Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

Equity Bottom-Up

<ul>
<li>In this insight, we highlight the pricing gap divergences of the major Korean holdcos and opcos in 1Q 2023.</li>
<li>Of the 33 pair trades, 2/3 of them involved holdcos outperforming opcos in the past year and 1/3 of them involved opcos outperforming holdcos in the same period.</li>
<li>We highlight 33 pair trades that involve Korean holdcos and opcos.</li>
</ul>


In this insight, we highlight the pricing gap divergences of the major Korean holdcos and opcos in 1Q 2023.
Of the 33 pair trades, 2/3 of them involved holdcos outperforming opcos in the past year and 1/3 of them involved opcos outperforming holdcos in the same period.
We highlight 33 pair trades that involve Korean holdcos and opcos.


Korean Holdcos Vs Opcos Gap Spreads Opportunities in 1Q 2023

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.

Event-Driven

<ul>
<li>The exercise price is the arithmetic average of weighted average prices for the past two months, the past month, and the past week from the day before the board resolution.  </li>
<li>Considering the governance structure of most local companies, a split-off will still be more likely to be preferred than a spin-off. Split-offs will emerge despite the mandate of appraisal rights.</li>
<li>We should look into staggering spread openings, with the pricing done on a two-month window, as a downward price revision will likely intensify toward the announcement with mandatory appraisal rights.</li>
</ul>


The exercise price is the arithmetic average of weighted average prices for the past two months, the past month, and the past week from the day before the board resolution.  
Considering the governance structure of most local companies, a split-off will still be more likely to be preferred than a spin-off. Split-offs will emerge despite the mandate of appraisal rights.
We should look into staggering spread openings, with the pricing done on a two-month window, as a downward price revision will likely intensify toward the announcement with mandatory appraisal rights.


Korea FSC: Official Mandate of Appraisal Rights in Split-Offs & Trading Ramifications

<ul>
<li>In this insight, we highlight the pricing gap divergence of the major Korean holdcos and opcos amid market carnage.</li>
<li>In general, more holdcos/quasi-holdcos have been outperforming the opcos in the past year, as compared to the previous years as more investors seek value-oriented, deep NAV discount stocks.</li>
<li>We highlight 26 pair trades that involve Korean holdcos and opcos.</li>
</ul>


In this insight, we highlight the pricing gap divergence of the major Korean holdcos and opcos amid market carnage.
In general, more holdcos/quasi-holdcos have been outperforming the opcos in the past year, as compared to the previous years as more investors seek value-oriented, deep NAV discount stocks.
We highlight 26 pair trades that involve Korean holdcos and opcos.


Korean Holdcos Vs Opcos Gap Spreads Opportunities Amid Market Carnage

<ul>
<li>On 7 September, Poongsan Corp announced a physical division spin-off of its defense business unit. This is likely to have a negative impact on the existing shareholders of Poongsan Corp.</li>
<li>Its proposal to spin off the defense business comes at a bad time when investors are very cautious about companies trying to spin off valuable businesses into a separate entity.</li>
<li>Poongsan's spin-off is excluded from the need to include stock purchase rights.</li>
</ul>


On 7 September, Poongsan Corp announced a physical division spin-off of its defense business unit. This is likely to have a negative impact on the existing shareholders of Poongsan Corp.
Its proposal to spin off the defense business comes at a bad time when investors are very cautious about companies trying to spin off valuable businesses into a separate entity.
Poongsan's spin-off is excluded from the need to include stock purchase rights.


Poongsan Corp: Spin-Off of Defense Business Is Negative for Existing Minority Shareholders

Equity Capital Markets

<ul>
<li>HPSP (403870 KS) announced its IPO book building results. The IPO price has been determined at 25,000 won, which is at the high end of the IPO price range.</li>
<li>There were 1,577 institutions that were involved in the IPO survey and the demand ratio was 1,511 to 1. The IPO offering amount is 75 billion won.</li>
<li>Our base case valuation of HPSP is target price of 38,228 won per share, which represents 53% higher than the high end of the IPO price range of 25,000 won.</li>
</ul>


HPSP (403870 KS) announced its IPO book building results. The IPO price has been determined at 25,000 won, which is at the high end of the IPO price range.
There were 1,577 institutions that were involved in the IPO survey and the demand ratio was 1,511 to 1. The IPO offering amount is 75 billion won.
Our base case valuation of HPSP is target price of 38,228 won per share, which represents 53% higher than the high end of the IPO price range of 25,000 won.


South Korea

Poongsan Corporation manufactures non-ferrous metal and defense-related products.  The Company also makes coin blanks, cans, stainless steel strips, lead frame alloys, tin plated strips, bars, and rods & wires.  It also produces precision products such as lead frames for semiconductors, machinery, and dies & gauges.

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Poongsan Corp (103140 KS)

Korean Holdcos Vs Opcos Gap Spreads Opportunities in 1Q 2023

In this insight, we highlight the pricing gap divergences of the major Korean holdcos and opcos in 1Q 2023. We highlight 33 pair trades that...

Douglas Kim

Korea FSC: Official Mandate of Appraisal Rights in Split-Offs & Trading Ramifications

This post details the official announcement of Korea FSC on the mandate of appraisal rights in split-offs and discusses trading ramifications.

Sanghyun Park

Korean Holdcos Vs Opcos Gap Spreads Opportunities Amid Market Carnage

In this insight, we highlight the pricing gap divergence of the major Korean holdcos and opcos amid market carnage. We highlight 26 pair trades...

Douglas Kim

Poongsan Corp: Spin-Off of Defense Business Is Negative for Existing Minority Shareholders

On 7 September, Poongsan Corp announced a physical division spin-off of its defense business unit. This is likely to have a negative impact on the...

Douglas Kim

HPSP IPO Book Building Results Analysis

HPSP (403870 KS) announced its IPO book building results. The IPO price has been determined at 25,000 won, which is at the high end of the IPO...

Douglas Kim

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