Founder/CEO of ROK Advisory, ROK Advisory LLC

Ken S. Kim

Founder/CEO of ROK Advisory

ROK Advisory LLC

ROK is an independent research advisory firm. We guide you to minimize the information gap between foreign and local investors in Northeast Asia with a focus in Korea, Taiwan and Japan.

Independent Research Advisory Firm

Event-Driven

<p>The talk of M&amp;A interest by Samsung Electronics has been making the rounds again and the question is how does <a href="https://www.smartkarma.com/entities/samsung-electronics-co-ltd" target="_blank" data-smartkarma-citation="entities:191:1" rel="noopener">Samsung Electronics (005930 KS)</a> grow with the current leader locked up in jail? <a href="https://www.smartkarma.com/entities/samsung-sdi-co-ltd" target="_blank" data-smartkarma-citation="entities:503:1" rel="noopener">Samsung SDI (006400 KS)</a> seems to be central to where the Group goes.</p>

The talk of M&amp;A interest by Samsung Electronics has been making the rounds again and the question is how does Samsung Electronics (005930 KS) grow with the current leader locked up in jail? Samsung SDI (006400 KS) seems to be central to where the Group goes.

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.

Samsung Electronics Pref Shares / Event-Driven

<p>We saw a series of filings by Samsung affiliates on the major shareholder stake changes due to the inheritance.</p><div class="content-highlight">
<p>Here are the links to the regulatory filings at DART of the three companies:</p>
<ul>
<li><a href="http://dart.fss.or.kr/dsaf001/main.do?rcpNo=20210430800706%20http://dart.fss.or.kr/dsaf001/main.do?rcpNo=20210430800576%20http://dart.fss.or.kr/dsaf001/main.do?rcpNo=20210430800687" target="_blank" rel="noopener">Samsung Electronics</a></li>
<li><a href="http://dart.fss.or.kr/dsaf001/main.do?rcpNo=20210430800706%20http://dart.fss.or.kr/dsaf001/main.do?rcpNo=20210430800576%20http://dart.fss.or.kr/dsaf001/main.do?rcpNo=20210430800687" target="_blank" rel="noopener">Samsung C&amp;T</a></li>
<li><a href="http://dart.fss.or.kr/dsaf001/main.do?rcpNo=20210430800687" target="_blank" rel="noopener">Samsung Life Insurance</a></li>
</ul>
</div><p>Samsung said that the late chairman Lee Kun-hee didn't leave any will. So, the inheritance went at a 1/3 (spouse) to 2/3/N (each child) ratio, except for Samsung Life Insurance under the family members' mutual consent.</p><p>As for Samsung Life Insurance, the mother, Hong Ra-hee, gave up on her share. Instead, Lee Jae-yong got 1/2, and Lee Bu-jin (elder daughter) received 2/3/2. The youngest one, Lee Seo-hyun, took 1/3/2.</p><table class="table table-striped">
<colgroup>
<col width="219">
<col width="100">
<col width="100">
<col width="100">
</colgroup>
<tbody>
<tr>
<td style="width: 388px;" data-sheets-value='{"1":2,"2":"Samsung Electronics Co Ltd"}' data-sheets-formula='=googlefinance(R[0]C[1], "name")'>Samsung Electronics Co Ltd</td>
<td style="text-align: right; width: 178px;" data-sheets-value='{"1":2,"2":"%"}'>Before</td>
<td style="text-align: right; width: 178px;" data-sheets-value='{"1":2,"2":"%"}'>After</td>
</tr>
<tr>
<td style="width: 388px;" data-sheets-value='{"1":2,"2":"Hong Ra-hee"}'><strong>Hong Ra-hee</strong></td>
<td style="text-align: right; width: 178px;" data-sheets-value='{"1":3,"3":0.009071285184415972}' data-sheets-numberformat='[null,3,"0.00%",1]' data-sheets-formula='=R[0]C[2]/googlefinance(R7C[-1], "shares")'><strong>0.91%</strong></td>
<td style="text-align: right; width: 178px;" data-sheets-value='{"1":3,"3":0.023}' data-sheets-numberformat='[null,3,"0.00%",1]'><strong>2.30%</strong></td>
</tr>
<tr>
<td style="width: 388px;" data-sheets-value='{"1":2,"2":"Lee Jae-yong"}'><strong>Lee Jae-yong</strong></td>
<td style="text-align: right; width: 178px;" data-sheets-value='{"1":3,"3":0.007038807468791305}' data-sheets-numberformat='[null,3,"0.00%",1]' data-sheets-formula='=R[0]C[2]/googlefinance(R7C[-1], "shares")'><strong>0.70%</strong></td>
