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

The last day to be eligible to receive the first quarter dividends is March 29, next Monday.The div payment is May 20.









Quarterly div schedule for FY2021
1Q
2Q
3Q
4Q


The last day to be eligible
3/29
6/28
9/28
12/28


Ex-div
3/30
6/29
9/29
12/29


Div record
3/31
6/30
9/30
12/30


Div payment (tentative)
5/20
8/20
11/18
4/20 (2022)

Source: KRX

We have four quarterly div stocks on KOSPI 200: POSCO, Samsung Electronics, Ssangyong Cement Industry, and Hanon Systems.The quarterly div yields range from 0.37% (Hanon Systems) to 1.60% (Ssangyong Cement Industry) based on the FnGuide consensus, which is pretty much in line with the previous year.









1Q dividend stocks
Ticker
1Q div (est.)
Yearly div (est.)
Quarterly div yield


POSCO
005490
₩2,000
₩9,500
0.65%


Samsung Electronics Co Ltd
005930
₩361
₩1,443
0.44%


Ssangyong Cement Industry Co Ltd
003410
₩110
₩440
1.60%


Hanon Systems
018880
₩68
₩320
0.37%


Source: FnGuide



Now, let's check potential short recovering for these div stocks.For this, it is crucial to check the loaned stock balance and 52W performance.On KOSPI, Doosan Infracore is leading at 19.51% of SO.The four div stocks do not carry a lot in their balance: 1.95% POSCO, 1.16% SamE, 0.95% Ssangyong Cement Ind, and 0.89% Hanon Systems.









Loaned stock balance (KOSPI)
Ticker
Balance
% of SO
MC (₩B)


Doosan Infracore Co Ltd
042670
42,246,502
19.51%
2,053.0


Cosmax Inc
192820
1,837,956
18.29%
1,216.0


DL Holdings Co Ltd
000210
2,798,553
18.12%
1,336.8


Lotte Tour Development Co., Ltd.
032350
10,031,962
14.48%
1,305.8


LG HAUSYS, LTD.
108670
1,080,271
12.05%
722.8


LG Display Co Ltd
034220
32,306,260
9.03%
7,961.4


Hotel Shilla Co Ltd
008770
3,527,067
8.99%
3,441.6


Kyeryong Construction Industrial Co.
013580
719,601
8.06%
275.5


Samsung Heavy Industries Co., Ltd
010140
47,943,664
7.61%
4,263.6


Celltrion, Inc.
068270
9,330,378
7.49%
39,968.2


HMM Co Ltd
011200
23,377,269
7.07%
9,724.4


Hana Tour Service Inc
039130
947,217
6.80%
939.5


NS Shopping Co Ltd
138250
2,221,727
6.59%
394.2


Inscobee Inc
006490
6,225,990
6.07%
364.9


Wooridul Pharmaceutical Ltd
004720
838,212
5.70%
134.2


CJ Logistics Corp
000120
1,240,086
5.44%
3,992.2


Netmarble Corp
251270
4,580,308
5.33%
10,656.6


Jahwa Electronics Co Ltd
033240
939,220
5.25%
308.8


GS Retail Co Ltd
007070
3,969,424
5.16%
2,979.9



POSCO
005490
1,699,950
1.95%
26,722.8


Samsung Electronics Co Ltd
005930
69,482,398
1.16%
545,145.9


Ssangyong Cement Industry Co Ltd
003410
4,762,928
0.95%
3,466.6


Hanon Systems
018880
4,751,149
0.89%
9,741.9

Source: KOFIA

Similarly, all of them stay near 52WH. There is no sign of being oversold.









Name
Ticker
MC (₩B)
x 52WH
52WH date


Ssangyong Cement Industry Co Ltd
003410
3,466.6
0.93
12/11/20


POSCO
005490
26,722.8
0.92
3/9/21


Hanon Systems
018880
9,795.2
0.91
1/8/21


Samsung Electronics Co Ltd
005930
485,940.3
0.84
1/11/21

Source: KRX



KOSPI 200 1Q Quarterly Div Stocks: Status Check

Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

Ssangyong Cement Industrial / Event-Driven

After the market close today, there was an announcement of the tender offer of Ssangyong Cement preferred (003415 KS) shares by Hahn &amp; Co private equity firm. Hahn &amp; Co will tender the entire 1,543,685 shares of Ssangyong Cement preferred (003415 KS) shares at 15,500 won, which is at a 59% premium to the current price of 9,760 won. According to Hahn &amp; Co, the main purpose of this tender offer of the preferred shares is to improve returns on capital.In our view, this is an excellent way to improve returns on capital for the company. While this tender offer will result in the Ssangyong Cement preferred shares surging close to the tender offer price, it will also have a positive impact on the Ssangyong Cement common shares. In addition to the tender offer of the Ssangyong Cement preferred (003415 KS) shares, the company announced a share buyback of the <a href="https://www.smartkarma.com/entities/ssangyong-cement-ind" target="_blank" data-smartkarma-citation="entities:9345:1" rel="noopener">Ssangyong Cement Ind (003410 KS)</a> common shares worth 30 billion won, representing 1.2% of common shares outstanding.

