In today’s briefing:
- Trading Considerations on the OCI Demerger
- OCI Spin-Off: Trade Opportunities Post Relisting, Valuations, & Impact on KOSPI 200
Trading Considerations on the OCI Demerger
- Value accretion by unlocking the voting eligibility of treasury shares won’t happen as the company holds no treasury share.
- But KOSPI 200 passive flows will pose a noteworthy trading point. PASSIVE’s selling outflow will be about 700-800K shares, 1.6x ADTV.
- Market cap imbalance, primarily driven by the tender offer dynamic and the split ratio that is excessively focused on Holdco, will likely exacerbate Holdco → Opco migration after re-listing.
OCI Spin-Off: Trade Opportunities Post Relisting, Valuations, & Impact on KOSPI 200
- After the spin-off and relisting of holdco/opco shares, we believe that there is a greater probability of OCI Co (opco) shares outperforming OCI Holdings (holdco).
- However, the degree of outperformance of OCI Co vs OCI Holdings is not likely to be similar to other recent spin-offs such as F&F Co and F&F Holdings.
- We have a long-term bullish view of OCI over the next one to two years. It is trading at P/E of 3.1x and P/B of 0.6x based 2022 earnings estimates.
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