<td style="text-align: right; width: 178px;" data-sheets-value='{"1":3,"3":0.0163}' data-sheets-numberformat='[null,3,"0.00%",1]'><strong>1.63%</strong></td>
</tr>
<tr>
<td style="width: 388px;" data-sheets-value='{"1":2,"2":"Lee Bu-jin"}'><strong>Lee Bu-jin</strong></td>
<td style="text-align: right; width: 178px;" data-sheets-value='{"1":3,"3":0}' data-sheets-numberformat='[null,3,"0.00%",1]' data-sheets-formula='=R[0]C[2]/googlefinance(R7C[-1], "shares")'><strong>0.00%</strong></td>
<td style="text-align: right; width: 178px;" data-sheets-value='{"1":3,"3":0.0093}' data-sheets-numberformat='[null,3,"0.00%",1]'><strong>0.93%</strong></td>
</tr>
<tr>
<td style="width: 388px;" data-sheets-value='{"1":2,"2":"Lee Seo-hyun"}'><strong>Lee Seo-hyun</strong></td>
<td style="text-align: right; width: 178px;" data-sheets-value='{"1":3,"3":0}' data-sheets-numberformat='[null,3,"0.00%",1]' data-sheets-formula='=R[0]C[2]/googlefinance(R7C[-1], "shares")'><strong>0.00%</strong></td>
<td style="text-align: right; width: 178px;" data-sheets-value='{"1":3,"3":0.0093}' data-sheets-numberformat='[null,3,"0.00%",1]'><strong>0.93%</strong></td>
</tr>
<tr><td colspan="3" style="width: 744px;" data-sheets-value='{"1":2,"2":"Source: DART"}'>Source: DART</td></tr>
</tbody>
</table><table class="table table-striped">
<colgroup>
<col width="219">
<col width="100">
<col width="100">
<col width="100">
</colgroup>
<tbody>
<tr>
<td style="width: 388px;" data-sheets-value='{"1":2,"2":"Samsung C&amp;T Corp"}' data-sheets-formula='=googlefinance(R[0]C[1], "name")'>Samsung C&amp;T Corp</td>
<td style="text-align: right; width: 178px;" data-sheets-value='{"1":2,"2":"%"}'>Before</td>
<td style="text-align: right; width: 178px;" data-sheets-value='{"1":2,"2":"%"}'>After</td>
</tr>
<tr>
<td style="width: 388px;" data-sheets-value='{"1":2,"2":"Hong Ra-hee"}'><strong>Hong Ra-hee</strong></td>
<td style="text-align: right; width: 178px;" data-sheets-value='{"1":3,"3":0}' data-sheets-numberformat='[null,3,"0.00%",1]'><strong>0.00%</strong></td>
<td style="text-align: right; width: 178px;" data-sheets-value='{"1":3,"3":0.009677378395139042}' data-sheets-numberformat='[null,3,"0.00%",1]'><strong>0.97%</strong></td>
</tr>
<tr>
<td style="width: 388px;" data-sheets-value='{"1":2,"2":"Lee Jae-yong"}'><strong>Lee Jae-yong</strong></td>
<td style="text-align: right; width: 178px;" data-sheets-value='{"1":3,"3":0.17483552006465336}' data-sheets-numberformat='[null,3,"0.00%",1]'><strong>17.48%</strong></td>
<td style="text-align: right; width: 178px;" data-sheets-value='{"1":3,"3":0.18128711636306202}' data-sheets-numberformat='[null,3,"0.00%",1]'><strong>18.13%</strong></td>
</tr>
<tr>
<td style="width: 388px;" data-sheets-value='{"1":2,"2":"Lee Bu-jin"}'><strong>Lee Bu-jin</strong></td>
<td style="text-align: right; width: 178px;" data-sheets-value='{"1":3,"3":0.05595063042372629}' data-sheets-numberformat='[null,3,"0.00%",1]'><strong>5.60%</strong></td>
<td style="text-align: right; width: 178px;" data-sheets-value='{"1":3,"3":0.06240221602048565}' data-sheets-numberformat='[null,3,"0.00%",1]'><strong>6.24%</strong></td>
</tr>
<tr>
<td style="width: 388px;" data-sheets-value='{"1":2,"2":"Lee Seo-hyun"}'><strong>Lee Seo-hyun</strong></td>
<td style="text-align: right; width: 178px;" data-sheets-value='{"1":3,"3":0.05595063042372629}' data-sheets-numberformat='[null,3,"0.00%",1]'><strong>5.60%</strong></td>
<td style="text-align: right; width: 178px;" data-sheets-value='{"1":3,"3":0.06240221602048565}' data-sheets-numberformat='[null,3,"0.00%",1]'><strong>6.24%</strong></td>
</tr>
<tr><td colspan="3" style="width: 744px;" data-sheets-value='{"1":2,"2":"Source: DART"}'>Source: DART</td></tr>
</tbody>
</table><table class="table table-striped">
<colgroup>
<col width="219">
<col width="100">
<col width="100">
<col width="100">
</colgroup>
<tbody>
<tr>
