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

Hankook TG Stock-Swap Merger with AtlasBX: A Likely Improvement in Holdco Discount

Hankook Tire Stub Trade: Sub Clearly Oversold Relative to Holdco on Hanon Takeover

Hankook Tire Stub: Price Ratio Nearing 1Y Low, Ripe for Stub Trade

Hankook Technology Group:  Chairman's 2nd Son Takes Over But It Is Not Over Yet!

Event-Driven

Hankook Tech Group is currently at a -2.6σ on a 20D MA, the widest in a long time.The price ratio is -10% from the 120D mean and now down almost in line with the 2-yr mean.





% of sigma

Today
-258.23%


T-1
-137.67%


T-2
73.60%


T-3
24.81%


T-4
6.13%


T-5
-34.48%

Source: KRX








Price ratio

Today
0.44118
-


20D MA
0.47580
-


σ
0.01341
-


+1 σ
0.48921
-


-1 σ
0.46239
-


120D mean
0.49160
-10.26%


120D median
0.49204
-10.34%


120D high
0.56522
-21.95%


120D low
0.39822
10.79%


1Y mean
0.46713
-5.56%


1Y median
0.46230
-4.57%


1Y high
0.56522
-21.95%


1Y low
0.39822
10.79%


2Y mean
0.45410
-2.85%


2Y median
0.45524
-3.09%


2Y high
0.56522
-21.95%


2Y low
0.36667
20.32%

Source: KRX

We can safely say that it is a single-sub holding company. Hankook Tire (161390) is nearly 90% of the subsidiary stakes.The NAV discount now sits at 40%, a level widely accepted as the average for the local holding companies.








Assets
% NAV
% GAV
% Holdings


Hankook Tire &amp; Technology Co Ltd
55.90%
60.55%
87.53%


Hankook AtlasBX Co Ltd
6.47%
7.01%
10.13%


Macquarie Korea Infrastructure Fund
0.26%
0.28%
0.40%


LB Semicon Co Ltd
0.10%
0.11%
0.15%


HK Automotive
0.76%
0.82%
1.19%


emFrontier
0.38%
0.42%
0.60%


Brand royalty
17.60%
19.07%
-


Real-estate
10.86%
11.76%
-


Holdco net cash/debt (de-consolidated)
7.67%
-
-


Value of pref shares
0.00%
-
-

Source: DART &amp; KRX







NAV (₩B)

Value of listed holdings
1,488.7


- % of holding company market cap
101.61%


Value of unlisted holdings
27.1


Stub value
-50.7


Stub value per share
-₩545


Value of operating assets
675.4


GAV
2,191.2


GAV per share
₩23,896


Discount to GAV (excl. treasury shares)
34.09%


Holdco net cash/debt (de-consolidated)
182.0


Value of pref shares
0.0


NAV
2,373.2


NAV per share (excl. treasury shares)
₩25,881


Discount to NAV
39.14%

Source: KRX &amp; DART



Hankook Tire Stub At -2.6σ with a 40% NAV Disc. Reversion Should Follow Here

Hankook & Company

Hankook Tire Stub At -2.6σ with a 40% NAV Disc. Reversion Should Follow Here