After the market close today, there was an announcement of the tender offer of Ssangyong Cement preferred (003415 KS) shares by Hahn &amp; Co private equity firm. Hahn &amp; Co will tender the entire 1,543,685 shares of Ssangyong Cement preferred (003415 KS) shares at 15,500 won, which is at a 59% premium to the current price of 9,760 won. According to Hahn &amp; Co, the main purpose of this tender offer of the preferred shares is to improve returns on capital.In our view, this is an excellent way to improve returns on capital for the company. While this tender offer will result in the Ssangyong Cement preferred shares surging close to the tender offer price, it will also have a positive impact on the Ssangyong Cement common shares. In addition to the tender offer of the Ssangyong Cement preferred (003415 KS) shares, the company announced a share buyback of the Ssangyong Cement Ind (003410 KS) common shares worth 30 billion won, representing 1.2% of common shares outstanding. 

Tender Offer of Ssangyong Cement Preferred Shares by Hahn & Co

<div class="content-highlight">
<h2>Review of Our M&amp;A Research in 2019</h2>
We wrote 31 reports about the M&amp;As in 2019, representing 11% of our total research production. All of them were related to Korean companies. We typically prefer to write about Korean M&amp;A deals that involve at $500 million in investments. Most of the M&amp;A research that we write about are related to public companies. However, we also wrote about a few private companies including Woowa Brothers, Have &amp; Be, and KCFT that were involved in major M&amp;A deals.
<h2>2020 Korea M&amp;A Market Outlook - What’s For Sale?</h2>
We highlight 30 Korean companies that are/may be seeking to find new owners through M&amp;As in 2020. Key sectors of M&amp;A in Korea in 2020 include financial (insurance in particular), industrial, and consumer. Our analysis is based on the publicly available information.
</div>


Review of Our M&amp;A Research in 2019
We wrote 31 reports about the M&amp;As in 2019, representing 11% of our total research production. All of them were related to Korean companies. We typically prefer to write about Korean M&amp;A deals that involve at $500 million in investments. Most of the M&amp;A research that we write about are related to public companies. However, we also wrote about a few private companies including Woowa Brothers, Have &amp; Be, and KCFT that were involved in major M&amp;A deals.
2020 Korea M&amp;A Market Outlook - What’s For Sale?
We highlight 30 Korean companies that are/may be seeking to find new owners through M&amp;As in 2020. Key sectors of M&amp;A in Korea in 2020 include financial (insurance in particular), industrial, and consumer. Our analysis is based on the publicly available information.


Review of Our M&A Research in 2019 & Korea M&A Market Outlook in 2020: What’s For Sale?

Equity Bottom-Up

<ul>
<li>
<a href="https://www.smartkarma.com/entities/kmw-co-ltd" target="_blank" data-smartkarma-citation="entities:2834:1" rel="noopener">Kmw Co Ltd (032500 KS)</a> reported its 3Q19 results today. It reported sales of 265 billion won (up 205.6% YoY and 8.6% higher than consensus estimates) in 3Q19. Despite better than expected sales, its operating profit was worse than expected. As such, the disappointing 3Q19 results drove down KMW share price by 12.5% to 50,000 won today.</li>
<li>The company reported sales of 57.8 billion won (turned black YoY and down 9.8% lower than consensus). Operating margin was 21.8% in 3Q19, lower than the consensus estimate of 26.2%.</li>
<li>
We continue to have a Negative view of KMW shares following its poor 3Q19 earnings results. We maintain our view that the company's intrinsic value is closer to 1.6 trillion won (market cap) or 41,000 won per share and this assumes a 15% average operating margin assumption for the company in 2020 and 2021, rather than 25% consensus estimates for the company's operating margins. Our base case valuation of 41,000 won still represents an additional 18% downside risk from current price of 50,000. 
</li>
</ul>



Kmw Co Ltd (032500 KS) reported its 3Q19 results today. It reported sales of 265 billion won (up 205.6% YoY and 8.6% higher than consensus estimates) in 3Q19. Despite better than expected sales, its operating profit was worse than expected. As such, the disappointing 3Q19 results drove down KMW share price by 12.5% to 50,000 won today.
The company reported sales of 57.8 billion won (turned black YoY and down 9.8% lower than consensus). Operating margin was 21.8% in 3Q19, lower than the consensus estimate of 26.2%.

