Korea / Special Sits, Pairs, Index Rebalancing, Clepsydra Capital

Sanghyun Park

I investigate special situations, pairs, and index rebalancing trades in Korea.

Korea / Special Sits, Pairs, Index Rebalancing

Doosan Heavy, Korea's Latest Meme Stock Without Substance?

Doosan Heavy/Infracore Corporate Actions Walkthrough & KOSPI 200 Index Treatments

How Would We Capitalize on a Massive Discount Present on Doosan Infracore Business Unit?

Doosan Restructuring Update: Doosan Solus for Sale

Korea Single Subsidiary Stub Trade: 18 in Total with 3 New Ones

Clepsydra Capital

Investigate special situations, pairs, and index rebalancing trades in Korea.

Event-Driven

<p>Doosan Heavy Industries is up 15% today on the news that Korea and the US signed the business collaboration agreement for the SMR (Small Modular Reactor) cooperation. Doosan Heavy has been looking to export its SMRs to the US for a while.</p><p>Doosan Heavy's price surge leads to an extreme diversion in the price ratio vs. Doosan Corp. It is currently 2.43% off the 180-day mean: Doosan Corp in the numerator and Doosan Heavy in the denominator. The pair is 31.51% below the 180-day high.</p><table class="table table-striped">
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<tr><td colspan="2" data-sheets-value='{"1":2,"2":"Doosan Corp"}' data-sheets-formula="=R[-110]C[-6]">Doosan Corp vs. Doosan Heavy Industries</td></tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Current price ratio"}'>Current price ratio</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":3.902869757174393}' data-sheets-numberformat='{"1":2,"2":"#,##0.00000","3":1}' data-sheets-formula='=indirect("$E"&amp;R159C[0])'>3.90287</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"%Δ to 180-day mean"}' data-sheets-numberformat='[null,4,"[$₩]#,##0"]'><strong>%Δ to 180-day mean</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":-0.024321120573437455}' data-sheets-numberformat='[null,3,"0.00%",1]' data-sheets-formula='=indirect("$B"&amp;R159C[0])'><strong>-2.43%</strong></td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"%Δ to 180-day high"}' data-sheets-numberformat='[null,4,"[$₩]#,##0"]'><strong>%Δ to 180-day high</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":-0.31509527938165255}' data-sheets-numberformat='[null,3,"0.00%",1]' data-sheets-formula='=indirect("$C"&amp;R159C[0])'><strong>-31.51%</strong></td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"%Δ to 180-day low"}' data-sheets-numberformat='[null,4,"[$₩]#,##0"]'>%Δ to 180-day low</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0.32239356345043796}' data-sheets-numberformat='[null,3,"0.00%",1]' data-sheets-formula='=indirect("$D"&amp;R159C[0])'>32.24%</td>
</tr>
<tr><td colspan="2" data-sheets-value='{"1":2,"2":"Source: KRX"}'>Source: KRX</td></tr>
</tbody>
</table><section class="figure"><p>The current sigma on a 20-day moving average is -2.59, putting the duo back to where there were a month ago. </p>
<figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/210/698/original/Doosan+Corp+vs.+Doosan+Heavy+Industries+Constrctn+Co+Ltd.png?1622610836" class="editor-image img-responsive" data-smartkarma-image-id="210698"></figure></section><p>Doosan Corp is basically a single-subsidiary holding company with a substantial presence of its own operating operation. But Doosan Heavy alone accounts for nearly 70% of the GAV, making them a suitable pair for a stub trade.</p><table class="table table-striped">
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<td style="width: 229.091px;" data-sheets-value='{"1":2,"2":"Assets"}'>Assets</td>
<td style="text-align: right; width: 225.455px;" data-sheets-value='{"1":2,"2":"% of NAV"}'>% of NAV</td>
<td style="text-align: right; width: 227.273px;" data-sheets-value='{"1":2,"2":"% of GAV"}'>% of GAV</td>
</tr>
<tr>
<td style="width: 229.091px;" data-sheets-value='{"1":2,"2":"Doosan Heavy Industries Constrctn Co Ltd"}' data-sheets-formula="=NAV!R[11]C[0]"><strong>Doosan Heavy Industries Constrctn Co Ltd</strong></td>
<td style="text-align: right; width: 225.455px;" data-sheets-value='{"1":3,"3":0.9151962366131203}' data-sheets-numberformat='[null,3,"0.00%",1]' data-sheets-formula="=R[11]C[2]/R28C[0]"><strong>91.52%</strong></td>