<td style="width: 388px;" data-sheets-value='{"1":2,"2":"Samsung Life Insurance co., Ltd"}' data-sheets-formula='=googlefinance(R[0]C[1], "name")'>Samsung Life Insurance co., Ltd</td>
<td style="text-align: right; width: 178px;" data-sheets-value='{"1":2,"2":"%"}'>Before</td>
<td style="text-align: right; width: 178px;" data-sheets-value='{"1":2,"2":"%"}'>After</td>
</tr>
<tr>
<td style="width: 388px;" data-sheets-value='{"1":2,"2":"Lee Jae-yong"}'><strong>Lee Jae-yong</strong></td>
<td style="text-align: right; width: 178px;" data-sheets-value='{"1":3,"3":0.0006}' data-sheets-numberformat='[null,3,"0.00%",1]'><strong>0.06%</strong></td>
<td style="text-align: right; width: 178px;" data-sheets-value='{"1":3,"3":0.1044}' data-sheets-numberformat='[null,3,"0.00%",1]'><strong>10.44%</strong></td>
</tr>
<tr>
<td style="width: 388px;" data-sheets-value='{"1":2,"2":"Lee Bu-jin"}'><strong>Lee Bu-jin</strong></td>
<td style="text-align: right; width: 178px;" data-sheets-value='{"1":3,"3":0}' data-sheets-numberformat='[null,3,"0.00%",1]'><strong>0.00%</strong></td>
<td style="text-align: right; width: 178px;" data-sheets-value='{"1":3,"3":0.0692}' data-sheets-numberformat='[null,3,"0.00%",1]'><strong>6.92%</strong></td>
</tr>
<tr>
<td style="width: 388px;" data-sheets-value='{"1":2,"2":"Lee Seo-hyun"}'><strong>Lee Seo-hyun</strong></td>
<td style="text-align: right; width: 178px;" data-sheets-value='{"1":3,"3":0}' data-sheets-numberformat='[null,3,"0.00%",1]'><strong>0.00%</strong></td>
<td style="text-align: right; width: 178px;" data-sheets-value='{"1":3,"3":0.0346}' data-sheets-numberformat='[null,3,"0.00%",1]'><strong>3.46%</strong></td>
</tr>
<tr><td colspan="3" style="width: 744px;" data-sheets-value='{"1":2,"2":"Source: DART"}'>Source: DART</td></tr>
</tbody>
</table><p><strong>As a result, we can safely say that the entire Samsung Group is under Lee Jae-yong's firm control.</strong></p><ul>
<li>He single-handedly controls 18.13% of Samsung C&amp;T, the de facto holding company.</li>
<li>He then owns 29.28% of Samsung Life Insurance, including C&amp;T's 19.34% stake in Life.</li>
<li>Lastly, he governs Samsung Electronics with a 15.15% stake, including Life's 8.51% and C&amp;T's 5.01%.</li>
</ul><table class="table table-striped">
<colgroup>
<col width="100">
<col width="100">
</colgroup>
<tbody>
<tr><td colspan="2" data-sheets-value='{"1":2,"2":"Lee Jae-yong"}' data-sheets-formula="=R[-22]C[0]">Lee Jae-yong's controlling stake</td></tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Samsung C&amp;T Corp"}' data-sheets-formula="=R[-9]C[0]"><strong>Samsung C&amp;T Corp</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0.18128711636306202}' data-sheets-numberformat='[null,3,"0.00%",1]' data-sheets-formula="=R[-6]C[2]"><strong>18.13%</strong></td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Samsung Life Insurance co., Ltd"}' data-sheets-formula="=R[-19]C[0]"><strong>Samsung Life Insurance co., Ltd</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0.2978}' data-sheets-numberformat='[null,3,"0.00%",1]' data-sheets-formula="=R[-15]C[2]+R[-18]C[2]"><strong>29.78%</strong></td>
</tr>
<tr>
<td><em> - Including the stake owned by Samsung C&amp;T</em></td>
<td style="text-align: right;"><em>19.34%</em></td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Samsung Electronics Co Ltd"}' data-sheets-formula="=R[-31]C[0]"><strong>Samsung Electronics Co Ltd</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0.15147665697890453}' data-sheets-numberformat='[null,3,"0.00%",1]' data-sheets-formula="=R[-25]C[2]+R[-29]C[2]+R[-30]C[2]"><strong>15.15%</strong></td>
</tr>
<tr>
<td><em> - Including the stake owned by Samsung C&amp;T</em></td>
<td style="text-align: right;"><em>8.51%</em></td>
</tr>
<tr>
<td><em> - Including the stake owned by Samsung Life Insurance</em></td>
<td style="text-align: right;"><em>5.01%</em></td>
</tr>
<tr><td colspan="2" data-sheets-value='{"1":2,"2":"Source: DART"}'>Source: DART</td></tr>
</tbody>
</table>