We continue to have a Negative view of KMW shares following its poor 3Q19 earnings results. We maintain our view that the company's intrinsic value is closer to 1.6 trillion won (market cap) or 41,000 won per share and this assumes a 15% average operating margin assumption for the company in 2020 and 2021, rather than 25% consensus estimates for the company's operating margins. Our base case valuation of 41,000 won still represents an additional 18% downside risk from current price of 50,000. 



KMW 3Q19 Earnings Review - A Big Decline in OP Margins on a QoQ Basis

<a href="https://www.smartkarma.com/entities/kmw-co-ltd" target="_blank" data-smartkarma-citation="entities:2834:1" rel="noopener">Kmw Co Ltd (032500 KS)</a>, a Korean telecom equipment maker, had a terrible week last week. Its share price fell 17.8% last week and 15.5% on Friday alone. Its market cap declined by 478 billion won in the past week to reach 2.3 trillion won ($1.9 billion) as of Friday close. The steep decline in the company's share price was mainly driven by <a href="https://www.smartkarma.com/entities/nokia-oyj-f4a36b63-c607-46d6-81d2-d212beb9e6e6" target="_blank" data-smartkarma-citation="entities:28201:1" rel="noopener">Nokia OYJ (NOK US)</a>'s disappointing earnings outlook. On Friday (October 25th), 4.6 million shares of KMW shares were traded, which was 5x the ADV in the past one month and the largest daily trading this year. There were 799,677 shares that were net sold by foreigners, which was the biggest net selling by foreigners this year. Foreign ownership in KMW declined to 14.1% from 16.1% previously. Are KMW Shares Overvalued or Undervalued Now? Although KMW shares fell 18% last week, we still believe that KMW shares are overvalued. Our base case value of KMW over a one year period is 41,000 won, which is still 28% below the current share price of 56,700 won. Our base case operating profit is 166 billion won (15% operating margins) in 2020, which is about 40% below the consensus estimates.

Kmw Co Ltd (032500 KS), a Korean telecom equipment maker, had a terrible week last week. Its share price fell 17.8% last week and 15.5% on Friday alone. Its market cap declined by 478 billion won in the past week to reach 2.3 trillion won ($1.9 billion) as of Friday close. The steep decline in the company's share price was mainly driven by Nokia OYJ (NOK US)'s disappointing earnings outlook. On Friday (October 25th), 4.6 million shares of KMW shares were traded, which was 5x the ADV in the past one month and the largest daily trading this year. There were 799,677 shares that were net sold by foreigners, which was the biggest net selling by foreigners this year. Foreign ownership in KMW declined to 14.1% from 16.1% previously. Are KMW Shares Overvalued or Undervalued Now? Although KMW shares fell 18% last week, we still believe that KMW shares are overvalued. Our base case value of KMW over a one year period is 41,000 won, which is still 28% below the current share price of 56,700 won. Our base case operating profit is 166 billion won (15% operating margins) in 2020, which is about 40% below the consensus estimates. 

KMW - What's Up Next After Nokia Earnings Disaster?

South Korea

Hanil Cement co.,Ltd. operates as a cement manufacturing company. The Company produces and sells cement, special cement, ready mixed concrete products, high solidity admixture, and other products. Hanil Cement markets its products throughout Korea.

Hanil Holdings Co.,Ltd. manufactures cement products. The Company produces and sells cement, ready-mixed concrete, ready-mixed dry mortar, and other related products. Hanil Holdings also provides information technology services and construction services.

Asia Cement Co., Ltd. manufactures cement and aggregate products.  The Company produces and sells cement, ready-mix concrete, and dry mortar. Asia Cement offers its products to construction industry in Korea.

SAMPYO Cement Co., Ltd. manufactures and distributes cement products. The Company produces slag cement, low heat cement, and other related products. SAMPYO Cement markets its products worldwide.

Eugene Corp. manufactures and markets ready mixed concrete and asphalt concrete. The Company handles pavement works and constructs commercial and residential buildings.

Dong Won Co., Ltd. owns and operates coal mines in South Korea.  The Company's products include hard coal for industrial and household uses.  Dong Won also develops overseas oil and gas fields, especially in South America.

