Korea / Special Situations, Clepsydra Capital

Sanghyun Park

Korea / Special Situations

Korea / Special Sits, Pairs, Index Rebalancing

Clepsydra Capital

Investigate special situations, pairs, and index rebalancing trades in Korea.

Event-Driven

<ul>
<li>In yesterday's hearing, Lotte skipped alternatives and signaled treasury burn, seen as bowing to political pressure, sparking a notable NXT post-market reaction.</li>
<li>The mandatory treasury burn story hinges on major local holdings and their follow-through. Lotte’s hearing gave a live read, boosting the narrative’s traction in the near-term local market.</li>
<li>Traders’ takeaway: holding cos with large treasury stakes could outperform, signaling a chance for outright longs, relative weight plays, or NAV discount tightening—time to get more aggressive locally.</li>
</ul>


In yesterday's hearing, Lotte skipped alternatives and signaled treasury burn, seen as bowing to political pressure, sparking a notable NXT post-market reaction.
The mandatory treasury burn story hinges on major local holdings and their follow-through. Lotte’s hearing gave a live read, boosting the narrative’s traction in the near-term local market.
Traders’ takeaway: holding cos with large treasury stakes could outperform, signaling a chance for outright longs, relative weight plays, or NAV discount tightening—time to get more aggressive locally.


Treasury Burn Story Hits a Milestone—Lotte Serves up the Ruling Party’s Playbook at the Hearing

Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

Douglas Research Advisory

Equity Bottom-Up

<ul>
<li>More than eight years have passed since Chairman Chey first filed for a divorce from this wife Roh So-young in July 2017.</li>
<li>This divorce case has finally reached the Supreme Court of Korea. Although the final outcome still remains unknown, it appears that this divorce case is finally coming to an end. </li>
<li>We also provide an NAV analysis of SK Inc. Our NAV valuation of SK Inc suggests implied market cap of 24.1 trillion won which is 42% higher than current levels.</li>
</ul>


More than eight years have passed since Chairman Chey first filed for a divorce from this wife Roh So-young in July 2017.
This divorce case has finally reached the Supreme Court of Korea. Although the final outcome still remains unknown, it appears that this divorce case is finally coming to an end. 
We also provide an NAV analysis of SK Inc. Our NAV valuation of SK Inc suggests implied market cap of 24.1 trillion won which is 42% higher than current levels.


Divorce Between SK Group Chairman Chey Tae-Won and Roh So-Young Coming to an End: Impact on SK Inc

<ul>
<li>LG plans to cancel its remaining 3.02M treasury shares by next year, effectively wiping out all treasury stock—a clear preemptive move ahead of mandatory cancellation rules.</li>
<li>Local pension funds are betting SK Inc will do a partial treasury burn before Q4, front-running the 3rd Commercial Act and sending a pro-policy signal.</li>
<li>The SK treasury burn story offers multiple plays: holdco rerate, SK Inc momentum, and subsidiary rollover as NAV discounts tighten—definitely a multi-layered setup worth active monitoring.</li>
</ul>


LG plans to cancel its remaining 3.02M treasury shares by next year, effectively wiping out all treasury stock—a clear preemptive move ahead of mandatory cancellation rules.
Local pension funds are betting SK Inc will do a partial treasury burn before Q4, front-running the 3rd Commercial Act and sending a pro-policy signal.
The SK treasury burn story offers multiple plays: holdco rerate, SK Inc momentum, and subsidiary rollover as NAV discounts tighten—definitely a multi-layered setup worth active monitoring.


What Was It in SK Inc that Got the Local Pension Funds Loading up Hard Today?

