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>Another play is spread trading Korea Zinc single-stock futures: go long on the front-month and short on the farther-out contract to profit from price convergence.</li>
<li>The key is when longer-dated futures' volume will rise and if the basis difference with front-month futures will create arbitrage opportunities. November's volume seems more for hedging than arbitrage.</li>
<li>MBK is likely to launch a second tender offer, potentially extending the spread trading timeline and giving us more chances to hit sweet spots.</li>
</ul>


Another play is spread trading Korea Zinc single-stock futures: go long on the front-month and short on the farther-out contract to profit from price convergence.
The key is when longer-dated futures' volume will rise and if the basis difference with front-month futures will create arbitrage opportunities. November's volume seems more for hedging than arbitrage.
MBK is likely to launch a second tender offer, potentially extending the spread trading timeline and giving us more chances to hit sweet spots.


Another Play to Consider: Spread Trading Korea Zinc Single-Stock Futures

Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

Shin Kong Financial Holding / Event-Driven

<ul>
<li>
<a href="https://www.smartkarma.com/entities/taishin-financial-holding" target="_blank" data-smartkarma-citation="entities:715:1" rel="noopener">Taishin</a>'s bid clearly has governance/related party issues and a significant portion of the "non-Taishin" reps on the <a href="https://www.smartkarma.com/entities/shin-kong-financial-holding" target="_blank" data-smartkarma-citation="entities:15351:1" rel="noopener">Shin Kong</a> Board had issues. October 9th passage is not a done deal.</li>
<li>KKR's "bid" for <a href="https://www.smartkarma.com/entities/asm-pacific-technology-ltd" target="_blank" data-smartkarma-citation="entities:15061:1" rel="noopener">ASMPT (522 HK)</a> has all the hallmarks of the "approach" by PAG last year. Which came to nought. From a regulatory standpoint, it's unlikely to get up.</li>
<li>Never a dull moment for <a href="https://www.smartkarma.com/entities/korea-zinc-co-ltd" target="_blank" data-smartkarma-citation="entities:17944:1" rel="noopener">Korea Zinc (010130 KS)</a>. The Choi family makes Offers for KZ and <a href="https://www.smartkarma.com/entities/young-poong-precision-corp" target="_blank" data-smartkarma-citation="entities:16188:1" rel="noopener">Young Poong Precision (036560 KS)</a> (YPP). Then MBK counters for both.</li>
</ul>



Taishin's bid clearly has governance/related party issues and a significant portion of the "non-Taishin" reps on the Shin Kong Board had issues. October 9th passage is not a done deal.
KKR's "bid" for ASMPT (522 HK) has all the hallmarks of the "approach" by PAG last year. Which came to nought. From a regulatory standpoint, it's unlikely to get up.
Never a dull moment for Korea Zinc (010130 KS). The Choi family makes Offers for KZ and Young Poong Precision (036560 KS) (YPP). Then MBK counters for both.


Last Week in Event SPACE: Shin Kong/Taishin, ASMPT, Korea Zinc/Young Poong Precision, Sigma Health

<ul>
<li>I tally 44 - mostly firm, mostly Asia-Pac - transactions currently being discussed and analysed on Smartkarma. Inside is a timetable of upcoming key events for each deal.</li>
<li>Three new deals discussed this week: <a href="https://www.smartkarma.com/entities/t-gaia-corp" target="_blank" data-smartkarma-citation="entities:8339:1" rel="noopener">T Gaia (3738 JP)</a>'s and <a href="https://www.smartkarma.com/entities/shinsegae-eng-construction-co-ltd" target="_blank" data-smartkarma-citation="entities:11972:1" rel="noopener">Shinsegae E&amp;C (034300 KS)</a> Tender Offers, and <a href="https://www.smartkarma.com/entities/mphb-capital-bhd" target="_blank" data-smartkarma-citation="entities:8540:1" rel="noopener">MPHB (MPHB MK)</a>'s SCR. Plus <a href="https://www.smartkarma.com/entities/asm-pacific-technology-ltd" target="_blank" data-smartkarma-citation="entities:15061:1" rel="noopener">ASMPT (522 HK)</a> in the crosshairs. Again.</li>
<li>Key updates took place on: <a href="https://www.smartkarma.com/entities/sigma-healthcare-ltd" target="_blank" data-smartkarma-citation="entities:15966:1" rel="noopener">Sigma Healthcare (SIG AU)</a>, <a href="https://www.smartkarma.com/entities/descente-ltd" target="_blank" data-smartkarma-citation="entities:8225:1" rel="noopener">Descente Ltd (8114 JP)</a>, <a href="https://www.smartkarma.com/entities/shin-kong-financial-holding" target="_blank" data-smartkarma-citation="entities:15351:1" rel="noopener">Shin Kong Financial Holding (2888 TT)</a>, <a href="https://www.smartkarma.com/entities/pacific-smiles-group-ltd" target="_blank" data-smartkarma-citation="entities:2891:1" rel="noopener">Pacific Smiles (PSQ AU)</a>, and <a href="https://www.smartkarma.com/entities/greatview-aseptic-packaging" target="_blank" data-smartkarma-citation="entities:10802:1" rel="noopener">Greatview Aseptic Packaging (468 HK)</a>.
</li>
</ul>


I tally 44 - mostly firm, mostly Asia-Pac - transactions currently being discussed and analysed on Smartkarma. Inside is a timetable of upcoming key events for each deal.
Three new deals discussed this week: T Gaia (3738 JP)'s and Shinsegae E&amp;C (034300 KS) Tender Offers, and MPHB (MPHB MK)'s SCR. Plus ASMPT (522 HK) in the crosshairs. Again.
Key updates took place on: Sigma Healthcare (SIG AU), Descente Ltd (8114 JP), Shin Kong Financial Holding (2888 TT), Pacific Smiles (PSQ AU), and Greatview Aseptic Packaging (468 HK).



