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

Brian Freitas

Pan-Asia Index Rebalances/ Events/ Delta One

Quantitative Analysis

<div><p>The Asia Short Interest weekly looks at moves in market wide short interest and highlights movements in stock specific short interest across Hong Kong, Japan, Korea and Taiwan using the last available data published by the relevant authorities.</p></div><div><p>Hong Kong saw shorts rise on <a href="https://www.smartkarma.com/entities/alibaba-group" target="_blank" data-smartkarma-citation="entities:28434:1" rel="noopener">Alibaba Group (9988 HK)</a>, <a href="https://www.smartkarma.com/entities/ping-an-insurance-grp-co-of-china-ltd" target="_blank" data-smartkarma-citation="entities:12880:1" rel="noopener">Ping An Insurance (H) (2318 HK)</a>, <a href="https://www.smartkarma.com/entities/tencent-holdings-ltd" target="_blank" data-smartkarma-citation="entities:26:1" rel="noopener">Tencent (700 HK)</a>, <a href="https://www.smartkarma.com/entities/country-garden-services-holdings-company-limited" target="_blank" data-smartkarma-citation="entities:27343:1" rel="noopener">Country Garden Services Holdings (6098 HK)</a> and <a href="https://www.smartkarma.com/entities/jd-health-international-inc" target="_blank" data-smartkarma-citation="entities:29677:1" rel="noopener">JD Health (6618 HK)</a> while there was short covering on <a href="https://www.smartkarma.com/entities/meituan-dianping" target="_blank" data-smartkarma-citation="entities:26970:1" rel="noopener">Meituan (3690 HK)</a>, <a href="https://www.smartkarma.com/entities/byd-co-ltd-h" target="_blank" data-smartkarma-citation="entities:20962:1" rel="noopener">BYD (1211 HK)</a>, <a href="https://www.smartkarma.com/entities/xinjiang-goldwind-science-technology-h" target="_blank" data-smartkarma-citation="entities:10112:1" rel="noopener">Xinjiang Goldwind Science &amp; Technology H (2208 HK)</a>, <a href="https://www.smartkarma.com/entities/shanghai-fosun-pharmaceutical-group" target="_blank" data-smartkarma-citation="entities:8045:1" rel="noopener">Shanghai Fosun Pharmaceutical (Group) (2196 HK)</a> and <a href="https://www.smartkarma.com/entities/new-oriental-education-technology-group" target="_blank" data-smartkarma-citation="entities:32210:1" rel="noopener">New Oriental Education &amp; Technology Group (9901 HK)</a>. Shorts increased in the Consumer Discretionary, Financials, Real Estate, Communication Services and Industrial sectors.</p></div><div><p>In Japan, stocks increased on <a href="https://www.smartkarma.com/entities/daito-trust-construct-co-ltd" target="_blank" data-smartkarma-citation="entities:10503:1" rel="noopener">Daito Trust Construct (1878 JP)</a>, <a href="https://www.smartkarma.com/entities/money-forward-inc" target="_blank" data-smartkarma-citation="entities:25919:1" rel="noopener">Money Forward (3994 JP)</a>, <a href="https://www.smartkarma.com/entities/shimizu-corp" target="_blank" data-smartkarma-citation="entities:8530:1" rel="noopener">Shimizu Corp (1803 JP)</a>, <a href="https://www.smartkarma.com/entities/seiko-epson-corp" target="_blank" data-smartkarma-citation="entities:16793:1" rel="noopener">Seiko Epson (6724 JP)</a> and <a href="https://www.smartkarma.com/entities/giftee-inc" target="_blank" data-smartkarma-citation="entities:28280:1" rel="noopener">giftee Inc (4449 JP)</a> while there was short covering on <a href="https://www.smartkarma.com/entities/kirin-holdings-co-ltd" target="_blank" data-smartkarma-citation="entities:16977:1" rel="noopener">Kirin Holdings (2503 JP)</a>, <a href="https://www.smartkarma.com/entities/base-inc" target="_blank" data-smartkarma-citation="entities:28353:1" rel="noopener">BASE Inc (4477 JP)</a>, <a href="https://www.smartkarma.com/entities/cyberagent-inc" target="_blank" data-smartkarma-citation="entities:8197:1" rel="noopener">CyberAgent Inc (4751 JP)</a>, <a href="https://www.smartkarma.com/entities/renesas-electronics-corp" target="_blank" data-smartkarma-citation="entities:15933:1" rel="noopener">Renesas Electronics (6723 JP)</a> and <a href="https://www.smartkarma.com/entities/industrial-infrastructure" target="_blank" data-smartkarma-citation="entities:3822:1" rel="noopener">Industrial &amp; Infrastructure Fund Investment (3249 JP)</a>. Shorts increased in the Utilities sector while decreasing in the Consumer Staples sector.