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

Sanghyun Park

Korea / Special Sits, Pairs, Index Rebalancing

Clepsydra Capital

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

Event-Driven

<h2>Share buyback</h2><p>LG U+ announced a well-anticipated share buyback. Well, the announcement was made earlier than initially expected. Also, the size is much smaller than ₩300B that the local street anticipated.</p><p>It is a ₩100.0B buyback, representing 1.49% of the total shares at the last closing price and 1.35% of the total equity.</p><table class="table table-striped">
<colgroup>
<col width="300">
<col width="300">
</colgroup>
<tbody>
<tr><td colspan="2" data-sheets-value='{"1":2,"2":"Overview (₩B)"}'>Buyback overview</td></tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Shares outstanding"}'>Shares outstanding</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":436611361}' data-sheets-numberformat='{"1":2,"2":"#,##0"}' data-sheets-formula="=sum(R[1]C[0]:R[2]C[0])">436,611,361</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Treasury shares"}'>Treasury shares</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":3}' data-sheets-numberformat='{"1":2,"2":"#,##0"}' data-sheets-formula="=sum(R[1]C[0]:R[2]C[0])">3</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Target qty."}'><strong>Target qty.</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":6493506.493506493}' data-sheets-numberformat='{"1":2,"2":"#,##0"}' data-sheets-formula="=R[2]C[0]"><strong>6,493,506</strong></td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":" - % of SO"}'><strong>- % of SO</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0.014872509223383432}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}' data-sheets-formula="=R[-1]C[0]/R[-7]C[0]"><strong>1.49%</strong></td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Treasury shares after buyback"}'>Treasury shares after buyback</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":6493509.493506493}' data-sheets-numberformat='{"1":2,"2":"#,##0"}' data-sheets-formula="=R[-11]C[0]+R[-8]C[0]">6,493,509</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":" - % of SO"}'>- % of SO</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0.014872516094482693}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}' data-sheets-formula="=R[-1]C[0]/R[-15]C[0]">1.49%</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Total value"}'>Total value</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":100}' data-sheets-numberformat='{"1":2,"2":"₩#,##0.0B"}' data-sheets-formula="=sum(R[1]C[0]:R[2]C[0])">₩100.0B</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Equity"}'>Equity</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":7418.124854889}' data-sheets-numberformat='{"1":2,"2":"₩#,##0.0B"}'>₩7,418.1B</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":" - % of equity"}'>- % of equity</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0.013480495671907417}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}' data-sheets-formula="=R[-6]C[0]/R[-1]C[0]">1.35%</td>
</tr>
<tr><td colspan="2" data-sheets-value='{"1":2,"2":"Source: DART"}'>Source: DART</td></tr>
</tbody>
</table><h2>Daily buyback impact</h2><p>The buyback is a year. Well, the usual period for a buyback in Korea is 3 months. But we see more and more companies do a year-long buyback of late.</p><p>The buyback begins tomorrow and runs for a year until June 8 next year. We have a daily equal-weighted buyback of 25,871 shares, representing a measly 0.89% of the 30-day average daily trade volume.</p><table class="table table-striped">
<colgroup>
<col width="300">
<col width="300">
</colgroup>
<tbody>
<tr><td colspan="2" style="width: 726.008px;" data-sheets-value='{"1":2,"2":"Execution"}'>Execution</td></tr>
<tr>
<td style="width: 352.5px;" data-sheets-value='{"1":2,"2":"Buyback begins"}'><strong>Buyback begins</strong></td>
<td style="text-align: right; width: 352.514px;" data-sheets-value='{"1":3,"3":44356}' data-sheets-numberformat='{"1":5,"2":"yyyy. m. d","3":1}'><strong>2021. 6. 9</strong></td>
</tr>
<tr>
<td style="width: 352.5px;" data-sheets-value='{"1":2,"2":"Buyback ends"}'><strong>Buyback ends</strong></td>
<td style="text-align: right; width: 352.514px;" data-sheets-value='{"1":3,"3":44720}' data-sheets-numberformat='{"1":5,"2":"yyyy. m. d","3":1}'><strong>2022. 6. 8</strong></td>
</tr>
<tr>
<td style="width: 352.5px;" data-sheets-value='{"1":2,"2":"Banker"}'>Banker</td>
<td style="text-align: right; width: 352.514px;" data-sheets-value='{"1":2,"2":"KB Securities Co., Ltd."}' data-sheets-numberformat='{"1":2,"2":"#,##0"}'>KB Securities Co., Ltd.</td>
</tr>
<tr>
<td style="width: 352.5px;" data-sheets-value='{"1":2,"2":"Method"}'>Method</td>
<td style="text-align: right; width: 352.514px;" data-sheets-value='{"1":2,"2":"Openly in the market (no off-hours block trade)"}'>Openly in the market (no off-hours block trade)</td>
</tr>
<tr>
<td style="width: 352.5px;" data-sheets-value='{"1":2,"2":"Number of trading days"}'>Number of trading days</td>
<td style="text-align: right; width: 352.514px;" data-sheets-numberformat='{"1":2,"2":"#,##0"}'>251</td>
</tr>
<tr>
<td style="width: 352.5px;" data-sheets-value='{"1":2,"2":"Daily equal-weighted buyback qty."}'><strong>Daily equal-weighted buyback qty.</strong></td>
<td style="text-align: right; width: 352.514px;" data-sheets-value='{"1":3,"3":25870.54379883065}' data-sheets-numberformat='{"1":2,"2":"#,##0"}' data-sheets-formula="=R[-35]C[0]/251"><strong>25,871</strong></td>
</tr>
<tr>
<td style="width: 352.5px;" data-sheets-value='{"1":2,"2":" - % of 1-month average daily trade volume"}'><strong>- % of 30-day average daily trade volume</strong></td>
<td style="text-align: right; width: 352.514px;" data-sheets-value='{"1":3,"3":0.008940932608776117}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}' data-sheets-formula='=R[-1]C[0]/googlefinance(R[-43]C[0], "volumeavg")'><strong>0.89%</strong></td>
</tr>
<tr><td colspan="2" style="width: 726.008px;" data-sheets-value='{"1":2,"2":"Source: DART &amp; Google Finance"}'>Source: DART &amp; Google Finance</td></tr>
</tbody>
</table>

