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

Sanghyun Park

Korea / Special Sits, Pairs, Index Rebalancing

Event-Driven

<ul>
<li>Poongsan Holdco/Sub duo is now at +277% of σ on a 20D MA. This is the highest in 120 days. Price ratio wise, they are a little above 120D mean. Holdco discount is 52% to NAV.</li>
<li>Sub share price has been closely correlated to the US-China trade war lately. Copper price is the single most important factor of Sub share price. US-China talks are currently affecting copper price enormously. Sub has again become a punching bag of short sellers amid fresh concerns over US-China trade.</li>
<li>Sub is now hitting a 9x PER on already harshly adjusted FY19 earnings. This level is substantially lower than FY18 yearend PER of 12.0x. Valuation wise, Sub shares seem to be hitting bottom at this point. Sub shares moving at least sideways will lead to a mean reversion on Holdco/Sub price ratio.</li>
<li>I expect it to happen at this point regardless of which direction the US-China talks are heading. Given Sub's current valuation, Sub wouldn't take more beating. I'd go long Sub and short Holdco now. Just, Holdco liquidity can be an issue to many of us here.</li>
</ul>


Poongsan Holdco/Sub duo is now at +277% of σ on a 20D MA. This is the highest in 120 days. Price ratio wise, they are a little above 120D mean. Holdco discount is 52% to NAV.
Sub share price has been closely correlated to the US-China trade war lately. Copper price is the single most important factor of Sub share price. US-China talks are currently affecting copper price enormously. Sub has again become a punching bag of short sellers amid fresh concerns over US-China trade.
Sub is now hitting a 9x PER on already harshly adjusted FY19 earnings. This level is substantially lower than FY18 yearend PER of 12.0x. Valuation wise, Sub shares seem to be hitting bottom at this point. Sub shares moving at least sideways will lead to a mean reversion on Holdco/Sub price ratio.
I expect it to happen at this point regardless of which direction the US-China talks are heading. Given Sub's current valuation, Sub wouldn't take more beating. I'd go long Sub and short Holdco now. Just, Holdco liquidity can be an issue to many of us here.


Poongsan Holdings Reverse Stub Trade: Current Status & Trade Approach

<ul>
<li>
<a href="https://www.smartkarma.com/entities/6659" target="_blank" data-smartkarma-citation="entities:6659:1">Poongsan Holdings (005810 KS)</a> is another clear-cut target of stub trade in Korea. <a href="https://www.smartkarma.com/entities/16504" target="_blank" data-smartkarma-citation="entities:16504:1">Poongsan Corp (103140 KS)</a> is responsible for nearly 80% of the sub holdings. Holdco is currently at a 53% discount to NAV. Holdco discount has narrowed. But it is still substantially higher than the local average of 40%.</li>
<li>Sub is having a run today. It went as high as 6% today. Currently, it is up 4%. Holdco is up 2%. They are now close to -1 σ on a 20D MA. Poongsan business is highly exposed to copper price and US ammunition demand. It still appears that Poongsan is suffering from a weaker copper price and falling demand of ammunition in US.</li>
<li>I'd make a trade on a short-term horizon. I'd capitalize on a divergence on a 20D MA. I'd wait a bit until later today when there is a little greater price divergence on the duo. I'd make a stub trade when the price ratio on a 20D MA once again enters &lt; -1 σ territory.</li>
</ul>



Poongsan Holdings (005810 KS) is another clear-cut target of stub trade in Korea. Poongsan Corp (103140 KS) is responsible for nearly 80% of the sub holdings. Holdco is currently at a 53% discount to NAV. Holdco discount has narrowed. But it is still substantially higher than the local average of 40%.
Sub is having a run today. It went as high as 6% today. Currently, it is up 4%. Holdco is up 2%. They are now close to -1 σ on a 20D MA. Poongsan business is highly exposed to copper price and US ammunition demand. It still appears that Poongsan is suffering from a weaker copper price and falling demand of ammunition in US.
I'd make a trade on a short-term horizon. I'd capitalize on a divergence on a 20D MA. I'd wait a bit until later today when there is a little greater price divergence on the duo. I'd make a stub trade when the price ratio on a 20D MA once again enters &lt; -1 σ territory.


Poongsan Holdings Stub Trade: Current Status & Trade Approach

South Korea

Poongsan Holdings Corporation is an investment holding company.  The company, through its subsidiaries, manufactures non-ferrous metal and defense-related products.

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52-week Range	0.00 - 0.00
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Poongsan Holdings (005810 KS)

Poongsan Holdings Reverse Stub Trade: Current Status & Trade Approach

Poongsan Holdco/Sub duo is now at +277% of σ on a 20D MA. This is the highest in 120 days. Price ratio wise, they are a little above 120D mean....

Sanghyun Park

Poongsan Holdings Stub Trade: Current Status & Trade Approach

Poongsan Holdings (005810 KS) is another clear-cut target of stub trade in Korea. Poongsan Corp (103140 KS) is responsible for nearly 80% of the...

Sanghyun Park

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)