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.

Thematic (Sector/Industry)

<ul>
<li>Korea’s impeachment drama hit a tipping point, with the second motion against Yoon set for a vote on the 14th, and the market pricing in a 100% chance of approval.</li>
<li>The market’s all-in on a Democratic Party win in May, as public sentiment against the president makes the ruling party’s chances virtually non-existent.</li>
<li>Target stocks impacted by corporate law changes, then focus on sector-specific plays, particularly the energy policy shift and growing support for virtual assets.</li>
</ul>


Korea’s impeachment drama hit a tipping point, with the second motion against Yoon set for a vote on the 14th, and the market pricing in a 100% chance of approval.
The market’s all-in on a Democratic Party win in May, as public sentiment against the president makes the ruling party’s chances virtually non-existent.
Target stocks impacted by corporate law changes, then focus on sector-specific plays, particularly the energy policy shift and growing support for virtual assets.


Yoon’s Impeachment a Lock, Regime Change Trade Set for May

Head of Research, IPOs & Placements, Aequitas Research

Sumeet Singh

Head of Research, IPOs & Placements

IPOs and Placements coverage across Asia Pacific

Aequitas Research

We cover all listing across the Asia Pacific along with follow-up placements. As of Dec 2020, our team had covered 539 IPOs with a hit rate of 73.5% and 685 placements with a hit rate of 66.8%.

We combine fundamental bottom-up views with our proprietary quantitative framework to provide a holistic coverage across new listings and placements. Our coverage includes pre-IPO notes before the deal is launched, follow-up analysis once the deal is live and post-listing trading analysis as well.

Equity Capital Markets

SK IE Technology   / Equity Capital Markets

<ul>
<li>SK IE Technology’s (SKIE) shareholder aims to raise around US$228m via selling their remaining shareholding.</li>
<li>The same shareholder had sold some of their stake earlier in Nov 21. That deal didn’t end up doing well.</li>
<li>In this note, we will talk about the deal dynamics and  run the deal through our ECM framework.</li>
</ul>


SK IE Technology’s (SKIE) shareholder aims to raise around US$228m via selling their remaining shareholding.
The same shareholder had sold some of their stake earlier in Nov 21. That deal didn’t end up doing well.
In this note, we will talk about the deal dynamics and  run the deal through our ECM framework.


SK IE Technology Placement - Last Deal Didn’t Do Well, More Discount and Cleanup Should Help

<ul>
<li>SK Shieldus (SKS) aims to raise around US$800m via issuing a mix of primary and secondary shares in its Korea IPO.</li>
<li>SKS is the security subsidiary of SK Square. It provides security services across four main categories: information security/Cybersecurity, convergence security, physical security, and Safety &amp; Care.</li>
<li>In this note, we look at valuations for its main segments.</li>
</ul>


SK Shieldus (SKS) aims to raise around US$800m via issuing a mix of primary and secondary shares in its Korea IPO.
SKS is the security subsidiary of SK Square. It provides security services across four main categories: information security/Cybersecurity, convergence security, physical security, and Safety &amp; Care.
In this note, we look at valuations for its main segments.


Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

Event-Driven

<p>In this insight, we discuss the stocks that could get included or excluded in the November 2021 KOSPI 200 rebalance. We highlight 15 stocks that could get included and 10 stocks that could get excluded in the upcoming KOSPI 200 rebalance.</p><div class="content-highlight">
<p>This rebalance of the KOSPI 200 strategy is a type of<strong> momentum-driven strategy.</strong> The 15 stocks that we think could get included in the next KOSPI 200 rebalance have generated strong share price performances <strong>(up 55% on average in the past six months</strong>). </p>
<p>On the other hand, the 10 stocks which we think could get excluded in the next KOSPI 200 rebalance (the bottom 5% of KOSPI 200 index in terms of market cap) have done much worse in terms of their share price performance (<strong>down 6.1% on average in the past six months</strong>). </p>
</div>

In this insight, we discuss the stocks that could get included or excluded in the November 2021 KOSPI 200 rebalance. We highlight 15 stocks that could get included and 10 stocks that could get excluded in the upcoming KOSPI 200 rebalance.
This rebalance of the KOSPI 200 strategy is a type of momentum-driven strategy. The 15 stocks that we think could get included in the next KOSPI 200 rebalance have generated strong share price performances (up 55% on average in the past six months). 
On the other hand, the 10 stocks which we think could get excluded in the next KOSPI 200 rebalance (the bottom 5% of KOSPI 200 index in terms of market cap) have done much worse in terms of their share price performance (down 6.1% on average in the past six months). 


