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 2Q 2023.</li>
<li>Of the 38 pair trades, 21 of them involved holdcos outperforming opcos YTD and 17 of them involved opcos outperforming holdcos in the same period.</li>
<li>We highlight 38 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 2Q 2023.
Of the 38 pair trades, 21 of them involved holdcos outperforming opcos YTD and 17 of them involved opcos outperforming holdcos in the same period.
We highlight 38 pair trades that involve Korean holdcos and opcos.


Korean Holdcos Vs Opcos Gap Trading Opportunities in 2Q 2023

Event-Driven

<ul>
<li>After the market close today, Samsung Sds announced a block deal of 1.51 million shares at a discount range of 3.5% to 4.5% to the closing price of 117,900 won.  </li>
<li>Lee Seo-Hyun, the daughter of the late Samsung Chairman Lee Kun-Hee, is selling her 1.51 million shares of Samsung SDS (1.95% of oustanding shares) in a block deal.</li>
<li>The company faces continued overhang on additional stake sale due to the inheritance tax issue in the next 2-3 years. As a result, we would avoid the block deal sale. </li>
</ul>


After the market close today, Samsung Sds announced a block deal of 1.51 million shares at a discount range of 3.5% to 4.5% to the closing price of 117,900 won.  
Lee Seo-Hyun, the daughter of the late Samsung Chairman Lee Kun-Hee, is selling her 1.51 million shares of Samsung SDS (1.95% of oustanding shares) in a block deal.
The company faces continued overhang on additional stake sale due to the inheritance tax issue in the next 2-3 years. As a result, we would avoid the block deal sale. 


Another Block Deal Sale of Samsung SDS by the Lee Family to Pay for Inheritance Taxes

<ul>
<li>In this insight, we discuss an increasing probability of the cancellation of LG Corp preferred shares.</li>
<li>We provide five major reasons as to why LG Corp should cancel its<strong> entire preferred shares</strong> and how this could have a positive impact on LG Corp's share price. </li>
<li>We believe a 5-10% buyback and cancellation of LG Corp's preferred shares in the next 1-2 years is a higher probability.</li>
</ul>


In this insight, we discuss an increasing probability of the cancellation of LG Corp preferred shares.
We provide five major reasons as to why LG Corp should cancel its entire preferred shares and how this could have a positive impact on LG Corp's share price. 
We believe a 5-10% buyback and cancellation of LG Corp's preferred shares in the next 1-2 years is a higher probability.


An Increasing Probability of LG Corp Preferred Shares Cancellation

<ul>
<li>Samsung C&amp;T announced the cancellation of its entire treasury shares over the next five years. It has 24.7 million shares of common shares (accounting for 13.2% of common shares outstanding).</li>
<li>We like a pair trade between Samsung C&amp;T (go long) and Samsung Electronics (go short). Samsung C&amp;T's share cancellation is likely to have a positive impact on its shares.</li>
<li>The recent sell-down of most of its shares in TSMC by Berkshire Hathaway is also likely to be viewed negatively by some investors in Samsung Electronics. </li>
</ul>


Samsung C&amp;T announced the cancellation of its entire treasury shares over the next five years. It has 24.7 million shares of common shares (accounting for 13.2% of common shares outstanding).
We like a pair trade between Samsung C&amp;T (go long) and Samsung Electronics (go short). Samsung C&amp;T's share cancellation is likely to have a positive impact on its shares.
The recent sell-down of most of its shares in TSMC by Berkshire Hathaway is also likely to be viewed negatively by some investors in Samsung Electronics. 


A Pair Trade Between Samsung C&T and Samsung Electronics Amid Big Share Cancellation at Samsung C&T

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>The target volume is 24,718,099 ordinary shares (13.2%) and 159,835 preferred shares (9.8%). That is, C&amp;T will cancel all of its treasury shares in the next five years.</li>
<li>C&amp;T's decision to cancel treasury shares clearly indicates that the family's fundraising strategy is focused on stake sales rather than dividend increases.</li>
<li>The number of shares inherited will be the volume Lee Seo-hyun will sell in the short term as this is within the range that minimizes the tax liability through LIFO.</li>
</ul>


The target volume is 24,718,099 ordinary shares (13.2%) and 159,835 preferred shares (9.8%). That is, C&amp;T will cancel all of its treasury shares in the next five years.
C&amp;T's decision to cancel treasury shares clearly indicates that the family's fundraising strategy is focused on stake sales rather than dividend increases.
The number of shares inherited will be the volume Lee Seo-hyun will sell in the short term as this is within the range that minimizes the tax liability through LIFO.


Samsung C&T Shareholder Return: Directly Related to Lee Family's Inheritax Tax Issue

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)

Korean Holdcos Vs Opcos Gap Trading Opportunities in 2Q 2023

In this insight, we highlight the pricing gap divergences of the major Korean holdcos and opcos in 2Q 2023. We highlight 38 pair trades that...

Douglas Kim

Another Block Deal Sale of Samsung SDS by the Lee Family to Pay for Inheritance Taxes

Lee Seo-Hyun is selling her 1.51 million shares of Samsung SDS in a block deal to pay for inheritance taxes. We would avoid this deal.

Douglas Kim

An Increasing Probability of LG Corp Preferred Shares Cancellation

We provide five major reasons as to why LG Corp should cancel its entire preferred shares and how this could have a positive impact on LG Corp's...

Douglas Kim

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

Korean Holdcos Vs Opcos Gap Trading Opportunities in 2Q 2023

In this insight, we highlight the pricing gap divergences of the major Korean holdcos and opcos in 2Q 2023. We highlight 38 pair trades that...

Douglas Kim

Another Block Deal Sale of Samsung SDS by the Lee Family to Pay for Inheritance Taxes

Lee Seo-Hyun is selling her 1.51 million shares of Samsung SDS in a block deal to pay for inheritance taxes. We would avoid this deal.

Douglas Kim

An Increasing Probability of LG Corp Preferred Shares Cancellation

We provide five major reasons as to why LG Corp should cancel its entire preferred shares and how this could have a positive impact on LG Corp's...

Douglas Kim

A Pair Trade Between Samsung C&T and Samsung Electronics Amid Big Share Cancellation at Samsung C&T

We like a pair trade between Samsung C&T (go long) and Samsung Electronics (go short). Samsung C&T's share cancellation is likely to have a...

Douglas Kim

Samsung C&T Shareholder Return: Directly Related to Lee Family's Inheritax Tax Issue

This post details Samsung C&T's latest shareholder return policy, announced this morning, and explains why this is directly related to the Lee...

Sanghyun Park