We saw a series of filings by Samsung affiliates on the major shareholder stake changes due to the inheritance.
Here are the links to the regulatory filings at DART of the three companies:

Samsung Electronics
Samsung C&amp;T
Samsung Life Insurance

Samsung said that the late chairman Lee Kun-hee didn't leave any will. So, the inheritance went at a 1/3 (spouse) to 2/3/N (each child) ratio, except for Samsung Life Insurance under the family members' mutual consent.As for Samsung Life Insurance, the mother, Hong Ra-hee, gave up on her share. Instead, Lee Jae-yong got 1/2, and Lee Bu-jin (elder daughter) received 2/3/2. The youngest one, Lee Seo-hyun, took 1/3/2.








Samsung Electronics Co Ltd
Before
After


Hong Ra-hee
0.91%
2.30%


Lee Jae-yong
0.70%
1.63%


Lee Bu-jin
0.00%
0.93%


Lee Seo-hyun
0.00%
0.93%

Source: DART










Samsung C&amp;T Corp
Before
After


Hong Ra-hee
0.00%
0.97%


Lee Jae-yong
17.48%
18.13%


Lee Bu-jin
5.60%
6.24%


Lee Seo-hyun
5.60%
6.24%

Source: DART










Samsung Life Insurance co., Ltd
Before
After


Lee Jae-yong
0.06%
10.44%


Lee Bu-jin
0.00%
6.92%


Lee Seo-hyun
0.00%
3.46%

Source: DART

As a result, we can safely say that the entire Samsung Group is under Lee Jae-yong's firm control.
He single-handedly controls 18.13% of Samsung C&amp;T, the de facto holding company.
He then owns 29.28% of Samsung Life Insurance, including C&amp;T's 19.34% stake in Life.
Lastly, he governs Samsung Electronics with a 15.15% stake, including Life's 8.51% and C&amp;T's 5.01%.






