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

Korea Preferred Shares Disparity & Sigma, Feat. Samsung Electronics 1P & CJ Corp 4PB

Earnings Surprise KOSPI Stocks Potentially Hedging Against Inflation for Basket & Pairs Trades

Korea Share Class Pair Trade: Assessing 3 Large Cap Prefs Below -1σ

Samsung Special Dividend & 1P Rally Revival

Samsung 1P Discount Should Go South, Probably as Far South as Historic Low

Samsung Inheritance Tax Event: Why Market Being Bearish on Samsung Electronics?

Clepsydra Capital

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

Event-Driven

Samsung Electronics Pref Shares / Event-Driven

Samsung Electronics Pref Shares (005935 KS)

We saw a series of filings by Samsung affiliates on the major shareholder stake changes due to the inheritance.<div class="content-highlight">
Here are the links to the regulatory filings at DART of the three companies:
<ul>
<li><a href="http://dart.fss.or.kr/dsaf001/main.do?rcpNo=20210430800706%20http://dart.fss.or.kr/dsaf001/main.do?rcpNo=20210430800576%20http://dart.fss.or.kr/dsaf001/main.do?rcpNo=20210430800687" target="_blank" rel="noopener">Samsung Electronics</a></li>
<li><a href="http://dart.fss.or.kr/dsaf001/main.do?rcpNo=20210430800706%20http://dart.fss.or.kr/dsaf001/main.do?rcpNo=20210430800576%20http://dart.fss.or.kr/dsaf001/main.do?rcpNo=20210430800687" target="_blank" rel="noopener">Samsung C&amp;T</a></li>
<li><a href="http://dart.fss.or.kr/dsaf001/main.do?rcpNo=20210430800687" target="_blank" rel="noopener">Samsung Life Insurance</a></li>
</ul>
</div>Samsung said that the late chairman Lee Kun-hee didn't leave any will. So, the inheritance went at a 1/3 (spouse) to 2/3/N (each child) ratio, except for Samsung Life Insurance under the family members' mutual consent.As for Samsung Life Insurance, the mother, Hong Ra-hee, gave up on her share. Instead, Lee Jae-yong got 1/2, and Lee Bu-jin (elder daughter) received 2/3/2. The youngest one, Lee Seo-hyun, took 1/3/2.<table class="table table-striped">
<colgroup>
<col width="219">
<col width="100">
<col width="100">
<col width="100">
</colgroup>
<tbody>
<tr>
<td style="width: 388px;" data-sheets-value='{"1":2,"2":"Samsung Electronics Co Ltd"}' data-sheets-formula='=googlefinance(R[0]C[1], "name")'>Samsung Electronics Co Ltd</td>
<td style="text-align: right; width: 178px;" data-sheets-value='{"1":2,"2":"%"}'>Before</td>
<td style="text-align: right; width: 178px;" data-sheets-value='{"1":2,"2":"%"}'>After</td>
</tr>
<tr>
<td style="width: 388px;" data-sheets-value='{"1":2,"2":"Hong Ra-hee"}'>Hong Ra-hee</td>
<td style="text-align: right; width: 178px;" data-sheets-value='{"1":3,"3":0.009071285184415972}' data-sheets-numberformat='[null,3,"0.00%",1]' data-sheets-formula='=R[0]C[2]/googlefinance(R7C[-1], "shares")'>0.91%</td>
<td style="text-align: right; width: 178px;" data-sheets-value='{"1":3,"3":0.023}' data-sheets-numberformat='[null,3,"0.00%",1]'>2.30%</td>
</tr>
<tr>
<td style="width: 388px;" data-sheets-value='{"1":2,"2":"Lee Jae-yong"}'>Lee Jae-yong</td>
<td style="text-align: right; width: 178px;" data-sheets-value='{"1":3,"3":0.007038807468791305}' data-sheets-numberformat='[null,3,"0.00%",1]' data-sheets-formula='=R[0]C[2]/googlefinance(R7C[-1], "shares")'>0.70%</td>
<td style="text-align: right; width: 178px;" data-sheets-value='{"1":3,"3":0.0163}' data-sheets-numberformat='[null,3,"0.00%",1]'>1.63%</td>
</tr>
<tr>
<td style="width: 388px;" data-sheets-value='{"1":2,"2":"Lee Bu-jin"}'>Lee Bu-jin</td>