</p></div><div><p>In Korea, shorts increased on <a href="https://www.smartkarma.com/entities/lg-electronics-inc" target="_blank" data-smartkarma-citation="entities:8814:1" rel="noopener">LG Electronics (066570 KS)</a>, <a href="https://www.smartkarma.com/entities/oci-co-ltd" target="_blank" data-smartkarma-citation="entities:1904:1" rel="noopener">Oci Co Ltd (010060 KS)</a>, <a href="https://www.smartkarma.com/entities/amorepacific-corp" target="_blank" data-smartkarma-citation="entities:20854:1" rel="noopener">Amorepacific Corp (090430 KS)</a>, <a href="https://www.smartkarma.com/entities/kumho-petro-chemical-co-ltd" target="_blank" data-smartkarma-citation="entities:2014:1" rel="noopener">Kumho Petro Chemical (011780 KS)</a> and <a href="https://www.smartkarma.com/entities/lg-display-co-ltd" target="_blank" data-smartkarma-citation="entities:7145:1" rel="noopener">LG Display (034220 KS)</a> while shorts were covered on <a href="https://www.smartkarma.com/entities/samsung-electronics-co-ltd" target="_blank" data-smartkarma-citation="entities:191:1" rel="noopener">Samsung Electronics (005930 KS)</a>, <a href="https://www.smartkarma.com/entities/kakao-corp" target="_blank" data-smartkarma-citation="entities:15002:1" rel="noopener">Kakao Corp (035720 KS)</a>, <a href="https://www.smartkarma.com/entities/doosan-heavy-industries-construction" target="_blank" data-smartkarma-citation="entities:7389:1" rel="noopener">Doosan Heavy Industries &amp; Construction (034020 KS)</a>, <a href="https://www.smartkarma.com/entities/hyundai-rotem-company" target="_blank" data-smartkarma-citation="entities:1554:1" rel="noopener">Hyundai Rotem Company (064350 KS)</a> and <a href="https://www.smartkarma.com/entities/lg-household-health-care" target="_blank" data-smartkarma-citation="entities:6501:1" rel="noopener">LG Household &amp; Health Care (051900 KS)</a>. </p></div><div><p>In Taiwan, shorts increased on <a href="https://www.smartkarma.com/entities/innolux-corp" target="_blank" data-smartkarma-citation="entities:4509:1" rel="noopener">Innolux Corp (3481 TT)</a>, <a href="https://www.smartkarma.com/entities/asustek-computer-inc" target="_blank" data-smartkarma-citation="entities:13002:1" rel="noopener">Asustek Computer (2357 TT)</a>, <a href="https://www.smartkarma.com/entities/delta-electronics-inc" target="_blank" data-smartkarma-citation="entities:12688:1" rel="noopener">Delta Electronics (2308 TT)</a>, <a href="https://www.smartkarma.com/entities/au-optronics-corp" target="_blank" data-smartkarma-citation="entities:6704:1" rel="noopener">AU Optronics (2409 TT)</a> and <a href="https://www.smartkarma.com/entities/asia-cement-corp" target="_blank" data-smartkarma-citation="entities:15350:1" rel="noopener">Asia Cement (1102 TT)</a> while shorts covered on <a href="https://www.smartkarma.com/entities/united-microelectronics-corp" target="_blank" data-smartkarma-citation="entities:6450:1" rel="noopener">United Microelectronics Corp (2303 TT)</a>, <a href="https://www.smartkarma.com/entities/quanta-computer-inc" target="_blank" data-smartkarma-citation="entities:2754:1" rel="noopener">Quanta Computer (2382 TT)</a>, <a href="https://www.smartkarma.com/entities/china-steel-corp" target="_blank" data-smartkarma-citation="entities:962:1" rel="noopener">China Steel (2002 TT)</a>, <a href="https://www.smartkarma.com/entities/winbond-electronics-corp" target="_blank" data-smartkarma-citation="entities:9177:1" rel="noopener">Winbond Electronics (2344 TT)</a> and <a href="https://www.smartkarma.com/entities/yageo-corporation" target="_blank" data-smartkarma-citation="entities:13212:1" rel="noopener">Yageo Corporation (2327 TT)</a>. </p></div>