Share buybackLG U+ announced a well-anticipated share buyback. Well, the announcement was made earlier than initially expected. Also, the size is much smaller than ₩300B that the local street anticipated.It is a ₩100.0B buyback, representing 1.49% of the total shares at the last closing price and 1.35% of the total equity.





Buyback overview

Shares outstanding
436,611,361


Treasury shares
3


Target qty.
6,493,506


- % of SO
1.49%


Treasury shares after buyback
6,493,509


- % of SO
1.49%


Total value
₩100.0B


Equity
₩7,418.1B


- % of equity
1.35%

Source: DART

Daily buyback impactThe buyback is a year. Well, the usual period for a buyback in Korea is 3 months. But we see more and more companies do a year-long buyback of late.The buyback begins tomorrow and runs for a year until June 8 next year. We have a daily equal-weighted buyback of 25,871 shares, representing a measly 0.89% of the 30-day average daily trade volume.





Execution

Buyback begins
2021. 6. 9


Buyback ends
2022. 6. 8


Banker
KB Securities Co., Ltd.


Method
Openly in the market (no off-hours block trade)


Number of trading days
251


Daily equal-weighted buyback qty.
25,871


- % of 30-day average daily trade volume
0.89%

Source: DART &amp; Google Finance



LG U+ Buyback Announcement: Details & Impacts

Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

<p>After the market close today (8 June), <a href="https://www.smartkarma.com/entities/lg-uplus-corp" target="_blank" data-smartkarma-citation="entities:1113:1" rel="noopener">LG Uplus Corp (032640 KS)</a> announced that it will complete share buyback worth 100 billion won as well the start of interim dividends starting this year. LG Uplus currently has a market cap of 6.7 trillion won so this buyback would be worth 1.5% of outstanding shares. The start of the 100 billion won worth of share buyback program starts on 9 June 2021 and ends on 8 June 2022.</p><p>There have been some rumors in the local media (previous to today's announcement) that there could be a buyback worth nearly 300 billion won. So today's announcement of 100 billion won in share buyback would be only about 1/3 of the amount mentioned in recent local media. With regards to share buyback, LG Uplus follows SK Telecom and KT Corp that have both announced share buyback programs in the past year. </p><div class="content-highlight">
<h2><strong>Conclusion:</strong></h2>
<p>LG Uplus' announcement to buyback 100 billion won worth of shares should have slightly positive impact on its share price. Its decision to make dividend payments bi-annually is also a step in the right direction. In the near term, there is an increasing probability that LG Uplus partners with Disney to provide Disney Plus OTT services in Korea. </p>
<p>Over a longer-term, there has definitely been a rotation from growth to value oriented stocks and sectors this year. The telcos have remained a key favorite and has been outperforming the market significantly. In the midst of these near-term and longer term catalysts and sector rotation, we have a positive view of LG Uplus. </p>
</div>

After the market close today (8 June), LG Uplus Corp (032640 KS) announced that it will complete share buyback worth 100 billion won as well the start of interim dividends starting this year. LG Uplus currently has a market cap of 6.7 trillion won so this buyback would be worth 1.5% of outstanding shares. The start of the 100 billion won worth of share buyback program starts on 9 June 2021 and ends on 8 June 2022.There have been some rumors in the local media (previous to today's announcement) that there could be a buyback worth nearly 300 billion won. So today's announcement of 100 billion won in share buyback would be only about 1/3 of the amount mentioned in recent local media. With regards to share buyback, LG Uplus follows SK Telecom and KT Corp that have both announced share buyback programs in the past year. 
Conclusion:
LG Uplus' announcement to buyback 100 billion won worth of shares should have slightly positive impact on its share price. Its decision to make dividend payments bi-annually is also a step in the right direction. In the near term, there is an increasing probability that LG Uplus partners with Disney to provide Disney Plus OTT services in Korea. 
Over a longer-term, there has definitely been a rotation from growth to value oriented stocks and sectors this year. The telcos have remained a key favorite and has been outperforming the market significantly. In the midst of these near-term and longer term catalysts and sector rotation, we have a positive view of LG Uplus. 