Lee Jae-yong's controlling stake

Samsung C&amp;T Corp
18.13%


Samsung Life Insurance co., Ltd
29.78%


 - Including the stake owned by Samsung C&amp;T
19.34%


Samsung Electronics Co Ltd
15.15%


 - Including the stake owned by Samsung C&amp;T
8.51%


 - Including the stake owned by Samsung Life Insurance
5.01%

Source: DART



Samsung Family Stake Change Filings: Ramifications for SamE 1P Discount

Pan-Asia Index Rebalances/ Events/ Delta One, Periscope Analytics

Brian Freitas

Pan-Asia Index Rebalances/ Events/ Delta One

Quantitative Analysis

<div><p>The Asia Short Interest weekly looks at moves in market wide short interest and highlights movements in stock specific short interest across Hong Kong, Japan, Korea and Taiwan using the last available data published by the relevant authorities.</p></div><div><p>Hong Kong saw shorts rise on <a href="https://www.smartkarma.com/entities/tencent-holdings-ltd" target="_blank" data-smartkarma-citation="entities:26:1" rel="noopener">Tencent Holdings (700 HK)</a>, <a href="https://www.smartkarma.com/entities/meituan-dianping" target="_blank" data-smartkarma-citation="entities:26970:1" rel="noopener">Meituan (3690 HK)</a>, <a href="https://www.smartkarma.com/entities/china-merchants-bank-co-ltd-3388a037-4214-4997-b45d-520518cfdb57" target="_blank" data-smartkarma-citation="entities:10987:1" rel="noopener">China Merchants Bank H (3968 HK)</a>, <a href="https://www.smartkarma.com/entities/wuxi-apptec-co-ltd-bf4a1265-beef-48b6-b82d-29308426030f" target="_blank" data-smartkarma-citation="entities:27795:1" rel="noopener">WuXi AppTec Co. Ltd. (2359 HK)</a> and <a href="https://www.smartkarma.com/entities/sunny-optical-tech" target="_blank" data-smartkarma-citation="entities:13363:1" rel="noopener">Sunny Optical (2382 HK)</a> while there was short covering on <a href="https://www.smartkarma.com/entities/ping-an-insurance-grp-co-of-china-ltd" target="_blank" data-smartkarma-citation="entities:12880:1" rel="noopener">Ping An Insurance (H) (2318 HK)</a>, <a href="https://www.smartkarma.com/entities/baidu-inc-a55ca720-5968-48f0-8194-ac94390d065c" target="_blank" data-smartkarma-citation="entities:32212:1" rel="noopener">Baidu (9888 HK)</a>, <a href="https://www.smartkarma.com/entities/haier-smart-home-co-ltd-b3ef445f-0f54-4586-8c58-9073de98d60e" target="_blank" data-smartkarma-citation="entities:31105:1" rel="noopener">Haier Smart Home Co Ltd (6690 HK)</a>, <a href="https://www.smartkarma.com/entities/alibaba-group" target="_blank" data-smartkarma-citation="entities:28434:1" rel="noopener">Alibaba Group (9988 HK)</a> and <a href="https://www.smartkarma.com/entities/citic-securities-h" target="_blank" data-smartkarma-citation="entities:463:1" rel="noopener">Citic Securities (H) (6030 HK)</a>. Shorts increased in the Communication Services, Consumer Discretionary, Health Care and Real Estate sectors, and decreased in the Financials, Industrials, and Information Technology sectors.</p></div><div><p>In Japan, stocks that saw the most shorts were <a href="https://www.smartkarma.com/entities/lasertec-corp" target="_blank" data-smartkarma-citation="entities:4126:1" rel="noopener">Lasertec Corp (6920 JP)</a>, <a href="https://www.smartkarma.com/entities/anritsu-corp" target="_blank" data-smartkarma-citation="entities:3700:1" rel="noopener">Anritsu Corp (6754 JP)</a>, <a href="https://www.smartkarma.com/entities/daito-trust-construct-co-ltd" target="_blank" data-smartkarma-citation="entities:10503:1" rel="noopener">Daito Trust Construct (1878 JP)</a>, <a href="https://www.smartkarma.com/entities/jfe-holdings-inc" target="_blank" data-smartkarma-citation="entities:210:1" rel="noopener">JFE Holdings (5411 JP)</a> and <a href="https://www.smartkarma.com/entities/tokyu-fudosan-holdings-corp" target="_blank" data-smartkarma-citation="entities:8355:1" rel="noopener">Tokyu Fudosan Holdings (3289 JP)</a> while shorts decreased on <a href="https://www.smartkarma.com/entities/toshiba-corp" target="_blank" data-smartkarma-citation="entities:637:1" rel="noopener">Toshiba Corp (6502 JP)</a>, <a href="https://www.smartkarma.com/entities/ana-holdings-inc" target="_blank" data-smartkarma-citation="entities:5308:1" rel="noopener">Ana Holdings (9202 JP)</a>, <a href="https://www.smartkarma.com/entities/h-i-s-co-ltd" target="_blank" data-smartkarma-citation="entities:19311:1" rel="noopener">H I S Co Ltd (9603 JP)</a>, <a href="https://www.smartkarma.com/entities/outsourcing-inc" target="_blank" data-smartkarma-citation="entities:7431:1" rel="noopener">Outsourcing Inc (2427 JP)</a> and <a href="https://www.smartkarma.com/entities/euglena-co-ltd" target="_blank" data-smartkarma-citation="entities:8414:1" rel="noopener">Euglena Co Ltd (2931 JP)</a>. Shorts increased in the Real Estate and Consumer Discretionary sectors, and decreased in the Industrials sector.</p></div><div><p>In Korea, shorts increased on <a href="https://www.smartkarma.com/entities/celltrion-inc" target="_blank" data-smartkarma-citation="entities:991:1" rel="noopener">Celltrion Inc (068270 KS)</a> and <a href="https://www.smartkarma.com/entities/hyundai-motor-co" target="_blank" data-smartkarma-citation="entities:155:1" rel="noopener">Hyundai Motor Co (005380 KS)</a> during the week while decreasing on <a href="https://www.smartkarma.com/entities/samsung-electronics-co-ltd" target="_blank" data-smartkarma-citation="entities:191:1" rel="noopener">Samsung Electronics (005930 KS)</a>, <a href="https://www.smartkarma.com/entities/hyundai-heavy-industries" target="_blank" data-smartkarma-citation="entities:10155:1" rel="noopener">Hyundai Heavy Industries (009540 KS)</a> and <a href="https://www.smartkarma.com/entities/doosan-infracore-co-ltd" target="_blank" data-smartkarma-citation="entities:3982:1" rel="noopener">Doosan Infracore (042670 KS)</a>. The short sell ban has ended today and short selling will be permitted on <a href="https://www.smartkarma.com/entities/korea-stock-exchange-kospi-200-index" target="_blank" data-smartkarma-citation="entities:26021:1" rel="noopener">Korea Stock Exchange Kospi 200 Index (KOSPI2 INDEX)</a> and <a href="https://www.smartkarma.com/entities/kosdaq-150-index" target="_blank" data-smartkarma-citation="entities:31077:1" rel="noopener">KOSDAQ 150 Index (KOSDQ150 INDEX)</a> constituents from Monday, 3 May.</p></div><div><p>Stocks in Taiwan that saw the highest increase in shorts were <a href="https://www.smartkarma.com/entities/china-development-financial" target="_blank" data-smartkarma-citation="entities:13818:1" rel="noopener">China Development Financial (2883 TT)</a>, <a href="https://www.smartkarma.com/entities/yang-ming-marine-transport" target="_blank" data-smartkarma-citation="entities:8502:1" rel="noopener">Yang Ming Marine Transport (2609 TT)</a>, <a href="https://www.smartkarma.com/entities/evergreen-marine-corp-ltd" target="_blank" data-smartkarma-citation="entities:15428:1" rel="noopener">Evergreen Marine Corp (2603 TT)</a>, <a href="https://www.smartkarma.com/entities/walsin-lihwa-corp" target="_blank" data-smartkarma-citation="entities:17142:1" rel="noopener">Walsin Lihwa (1605 TT)</a> and <a href="https://www.smartkarma.com/entities/compal-electronics" target="_blank" data-smartkarma-citation="entities:4620:1" rel="noopener">Compal Electronics (2324 TT)</a> while shorts were covered on <a href="https://www.smartkarma.com/entities/au-optronics-corp" target="_blank" data-smartkarma-citation="entities:6704:1" rel="noopener">AU Optronics (2409 TT)</a>, <a href="https://www.smartkarma.com/entities/winbond-electronics-corp" target="_blank" data-smartkarma-citation="entities:9177:1" rel="noopener">Winbond Electronics (2344 TT)</a>, <a href="https://www.smartkarma.com/entities/asmedia-technology-inc" target="_blank" data-smartkarma-citation="entities:15732:1" rel="noopener">Asmedia Technology (5269 TT)</a>, <a href="https://www.smartkarma.com/entities/genius-electronic-optical-co-ltd" target="_blank" data-smartkarma-citation="entities:9632:1" rel="noopener">Genius Electronic Optical (3406 TT)</a> and <a href="https://www.smartkarma.com/entities/novatek-microelectronics-corp" target="_blank" data-smartkarma-citation="entities:10904:1" rel="noopener">Novatek Microelectronics Corp (3034 TT)</a>.</p></div>