The Asia Short Interest weekly looks at moves in market wide short interest and highlights movements in stock specific short interest across Hong Kong, Japan, Korea and Taiwan using the last available data published by the relevant authorities.Hong Kong saw shorts rise on Alibaba Group (9988 HK), Ping An Insurance (H) (2318 HK), Tencent (700 HK), Country Garden Services Holdings (6098 HK) and JD Health (6618 HK) while there was short covering on Meituan (3690 HK), BYD (1211 HK), Xinjiang Goldwind Science &amp; Technology H (2208 HK), Shanghai Fosun Pharmaceutical (Group) (2196 HK) and New Oriental Education &amp; Technology Group (9901 HK). Shorts increased in the Consumer Discretionary, Financials, Real Estate, Communication Services and Industrial sectors.In Japan, stocks increased on Daito Trust Construct (1878 JP), Money Forward (3994 JP), Shimizu Corp (1803 JP), Seiko Epson (6724 JP) and giftee Inc (4449 JP) while there was short covering on Kirin Holdings (2503 JP), BASE Inc (4477 JP), CyberAgent Inc (4751 JP), Renesas Electronics (6723 JP) and Industrial &amp; Infrastructure Fund Investment (3249 JP). Shorts increased in the Utilities sector while decreasing in the Consumer Staples sector.In Korea, shorts increased on LG Electronics (066570 KS), Oci Co Ltd (010060 KS), Amorepacific Corp (090430 KS), Kumho Petro Chemical (011780 KS) and LG Display (034220 KS) while shorts were covered on Samsung Electronics (005930 KS), Kakao Corp (035720 KS), Doosan Heavy Industries &amp; Construction (034020 KS), Hyundai Rotem Company (064350 KS) and LG Household &amp; Health Care (051900 KS). In Taiwan, shorts increased on Innolux Corp (3481 TT), Asustek Computer (2357 TT), Delta Electronics (2308 TT), AU Optronics (2409 TT) and Asia Cement (1102 TT) while shorts covered on United Microelectronics Corp (2303 TT), Quanta Computer (2382 TT), China Steel (2002 TT), Winbond Electronics (2344 TT) and Yageo Corporation (2327 TT). 

Asia Shorts: Alibaba, Tencent, Meituan, BYD, Daito, Kirin, BASE, LGE, OCI, Kakao, LGH&H, Innolux

Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

Event-Driven

<div class="content-highlight">
<p>There have been some recent events that suggest that Kim Jung-Ju, the controlling owner of <a href="https://www.smartkarma.com/entities/nexon-co-ltd" target="_blank" data-smartkarma-citation="entities:16032:1" rel="noopener">Nexon (3659 JP)</a>, may be getting ready to sell the company once again. For now, Nexon has denied that it is up for sale. </p>
<p>Last week, it was announced that the founder <a href="https://koreajoongangdaily.joins.com/2021/07/29/business/industry/Nexon-NXC-Kim-Jungju/20210729173400349.html" target="_blank" rel="noopener">Kim Jung-Ju</a> is stepping down as the CEO of NXC Corp, which owns a 47.3% stake of Nexon. NXC Corp is essentially a holding company of Nexon Corp and other Nexon Group companies. Kim Jung-Ju and his wife own a 98.6% stake in NXC Corp. </p>
</div><ul>
<li>Kim Jung-Ju has served as the CEO of NXC Corp for 16 years. Kim Jung-Ju will be replaced by <strong>Lee Jae-Kyo</strong>, who has been working as a director at the Nexon Foundation.  Kim Jung-Ju will remain on the board of NXC Corp.</li>
<li>There was also another interesting recent hire of <strong>Alex Iosilevich, w</strong>ho was an investment specialist that helped Nexon complete its IPO in 2011. <ul>
<li>Alex Iosilevich will become the chief investment officer (CIO) of NXC Corp. Iosilevic has been an investment consultant for Nexon in the past decade.</li>
<li>He has recently worked as the Head of the Media Investment Banking with UBS Securities in the Americas.</li>
<li>
<a href="https://www.mk.co.kr/news/stock/view/2021/08/760133/" target="_blank" rel="noopener">Iosilevich</a> also played a key role a couple of years ago when NXC Corp was trying to sell its controlling interest in Nexon. </li>
</ul>
</li>
</ul>


There have been some recent events that suggest that Kim Jung-Ju, the controlling owner of Nexon (3659 JP), may be getting ready to sell the company once again. For now, Nexon has denied that it is up for sale. 
Last week, it was announced that the founder Kim Jung-Ju is stepping down as the CEO of NXC Corp, which owns a 47.3% stake of Nexon. NXC Corp is essentially a holding company of Nexon Corp and other Nexon Group companies. Kim Jung-Ju and his wife own a 98.6% stake in NXC Corp. 

Kim Jung-Ju has served as the CEO of NXC Corp for 16 years. Kim Jung-Ju will be replaced by Lee Jae-Kyo, who has been working as a director at the Nexon Foundation.  Kim Jung-Ju will remain on the board of NXC Corp.
There was also another interesting recent hire of Alex Iosilevich, who was an investment specialist that helped Nexon complete its IPO in 2011. 
Alex Iosilevich will become the chief investment officer (CIO) of NXC Corp. Iosilevic has been an investment consultant for Nexon in the past decade.
He has recently worked as the Head of the Media Investment Banking with UBS Securities in the Americas.

Iosilevich also played a key role a couple of years ago when NXC Corp was trying to sell its controlling interest in Nexon. 




Nexon: Is Kim Jung-Ju Getting Ready to Sell NXC Corp Once Again?

Silver Point

Thomas J. Monaco

Independent Insight Provider

Silver Point is a boutique research firm that focuses on the broader financial services sector, with a particular focus on troubled institutions globally. 

Asia Ex Japan

Equity Bottom-Up

<p><strong><em>*Competitor Sees 73% Upside: </em></strong> A bulge bracket competitor recently published a table pounding note on the shares of Tencent Holdings (700.HK) [Tencent], which states that the shares are undervalued to the tune of 73%; and  </p><p><strong><em>*We Beg To Differ:</em></strong> Mainland China's crackdown on capital markets has rapidly expanded under the broad narrative of "financial stability". We have witnessed fines at Tencent, new user WeChat suspensions. Tencent may have to give up its exclusive music rights and possibly dispose of Kuwo and Kugou, and likely form of a financial holding company. The big table pounding report and a massive need for equity; this has all of the markings of the usual near-term gigantic capital raise.      </p>

*Competitor Sees 73% Upside:  A bulge bracket competitor recently published a table pounding note on the shares of Tencent Holdings (700.HK) [Tencent], which states that the shares are undervalued to the tune of 73%; and  *We Beg To Differ: Mainland China's crackdown on capital markets has rapidly expanded under the broad narrative of "financial stability". We have witnessed fines at Tencent, new user WeChat suspensions. Tencent may have to give up its exclusive music rights and possibly dispose of Kuwo and Kugou, and likely form of a financial holding company. The big table pounding report and a massive need for equity; this has all of the markings of the usual near-term gigantic capital raise.      

