STX PO / STX OSV

STX PO / STX OSV: shares of STX entities fell 5-11% Friday, with STX PO shares limit down intraday in Korea before closing -10%, and STX OSV shares closing at intraday low of -9.3%, hugely underperforming the KOSPI (+1.8%) and STI (+0.7%).
The heavy sell-down of STX-related shares was triggered by speculation that surfaced in the morning that STX Group may be planning to sell shares and bonds (reportedly up to KRW 1.3tr, or US$1.1n in value) as it may be short of funds. Citi’s check with STX PO suggests the speculation arose due to miscommunication between parties unrelated to STX, where one of the STX entities requested proposals on bond re-financing, but the amount in question was blown out of proportion by third parties. Market concern about the shortage of funds then began to spread to the equity market.

Citi believes the STX Group is not short of fund. Notes the STX Group continues to have access to the corporate bond mkt at reasonable rates, and that its bond re-financing and capex needs can be adequately met. Says the unfounded speculation may subside in the following trading days, which may drive a near-term share price bounce for STX PO.
Fundamentally, Citi has a Neutral rating on STX PO with TP KRW 8300 (~S$7.39).

This morning in Korea,
STX Corp (011810 KS) is up 2.7% at KRW 13,450,
STX Engine (077970 KS) is up 2.5% at KRW 18.850,
STX Metal (071970 KS ) is up 2.7% at KRW 6,530
STX Offshore & Shipbuilding (067250 KS) is up 3.9% at KRW 14.800
STX PO (028670 KS ) is up 6.2% at KRW 7,050 (~S$7.84)

SGD 1 = KRW 899