<td style="text-align: right; width: 178px;" data-sheets-value='{"1":3,"3":0}' data-sheets-numberformat='[null,3,"0.00%",1]' data-sheets-formula='=R[0]C[2]/googlefinance(R7C[-1], "shares")'>0.00%</td>
<td style="text-align: right; width: 178px;" data-sheets-value='{"1":3,"3":0.0093}' data-sheets-numberformat='[null,3,"0.00%",1]'>0.93%</td>
</tr>
<tr>
<td style="width: 388px;" data-sheets-value='{"1":2,"2":"Lee Seo-hyun"}'>Lee Seo-hyun</td>
<td style="text-align: right; width: 178px;" data-sheets-value='{"1":3,"3":0}' data-sheets-numberformat='[null,3,"0.00%",1]' data-sheets-formula='=R[0]C[2]/googlefinance(R7C[-1], "shares")'>0.00%</td>
<td style="text-align: right; width: 178px;" data-sheets-value='{"1":3,"3":0.0093}' data-sheets-numberformat='[null,3,"0.00%",1]'>0.93%</td>
</tr>
<tr><td colspan="3" style="width: 744px;" data-sheets-value='{"1":2,"2":"Source: DART"}'>Source: DART</td></tr>
</tbody>
</table><table class="table table-striped">
<colgroup>
<col width="219">
<col width="100">
<col width="100">
<col width="100">
</colgroup>
<tbody>
<tr>
<td style="width: 388px;" data-sheets-value='{"1":2,"2":"Samsung C&amp;T Corp"}' data-sheets-formula='=googlefinance(R[0]C[1], "name")'>Samsung C&amp;T Corp</td>
<td style="text-align: right; width: 178px;" data-sheets-value='{"1":2,"2":"%"}'>Before</td>
<td style="text-align: right; width: 178px;" data-sheets-value='{"1":2,"2":"%"}'>After</td>
</tr>
<tr>
<td style="width: 388px;" data-sheets-value='{"1":2,"2":"Hong Ra-hee"}'>Hong Ra-hee</td>
<td style="text-align: right; width: 178px;" data-sheets-value='{"1":3,"3":0}' data-sheets-numberformat='[null,3,"0.00%",1]'>0.00%</td>
<td style="text-align: right; width: 178px;" data-sheets-value='{"1":3,"3":0.009677378395139042}' data-sheets-numberformat='[null,3,"0.00%",1]'>0.97%</td>
</tr>
<tr>
<td style="width: 388px;" data-sheets-value='{"1":2,"2":"Lee Jae-yong"}'>Lee Jae-yong</td>
<td style="text-align: right; width: 178px;" data-sheets-value='{"1":3,"3":0.17483552006465336}' data-sheets-numberformat='[null,3,"0.00%",1]'>17.48%</td>
<td style="text-align: right; width: 178px;" data-sheets-value='{"1":3,"3":0.18128711636306202}' data-sheets-numberformat='[null,3,"0.00%",1]'>18.13%</td>
</tr>
<tr>
<td style="width: 388px;" data-sheets-value='{"1":2,"2":"Lee Bu-jin"}'>Lee Bu-jin</td>
<td style="text-align: right; width: 178px;" data-sheets-value='{"1":3,"3":0.05595063042372629}' data-sheets-numberformat='[null,3,"0.00%",1]'>5.60%</td>
<td style="text-align: right; width: 178px;" data-sheets-value='{"1":3,"3":0.06240221602048565}' data-sheets-numberformat='[null,3,"0.00%",1]'>6.24%</td>
</tr>
<tr>
<td style="width: 388px;" data-sheets-value='{"1":2,"2":"Lee Seo-hyun"}'>Lee Seo-hyun</td>
<td style="text-align: right; width: 178px;" data-sheets-value='{"1":3,"3":0.05595063042372629}' data-sheets-numberformat='[null,3,"0.00%",1]'>5.60%</td>
<td style="text-align: right; width: 178px;" data-sheets-value='{"1":3,"3":0.06240221602048565}' data-sheets-numberformat='[null,3,"0.00%",1]'>6.24%</td>
</tr>
<tr><td colspan="3" style="width: 744px;" data-sheets-value='{"1":2,"2":"Source: DART"}'>Source: DART</td></tr>
</tbody>
</table><table class="table table-striped">
<colgroup>
<col width="219">
<col width="100">
<col width="100">
<col width="100">
</colgroup>
<tbody>
<tr>
<td style="width: 388px;" data-sheets-value='{"1":2,"2":"Samsung Life Insurance co., Ltd"}' data-sheets-formula='=googlefinance(R[0]C[1], "name")'>Samsung Life Insurance co., Ltd</td>
