Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

Douglas Research Advisory

<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

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 Dems are serious about the Commercial Act amendment, with Lee Jae-myung personally attending the policy forum to pitch the change directly to key business players.</li>
<li>Key takeaways: expanding directors' fiduciary duties to all shareholders and mandatory cumulative voting, which could empower minority shareholders and reignite value-up policies in Korean companies.</li>
<li>The Dems plan to fast-track the Commercial Act amendment by year-end, with implementation likely by Q2 next year, boosting market moves and reigniting the value-up trade ahead of May’s election.</li>
</ul>


The Dems are serious about the Commercial Act amendment, with Lee Jae-myung personally attending the policy forum to pitch the change directly to key business players.
Key takeaways: expanding directors' fiduciary duties to all shareholders and mandatory cumulative voting, which could empower minority shareholders and reignite value-up policies in Korean companies.
The Dems plan to fast-track the Commercial Act amendment by year-end, with implementation likely by Q2 next year, boosting market moves and reigniting the value-up trade ahead of May’s election.


Korean Dems Push for Commercial Act Amendment by Year-End: Game-Changer for Value-Up Trade

Equity Bottom-Up

<ul>
<li>NPS has filed a lawsuit against Samsung Group Chairman Lee Jae-Yong and others involved in the merger of Samsung C&amp;T (028260 KS) and Cheil Industries nearly nine years ago.</li>
<li>NPS is trying to recover damages estimated at up to 675 billion won. </li>
<li>If NPS is able to win in this lawsuit, it could result in other minority shareholders launching their own lawsuits which could further raise concerns on Samsung C&amp;T. </li>
</ul>


NPS has filed a lawsuit against Samsung Group Chairman Lee Jae-Yong and others involved in the merger of Samsung C&amp;T (028260 KS) and Cheil Industries nearly nine years ago.
NPS is trying to recover damages estimated at up to 675 billion won. 
If NPS is able to win in this lawsuit, it could result in other minority shareholders launching their own lawsuits which could further raise concerns on Samsung C&amp;T. 


<ul>
<li>We provide an updated NAV analysis of Samsung C&amp;T, discuss the reduced overhang post final Lee family inheritance tax payment, and also provide further details of its Corporate Value-Up announcement. </li>
<li>Given 2025 will be the last year of major inheritance tax payment for the Lee family, there is likely to be reduced overhang associated with inheritance tax issue next year.</li>
<li>Our NAV analysis of Samsung C&amp;T suggests NAV of 39.9 trillion won or NAV per share of 224,249 won which is 45% higher from current levels.</li>
</ul>


We provide an updated NAV analysis of Samsung C&amp;T, discuss the reduced overhang post final Lee family inheritance tax payment, and also provide further details of its Corporate Value-Up announcement. 
Given 2025 will be the last year of major inheritance tax payment for the Lee family, there is likely to be reduced overhang associated with inheritance tax issue next year.
Our NAV analysis of Samsung C&amp;T suggests NAV of 39.9 trillion won or NAV per share of 224,249 won which is 45% higher from current levels.


Samsung C&T: Corporate Value-Up + Reduced Overhang Post Final Lee Family Inheritance Tax in 2025

<ul>
<li>Construction and semiconductors are key targets due to their low value-up representation. For shareholder returns, keep an eye on Samsung C&amp;T and SK Square.</li>
<li>Expect announcements before the mid-September value-up index, with early September releases mirroring LG Electronics' prior notices and detailed plans arriving by Q4.</li>
<li>Even with prior notices, details will leak. Samsung C&amp;T and SK Square are likely to prioritize short-term shareholder returns over long-term growth, potentially leading to a bigger price impact.</li>
</ul>


Construction and semiconductors are key targets due to their low value-up representation. For shareholder returns, keep an eye on Samsung C&amp;T and SK Square.
Expect announcements before the mid-September value-up index, with early September releases mirroring LG Electronics' prior notices and detailed plans arriving by Q4.
Even with prior notices, details will leak. Samsung C&amp;T and SK Square are likely to prioritize short-term shareholder returns over long-term growth, potentially leading to a bigger price impact.


Keep an Eye on Samsung C&T & SK Square as the Next Hot Picks for Value-Up Announcements

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)

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

Korean Dems Push for Commercial Act Amendment by Year-End: Game-Changer for Value-Up Trade

Korean democratic party is pushing to wrap up the Commercial Act amendment by year-end: This could spark a fresh turning point for the value-up trade.

Sanghyun Park

NPS Sues Samsung's Lee Jae-Yong

NPS has filed a lawsuit against Samsung Group Chairman Lee Jae-Yong and others involved in the merger of Samsung C&T (028260 KS) and Cheil...

Douglas Kim

Samsung C&T: Corporate Value-Up + Reduced Overhang Post Final Lee Family Inheritance Tax in 2025

We provide an updated NAV analysis of Samsung C&T, discuss the reduced overhang post final Lee family inheritance tax payment, and provide further...

Douglas Kim

Keep an Eye on Samsung C&T & SK Square as the Next Hot Picks for Value-Up Announcements

This post dives into the potential for Samsung C&T and SK Square to be the next big players in value-up announcements and explores the likely price...

Sanghyun Park

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