<td style="text-align: right; width: 227.273px;" data-sheets-value='{"1":3,"3":0.6808923434006716}' data-sheets-numberformat='[null,3,"0.00%",1]' data-sheets-formula="=R[11]C[1]/R23C[-1]"><strong>68.09%</strong></td>
</tr>
<tr>
<td style="width: 229.091px;" data-sheets-value='{"1":2,"2":"Oricom Inc"}' data-sheets-formula="=NAV!R[11]C[0]">Oricom Inc</td>
<td style="text-align: right; width: 225.455px;" data-sheets-value='{"1":3,"3":0.011680247052466503}' data-sheets-numberformat='[null,3,"0.00%",1]' data-sheets-formula="=R[11]C[2]/R28C[0]">1.17%</td>
<td style="text-align: right; width: 227.273px;" data-sheets-value='{"1":3,"3":0.00868992951335164}' data-sheets-numberformat='[null,3,"0.00%",1]' data-sheets-formula="=R[11]C[1]/R23C[-1]">0.87%</td>
</tr>
<tr>
<td style="width: 229.091px;" data-sheets-value='{"1":2,"2":"Infinitt Healthcare Co Ltd"}' data-sheets-formula="=NAV!R[11]C[0]">Infinitt Healthcare Co Ltd</td>
<td style="text-align: right; width: 225.455px;" data-sheets-value='{"1":3,"3":0.000027824626946200257}' data-sheets-numberformat='[null,3,"0.00%",1]' data-sheets-formula="=R[11]C[2]/R28C[0]">0.00%</td>
<td style="text-align: right; width: 227.273px;" data-sheets-value='{"1":3,"3":0.00002070110724641955}' data-sheets-numberformat='[null,3,"0.00%",1]' data-sheets-formula="=R[11]C[1]/R23C[-1]">0.00%</td>
</tr>
<tr>
<td style="width: 229.091px;" data-sheets-value='{"1":2,"2":"Solus Advanced Materials 1P"}' data-sheets-formula="=NAV!R[11]C[0]">Solus Advanced Materials 1P</td>
<td style="text-align: right; width: 225.455px;" data-sheets-value='{"1":3,"3":0.029027529178169444}' data-sheets-numberformat='[null,3,"0.00%",1]' data-sheets-formula="=R[11]C[2]/R28C[0]">2.90%</td>
<td style="text-align: right; width: 227.273px;" data-sheets-value='{"1":3,"3":0.02159604855719073}' data-sheets-numberformat='[null,3,"0.00%",1]' data-sheets-formula="=R[11]C[1]/R23C[-1]">2.16%</td>
</tr>
<tr>
<td style="width: 229.091px;" data-sheets-value='{"1":2,"2":"Other - unlisted"}' data-sheets-formula="=NAV!R[11]C[0]">Other - unlisted</td>
<td style="text-align: right; width: 225.455px;" data-sheets-value='{"1":3,"3":0.13198779914059305}' data-sheets-numberformat='[null,3,"0.00%",1]' data-sheets-formula="=R[11]C[2]/R28C[0]">13.20%</td>
<td style="text-align: right; width: 227.273px;" data-sheets-value='{"1":3,"3":0.09819695302694514}' data-sheets-numberformat='[null,3,"0.00%",1]' data-sheets-formula="=R[11]C[1]/R23C[-1]">9.82%</td>
</tr>
<tr>
<td style="width: 229.091px;" data-sheets-value='{"1":2,"2":"Operation"}' data-sheets-formula="=NAV!R[25]C[0]"><strong>Operation</strong></td>
<td style="text-align: right; width: 225.455px;" data-sheets-value='{"1":3,"3":0.25619334319140497}' data-sheets-numberformat='[null,3,"0.00%",1]' data-sheets-formula="=R[25]C[2]/R28C[0]"><strong>25.62%</strong></td>
<td style="text-align: right; width: 227.273px;" data-sheets-value='{"1":3,"3":0.19060402439459445}' data-sheets-numberformat='[null,3,"0.00%",1]' data-sheets-formula="=R[25]C[1]/R23C[-1]"><strong>19.06%</strong></td>
</tr>
<tr>
<td style="width: 229.091px;" data-sheets-value='{"1":2,"2":"Holdco net cash/debt (de-consolidated)"}' data-sheets-formula="=NAV!R[25]C[0]">Holdco net cash/debt (de-consolidated)</td>
<td style="text-align: right; width: 225.455px;" data-sheets-value='{"1":3,"3":-0.2705439344996471}' data-sheets-numberformat='[null,3,"0.00%",1]' data-sheets-formula="=R[25]C[2]/R28C[0]">-27.05%</td>
<td style="text-align: right; width: 227.273px;" data-sheets-value='{"1":2,"2":"-"}' data-sheets-numberformat='[null,3,"0.00%",1]'>-</td>
</tr>
<tr>
<td style="width: 229.091px;" data-sheets-value='{"1":2,"2":"Value of pref shares"}' data-sheets-formula="=NAV!R[-14]C[0]">Value of pref shares</td>
<td style="text-align: right; width: 225.455px;" data-sheets-value='{"1":3,"3":-0.07356904530305353}' data-sheets-numberformat='[null,3,"0.00%",1]' data-sheets-formula="=-R[-14]C[0]/R28C[0]">-7.36%</td>
<td style="text-align: right; width: 227.273px;" data-sheets-value='{"1":2,"2":"-"}' data-sheets-numberformat='[null,3,"0.00%",1]'>-</td>
</tr>
<tr><td colspan="3" style="width: 723.636px;">Source: DART &amp; KRX</td></tr>
</tbody>
</table><p>Doosan Corp controls 41.95% of Doosan Heavy Industries, translating into a ₩3.85T market value.</p><table class="table table-striped">
<colgroup>
<col width="100">
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<col width="100">
