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>Maximizing Lee Jae-yong's dividend income is crucial, making Samsung SDS's ₩5.5T cash assets key, thus prompting the merger of Samsung C&amp;T and Samsung SDS's BPO division.</li>
<li>With no legal risks for Lee Jae-yong, Samsung C&amp;T needs the merger to increase assets and avoid forced holding company conversion, making the acquisition of Samsung SDS’s BPO division necessary.</li>
<li>We should target a setup for likely appraisal rights for C&amp;T. Monitor and capture the spread between the stock price and appraisal rights exercise price.</li>
</ul>


Maximizing Lee Jae-yong's dividend income is crucial, making Samsung SDS's ₩5.5T cash assets key, thus prompting the merger of Samsung C&amp;T and Samsung SDS's BPO division.
With no legal risks for Lee Jae-yong, Samsung C&amp;T needs the merger to increase assets and avoid forced holding company conversion, making the acquisition of Samsung SDS’s BPO division necessary.
We should target a setup for likely appraisal rights for C&amp;T. Monitor and capture the spread between the stock price and appraisal rights exercise price.


Examining Market Interest in the Potential Samsung C&T and SDS Restructuring

<ul>
<li>Senior Presidential Secretary said this morning that a tax reform, including reducing inheritance tax rates to the OECD average, will be disclosed in late July with the tax reform plan.</li>
<li>Stocks sensitive to reduced inheritance tax, notably Hyundai Motor Group subsidiaries like Hyundai Glovis and Hyundai Motor, could see significant attention amid governance restructuring efforts under Chung Eui-sun.</li>
<li>Retroactive application and its extent may impact markets, potentially affecting groups like Samsung, influencing diverse investment strategies based on specifics.</li>
</ul>


Senior Presidential Secretary said this morning that a tax reform, including reducing inheritance tax rates to the OECD average, will be disclosed in late July with the tax reform plan.
Stocks sensitive to reduced inheritance tax, notably Hyundai Motor Group subsidiaries like Hyundai Glovis and Hyundai Motor, could see significant attention amid governance restructuring efforts under Chung Eui-sun.
Retroactive application and its extent may impact markets, potentially affecting groups like Samsung, influencing diverse investment strategies based on specifics.


Unexpected Inheritance Tax Rate Reduction Included in July Tax Reform: Impact on Value-Up Trading

Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

Douglas Research Advisory

<ul>
<li>On 11 June, the FSC announced that the restrictions on allocation of treasury shares as new shares post spin-offs is expected to be made into law in 2H 2024.</li>
<li>Meanwhile, starting <strong>1 July,</strong> the financial regulators will make it more difficult for Korean companies to conduct spin-offs that have separate allocation of treasury shares as new shares.</li>
<li>The top five stocks with highest percentage of treasury shares/outstanding shares are up on average 40.5% YTD. </li>
</ul>


On 11 June, the FSC announced that the restrictions on allocation of treasury shares as new shares post spin-offs is expected to be made into law in 2H 2024.
Meanwhile, starting 1 July, the financial regulators will make it more difficult for Korean companies to conduct spin-offs that have separate allocation of treasury shares as new shares.
The top five stocks with highest percentage of treasury shares/outstanding shares are up on average 40.5% YTD. 


Changes in Law for Allocation of Treasury Shares as New Shares Post Spin-Offs in Korea in 2H 2024

<ul>
<li>On 14 December, it was reported that US based Whitebox Advisors has started an activist campaign on Samsung C&amp;T (028260 KS).</li>
<li>Whitebox estimates that Samsung C&amp;T's stock price is about 68% undervalued compared to its NAV.</li>
<li>In addition to Whitebox, there are two other foreign investors including Palliser Capital and City of London Investment Management that have requested Samsung C&amp;T to improve corporate governance.</li>
</ul>


On 14 December, it was reported that US based Whitebox Advisors has started an activist campaign on Samsung C&amp;T (028260 KS).
Whitebox estimates that Samsung C&amp;T's stock price is about 68% undervalued compared to its NAV.
In addition to Whitebox, there are two other foreign investors including Palliser Capital and City of London Investment Management that have requested Samsung C&amp;T to improve corporate governance.