Potential Changes of KOSPI 200 Index Components in the November 2021 Rebalance

<p>SK Discovery is a pure holding company and consists of two major subsidiaries: </p><ul>
<li>
<a href="https://www.smartkarma.com/entities/sk-chemicals-co-ltd-new" target="_blank" data-smartkarma-citation="entities:26190:1" rel="noopener">SK Chemicals Co Ltd/New (285130 KS)</a> </li>
<li><a href="https://www.smartkarma.com/entities/sk-gas-ltd" target="_blank" data-smartkarma-citation="entities:4088:1" rel="noopener">SK Gas Ltd (018670 KS)</a></li>
</ul><p>Since the stake value of these two subsidiaries is almost the same at this point, SK Discovery's share price should be affected by the share price of these two subsidiaries in a 5:5 ratio.</p><table class="table table-striped">
<colgroup>
<col width="70">
<col width="70">
<col width="70">
<col width="70">
</colgroup>
<tbody>
<tr>
<td data-sheets-value='{"1":2,"2":"Holdings"}'>Holdings</td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"Ticker"}'>Ticker</td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"Stake"}'>Stake</td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"Value"}'>Value</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"SK Chemicals Co Ltd"}' data-sheets-formula='=googlefinance(R[0]C[1], "name")'><strong>SK Chemicals Co Ltd</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"285130"}' data-sheets-numberformat='[null,2,"#,##0",1]' data-sheets-formula='="285130"'><strong>285130</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0.3345}' data-sheets-numberformat='[null,3,"0.00%",1]'><strong>33.45%</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":1132.082485056}' data-sheets-numberformat='[null,2,"₩#,##0.0B",1]' data-sheets-formula='=googlefinance(R[0]C[-2], "price")*googlefinance(R[0]C[-2], "shares")*R[0]C[-1]/1000000000'><strong>₩1,132.1B</strong></td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"SK Gas Ltd."}' data-sheets-formula='=googlefinance(R[0]C[1], "name")'><strong>SK Gas Ltd.</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"018670"}' data-sheets-numberformat='[null,2,"#,##0",1]' data-sheets-formula='="018670"'><strong>018670</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0.722}' data-sheets-numberformat='[null,3,"0.00%",1]'><strong>72.20%</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":1139.584384728}' data-sheets-numberformat='[null,2,"₩#,##0.0B",1]' data-sheets-formula='=googlefinance(R[0]C[-2], "price")*googlefinance(R[0]C[-2], "shares")*R[0]C[-1]/1000000000'><strong>₩1,139.6B</strong></td>
</tr>
<tr><td colspan="4"><strong> </strong></td></tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Huvis Corp"}' data-sheets-formula='=googlefinance(R[0]C[1], "name")'>Huvis Corp</td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"079980"}' data-sheets-numberformat='[null,2,"#,##0",1]' data-sheets-formula='="079980"'>079980</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0.255}' data-sheets-numberformat='[null,3,"0.00%",1]'>25.50%</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":91.933875}' data-sheets-numberformat='[null,2,"₩#,##0.0B",1]' data-sheets-formula='=googlefinance(R[0]C[-2], "price")*googlefinance(R[0]C[-2], "shares")*R[0]C[-1]/1000000000'>₩91.9B</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Other - unlisted"}'>Other - unlisted</td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"-"}' data-sheets-numberformat='[null,2,"#,##0",1]'>-</td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"-"}' data-sheets-numberformat='[null,3,"0.00%",1]'>-</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":186.394}' data-sheets-numberformat='[null,2,"₩#,##0.0B",1]' data-sheets-formula="=186.394">₩186.4B</td>
</tr>
<tr><td colspan="4" data-sheets-value='{"1":2,"2":"Source: KRX &amp; DART"}'>Source: KRX &amp; DART</td></tr>
</tbody>
</table><table class="table table-striped">
<colgroup>
<col width="70">
<col width="70">
<col width="70">
<col width="70">
</colgroup>
<tbody>
<tr>
<td data-sheets-value='{"1":2,"2":"Assets"}'>Assets</td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"% NAV"}'>% NAV</td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"% GAV"}'>% GAV</td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"% Holdings"}'>% Holdings</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"SK Chemicals Co Ltd"}' data-sheets-formula="=R[0]C[5]"><strong>SK Chemicals Co Ltd</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0.4642058632163233}' data-sheets-numberformat='[null,3,"0.00%",1]' data-sheets-formula="=R[0]C[7]/R13C[-3]"><strong>46.42%</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0.4439548306409918}' data-sheets-numberformat='[null,3,"0.00%",1]' data-sheets-formula="=R[0]C[6]/R8C[-4]"><strong>44.40%</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0.4439548306409918}' data-sheets-numberformat='[null,3,"0.00%",1]' data-sheets-formula="=R[0]C[5]/SUM(R2C[5]:R5C[5])"><strong>44.40%</strong></td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"SK Gas Ltd."}' data-sheets-formula="=R[0]C[5]"><strong>SK Gas Ltd.</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0.4672819869608142}' data-sheets-numberformat='[null,3,"0.00%",1]' data-sheets-formula="=R[0]C[7]/R13C[-3]"><strong>46.73%</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0.44689675814391905}' data-sheets-numberformat='[null,3,"0.00%",1]' data-sheets-formula="=R[0]C[6]/R8C[-4]"><strong>44.69%</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0.44689675814391905}' data-sheets-numberformat='[null,3,"0.00%",1]' data-sheets-formula="=R[0]C[5]/SUM(R2C[5]:R5C[5])"><strong>44.69%</strong></td>