The Asia Short Interest weekly looks at moves in market wide short interest and highlights movements in stock specific short interest across Hong Kong, Japan, Korea and Taiwan using the last available data published by the relevant authorities.Hong Kong saw shorts rise on Tencent Holdings (700 HK), Meituan (3690 HK), China Merchants Bank H (3968 HK), WuXi AppTec Co. Ltd. (2359 HK) and Sunny Optical (2382 HK) while there was short covering on Ping An Insurance (H) (2318 HK), Baidu (9888 HK), Haier Smart Home Co Ltd (6690 HK), Alibaba Group (9988 HK) and Citic Securities (H) (6030 HK). Shorts increased in the Communication Services, Consumer Discretionary, Health Care and Real Estate sectors, and decreased in the Financials, Industrials, and Information Technology sectors.In Japan, stocks that saw the most shorts were Lasertec Corp (6920 JP), Anritsu Corp (6754 JP), Daito Trust Construct (1878 JP), JFE Holdings (5411 JP) and Tokyu Fudosan Holdings (3289 JP) while shorts decreased on Toshiba Corp (6502 JP), Ana Holdings (9202 JP), H I S Co Ltd (9603 JP), Outsourcing Inc (2427 JP) and Euglena Co Ltd (2931 JP). Shorts increased in the Real Estate and Consumer Discretionary sectors, and decreased in the Industrials sector.In Korea, shorts increased on Celltrion Inc (068270 KS) and Hyundai Motor Co (005380 KS) during the week while decreasing on Samsung Electronics (005930 KS), Hyundai Heavy Industries (009540 KS) and Doosan Infracore (042670 KS). The short sell ban has ended today and short selling will be permitted on Korea Stock Exchange Kospi 200 Index (KOSPI2 INDEX) and KOSDAQ 150 Index (KOSDQ150 INDEX) constituents from Monday, 3 May.Stocks in Taiwan that saw the highest increase in shorts were China Development Financial (2883 TT), Yang Ming Marine Transport (2609 TT), Evergreen Marine Corp (2603 TT), Walsin Lihwa (1605 TT) and Compal Electronics (2324 TT) while shorts were covered on AU Optronics (2409 TT), Winbond Electronics (2344 TT), Asmedia Technology (5269 TT), Genius Electronic Optical (3406 TT) and Novatek Microelectronics Corp (3034 TT).

