Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

Douglas Research Advisory

Event-Driven

<ul>
<li>On 10 March, Young Poong (000670 KS) announced that it plans to cancel all of its treasury shares and conduct a 10-to-1 stock split.</li>
<li>Driven by the treasury shares cancellation and stock split, Young Poong's share price rose 8.9% to 489,000 won today (10 March 2025). </li>
<li>Our updated NAV of Young Poong suggests NAV per share of 834,064 per share, representing a 71% upside from current levels.</li>
</ul>


On 10 March, Young Poong (000670 KS) announced that it plans to cancel all of its treasury shares and conduct a 10-to-1 stock split.
Driven by the treasury shares cancellation and stock split, Young Poong's share price rose 8.9% to 489,000 won today (10 March 2025). 
Our updated NAV of Young Poong suggests NAV per share of 834,064 per share, representing a 71% upside from current levels.


Young Poong: Announces Cancellation of Entire Treasury Shares and 10:1 Stock Split

<ul>
<li>Must Asset Management, a 3% shareholder of Young Poong (000670 KS), started to go activist on the company on 5 February.</li>
<li>Based on current market cap, this would represent a P/B of 0.2x using the consolidated controlling interest equity of 3.9 trillion won!</li>
<li>There is some speculation that Must Asset Mgmt may form an alliance with Chairman Choi’s family as it proposed to Young Poong to recommend outside directors.</li>
</ul>


Must Asset Management, a 3% shareholder of Young Poong (000670 KS), started to go activist on the company on 5 February.
Based on current market cap, this would represent a P/B of 0.2x using the consolidated controlling interest equity of 3.9 trillion won!
There is some speculation that Must Asset Mgmt may form an alliance with Chairman Choi’s family as it proposed to Young Poong to recommend outside directors.


Must Asset Mgmt Goes Activist on Young Poong

Equity Bottom-Up

<ul>
<li>In this insight, we highlight the recent pricing gap divergences of the major Korean holdcos and opcos which could provide trading opportunities in 4Q 2024.</li>
<li>Volatility has been high in the Korean stock market in the past several weeks resulting in some interesting widening of some gaps among numerous holdcos and opcos in Korea. </li>
<li>Of the 38 pair trades, 19 of them involved holdcos outperforming opcos in the past six months and the other 19 opcos outperforming holdcos in the same period. </li>
</ul>


In this insight, we highlight the recent pricing gap divergences of the major Korean holdcos and opcos which could provide trading opportunities in 4Q 2024.
Volatility has been high in the Korean stock market in the past several weeks resulting in some interesting widening of some gaps among numerous holdcos and opcos in Korea. 
Of the 38 pair trades, 19 of them involved holdcos outperforming opcos in the past six months and the other 19 opcos outperforming holdcos in the same period. 


Korean Holdcos Vs Opcos Gap Trading Opportunities in 4Q 2024

<ul>
<li>We have significantly raised the NAV of Young Poong to 965,193 won (up 105% than previously). Our current NAV estimate of the company is 150% higher than current price.</li>
<li>Some traders have been positioning for Young Poong to be deleted from the KOSPI200 in the next round of rebalancing. Young Poong is not likely to be deleted from KOSPI200.</li>
<li>We also provide three potential scenarios of the Choi family's strategy to fight back to gain control of Korea Zinc.</li>
</ul>


We have significantly raised the NAV of Young Poong to 965,193 won (up 105% than previously). Our current NAV estimate of the company is 150% higher than current price.
Some traders have been positioning for Young Poong to be deleted from the KOSPI200 in the next round of rebalancing. Young Poong is not likely to be deleted from KOSPI200.
We also provide three potential scenarios of the Choi family's strategy to fight back to gain control of Korea Zinc.


NAV Analysis of Young Poong and Three Potential Scenarios of Choi Family's Strategy to Fight Back

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

Brian Freitas

Pan-Asia Index Rebalances/ Events/ Delta One

Periscope Analytics

Periscope Analytics focuses on event-driven trades across Asia Pacific and provides comprehensive, timely and systematic coverage of index changes to major Asia Pacific indices in a structured manner.

The analysis includes forecasted inclusions and exclusions to all major Asian indices that have significant amount of tracking assets, including estimates of passive buy/sell flow on the stocks. The service also provides commentary and impact of market consultations, ground rule changes, and other events (IPOs, spin-offs, M&A) that could lead to index changes and passive flow.

Periscope Analytics works with multi-strategy hedge funds, proprietary trading firms, stat arb trading groups and long-only investors that invest and trade in the Asia Pacific region with the data being used to trade index rebalances, avoid pre-positioning and passive flow, and to time entry into and exit from stocks.

Event-Driven Trades Across Asia Pacific

Index Rebalance

<ul>
<li>With the review period complete, there could be 7 changes for the <a href="https://www.smartkarma.com/entities/korea-stock-exchange-kospi-200" target="_blank" data-smartkarma-citation="entities:26021:1" rel="noopener">Korea Stock Exchange KOSPI 200 (KOSPI2 INDEX)</a> in June.</li>
<li>The impact on the potential inclusions ranges from 1.6-22 days of ADV while the impact on the potential deletions varies from 3.6-16.5 days of ADV.</li>
<li>
<a href="https://www.smartkarma.com/entities/han-kuk-carbon-co-ltd" target="_blank" data-smartkarma-citation="entities:17241:1" rel="noopener">Han Kuk Carbon (017960 KS)</a> appeared as a forecast add in the week starting 22 March and the stock is up 38% since then.</li>
</ul>


With the review period complete, there could be 7 changes for the Korea Stock Exchange KOSPI 200 (KOSPI2 INDEX) in June.
The impact on the potential inclusions ranges from 1.6-22 days of ADV while the impact on the potential deletions varies from 3.6-16.5 days of ADV.

Han Kuk Carbon (017960 KS) appeared as a forecast add in the week starting 22 March and the stock is up 38% since then.


KOSPI200 Index Rebalance Preview: 7 Changes a Side for June

South Korea

Young Poong Corporation produces and markets non-ferrous metals, such as zinc ingots, sulfate, and cadmium.  The Company also generates income from leasing buildings.

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Young Poong (000670 KS)

Young Poong: Announces Cancellation of Entire Treasury Shares and 10:1 Stock Split

On 10 March, Young Poong (000670 KS) announced that it plans to cancel all of its treasury shares and conduct a 10-to-1 stock split.

Douglas Kim

Must Asset Mgmt Goes Activist on Young Poong

Must Asset Management, a 3% shareholder of Young Poong (000670 KS), started to go activist on the company on 5 February.

Douglas Kim

Korean Holdcos Vs Opcos Gap Trading Opportunities in 4Q 2024

In this insight, we highlight the recent pricing gap divergences of the major Korean holdcos and opcos which could provide trading opportunities in...

Douglas Kim

NAV Analysis of Young Poong and Three Potential Scenarios of Choi Family's Strategy to Fight Back

We have significantly raised the NAV of Young Poong to 965,193 won (up 105% than previously). Our current NAV estimate of the company is 150%...

Douglas Kim

KOSPI200 Index Rebalance Preview: 7 Changes a Side for June

There could be 7 changes for the KOSPI200 in June. Potential impact ranges from 1.6-22 days of ADV. HDC Holdings has jumped the most while Hankuk...

Brian Freitas

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