(Mostly) Asia-Pac M&A: Descente, Shin Kong Financial, T Gaia, Shinsegae E&C, MPHB, Pacific Smiles

<ul>
<li>Never a dull moment for <a href="https://www.smartkarma.com/entities/korea-zinc-co-ltd" target="_blank" data-smartkarma-citation="entities:17944:1" rel="noopener">Korea Zinc (010130 KS)</a> (KZ).  After MBK/Young Poong’s injunction to block KZ’s buyback was denied, KZ, together with Bain Capital, tabled a punchy Offer.</li>
<li>KZ has launched a 3.21mn share buyback (15.5% of shares out) at ₩830,000/share. Bain will also buy 2.5%. KZ's buyback is to be funded by short-term loans and corporate bonds.</li>
<li>MBK/Young Poong have filed another injunction against this buyback. Its case has merit. And that legal overhang ostensibly accounts for KZ trading ~14% below the buyback terms. </li>
</ul>


Never a dull moment for Korea Zinc (010130 KS) (KZ).  After MBK/Young Poong’s injunction to block KZ’s buyback was denied, KZ, together with Bain Capital, tabled a punchy Offer.
KZ has launched a 3.21mn share buyback (15.5% of shares out) at ₩830,000/share. Bain will also buy 2.5%. KZ's buyback is to be funded by short-term loans and corporate bonds.
MBK/Young Poong have filed another injunction against this buyback. Its case has merit. And that legal overhang ostensibly accounts for KZ trading ~14% below the buyback terms. 


Korea Zinc (010130 KS)'s ₩830,000/Share Offer. Mmm ...

<ul>
<li>For the month of September 2024, 15 new transactions (firm and non-binding) were discussed on Smartkarma with an overall announced deal size of ~US$23bn. </li>
<li>The average premium for the new transactions announced (or first discussed) in September was ~43%. The average premium YTD is ~44%</li>
<li>This compares to the average premium for transactions in 2023 (117 transactions), 2022 (106), 2021 (165), 2020 (158), and 2019 (145 ) of 39%, 41%, 33%, 31%, and 31% respectively.</li>
</ul>


For the month of September 2024, 15 new transactions (firm and non-binding) were discussed on Smartkarma with an overall announced deal size of ~US$23bn. 
The average premium for the new transactions announced (or first discussed) in September was ~43%. The average premium YTD is ~44%
This compares to the average premium for transactions in 2023 (117 transactions), 2022 (106), 2021 (165), 2020 (158), and 2019 (145 ) of 39%, 41%, 33%, 31%, and 31% respectively.


(Mostly) Asia M&A, Sep 2024: GTJA/Haitong Sec, Korea Zinc/YPP, Hotel Property, Virgin Money, Raysum

South Korea

Young Poong Precision Corporation manufactures centrifugal pumps, valves, and anti-corrosion equipment.  The Company also manufactures mold products, and retails various machine parts and motors.

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Young Poong Precision (036560 KS)

Another Play to Consider: Spread Trading Korea Zinc Single-Stock Futures

This post explores spread trading Korea Zinc single-stock futures: go long on the front-month and short on the farther-out contract to profit from...

Sanghyun Park

Last Week in Event SPACE: Shin Kong/Taishin, ASMPT, Korea Zinc/Young Poong Precision, Sigma Health

It’s Sunday! Pour yourself a coffee, grab a comfortable seat, and sift through a brief summary of insights on various events discussed during the...

David Blennerhassett

(Mostly) Asia-Pac M&A: Descente, Shin Kong Financial, T Gaia, Shinsegae E&C, MPHB, Pacific Smiles

This insight provides a summary of gross/annualised spreads (on deals discussed on Smartkarma) across Asia-Pacific as at the last trading date, and...

David Blennerhassett

(Mostly) Asia M&A, Sep 2024: GTJA/Haitong Sec, Korea Zinc/YPP, Hotel Property, Virgin Money, Raysum

For the month of Sep, 15 new deals were discussed on Smartkarma with an overall deal size of just ~US$23bn. The average premium for the new deals...

David Blennerhassett

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

Another Play to Consider: Spread Trading Korea Zinc Single-Stock Futures

This post explores spread trading Korea Zinc single-stock futures: go long on the front-month and short on the farther-out contract to profit from...

Sanghyun Park

Last Week in Event SPACE: Shin Kong/Taishin, ASMPT, Korea Zinc/Young Poong Precision, Sigma Health

It’s Sunday! Pour yourself a coffee, grab a comfortable seat, and sift through a brief summary of insights on various events discussed during the...

David Blennerhassett

(Mostly) Asia-Pac M&A: Descente, Shin Kong Financial, T Gaia, Shinsegae E&C, MPHB, Pacific Smiles

This insight provides a summary of gross/annualised spreads (on deals discussed on Smartkarma) across Asia-Pacific as at the last trading date, and...

David Blennerhassett

Korea Zinc (010130 KS)'s ₩830,000/Share Offer. Mmm ...

Korea Zinc (KZ) is trading ~14% below terms. The market evidently sees KZ's Offer facing legal issues; versus MBK's cleaner approach. I'd buy KZ...

David Blennerhassett

(Mostly) Asia M&A, Sep 2024: GTJA/Haitong Sec, Korea Zinc/YPP, Hotel Property, Virgin Money, Raysum

For the month of Sep, 15 new deals were discussed on Smartkarma with an overall deal size of just ~US$23bn. The average premium for the new deals...

David Blennerhassett