</tr>
<tr><td colspan="4"><strong> </strong></td></tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Huvis Corp"}' data-sheets-formula="=R[0]C[5]">Huvis Corp</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0.037697115154189074}' data-sheets-numberformat='[null,3,"0.00%",1]' data-sheets-formula="=R[0]C[7]/R13C[-3]">3.77%</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0.03605257429963345}' data-sheets-numberformat='[null,3,"0.00%",1]' data-sheets-formula="=R[0]C[6]/R8C[-4]">3.61%</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0.03605257429963345}' data-sheets-numberformat='[null,3,"0.00%",1]' data-sheets-formula="=R[0]C[5]/SUM(R2C[5]:R5C[5])">3.61%</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Other - unlisted"}' data-sheets-formula="=R[0]C[5]">Other - unlisted</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0.07643010894569513}' data-sheets-numberformat='[null,3,"0.00%",1]' data-sheets-formula="=R[0]C[7]/R13C[-3]">7.64%</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0.07309583691545556}' data-sheets-numberformat='[null,3,"0.00%",1]' data-sheets-formula="=R[0]C[6]/R8C[-4]">7.31%</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0.07309583691545556}' data-sheets-numberformat='[null,3,"0.00%",1]' data-sheets-formula="=R[0]C[5]/SUM(R2C[5]:R5C[5])">7.31%</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Operation"}' data-sheets-formula="=R[6]C[0]">Operation</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0}' data-sheets-numberformat='[null,3,"0.00%",1]' data-sheets-formula="=R[6]C[2]/R13C[-3]">0.00%</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0}' data-sheets-numberformat='[null,3,"0.00%",1]' data-sheets-formula="=R[6]C[1]/R8C[-4]">0.00%</td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"-"}' data-sheets-numberformat='[null,3,"0.00%",1]'>-</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Holdco net cash/debt (deconsolidated)"}' data-sheets-formula="=R[6]C[0]">Holdco net cash/debt (deconsolidated)</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":-0.022470519277573812}' data-sheets-numberformat='[null,3,"0.00%",1]' data-sheets-formula="=R[6]C[2]/R13C[-3]">-2.25%</td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"-"}' data-sheets-numberformat='[null,3,"0.00%",1]'>-</td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"-"}' data-sheets-numberformat='[null,3,"0.00%",1]'>-</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Value of pref shares"}' data-sheets-formula="=R[4]C[-3]">Value of pref shares</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":-0.023144554999447935}' data-sheets-numberformat='[null,3,"0.00%",1]' data-sheets-formula="=-R[4]C[-3]/R13C[-3]">-2.31%</td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"-"}' data-sheets-numberformat='[null,3,"0.00%",1]'>-</td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"-"}' data-sheets-numberformat='[null,3,"0.00%",1]'>-</td>
</tr>
<tr><td colspan="4" data-sheets-value='{"1":2,"2":"Source: DART &amp; KRX"}'>Source: DART &amp; KRX</td></tr>
</tbody>
</table><p>However, a significant price divergence has recently occurred between SK Discovery and them. Even with SK Chemicals' recent price fluctuations caused by the activist fund (Metrica), SK Discovery did not fully synchronize. However, what is more striking is that SK Discovery's share price is not at all in sync with the recent surge in SK Gas's share price.</p><section class="figure"><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/230/636/original/1.png?1632009568" class="editor-image img-responsive" data-smartkarma-image-id="230636"></figure></section><p>SK Discovery is currently at a 61% discount to NAV. Of course, this discount rate is at a historic high.</p><table class="table table-striped">
<colgroup>
<col width="70">
<col width="70">
</colgroup>
<tbody>