<ul>
<li>Today, the Financial Services Commission of Korea announced treasury stock rule improvements: (1) No new share allocation to treasury shares during equity spinoffs. (2) Strengthened disclosure requirements.</li>
<li>No mandatory cancellation may disappoint the market. Nevertheless, the decision not to issue new shares during equity spinoffs amplifies the volume targeted during subsequent tender offers, potentially intensifying price impacts.</li>
<li>Also, enhanced disclosure for treasury stocks, especially for companies with over 10% holdings, may trigger significant trading events based on pre-information about holdings and disposals.</li>
</ul>


Today, the Financial Services Commission of Korea announced treasury stock rule improvements: (1) No new share allocation to treasury shares during equity spinoffs. (2) Strengthened disclosure requirements.
No mandatory cancellation may disappoint the market. Nevertheless, the decision not to issue new shares during equity spinoffs amplifies the volume targeted during subsequent tender offers, potentially intensifying price impacts.
Also, enhanced disclosure for treasury stocks, especially for companies with over 10% holdings, may trigger significant trading events based on pre-information about holdings and disposals.


Korean FSC's Official Disclosure of New Treasury Share Regulations & Potential Trading Dynamics

South Korea

Samsung C&T Corporation conducts diversified business support services and resort operation activities. The Company offers a range of services in areas including clothing retail, construction, energy, real estate, food service, and resort accommodations. Samsung C&T also operates a resort with amusement rides, a zoo, water park, golf clubs, and restaurants.

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Samsung C&T (028260 KS)

Examining Market Interest in the Potential Samsung C&T and SDS Restructuring

This post examines the growing market interest and trading angles in the potential restructuring involving Samsung C&T and Samsung SDS.

Sanghyun Park

Unexpected Inheritance Tax Rate Reduction Included in July Tax Reform: Impact on Value-Up Trading

Senior Presidential Secretary Seong Tae-yoon confirmed this morning on KBS that reducing inheritance tax rates to 30% will be disclosed in late...

Sanghyun Park

Changes in Law for Allocation of Treasury Shares as New Shares Post Spin-Offs in Korea in 2H 2024

On 11 June, the FSC announced that the restrictions on allocation of treasury shares as new shares post spin-offs is expected to be made into law...

Douglas Kim

Whitebox Goes Activist on Samsung C&T

On 14 December, it was reported that US based Whitebox Advisors has started an activist campaign on Samsung C&T (028260 KS).

Douglas Kim

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

Examining Market Interest in the Potential Samsung C&T and SDS Restructuring

This post examines the growing market interest and trading angles in the potential restructuring involving Samsung C&T and Samsung SDS.

Sanghyun Park

Unexpected Inheritance Tax Rate Reduction Included in July Tax Reform: Impact on Value-Up Trading

Senior Presidential Secretary Seong Tae-yoon confirmed this morning on KBS that reducing inheritance tax rates to 30% will be disclosed in late...

Sanghyun Park

Changes in Law for Allocation of Treasury Shares as New Shares Post Spin-Offs in Korea in 2H 2024

On 11 June, the FSC announced that the restrictions on allocation of treasury shares as new shares post spin-offs is expected to be made into law...

Douglas Kim

Whitebox Goes Activist on Samsung C&T

On 14 December, it was reported that US based Whitebox Advisors has started an activist campaign on Samsung C&T (028260 KS).

Douglas Kim

Korean FSC's Official Disclosure of New Treasury Share Regulations & Potential Trading Dynamics

Korea FSC announced today that it will issue a legislative change notice regarding the Capital Markets Act amendment, following the January...

Sanghyun Park