Asia Shorts: Tencent, CM Bank, Wuxi Apptec, Baidu, Anritsu, Daito, Ana, Yang Ming, Evergreen Marine

<p>Samsung unveiled the Lee family's inheritance tax payment plan. But key details were missing. We do not still know which family member gets which company stake.</p><p>Unless specified in the will, the inheritance will go at a 1/3 (spouse) to 2/3/N (each child) ratio. But the consensus now is there is a will, and this 1/3 (spouse) to 2/3/N (each child) ratio won't happen.</p><p>The deadline to report the tax payment is April 30. But the family doesn't need to report who gets what information. The Korean inheritance tax law allows a family to make a collective payment for the entire family. Inheritance sharing can be discussed later, and there is no deadline for this.</p><p>Nonetheless, several Samsung insiders familiar with this matter have reportedly said that the who gets what information will be made public as early as next week. <span>All shareholding changes by a major shareholder must be filed and made public at DART within 5 days after changes are made. So, we will know once a decision is reached.</span></p>

Samsung unveiled the Lee family's inheritance tax payment plan. But key details were missing. We do not still know which family member gets which company stake.Unless specified in the will, the inheritance will go at a 1/3 (spouse) to 2/3/N (each child) ratio. But the consensus now is there is a will, and this 1/3 (spouse) to 2/3/N (each child) ratio won't happen.The deadline to report the tax payment is April 30. But the family doesn't need to report who gets what information. The Korean inheritance tax law allows a family to make a collective payment for the entire family. Inheritance sharing can be discussed later, and there is no deadline for this.Nonetheless, several Samsung insiders familiar with this matter have reportedly said that the who gets what information will be made public as early as next week. All shareholding changes by a major shareholder must be filed and made public at DART within 5 days after changes are made. So, we will know once a decision is reached.