<tr><td colspan="2" data-sheets-value='{"1":2,"2":"NAV"}' data-sheets-note="Sang Hyun Park: Cases when a company's net cash position and the value of its publically traded interests are worth more than its market cap create the opportunity of a stub trade, in which investors can take a view that the company's core business will rise by shorting the minority stakes whilst going long the underlying. Such an opportunity has arisen in the wake of the Alibaba listing which has seen early investing company Yahoo trade at a discount to the value of its stake in Alibaba.">NAV</td></tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Value of listed holdings"}'>Value of listed holdings</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":2363.600744784}' data-sheets-numberformat='[null,2,"₩#,##0.0B"]' data-sheets-formula="=SUM(R[0]C[10]:R[2])">₩2,363.6B</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":" - % of Holdco market cap"}'>- % of Holdco market cap</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":2.4633468515379344}' data-sheets-numberformat='[null,3,"0.00%",1]' data-sheets-formula="=R[-1]C[0]/((R[3]C[-3]*R[0]C[-3])/1000000000)">246.33%</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Value of unlisted holdings"}'>Value of unlisted holdings</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":186.394}' data-sheets-numberformat='[null,2,"₩#,##0.0B"]' data-sheets-formula="=SUM(R[1]C[10])">₩186.4B</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Stub value"}'>Stub value</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":-1590.4868527840001}' data-sheets-numberformat='[null,2,"₩#,##0.0B"]' data-sheets-formula="=(R[1]C[-3]*R[-2]C[-3]/1000000000)-R[-3]C[0]-R[-1]C[0]">-₩1,590.5B</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Stub value per share"}'>Stub value per share</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":-83543.3851546826}' data-sheets-numberformat='[null,2,"[$₩-412]#,##0",1]' data-sheets-formula="=R[-1]C[0]*1000000000/R[-3]C[-3]">-₩83,543</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Value of operating assets"}'>Value of operating assets</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0}' data-sheets-numberformat='[null,2,"₩#,##0.0B"]' data-sheets-formula="=SUM(R[5]C[5])">₩0.0B</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"GAV"}'>GAV</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":2549.9947447840004}' data-sheets-numberformat='[null,2,"₩#,##0.0B"]' data-sheets-formula="=R[-6]C[0]+R[-4]C[0]+R[-1]C[0]">₩2,550.0B</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"GAV per share"}'>GAV per share</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":134028.83112132747}' data-sheets-numberformat='[null,2,"[$₩-412]#,##0",1]' data-sheets-formula="=R[-1]C[0]/R[4]C[-3]*1000000000">₩134,029</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Discount to GAV (excl. treasury shares)"}'>Discount to GAV (excl. treasury shares)</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0.6239615045633263}' data-sheets-numberformat='[null,3,"0.00%",1]' data-sheets-formula="=(R[-1]C[0]-R[-4]C[-3])/R[-1]C[0]">62.40%</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Holdco net cash/debt (de-consolidated)"}'>Holdco net cash/debt (de-consolidated)</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":-54.8}' data-sheets-numberformat='[null,2,"₩#,##0.0B"]' data-sheets-formula="=R[2]C[5]">-₩54.8B</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Value of pref shares"}'>Value of pref shares</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":56.44380525}' data-sheets-numberformat='[null,2,"₩#,##0.0B"]' data-sheets-formula="=(R[-5]C[-3]*R[-2]C[-3]+R[-5]C[-2]*R[-2]C[-2])/1000000000">₩56.4B</td>
</tr>
<tr><td colspan="2"></td></tr>
<tr>
<td data-sheets-value='{"1":2,"2":"NAV"}'><strong>NAV</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":2438.7509395340003}' data-sheets-numberformat='[null,2,"₩#,##0.0B"]' data-sheets-formula="=R[-5]C[0]+R[-2]C[0]-R[-1]C[0]"><strong>₩2,438.8B</strong></td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"NAV per share (excl. treasury shares)"}'><strong>NAV per share (excl. treasury shares)</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":128181.80840975358}' data-sheets-numberformat='[null,2,"[$₩-412]#,##0",1]' data-sheets-formula="=R[-1]C[0]/R[-1]C[-3]*1000000000"><strong>₩128,182</strong></td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Discount to NAV"}'><strong>Discount to NAV</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0.606808480662963}' data-sheets-numberformat='[null,3,"0.00%",1]' data-sheets-formula="=(R[-1]C[0]-R[-9]C[-3])/R[-1]C[0]"><strong>60.68%</strong></td>
</tr>
<tr><td colspan="2" data-sheets-value='{"1":2,"2":"Source: KRX &amp; DART","6":1}'>Source: KRX &amp; DART</td></tr>
</tbody>
</table><p>The sigma on a 20-day moving average calculated by synthesizing these two affiliates at 50:50 is -1.35 at present, and the relative price ratio compared to this synthesis has diverged sharply over the past two weeks.</p><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/230/640/original/image_9329493321632010559259.png?1632010561" class="editor-image img-responsive" data-smartkarma-image-id="230640"></figure>