LG Uplus: A 100 Billion Won in Buyback, Bi-Annual Dividends, & A Potential Partnership with Disney

CEO, A. Stotz Investment Research

Dr. Andrew Stotz, CFA

Quantamental Investing to beat Benchmarks

A. Stotz Investment Research

We pick stocks. We construct portfolios. All our effort is focused on how to better pick stocks and construct portfolios. We serve fund management companies, family offices, and high net worth individuals.

Thematic (Sector/Industry)

<p>We highlight 14 stocks in Asia that look interesting to us based upon our FVMR Methodology. Our research team constantly reviews the Asian markets to try to find interesting ideas based on Fundamentals or Valuation or Momentum or Risk or some combination thereof.</p>

We highlight 14 stocks in Asia that look interesting to us based upon our FVMR Methodology. Our research team constantly reviews the Asian markets to try to find interesting ideas based on Fundamentals or Valuation or Momentum or Risk or some combination thereof.

Pan-Asia Index Rebalances/ Events/ Delta One, Periscope Analytics

Brian Freitas

Pan-Asia Index Rebalances/ Events/ Delta One

Quantitative Analysis

<p>Short selling has finally resumed in Korea and it has been a busy couple of days on that front with foreign investors piling into stocks that have run up more than their peers over the last year and are potentially overvalued.</p><p>Long/short pairs could be implemented in Korea during the short sell ban if you had long inventory or if there were listed single stock futures on the short leg.</p><p>With short selling permitted on constituents of the <a href="https://www.smartkarma.com/entities/korea-stock-exchange-kospi-200-index" target="_blank" data-smartkarma-citation="entities:26021:1" rel="noopener">Korea Stock Exchange Kospi 200 Index (KOSPI2 INDEX)</a>, we take a look at long/short pairs where both stocks are members of the index. These pairs belong to the same GICS sub-industry, are correlated and exhibit mean-reversion. We also use short sale data from the last couple of trading sessions to see which stocks are being targeted by short sellers.</p>

Short selling has finally resumed in Korea and it has been a busy couple of days on that front with foreign investors piling into stocks that have run up more than their peers over the last year and are potentially overvalued.Long/short pairs could be implemented in Korea during the short sell ban if you had long inventory or if there were listed single stock futures on the short leg.With short selling permitted on constituents of the Korea Stock Exchange Kospi 200 Index (KOSPI2 INDEX), we take a look at long/short pairs where both stocks are members of the index. These pairs belong to the same GICS sub-industry, are correlated and exhibit mean-reversion. We also use short sale data from the last couple of trading sessions to see which stocks are being targeted by short sellers.

Korea Pair Trades: High Risk/Reward Names with Short Sell Screen

<p>After the market close on 14 April, <a href="https://www.smartkarma.com/entities/sk-telecom-co-ltd-bbccd86c-474d-4a4d-946d-10e911a225a2" target="_blank" data-smartkarma-citation="entities:395:1" rel="noopener">SK Telecom (017670 KS)</a> finally announced its long awaited decision to create a new holding company for its non-telecom related subsidiaries. The market has been waiting for this decision in the past 5+ years. In the past several weeks, the CEO of SK Telecom has mentioned a very high likelihood of the company announcing a new holdco structure. </p>

After the market close on 14 April, SK Telecom (017670 KS) finally announced its long awaited decision to create a new holding company for its non-telecom related subsidiaries. The market has been waiting for this decision in the past 5+ years. In the past several weeks, the CEO of SK Telecom has mentioned a very high likelihood of the company announcing a new holdco structure. 

SK Telecom Officially Announces a Spin-Off to Create a Holding Company Structure

South Korea

KT Corporation provides telecommunication services including local, long distance, and international calling, satellite communication, data transmission, and wireless telephone services in South Korea.  The Company also offers network portal and high-speed Internet access services using asymmetric digital subscriber lines (ADSLs).

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KT Corp (030200 KS)

LG U+ Buyback Announcement: Details & Impacts

LG U+ finally announced a buyback. This post has the details and impacts of the buyback along with trading angles with the local peers.

Sanghyun Park

LG Uplus: A 100 Billion Won in Buyback, Bi-Annual Dividends, & A Potential Partnership with Disney

After the market close today (8 June), LG Uplus Corp (032640 KS) announced that it will complete share buyback worth 100 billion won as well the...

Douglas Kim

The Stocks to Own in Asia – Vol. 33

Since its inception, our FVMR Asia strategy has generated a before-fee total return of 95% versus the MSCI Asia ex Japan of 97%.

A. Stotz Investment Research

Korea Pair Trades: High Risk/Reward Names with Short Sell Screen

With the resumption of short selling in Korea, we highlight correlated pairs from the same GICS sub-industry that are near reversion points and...

Brian Freitas

SK Telecom Officially Announces a Spin-Off to Create a Holding Company Structure

After the market close on 14 April, SK Telecom (017670 KS) finally announced its long awaited decision to create a new holding company for its non...

Douglas Kim

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