<td style="text-align: right; width: 178px;" data-sheets-value='{"1":2,"2":"%"}'>Before</td>
<td style="text-align: right; width: 178px;" data-sheets-value='{"1":2,"2":"%"}'>After</td>
</tr>
<tr>
<td style="width: 388px;" data-sheets-value='{"1":2,"2":"Lee Jae-yong"}'>Lee Jae-yong</td>
<td style="text-align: right; width: 178px;" data-sheets-value='{"1":3,"3":0.0006}' data-sheets-numberformat='[null,3,"0.00%",1]'>0.06%</td>
<td style="text-align: right; width: 178px;" data-sheets-value='{"1":3,"3":0.1044}' data-sheets-numberformat='[null,3,"0.00%",1]'>10.44%</td>
</tr>
<tr>
<td style="width: 388px;" data-sheets-value='{"1":2,"2":"Lee Bu-jin"}'>Lee Bu-jin</td>
<td style="text-align: right; width: 178px;" data-sheets-value='{"1":3,"3":0}' data-sheets-numberformat='[null,3,"0.00%",1]'>0.00%</td>
<td style="text-align: right; width: 178px;" data-sheets-value='{"1":3,"3":0.0692}' data-sheets-numberformat='[null,3,"0.00%",1]'>6.92%</td>
</tr>
<tr>
<td style="width: 388px;" data-sheets-value='{"1":2,"2":"Lee Seo-hyun"}'>Lee Seo-hyun</td>
<td style="text-align: right; width: 178px;" data-sheets-value='{"1":3,"3":0}' data-sheets-numberformat='[null,3,"0.00%",1]'>0.00%</td>
<td style="text-align: right; width: 178px;" data-sheets-value='{"1":3,"3":0.0346}' data-sheets-numberformat='[null,3,"0.00%",1]'>3.46%</td>
</tr>
<tr><td colspan="3" style="width: 744px;" data-sheets-value='{"1":2,"2":"Source: DART"}'>Source: DART</td></tr>
</tbody>
</table>As a result, we can safely say that the entire Samsung Group is under Lee Jae-yong's firm control.<ul>
<li>He single-handedly controls 18.13% of Samsung C&amp;T, the de facto holding company.</li>
<li>He then owns 29.28% of Samsung Life Insurance, including C&amp;T's 19.34% stake in Life.</li>
<li>Lastly, he governs Samsung Electronics with a 15.15% stake, including Life's 8.51% and C&amp;T's 5.01%.</li>
</ul><table class="table table-striped">
<colgroup>
<col width="100">
<col width="100">
</colgroup>
<tbody>
<tr><td colspan="2" data-sheets-value='{"1":2,"2":"Lee Jae-yong"}' data-sheets-formula="=R[-22]C[0]">Lee Jae-yong's controlling stake</td></tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Samsung C&amp;T Corp"}' data-sheets-formula="=R[-9]C[0]">Samsung C&amp;T Corp</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0.18128711636306202}' data-sheets-numberformat='[null,3,"0.00%",1]' data-sheets-formula="=R[-6]C[2]">18.13%</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Samsung Life Insurance co., Ltd"}' data-sheets-formula="=R[-19]C[0]">Samsung Life Insurance co., Ltd</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0.2978}' data-sheets-numberformat='[null,3,"0.00%",1]' data-sheets-formula="=R[-15]C[2]+R[-18]C[2]">29.78%</td>
</tr>
<tr>
<td> - Including the stake owned by Samsung C&amp;T</td>
<td style="text-align: right;">19.34%</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Samsung Electronics Co Ltd"}' data-sheets-formula="=R[-31]C[0]">Samsung Electronics Co Ltd</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0.15147665697890453}' data-sheets-numberformat='[null,3,"0.00%",1]' data-sheets-formula="=R[-25]C[2]+R[-29]C[2]+R[-30]C[2]">15.15%</td>
</tr>
<tr>
<td> - Including the stake owned by Samsung C&amp;T</td>
<td style="text-align: right;">8.51%</td>
</tr>
<tr>
<td> - Including the stake owned by Samsung Life Insurance</td>
<td style="text-align: right;">5.01%</td>
</tr>
<tr><td colspan="2" data-sheets-value='{"1":2,"2":"Source: DART"}'>Source: DART</td></tr>
</tbody>
</table>