SK Discovery is a pure holding company and consists of two major subsidiaries: 

SK Chemicals Co Ltd/New (285130 KS) 
SK Gas Ltd (018670 KS)
Since the stake value of these two subsidiaries is almost the same at this point, SK Discovery's share price should be affected by the share price of these two subsidiaries in a 5:5 ratio.








Holdings
Ticker
Stake
Value


SK Chemicals Co Ltd
285130
33.45%
₩1,132.1B


SK Gas Ltd.
018670
72.20%
₩1,139.6B

 

Huvis Corp
079980
25.50%
₩91.9B


Other - unlisted
-
-
₩186.4B

Source: KRX &amp; DART










Assets
% NAV
% GAV
% Holdings


SK Chemicals Co Ltd
46.42%
44.40%
44.40%


SK Gas Ltd.
46.73%
44.69%
44.69%

 

Huvis Corp
3.77%
3.61%
3.61%


Other - unlisted
7.64%
7.31%
7.31%


Operation
0.00%
0.00%
-


Holdco net cash/debt (deconsolidated)
-2.25%
-
-


Value of pref shares
-2.31%
-
-

Source: DART &amp; KRX

However, a significant price divergence has recently occurred between SK Discovery and them. Even with SK Chemicals' recent price fluctuations caused by the activist fund (Metrica), SK Discovery did not fully synchronize. However, what is more striking is that SK Discovery's share price is not at all in sync with the recent surge in SK Gas's share price.SK Discovery is currently at a 61% discount to NAV. Of course, this discount rate is at a historic high.





NAV

Value of listed holdings
₩2,363.6B


- % of Holdco market cap
246.33%


Value of unlisted holdings
₩186.4B


Stub value
-₩1,590.5B


Stub value per share
-₩83,543


Value of operating assets
₩0.0B


GAV
₩2,550.0B


GAV per share
₩134,029


Discount to GAV (excl. treasury shares)
62.40%


Holdco net cash/debt (de-consolidated)
-₩54.8B


Value of pref shares
₩56.4B



NAV
₩2,438.8B


NAV per share (excl. treasury shares)
₩128,182


Discount to NAV
60.68%

Source: KRX &amp; DART

The sigma on a 20-day moving average calculated by synthesizing these two affiliates at 50:50 is -1.35 at present, and the relative price ratio compared to this synthesis has diverged sharply over the past two weeks.

SK Discovery in a Massive Price Divergence Vs. The Synthetic Involving SK Gas

South Korea

SK Gas Ltd imports, stores, and distributes liquefied petroleum gas (LPG). The Company supplies its products mainly to domestic market for household, the transportation industry, and petrochemical products manufacturers.

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Sk Gas Ltd (018670 KS)

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SK Discovery in a Massive Price Divergence Vs. The Synthetic Involving SK Gas

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