Asia Pac IPO & Placement Research, China biotech, Aequitas Research

Ke Yan, CFA, FRM

Asia Pac IPO & Placement Research, China biotech

IPOs and Placements coverage across Asia Pacific

Aequitas Research

We cover all listing across the Asia Pacific along with follow-up placements. As of Dec 2020, our team had covered 539 IPOs with a hit rate of 73.5% and 685 placements with a hit rate of 66.8%.

We combine fundamental bottom-up views with our proprietary quantitative framework to provide a holistic coverage across new listings and placements. Our coverage includes pre-IPO notes before the deal is launched, follow-up analysis once the deal is live and post-listing trading analysis as well.

<p>Following the Xinhua News Agency's article which once dubbed online gaming as spiritual opium two days ago on August 3rd, today one article on the Security Times proposed to remove the tax rebate for online gaming companies. We look at the current tax benefit for the online gaming companies and are of the view that the proposal is sensible but financial impact will be minor on the established game studio and operators. </p>

Following the Xinhua News Agency's article which once dubbed online gaming as spiritual opium two days ago on August 3rd, today one article on the Security Times proposed to remove the tax rebate for online gaming companies. We look at the current tax benefit for the online gaming companies and are of the view that the proposal is sensible but financial impact will be minor on the established game studio and operators. 

Tencent: Assessment of New Tax Proposal for Game Industry

Latest News from the World’s Leading Innovators

Granite Bay Capital

An innovation focussed investment company

Granite Bay Capital is an innovation focussed investment company with a deep focus on the companies at the leading edge of innovation across major themes such as AI, ubiquitous computing, sustainability, automation and longevity.

Thematic (Sector/Industry)

<p>Headline Developments China has likened online computer games to opium, causing shares in Tencent (700.HK) and NetEase (9999.HK) to drop 10% and 15% respectively.  The article, which appeared in state-run Economic Information Daily (before being removed), said more than half of China’s children were nearsighted and online games affects their education; adding that gaming addiction is widespread and could negatively impact their growth.</p>

Headline Developments China has likened online computer games to opium, causing shares in Tencent (700.HK) and NetEase (9999.HK) to drop 10% and 15% respectively.  The article, which appeared in state-run Economic Information Daily (before being removed), said more than half of China’s children were nearsighted and online games affects their education; adding that gaming addiction is widespread and could negatively impact their growth.

China

Tencent Holdings Limited operates as an investment holding company. The Company, through its subsidiaries, provides Internet and mobile value-added services (VAS), online advertising, and e-commerce transactions. Tencent Holdings offers services to users worldwide.

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Tencent (700 HK)

Asia Shorts: Alibaba, Tencent, Meituan, BYD, Daito, Kirin, BASE, LGE, OCI, Kakao, LGH&H, Innolux

The Insight looks at short interest movements across HK, Japan, Korea and Taiwan stocks and highlights large increases/decreases in shorts to aid...

Brian Freitas

Nexon: Is Kim Jung-Ju Getting Ready to Sell NXC Corp Once Again?

There have been some recent events that suggest that Kim Jung-Ju, the controlling owner of Nexon, may be getting ready to sell the company once...

Douglas Kim

Tencent Holdings - Bulge Bracket Bull

TENCENT HOLDINGS: A competitor recently suggested the shares of Tencent have 73% upside. We beg to differ, further pain in these shares is expected...

Thomas J. Monaco

Tencent: Assessment of New Tax Proposal for Game Industry

We look at the current tax benefit for the online gaming companies and are of the view that the proposal is sensible but the financial impact will...

Ke Yan, CFA, FRM

Weekly Innovation Review (WIRE) #43

Headline Developments: China has likened online computer games to opium, causing shares in Tencent (700.HK) and NetEase (9999.HK) to drop 10% and...

Granite Bay Capital

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