-strategy hedge funds, proprietary trading firms, stat arb trading groups and long-only investors that invest and trade in the Asia Pacific region with the data being used to trade index rebalances, avoid pre-positioning and passive flow, and to time entry into and exit from stocks.

Event-Driven Trades Across Asia Pacific

<ul>
<li>The review period for the March rebalance of the KOSPI Size Indices commenced on 1 December and will end on 28 February.</li>
<li>A quarter of the way through the review period, we forecast 37 migrating stocks. Among new listings, 1 could be added to LargeCap, 3 to MidCap and 2 to SmallCap.</li>
<li>Four downward migrations were deleted from a global index in November. Now, three more downward migrations could be deleted from the same global index in February.</li>
</ul>


The review period for the March rebalance of the KOSPI Size Indices commenced on 1 December and will end on 28 February.
A quarter of the way through the review period, we forecast 37 migrating stocks. Among new listings, 1 could be added to LargeCap, 3 to MidCap and 2 to SmallCap.
Four downward migrations were deleted from a global index in November. Now, three more downward migrations could be deleted from the same global index in February.


KOSPI Size Indices: Overlap Between Global Passive Selling & Downward Migrations

South Korea

LS Corp is a holding company, which operated subsidiaries including LS Industrial Systems, LS Cable, LS-Nikko Copper and LS Mtron.

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LS Corp (006260 KS)

Hoban Group Purchases LS Corp Shares - Is This a Hanjin Kal 2.0?

Hoban Group has recently purchased shares of LS Corp. Although the exact percentage of shares has yet to be made public, it is estimated to be less...

Douglas Kim

A Pair Trade Between Korean Air and Hanjin Kal

In this insight, we discuss a pair trade between Korean Air Lines (003490 KS) (go long) and Hanjin KAL Corp (180640 KS) (go short).

Douglas Kim

Change in Regulation of Treasury Shares Allocation Post Spinoffs Starting January 2025

Starting January 2025, there will be a major change in the regulation regarding the use of treasury shares during a company spinoff process.

Douglas Kim

KOSPI Size Indices: Overlap Between Global Passive Selling & Downward Migrations

There could be 37 migrations for the KOSPI Size indices in March, plus 1 LargeCap and 3 MidCap inclusions. The MidCap to LargeCap migrations have...

Brian Freitas

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