Hanil Hyundai Cement Co.,Ltd manufactures and distributes cement products. The Company produces portland cement, slag cement, and other related products. Hanil Hyundai Cement also operates traveler accommodation businesses.

Sungshin Cement Co., Ltd. manufactures cement, ready-mixed concrete, clinker, and dry ready-mixed cement mortar.  The Company provides its products mainly to domestic market.

Korea Petroleum Industrial Co., Ltd. manufactures and markets asphalt used in constructions.  The Company also produces solvents, waterproofing sheets, and synthetic resins for the building contractors and manufacturers of paint, tire, and pharmaceuticals.  In addition, Korea Petroleum Industrial distributes gasoline, kerosene, and other chemicals.

Baek Kwang Mineral Products Co., Ltd. manufactures quicklime, calcium hydroxide, granular calcium oxide, and calcium hydroxide fertilizer.

The Ramco Cements Limited manufactures cement, ready mix concrete and dry mix products.  The Company also exports  cement and owns and operates a private sector wind mill power generating farm.

Gansu Qilianshan Cement Group Co.,Ltd manufactures cement products. The Company produces portland cements, low alkali cements, sulphate resistant cements, cement clinkers, and other products. Gansu Qilianshan Cement Group also produces cement equipment.

China Resources Cement Holdings Limited, through its subsidiaries, produces, distributes and sells cement, clinker and concrete.

Goldsun Building Materials Co., Ltd. manufactures building materials. The Company produces pre-mixed concrete, corrugated asbestos sheets, and concrete products. The Company also operates in the real estate development business.

Taiwan Goldsun Building Materials (2504 TT)

PT Semen Indonesia (Persero) Tbk manufactures cement including portland cement, oil well cement, and mixed cement. Through its subsidiaries, the Company also develops and operates an industrial estate, mines limestone and clay, and packages and distributes cement.

United States Lime & Minerals, Inc. supplies lime and limestone products to the steel, paper, agriculture, environmental protection, and construction industries.  The Company operates plants in Texas and Arkansas.

Vicat S.A. manufactures and sells cements, ready-mix concrete, aggregates and concrete pipes, as well as stucco and mortar for use in building construction internationally.  The Company also produces a variety of papers, medium-to-large capacity paper bags and chemicals and provides freight transportation services.

BBMG Corporation has operation in manufacturing and sales of cement and modern building materials. The Company also operates in property development, property investment and provision of property management services in China.

CSG Holding Co. Ltd.  manufactures raw sheets of high-grade float glass, archite ctural glass, delicacy glass, automotive glass, new-typed electronic components, and structure ceramic materials. The Company also operates in real estate development.

Cementos Argos SA is a cement and concrete producer and marketer, covering  several markets such as Colombia, Caribbean and Central America, and United  States.

Ssangyong Cement Industrial Co., Ltd. produces cement and ready-mixed concrete. The Company also manufactures fine ceramics for industrial uses and ferrite magnets for components used in audio equipment.  In addition, Ssangyong Cement Industrial develops housing, plant engineering, environmental resources, and leisure businesses.

Price Gauge
52-week Range	0.00 - 0.00
Market Cap (USDm)	0.00
P/E	0.00
Dividend (Yield)	0.00

Ssangyong Cement Industrial (003410 KS)

KOSPI 200 1Q Quarterly Div Stocks: Status Check

This post examines potential short recovering and spot/futures arb entry points of the four 1Q dividend stocks on KOSPI 200.

Sanghyun Park

Tender Offer of Ssangyong Cement Preferred Shares by Hahn & Co

After the market close today, there was an announcement of the tender offer of Ssangyong Cement preferred (003415 KS) shares by Hahn & Co...

Douglas Kim

Review of Our M&A Research in 2019 & Korea M&A Market Outlook in 2020: What’s For Sale?

Review of Our M&A Research in 2019 We wrote 31 reports about the M&As in 2019, representing 11% of our total research production. All of...

Douglas Kim

KMW 3Q19 Earnings Review - A Big Decline in OP Margins on a QoQ Basis

Kmw Co Ltd (032500 KS) reported its 3Q19 results today. It reported sales of 265 billion won (up 205.6% YoY and 8.6% higher than consensus...

Douglas Kim

KMW - What's Up Next After Nokia Earnings Disaster?

Kmw Co Ltd (032500 KS), a Korean telecom equipment maker, had a terrible week last week. Its share price fell 17.8% last week and 15.5% on Friday...

Douglas Kim

Price Gauge

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