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>In a surprising move, SK Inc confirmed the interim dividend amount (₩1,500) on July 26, and the ex-dividend date is set for August 10.</li>
<li>As a result, this enables risk-free dividend arb trading in Korea as SK Inc carries single-stock futures, whose liquidity level is around 70% of the spot since July 26.</li>
<li>The backwardation level has not yet pushed this arbitrage to a profitable level. Nevertheless, it's still possible to observe the basis spread moving to a meaningful extent before the ex-date.</li>
</ul>


In a surprising move, SK Inc confirmed the interim dividend amount (₩1,500) on July 26, and the ex-dividend date is set for August 10.
As a result, this enables risk-free dividend arb trading in Korea as SK Inc carries single-stock futures, whose liquidity level is around 70% of the spot since July 26.
The backwardation level has not yet pushed this arbitrage to a profitable level. Nevertheless, it's still possible to observe the basis spread moving to a meaningful extent before the ex-date.


Finally, a Risk-Free Dividend Arbitrage Trading Opportunity Is Presented in Korea: Feat. SK Inc

Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

Private Capital Markets

<ul>
<li>SK Ecoplant is getting ready to complete its IPO sometime in late 2023/1H 2024.</li>
<li>Local media have mentioned that SK Ecoplant's market cap could range from 5 trillion won to 10 trillion won.</li>
<li>At the end of 2022, SK Inc's 44.5% stake in SK Ecoplant had a book value of 545 billion won, which is much less the market value of SK Ecoplant.</li>
</ul>


SK Ecoplant is getting ready to complete its IPO sometime in late 2023/1H 2024.
Local media have mentioned that SK Ecoplant's market cap could range from 5 trillion won to 10 trillion won.
At the end of 2022, SK Inc's 44.5% stake in SK Ecoplant had a book value of 545 billion won, which is much less the market value of SK Ecoplant.


Initial Thoughts on the SK Ecoplant IPO - Impact on SK Inc

Equity Bottom-Up

<ul>
<li>In this insight, we highlight the pricing gap divergences of the major Korean holdcos and opcos in 3Q 2023.</li>
<li>Of the 38 pair trades, 22 of them involved holdcos outperforming opcos YTD and 16 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 3Q 2023.
Of the 38 pair trades, 22 of them involved holdcos outperforming opcos YTD and 16 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 3Q 2023

Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

<ul>
<li>My read of Bain's Offer last month, was a tactic to flesh out a competing Offer.  It seemed unlikely Bain would get the regulatory approval to take <strong><a href="https://www.smartkarma.com/entities/chindata-group-holdings-adr" target="_blank" data-smartkarma-citation="entities:29274:1" rel="noopener">Chindata (CD US)</a> </strong>private. </li>
<li>Now state-backed China Merchants Capital Holdings International Ltd. has made a non-binding offer of $9.20/ADS, compared to $8/ADS from Bain.</li>
<li>This Offer is indicative. But an SOE taking over data centres makes a lot of sense. </li>
</ul>


My read of Bain's Offer last month, was a tactic to flesh out a competing Offer.  It seemed unlikely Bain would get the regulatory approval to take Chindata (CD US) private. 
Now state-backed China Merchants Capital Holdings International Ltd. has made a non-binding offer of $9.20/ADS, compared to $8/ADS from Bain.
This Offer is indicative. But an SOE taking over data centres makes a lot of sense. 


Chindata: Bain's Move Spurs China Merchants Into Action

<ul>
<li>SKC Co Ltd (011790 KS) announced on 29 April that it plans to change into an intermediate holding company.</li>
<li>We believe that the formation of an intermediate holding company structure could have a negative impact on SKC's share price. </li>
<li>This is because some investors may be concerned that SKC may try to complete IPOs of some of its valuable subsidiaries including SKCFT Holdings without adequate protection for SKC shareholders.</li>
</ul>


SKC Co Ltd (011790 KS) announced on 29 April that it plans to change into an intermediate holding company.
We believe that the formation of an intermediate holding company structure could have a negative impact on SKC's share price. 
This is because some investors may be concerned that SKC may try to complete IPOs of some of its valuable subsidiaries including SKCFT Holdings without adequate protection for SKC shareholders.


SKC Co: Formation of an Intermediate Holding Company

South Korea

SK Holdings Co., Ltd. is a holdings company that is engaged in various industries including energy, chemicals, information technology, semiconductors, marketing, and services businesses in South Korea and internationally.

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SK Inc (034730 KS)

Finally, a Risk-Free Dividend Arbitrage Trading Opportunity Is Presented in Korea: Feat. SK Inc

This post discusses Korea's practically first risk-free dividend arbitrage trading opportunity, presented by SK Inc, which declares its interim...

Sanghyun Park

Initial Thoughts on the SK Ecoplant IPO - Impact on SK Inc

SK Ecoplant is getting ready to complete its IPO sometime in late 2023/1H 2024. Local media have mentioned that SK Ecoplant's market cap could...

Douglas Kim

Korean Holdcos Vs Opcos Gap Trading Opportunities in 3Q 2023

In this insight, we highlight the pricing gap divergences of the major Korean holdcos and opcos in 3Q 2023. We highlight 38 pair trades that...

Douglas Kim

Chindata: Bain's Move Spurs China Merchants Into Action

A unit of China Merchants is the right vehicle for this Offer. Trading at a 13.1% gross spread to terms, which is indicative of the non-binding...

David Blennerhassett

SKC Co: Formation of an Intermediate Holding Company

This insight provides additional details of SKC which has announced highly aggressive investment plans to expand its rechargeable batteries and...

Douglas Kim

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