Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Nearly 25 years of experience in analyzing hundreds of companies, especially in Asia. Deep expertise in the following sectors:
- Technology (E-commerce, SaaS, Internet)
- Consumer 
- Special Situations/Deep Value Plays
- Holdcos/Stubs
- Asian Unicorns/Private Companies

Korea/Asia, Events, IPOs

End of Mandatory Lock-Up Periods for 52 Stocks in Korea in December 2021

End of Mandatory Lock-Up Periods for 44 Stocks in Korea in February 2022

End of Mandatory Lock-Up Periods for 43 Stocks in Korea in March 2022

Korean Air + Asiana Airlines - Is This Becoming Another KEPCO?

A Big Potential Selling in Hanjin Kal Once Lock-Up Period Ends & The Collapse of Warrant Price

Closing the Gap: Korean Holdcos Vs. Opcos

Gravity Works As WeWork Doesn't; Now Plan B

Equity Bottom-Up

It has been reported in the past few days that <a href="https://finance.naver.com/item/news_read.nhn?article_id=0000715983&amp;office_id=366&amp;code=180640&amp;sm=title_entity_id.basic" target="_blank" rel="noopener">Cho Hyun-Ah</a> sold 12 billion won worth ($1.1 million) of <a href="https://www.smartkarma.com/entities/hanjin-kal-corp" target="_blank" data-smartkarma-citation="entities:19086:1" rel="noopener">Hanjin KAL Corp (180640 KS)</a> shares in 2021. It appears that one of the reasons why she may have sold these shares was to pay for the inheritance tax of the late Hanjin Group Chairman Cho Yang-Ho. Cho Hyun-Ah needs to pay a total of nearly 60 billion won in inheritance taxes, broken down into 12 billion won payment per year.Although Korean Air has been infused with new, fresh capital, it is not all certain whether the company will best use the resources in the best ways possible. In other words, she may be waiting for her brother to make another mistake in managing the company. If one or two years later if enough shareholders decide that Cho Won-Tae and his assigned managers are not acting in the best interest of the shareholders, then his sister Cho Hyun-Ah may be waiting for an another shareholders battle against his brother. All in all, from a pair-trade perspective, the short term momentum is on the side of long Hanjin Kal and short Korean Air, which has worked so far since the end of the ban on many Korean stocks starting May 3. Given the huge price disparity between these two stocks in the past year, we think that this could be a nice trade as many investors look to close the gap on the two prices which have diverged greatly in the past year.

It has been reported in the past few days that Cho Hyun-Ah sold 12 billion won worth ($1.1 million) of Hanjin KAL Corp (180640 KS) shares in 2021. It appears that one of the reasons why she may have sold these shares was to pay for the inheritance tax of the late Hanjin Group Chairman Cho Yang-Ho. Cho Hyun-Ah needs to pay a total of nearly 60 billion won in inheritance taxes, broken down into 12 billion won payment per year.Although Korean Air has been infused with new, fresh capital, it is not all certain whether the company will best use the resources in the best ways possible. In other words, she may be waiting for her brother to make another mistake in managing the company. If one or two years later if enough shareholders decide that Cho Won-Tae and his assigned managers are not acting in the best interest of the shareholders, then his sister Cho Hyun-Ah may be waiting for an another shareholders battle against his brother. All in all, from a pair-trade perspective, the short term momentum is on the side of long Hanjin Kal and short Korean Air, which has worked so far since the end of the ban on many Korean stocks starting May 3. Given the huge price disparity between these two stocks in the past year, we think that this could be a nice trade as many investors look to close the gap on the two prices which have diverged greatly in the past year.

Hanjin Kal: Why Is Cho Hyun-Ah Selling A Partial Stake?

Korean Air Lines

Hanjin Kal: Why Is Cho Hyun-Ah Selling A Partial Stake?