<ul>
<li>Dems likely to push 3rd package in Q4; near-term flows chasing treasury stock cancellation theme, with locals screening &gt;₩1tn mkt cap, &gt;10% treasury shares of float.</li>
<li>Little pushback on mandatory treasury cancellations; debate focused on timeline — grace period vs. immediate rollout — highlighting how much leeway government may grant differing governance structures.</li>
<li>Too early for governance plays; near-term momentum flows likely in names with highest treasury stock relative to float, where cancellation is expected to hit flows hardest.</li>
</ul>


Dems likely to push 3rd package in Q4; near-term flows chasing treasury stock cancellation theme, with locals screening &gt;₩1tn mkt cap, &gt;10% treasury shares of float.
Little pushback on mandatory treasury cancellations; debate focused on timeline — grace period vs. immediate rollout — highlighting how much leeway government may grant differing governance structures.
Too early for governance plays; near-term momentum flows likely in names with highest treasury stock relative to float, where cancellation is expected to hit flows hardest.


Near-Term Flows to Watch on Mandatory Treasury Share Cancellation in Korea

<ul>
<li>Mandatory treasury cancellation isn’t in the current bill, but FSC and MOJ have started internal reviews; enforcement decree could drop as early as Q4.</li>
<li>An internal policy paper suggests mandatory cancellation will apply only to newly acquired treasury shares, with tight limits on existing ones to curb owner control abuse.</li>
<li>Lack of retroactive cancellation weakens the bull case, and while holdco sentiment stays upbeat, momentum may fade, opening the door to a tactical pullback.</li>
</ul>


Mandatory treasury cancellation isn’t in the current bill, but FSC and MOJ have started internal reviews; enforcement decree could drop as early as Q4.
An internal policy paper suggests mandatory cancellation will apply only to newly acquired treasury shares, with tight limits on existing ones to curb owner control abuse.
Lack of retroactive cancellation weakens the bull case, and while holdco sentiment stays upbeat, momentum may fade, opening the door to a tactical pullback.


Korea Holdco Rerating Pullback Risk: No Retroactive Treasury Cancellation

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)

Treasury Burn Story Hits a Milestone—Lotte Serves up the Ruling Party’s Playbook at the Hearing

This post highlights a key milestone in the treasury burn story—Lotte Holdings handed the market the ruling party’s playbook at yesterday’s hearing.

Sanghyun Park

Divorce Between SK Group Chairman Chey Tae-Won and Roh So-Young Coming to an End: Impact on SK Inc

The divorce case between SK Chairman Chey Tae-won and Roh So-young will FINALLY be concluded by the Supreme Court on 16 October. There is likely to...

Douglas Kim

What Was It in SK Inc that Got the Local Pension Funds Loading up Hard Today?

Fresh local intel indicates that the 3rd Commercial Act tweak, mandating treasury share cancellations, is a done deal with bipartisan backing....

Sanghyun Park

Korea Holdco Rerating Pullback Risk: No Retroactive Treasury Cancellation

This post covers the tactical pullback risk in Korea holdco rerating momentum, driven by the setback from non-retroactive mandatory treasury...

Sanghyun Park

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52-week Range

Market Cap (USDm)

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Treasury Burn Story Hits a Milestone—Lotte Serves up the Ruling Party’s Playbook at the Hearing

This post highlights a key milestone in the treasury burn story—Lotte Holdings handed the market the ruling party’s playbook at yesterday’s hearing.

Sanghyun Park

Divorce Between SK Group Chairman Chey Tae-Won and Roh So-Young Coming to an End: Impact on SK Inc

The divorce case between SK Chairman Chey Tae-won and Roh So-young will FINALLY be concluded by the Supreme Court on 16 October. There is likely to...

Douglas Kim

What Was It in SK Inc that Got the Local Pension Funds Loading up Hard Today?

Fresh local intel indicates that the 3rd Commercial Act tweak, mandating treasury share cancellations, is a done deal with bipartisan backing....

Sanghyun Park

Near-Term Flows to Watch on Mandatory Treasury Share Cancellation in Korea

This post covers how policy-theme flows around mandatory treasury share cancellation could emerge as a near-term driver in the Korean market.

Sanghyun Park

Korea Holdco Rerating Pullback Risk: No Retroactive Treasury Cancellation

This post covers the tactical pullback risk in Korea holdco rerating momentum, driven by the setback from non-retroactive mandatory treasury...

Sanghyun Park