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

<ul>
<li>Compared to the tightly crowded KOSPI 200, the sector ETFs' rebalancing flow trading appears relatively less crowded, which led to a significantly higher flow/price correlation on the rebalancing day.</li>
<li>The KRX now delivers the rebalancing results of the KRX Sector &amp; K-New Deal Indexes only to paying customers. This can increase the profit effect of acquiring prior information.</li>
<li>So, safe play, which builds up a position from the time this information is acquired, rather than an aggressive preemptive position build-up, can still obtain a sufficient level of juice.</li>
</ul>


Compared to the tightly crowded KOSPI 200, the sector ETFs' rebalancing flow trading appears relatively less crowded, which led to a significantly higher flow/price correlation on the rebalancing day.
The KRX now delivers the rebalancing results of the KRX Sector &amp; K-New Deal Indexes only to paying customers. This can increase the profit effect of acquiring prior information.
So, safe play, which builds up a position from the time this information is acquired, rather than an aggressive preemptive position build-up, can still obtain a sufficient level of juice.


Backtesting Implications: Korea Sector ETFs Rebalancing on the 8th

IPOs and Catalysts/Events, Global Equity Research Ltd

Arun George

IPOs and Catalysts/Events

Uncompromised, Independent, Conflict-Free Research

Global Equity Research Ltd

Global Equity Research was started in 2017 by a group of experienced research professionals. It was founded on a passionate belief in the importance and the need for uncompromised, independent, conflict-free research. We aim to provide differentiated and actionable primary and bottom up fundamental research.

Equity Capital Markets

<ul>
<li>
<a href="https://www.smartkarma.com/entities/calb-co-ltd" target="_blank" data-smartkarma-citation="entities:35985:1" rel="noopener">CALB (CALBLZ CH)</a>, a leading EV battery manufacturer, is seeking to raise US$2.0 billion through an HKEx IPO, according to press reports.</li>
<li>In <em><strong><a href="https://www.smartkarma.com/insights/calb-ipo-the-bull-case" target="_blank" data-smartkarma-citation="insights:80243" rel="noopener">CALB IPO: The Bull Case</a></strong></em>, we highlighted the key elements of the bull case. In this note, we outline the bear case.  </li>
<li>The key elements of the bear case rest on its small scale, low profitability and high FCF burn compared to listed peers.   </li>
</ul>



CALB (CALBLZ CH), a leading EV battery manufacturer, is seeking to raise US$2.0 billion through an HKEx IPO, according to press reports.
In CALB IPO: The Bull Case, we highlighted the key elements of the bull case. In this note, we outline the bear case.  
The key elements of the bear case rest on its small scale, low profitability and high FCF burn compared to listed peers.   


<ul>
<li>
<a href="https://www.smartkarma.com/entities/calb-co-ltd" target="_blank" data-smartkarma-citation="entities:35985:1" rel="noopener">CALB (CALBLZ CH)</a>, a leading EV battery manufacturer, is seeking to raise US$2.0 billion through an HKEx IPO, according to press reports.</li>
<li>According to Frost &amp; Sullivan, in terms of installed capacity in 2021, CALB ranked seventh globally among EV battery companies with a 3.2% market share.</li>
<li>The key elements of the bull case rest on a large and growing market, rising market share, explosive top-line growth and ambitious capacity expansion plans.</li>
</ul>



CALB (CALBLZ CH), a leading EV battery manufacturer, is seeking to raise US$2.0 billion through an HKEx IPO, according to press reports.
According to Frost &amp; Sullivan, in terms of installed capacity in 2021, CALB ranked seventh globally among EV battery companies with a 3.2% market share.
The key elements of the bull case rest on a large and growing market, rising market share, explosive top-line growth and ambitious capacity expansion plans.


<ul>
<li>The Korea FSC finalized the additional investor protection measures: 1. stricter disclosure rules, 2. tighter listing requirements, and 3. mandatory appraisal rights.</li>
<li>The retroactive application period is five years. Companies that have been split off five years ago from the effective date are also subject to these new rules.</li>
<li>We can play LONG/SHORT aimed at staggered spreads, considering that the pricing period is 2M VWAP and that a downward price revision intensifies towards the announcement with mandatory appraisal rights.</li>
</ul>


The Korea FSC finalized the additional investor protection measures: 1. stricter disclosure rules, 2. tighter listing requirements, and 3. mandatory appraisal rights.
The retroactive application period is five years. Companies that have been split off five years ago from the effective date are also subject to these new rules.
We can play LONG/SHORT aimed at staggered spreads, considering that the pricing period is 2M VWAP and that a downward price revision intensifies towards the announcement with mandatory appraisal rights.


New Regulations on Split-Off Listing in Korea: Complete Details & Trading Implications

Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

<ul>
<li>On 30 August, SK Inc announced that it will buyback and cancel 200 billion won worth of common shares which represents 1.2% of SK Inc's current market cap. </li>
<li>Our SoTP valuation of SK Inc suggests an implied valuation of 325,228 won per share, suggesting 40% upside from current levels.</li>
<li>SK Inc's decision to buyback and cancel 200 billion won of common shares is a step in the right direction and the company abiding by its promises to its shareholders.</li>
</ul>


On 30 August, SK Inc announced that it will buyback and cancel 200 billion won worth of common shares which represents 1.2% of SK Inc's current market cap. 
Our SoTP valuation of SK Inc suggests an implied valuation of 325,228 won per share, suggesting 40% upside from current levels.
SK Inc's decision to buyback and cancel 200 billion won of common shares is a step in the right direction and the company abiding by its promises to its shareholders.


SK Inc's Common Shares Buyback & Cancellation of 200 Billion Won

South Korea

SK Innovation Co., Ltd. refines, markets, and distributes oil.  The Company produces a variety of petroleum products, such as gasoline, kerosene, liquefied petroleumgas (LPG), and diesel oil.  SK Energy also manufactures petrochemical p roducts, including paraxylene, synthetic resins, styrene monomer, and ethylene.

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SK Innovation (096770 KS)

Backtesting Implications: Korea Sector ETFs Rebalancing on the 8th

This post backtests the flow trading performance for the rebalancings of Korea's sector ETFs on the 8th and discusses unique patterns and...

Sanghyun Park

CALB IPO: The Bear Case

The key elements of the bear case rest on its small scale, low profitability and high FCF burn compared to listed peers.

Arun George

CALB IPO: The Bull Case

The key elements of the bull case rest on a large and growing market, rising market share, explosive top-line growth and ambitious capacity...

Arun George

New Regulations on Split-Off Listing in Korea: Complete Details & Trading Implications

This post details the new rules applicable to the split-off listings in Korea, which the Korea FSC finalized yesterday and will be effective as...

Sanghyun Park

SK Inc's Common Shares Buyback & Cancellation of 200 Billion Won

SK Inc's decision to buyback and cancel 200 billion won of common shares is a step in the right direction and the company abiding by its promises...

Douglas Kim

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