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<tbody>
<tr>
<td style="width: 242.727px;" data-sheets-value='{"1":2,"2":"Holdings"}'>Holdings</td>
<td style="text-align: right; width: 148.182px;" data-sheets-value='{"1":2,"2":"Ticker"}'>Ticker</td>
<td style="text-align: right; width: 122.727px;" data-sheets-value='{"1":2,"2":"Stake"}'>Stake</td>
<td style="text-align: right; width: 147.273px;" data-sheets-value='{"1":2,"2":"Value"}'>Value</td>
</tr>
<tr>
<td style="width: 242.727px;" data-sheets-value='{"1":2,"2":"Doosan Heavy Industries Constrctn Co Ltd"}' data-sheets-formula="=NAV!R[10]C[0]"><strong>Doosan Heavy Industries Constrctn Co Ltd</strong></td>
<td style="text-align: right; width: 148.182px;" data-sheets-value='{"1":2,"2":"034020"}' data-sheets-numberformat='[null,2,"#,##0",1]' data-sheets-formula="=NAV!R[10]C[0]"><strong>034020</strong></td>
<td style="text-align: right; width: 122.727px;" data-sheets-value='{"1":3,"3":0.41950000000000004}' data-sheets-numberformat='[null,3,"0.00%",1]' data-sheets-formula="=NAV!R[10]C[0]"><strong>41.95%</strong></td>
<td style="text-align: right; width: 147.273px;" data-sheets-value='{"1":3,"3":3854.7747096210005}' data-sheets-numberformat='[null,2,"₩#,##0.0B"]' data-sheets-formula="=NAV!R[10]C[0]"><strong>₩3,854.8B</strong></td>
</tr>
<tr>
<td style="width: 242.727px;" data-sheets-value='{"1":2,"2":"Oricom Inc"}' data-sheets-formula="=NAV!R[10]C[0]">Oricom Inc</td>
<td style="text-align: right; width: 148.182px;" data-sheets-value='{"1":2,"2":"010470"}' data-sheets-numberformat='[null,2,"#,##0",1]' data-sheets-formula="=NAV!R[10]C[0]">010470</td>
<td style="text-align: right; width: 122.727px;" data-sheets-value='{"1":3,"3":0.6154999999999999}' data-sheets-numberformat='[null,3,"0.00%",1]' data-sheets-formula="=NAV!R[10]C[0]">61.55%</td>
<td style="text-align: right; width: 147.273px;" data-sheets-value='{"1":3,"3":49.50336598724999}' data-sheets-numberformat='[null,2,"₩#,##0.0B"]' data-sheets-formula="=NAV!R[10]C[0]">₩49.5B</td>
</tr>
<tr>
<td style="width: 242.727px;" data-sheets-value='{"1":2,"2":"Infinitt Healthcare Co Ltd"}' data-sheets-formula="=NAV!R[10]C[0]">Infinitt Healthcare Co Ltd</td>
<td style="text-align: right; width: 148.182px;" data-sheets-value='{"1":2,"2":"071200"}' data-sheets-numberformat='[null,2,"#,##0",1]' data-sheets-formula="=NAV!R[10]C[0]">071200</td>
<td style="text-align: right; width: 122.727px;" data-sheets-value='{"1":3,"3":0.0006}' data-sheets-numberformat='[null,3,"0.00%",1]' data-sheets-formula="=NAV!R[10]C[0]">0.06%</td>
<td style="text-align: right; width: 147.273px;" data-sheets-value='{"1":3,"3":0.11827402838399999}' data-sheets-numberformat='[null,2,"₩#,##0.0B"]' data-sheets-formula="=NAV!R[10]C[0]">₩0.1B</td>
</tr>
<tr>
<td style="width: 242.727px;" data-sheets-value='{"1":2,"2":"Solus Advanced Materials 1P"}' data-sheets-formula="=NAV!R[10]C[0]">Solus Advanced Materials 1P</td>
<td style="text-align: right; width: 148.182px;" data-sheets-value='{"1":2,"2":"33637K"}' data-sheets-numberformat='[null,2,"#,##0",1]' data-sheets-formula="=NAV!R[10]C[0]">33637K</td>
<td style="text-align: right; width: 122.727px;" data-sheets-value='{"1":3,"3":0.028399999999999998}' data-sheets-numberformat='[null,3,"0.00%",1]' data-sheets-formula="=NAV!R[10]C[0]">2.84%</td>
<td style="text-align: right; width: 147.273px;" data-sheets-value='{"1":3,"3":123.01888}' data-sheets-numberformat='[null,2,"₩#,##0.0B"]' data-sheets-formula="=NAV!R[10]C[0]">₩123.0B</td>
</tr>
<tr>
<td style="width: 242.727px;" data-sheets-value='{"1":2,"2":"Other - unlisted"}' data-sheets-formula="=NAV!R[13]C[0]">Other - unlisted</td>
<td style="text-align: right; width: 148.182px;" data-sheets-value='{"1":2,"2":"-"}' data-sheets-numberformat='[null,2,"#,##0",1]'>-</td>
<td style="text-align: right; width: 122.727px;" data-sheets-value='{"1":2,"2":"-"}' data-sheets-numberformat='[null,3,"0.00%",1]' data-sheets-formula="=NAV!R[13]C[0]">-</td>
<td style="text-align: right; width: 147.273px;" data-sheets-value='{"1":3,"3":561.04}' data-sheets-numberformat='[null,2,"₩#,##0.0B"]' data-sheets-formula="=NAV!R[13]C[0]">₩561.0B</td>
</tr>
<tr><td colspan="4" style="width: 723.636px;" data-sheets-value='{"1":2,"2":"Source: KRX &amp; DART"}'>Source: KRX &amp; DART</td></tr>
</tbody>
</table>

