Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

Equity Bottom-Up

<ul>
<li>On 15 November, Ecopro Group announced a major equity grant for 2,706 employees that work for various affiliates of the Ecopro Group.</li>
<li>The company announced that it will provide equity grant shares worth about 10 million won per employee (for most of the Ecopro Group full time employees as of 30 September).</li>
<li>We like what Ecopro Group is trying to do with this equity grant program and we believe this equity grant program will positively impact Ecopro Co and Ecopro BM. </li>
</ul>


On 15 November, Ecopro Group announced a major equity grant for 2,706 employees that work for various affiliates of the Ecopro Group.
The company announced that it will provide equity grant shares worth about 10 million won per employee (for most of the Ecopro Group full time employees as of 30 September).
We like what Ecopro Group is trying to do with this equity grant program and we believe this equity grant program will positively impact Ecopro Co and Ecopro BM. 


Ecopro Group: Major Equity Grants for 2,706 Employees

Event-Driven

<ul>
<li>The sharp decline in the Korean stock market this year has led to more Korean companies conducting share buybacks. </li>
<li>As of 23 October, the number of companies in Korea seeking share buybacks in Korea increased by 41% YoY with 308 companies announcing share buyback programs.</li>
<li>In the past month, some of the larger market cap companies including Ecopro BM and SKC that have announced share buybacks have significantly outperformed the market.</li>
</ul>


The sharp decline in the Korean stock market this year has led to more Korean companies conducting share buybacks. 
As of 23 October, the number of companies in Korea seeking share buybacks in Korea increased by 41% YoY with 308 companies announcing share buyback programs.
In the past month, some of the larger market cap companies including Ecopro BM and SKC that have announced share buybacks have significantly outperformed the market.


Alpha Generation Through Share Buybacks in Korea: October 2022

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.

<ul>
<li>LG Chem's deletion is almost a done deal. The pouch-type pack goes to LG Energy, and the cathode business is not big enough to beat L&amp;F.</li>
<li>Chunbo is an additive field that this index has not included so far. So, Chunbo will be added as a new addition rather than replacing someone else.</li>
<li>SK IE Tech is quite tricky. The key is to see separator and elecfoil as the same field. If so, SK IET is likely to replace Iljin Materials.</li>
</ul>


LG Chem's deletion is almost a done deal. The pouch-type pack goes to LG Energy, and the cathode business is not big enough to beat L&amp;F.
Chunbo is an additive field that this index has not included so far. So, Chunbo will be added as a new addition rather than replacing someone else.
SK IE Tech is quite tricky. The key is to see separator and elecfoil as the same field. If so, SK IET is likely to replace Iljin Materials.


Solactive Lithium Index Rebalancing: Noteworthy Names in Korea Before the Announcement

<ul>
<li>Long/Short basket trading on an equal weight using only six stocks for a 10% ceiling reversion with SungEel and Sebitchem would have delivered a daily yield of close to 2%.</li>
<li>An outright position on SungEel and Sebitchem and the biggest mover, Ecopro BM, alone would have delivered a pretty juicy yield of 4.2%.</li>
<li>The rebalancing of this ETF is an event that allows you to bet on highly predictable share price movements by forming a basket with a relatively small number of stocks.</li>
</ul>


Long/Short basket trading on an equal weight using only six stocks for a 10% ceiling reversion with SungEel and Sebitchem would have delivered a daily yield of close to 2%.
An outright position on SungEel and Sebitchem and the biggest mover, Ecopro BM, alone would have delivered a pretty juicy yield of 4.2%.
The rebalancing of this ETF is an event that allows you to bet on highly predictable share price movements by forming a basket with a relatively small number of stocks.


Tracing Back TIGER (WISE) Battery ETF Rebalancing on October 13

Equity Capital Markets

<ul>
<li>Our base case valuation of JEIO is target price of 12,752 won per share, which is 15% lower than the low end of the IPO price range.</li>
<li>Given the low target price relative to the IPO price range, we have a Negative view of JEIO IPO.  </li>
<li>We estimate its sales to increase by 29.5% YoY to reach 117.1 billion won and operating profit to improve to 6.1 billion won in 2023 (turned black YoY).</li>
</ul>


Our base case valuation of JEIO is target price of 12,752 won per share, which is 15% lower than the low end of the IPO price range.
Given the low target price relative to the IPO price range, we have a Negative view of JEIO IPO.  
We estimate its sales to increase by 29.5% YoY to reach 117.1 billion won and operating profit to improve to 6.1 billion won in 2023 (turned black YoY).


South Korea

Ecopro BM Co.,Ltd develops and manufactures advanced materials. The Company produces and sells high-nickel cathode materials and other products. Ecopro BM markets its products throughout Korea.

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Ecopro BM (247540 KS)

Ecopro Group: Major Equity Grants for 2,706 Employees

On 15 November, Ecopro Group announced a major equity grant for 2,706 employees that work for various affiliates of the Ecopro Group.

Douglas Kim

Solactive Lithium Index Rebalancing: Noteworthy Names in Korea Before the Announcement

This post discusses the notable Korean stocks in the upcoming rebalancing of the Solactive Lithium Index (Global X ETF: LIT).

Sanghyun Park

Tracing Back TIGER (WISE) Battery ETF Rebalancing on October 13

This post traces back and backtests the rebalancing of the WISE Battery ETF, which occurred last Thursday, to examine the correction degree of net...

Sanghyun Park

JEIO IPO Valuation Analysis

Our base case valuation of JEIO is target price of 12,752 won per share, which is 15% lower than the low end of the IPO price range.

Douglas Kim

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Ecopro Group: Major Equity Grants for 2,706 Employees

On 15 November, Ecopro Group announced a major equity grant for 2,706 employees that work for various affiliates of the Ecopro Group.

Douglas Kim

Alpha Generation Through Share Buybacks in Korea: October 2022

In this insight, we discuss the alpha generation through companies that have been buying back their shares in the Korean stock market in the past...

Douglas Kim

Solactive Lithium Index Rebalancing: Noteworthy Names in Korea Before the Announcement

This post discusses the notable Korean stocks in the upcoming rebalancing of the Solactive Lithium Index (Global X ETF: LIT).

Sanghyun Park

Tracing Back TIGER (WISE) Battery ETF Rebalancing on October 13

This post traces back and backtests the rebalancing of the WISE Battery ETF, which occurred last Thursday, to examine the correction degree of net...

Sanghyun Park

JEIO IPO Valuation Analysis

Our base case valuation of JEIO is target price of 12,752 won per share, which is 15% lower than the low end of the IPO price range.

Douglas Kim