In today’s briefing:
- StubWorld’s: Amorepacific’s NAV Discount Plumbs New Multi-Year Low
- Doosan Bobcat Employees Involved In Major Breach of Duty + Doosan Group Pushes Ahead With Merger
- GEM Banks; Focus on Value Attributes and Returns Recovery Potential
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StubWorld’s: Amorepacific’s NAV Discount Plumbs New Multi-Year Low
- A double dose of StubWorld this week: both the implied stub for Amorepacific Group (002790 KS) and the simple ratio (Group/Amorepacific Corp (090430 KS)) are around lifetime low levels.
- Preceding my comments on Amorepacific are the current setup/unwind tables for Asia-Pacific Holdcos.
- These relationships trade with a minimum liquidity of US$1mn, and a % market capitalisation >20%.
Doosan Bobcat Employees Involved In Major Breach of Duty + Doosan Group Pushes Ahead With Merger
- On 26 July, it was reported in the local media that there has been a major breach of duty by nearly 40 current/former employees at Doosan Bobcat.
- The fact that this material breach of duty was not revealed prior to the merger announcement adds to the argument that this merger/split/delisting should be either cancelled or redone.
- We remain negative on all major companies involved in this deal including Doosan Bobcat and Doosan Robotics. The breach of duty at Doosan Bobcat adds to the fire.
GEM Banks; Focus on Value Attributes and Returns Recovery Potential
- Among bigger cap GEM banks, we pick five longs and two shorts as our conviction calls; we add country-based equity risk premia to our screening process
- Our core buys are Bank Mandiri from Indonesia, Hana Financial from South Korea, CIMB Group from Malaysia, Bradesco from Brazil and CCB from China; four of these are value picks
- Our sells are Kotak Mahindra Bank and ICICI Bank from India, both richly valued larger cap banks that have benefited from past economic and political tailwinds with headwinds now emerging