In today’s briefing:
- New Pricing Rule for Appraisal Rights in ECO: Potential Arb Openings in DB Hitek
- Hanwha Solutions: Biggest Restructuring Measures in 50 Years
- Classys (214150 KS): Overseas Expansion +Portfolio Enlargement = Consistent & Sustainable Growth
New Pricing Rule for Appraisal Rights in ECO: Potential Arb Openings in DB Hitek
- A South Korean lawmaker introduced legislation that would mandate that appraisal right exercise prices in split-off listings (equity carve-out) be based on asset/earnings value rather than market price (stock price).
- We may find an arb opening in DB Hitek. The appraisal price based on the asset/earnings value is at an 11.31% premium to the last close.
- If DB HiTek postpones the split-off listing to next year, FY22 earnings should be reflected. In this case, the appraisal price will be at a 90% premium.
Hanwha Solutions: Biggest Restructuring Measures in 50 Years
- On 23 September, Hanwha Solutions announced a set of restructuring measures which are probably the biggest ever moves by the company in the past 50 years.
- The spin-off of the Hanwha Galleria is a good move. Clearly, having both the renewable energy and a luxury department store business under one roof does not make much sense.
- We also like the company’s move expand its U.S. solar module production capacity. The total amount of potential benefit could be nearly US$2 billion over the next decade.
Classys (214150 KS): Overseas Expansion +Portfolio Enlargement = Consistent & Sustainable Growth
- Classys (214150 KS), under new management, has announced a treasury stock acquisition program of KRW20 billion through March 2023. As of June 2022, Classys had cash equivalents of KRW68 billion.
- Global expansion of Classys’ latest lifting product, Shrink Universe is the near-term growth driver. The product is seeing steady domestic demand, with cumulative sales exceeding 1,000 units.
- In August Classys received approval for its new skin care product Volnewmer. The company is expected to start selling Volnewmer in Q3 and initially targeting 100 units for the device.
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