We saw a series of filings by Samsung affiliates on the major shareholder stake changes due to the inheritance.
Here are the links to the regulatory filings at DART of the three companies:

Samsung Electronics
Samsung C&amp;T
Samsung Life Insurance

Samsung said that the late chairman Lee Kun-hee didn't leave any will. So, the inheritance went at a 1/3 (spouse) to 2/3/N (each child) ratio, except for Samsung Life Insurance under the family members' mutual consent.As for Samsung Life Insurance, the mother, Hong Ra-hee, gave up on her share. Instead, Lee Jae-yong got 1/2, and Lee Bu-jin (elder daughter) received 2/3/2. The youngest one, Lee Seo-hyun, took 1/3/2.








Samsung Electronics Co Ltd
Before
After


Hong Ra-hee
0.91%
2.30%


Lee Jae-yong
0.70%
1.63%


Lee Bu-jin
0.00%
0.93%


Lee Seo-hyun
0.00%
0.93%

Source: DART










Samsung C&amp;T Corp
Before
After


Hong Ra-hee
0.00%
0.97%


Lee Jae-yong
17.48%
18.13%


Lee Bu-jin
5.60%
6.24%


Lee Seo-hyun
5.60%
6.24%

Source: DART










Samsung Life Insurance co., Ltd
Before
After


Lee Jae-yong
0.06%
10.44%


Lee Bu-jin
0.00%
6.92%


Lee Seo-hyun
0.00%
3.46%

Source: DART

As a result, we can safely say that the entire Samsung Group is under Lee Jae-yong's firm control.
He single-handedly controls 18.13% of Samsung C&amp;T, the de facto holding company.
He then owns 29.28% of Samsung Life Insurance, including C&amp;T's 19.34% stake in Life.
Lastly, he governs Samsung Electronics with a 15.15% stake, including Life's 8.51% and C&amp;T's 5.01%.






Lee Jae-yong's controlling stake

Samsung C&amp;T Corp
18.13%


Samsung Life Insurance co., Ltd
29.78%


 - Including the stake owned by Samsung C&amp;T
19.34%


Samsung Electronics Co Ltd
15.15%


 - Including the stake owned by Samsung C&amp;T
8.51%


 - Including the stake owned by Samsung Life Insurance
5.01%

Source: DART



Samsung Family Stake Change Filings: Ramifications for SamE 1P Discount