Doosan Heavy Industries is up 15% today on the news that Korea and the US signed the business collaboration agreement for the SMR (Small Modular Reactor) cooperation. Doosan Heavy has been looking to export its SMRs to the US for a while.Doosan Heavy's price surge leads to an extreme diversion in the price ratio vs. Doosan Corp. It is currently 2.43% off the 180-day mean: Doosan Corp in the numerator and Doosan Heavy in the denominator. The pair is 31.51% below the 180-day high.





Doosan Corp vs. Doosan Heavy Industries

Current price ratio
3.90287


%Δ to 180-day mean
-2.43%


%Δ to 180-day high
-31.51%


%Δ to 180-day low
32.24%

Source: KRX

The current sigma on a 20-day moving average is -2.59, putting the duo back to where there were a month ago. 
Doosan Corp is basically a single-subsidiary holding company with a substantial presence of its own operating operation. But Doosan Heavy alone accounts for nearly 70% of the GAV, making them a suitable pair for a stub trade.







Assets
% of NAV
% of GAV


Doosan Heavy Industries Constrctn Co Ltd
91.52%
68.09%


Oricom Inc
1.17%
0.87%


Infinitt Healthcare Co Ltd
0.00%
0.00%


Solus Advanced Materials 1P
2.90%
2.16%


Other - unlisted
13.20%
9.82%


Operation
25.62%
19.06%


Holdco net cash/debt (de-consolidated)
-27.05%
-


Value of pref shares
-7.36%
-

Source: DART &amp; KRX

Doosan Corp controls 41.95% of Doosan Heavy Industries, translating into a ₩3.85T market value.








Holdings
Ticker
Stake
Value


Doosan Heavy Industries Constrctn Co Ltd
034020
41.95%
₩3,854.8B


Oricom Inc
010470
61.55%
₩49.5B


Infinitt Healthcare Co Ltd
071200
0.06%
₩0.1B


Solus Advanced Materials 1P
33637K
2.84%
₩123.0B


Other - unlisted
-
-
₩561.0B

Source: KRX &amp; DART



Doosan Stub: An Entry Point in This Extreme Diversion