Samsung 1P Discount Should Go South, Probably as Far South as Historic Low

Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

<div class="content-highlight"><p>In this insight, we highlight the closing of the pricing gaps between the major Korean holdcos and opcos, especially with the upcoming end of the ban on the short selling of shares in Korea in May. In this insight, we highlight 26 pair trades that involve Korean holdcos and opcos.</p></div><p>Just a reminder that the ban on short selling of KOSPI 200 and KOSDAQ 150 included stocks will remain in place until May 2nd and investors will be able to resume their shorting on these 350 stocks starting on May 3rd. Once this ban on short selling of stocks ends, there could be more investors that may look to add to the holdco shares and short the opco shares (especially among the pairs where the holdco shares have underperformed the opco shares in the past year). However, some of these moves have already started to take place in the past few weeks, which could reduce the overall profits on the pair trades. </p><p>Traditionally, the pair trades involving Korean holdcos and opcos have been a trading strategy that many hedge funds have employed for many years. However, the ban on short selling of stocks in Korea have prevented many of these funds from employing these pair trade strategies. Once the ban ends, you will likely see these funds becoming more active in these trading methods once again. </p><div class="content-highlight">
<p>In the section below, we separated the pair trades into two different sections. The first table involves major opcos outperforming holdcos (regular and quasi) in the past year. Of the 26 pair trade strategies mentioned in this insight, this section I involves 19 of them (73% of total). The section II (which involve holdcos outperforming the opcos in the past year) involves 7 pair trade strategies (27% of total).</p>
<p>In other words, the opcos in general have vastly outperformed the holdcos in the past year, especially due to the ban on the short selling of stocks in Korea. Because the opcos tend to be the bigger company than the holdcos in terms of market cap, many fund managers (both active and passive) have tended to just invest in the opcos and pay less attention to the holdcos.  </p>
</div><p>Also, we described the holdcos as either regular or quasi. SK Telecom and Samsung C&amp;T would be examples of "quasi" holdcos whereas Orion Holdings and Hanjin Kal would be examples of regular holdcos. </p>

In this insight, we highlight the closing of the pricing gaps between the major Korean holdcos and opcos, especially with the upcoming end of the ban on the short selling of shares in Korea in May. In this insight, we highlight 26 pair trades that involve Korean holdcos and opcos.Just a reminder that the ban on short selling of KOSPI 200 and KOSDAQ 150 included stocks will remain in place until May 2nd and investors will be able to resume their shorting on these 350 stocks starting on May 3rd. Once this ban on short selling of stocks ends, there could be more investors that may look to add to the holdco shares and short the opco shares (especially among the pairs where the holdco shares have underperformed the opco shares in the past year). However, some of these moves have already started to take place in the past few weeks, which could reduce the overall profits on the pair trades. Traditionally, the pair trades involving Korean holdcos and opcos have been a trading strategy that many hedge funds have employed for many years. However, the ban on short selling of stocks in Korea have prevented many of these funds from employing these pair trade strategies. Once the ban ends, you will likely see these funds becoming more active in these trading methods once again. 
In the section below, we separated the pair trades into two different sections. The first table involves major opcos outperforming holdcos (regular and quasi) in the past year. Of the 26 pair trade strategies mentioned in this insight, this section I involves 19 of them (73% of total). The section II (which involve holdcos outperforming the opcos in the past year) involves 7 pair trade strategies (27% of total).
In other words, the opcos in general have vastly outperformed the holdcos in the past year, especially due to the ban on the short selling of stocks in Korea. Because the opcos tend to be the bigger company than the holdcos in terms of market cap, many fund managers (both active and passive) have tended to just invest in the opcos and pay less attention to the holdcos.  
Also, we described the holdcos as either regular or quasi. SK Telecom and Samsung C&amp;T would be examples of "quasi" holdcos whereas Orion Holdings and Hanjin Kal would be examples of regular holdcos. 

Closing the Gap: Korean Holdcos Vs. Opcos

South Korea

Samsung Electronics Co., Ltd. manufactures a wide range of consumer and industrial electronic equipment and products such as semiconductors, personal computers, peripherals, monitors, televisions, and home appliances including air conditioners and microwave ovens. The Company also produces Internet access network systems and telecommunications equipment including mobile phones.

Samsung Electronics Pref Shares (005935 KS)

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Samsung Electronics Pref Shares (005935 KS)

SDI's Future Tied to JY Lee?

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Samsung Family Stake Change Filings: Ramifications for SamE 1P Discount

Samsung family stake change filings are out for the four companies. This post looks into their ramifications for the Samsung Electronics 1P discount.

Sanghyun Park

Asia Shorts: Tencent, CM Bank, Wuxi Apptec, Baidu, Anritsu, Daito, Ana, Yang Ming, Evergreen Marine

The Insight looks at large short interest movements across HK, Japan, Korea and Taiwan stocks and highlights large increases/decreases in shorts to...

Brian Freitas

Samsung 1P Discount Should Go South, Probably as Far South as Historic Low

Samsung announced the family's inheritance tax payment plan yesterday. This post argues why Samsung Electronics 1P should outperform Ord from now on.

Sanghyun Park

Closing the Gap: Korean Holdcos Vs. Opcos

In this insight, we highlight the closing of the pricing gaps between the major Korean holdcos and opcos, especially with the upcoming end of the...

Douglas Kim

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