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>This ETF's AUM has stayed flat over the past three months, sitting at ₩1.3T. It has 28 constituents, and it is unlikely that there will be any addition/deletion.</li>
<li>SKIET is expected to have the most inflow relative to ADTV. Then, we have Ecopro BM, which will increase the number of shares through a rights offering.</li>
<li>On the other hand, among the top-tier stocks, SK Innovation, SKC, and Ecopro Co Ltd deserve our attention for shorting.</li>
</ul>


This ETF's AUM has stayed flat over the past three months, sitting at ₩1.3T. It has 28 constituents, and it is unlikely that there will be any addition/deletion.
SKIET is expected to have the most inflow relative to ADTV. Then, we have Ecopro BM, which will increase the number of shares through a rights offering.
On the other hand, among the top-tier stocks, SK Innovation, SKC, and Ecopro Co Ltd deserve our attention for shorting.


TIGER Theme ETF "Secondary Cell" Rebalancing Projections: SKIET, Ecopro BM, SKI, SKC, & Ecopro

Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

Equity Bottom-Up

<ul>
<li>The US President Joe Biden is planning to visit South Korea on 20 to 22 May to meet the new South Korean President Yoon Suk-Yeol.</li>
<li>Hyundai Motor is likely to announce investments of nearly $7 billion for building a mega EV facility in Georgia which was leaked in the media in the last few days.</li>
<li>Hyundai Motor is aggressively penetrating the global EV markets and it is becoming an increasing threat against Tesla. Hyundai Motor has outperformed Tesla in the past 6 months.</li>
</ul>


The US President Joe Biden is planning to visit South Korea on 20 to 22 May to meet the new South Korean President Yoon Suk-Yeol.
Hyundai Motor is likely to announce investments of nearly $7 billion for building a mega EV facility in Georgia which was leaked in the media in the last few days.
Hyundai Motor is aggressively penetrating the global EV markets and it is becoming an increasing threat against Tesla. Hyundai Motor has outperformed Tesla in the past 6 months.


Joe Biden's Visit to South Korea: Hyundai Motor Ready to Announce $7 Billion Investment in EVs in US

<ul>
<li>The FnGuide Secondary Battery Index currently holds an AUM of ₩1.35T, and the next rebalancing implementation period is from June 13th to 15th.</li>
<li>Since these are same-sector stocks with a high cointegration level, they are suitable for narrow-window basket trading based on passive flow differences.</li>
<li>So, I would consider basket trading by targeting the large-cap constituents with a relatively significant passive flow: <a href="https://www.smartkarma.com/entities/sk-innovation-co-ltd" target="_blank" data-smartkarma-citation="entities:1268:1" rel="noopener">SK Innovation (096770)</a>, <a href="https://www.smartkarma.com/entities/sk-ie-technology" target="_blank" data-smartkarma-citation="entities:29207:1" rel="noopener">SK IE Technology (361610)</a>, <a href="https://www.smartkarma.com/entities/ecopro-bm-co-ltd" target="_blank" data-smartkarma-citation="entities:27873:1" rel="noopener">Ecopro BM (247540)</a>, &amp; <a href="https://www.smartkarma.com/entities/ecopro-co-ltd" target="_blank" data-smartkarma-citation="entities:19029:1" rel="noopener">Ecopro (086520)</a> </li>
</ul>


The FnGuide Secondary Battery Index currently holds an AUM of ₩1.35T, and the next rebalancing implementation period is from June 13th to 15th.
Since these are same-sector stocks with a high cointegration level, they are suitable for narrow-window basket trading based on passive flow differences.
So, I would consider basket trading by targeting the large-cap constituents with a relatively significant passive flow: SK Innovation (096770), SK IE Technology (361610), Ecopro BM (247540), &amp; Ecopro (086520) 


FnGuide Secondary Battery Index (KODEX ETF) Rebalancing Preview

<ul>
<li>Ecopro BM announced a ₩0.5T rights offer: 1.6M new ordinary shares at a preliminary offering price of ₩310,300. In addition, there will also be a 1-to-3 bonus share issuance.</li>
<li>In outright Long trading aiming for a 20% discount, one thing to keep in mind is bonus issues. Post-bonus issue price correction will likely be more substantial this time.</li>
<li>
 We should aim at outright shorting as moving into the bonus issue ex-rights date while watching Ecopro's share price upward trend and volatility during this event.</li>
</ul>


Ecopro BM announced a ₩0.5T rights offer: 1.6M new ordinary shares at a preliminary offering price of ₩310,300. In addition, there will also be a 1-to-3 bonus share issuance.
In outright Long trading aiming for a 20% discount, one thing to keep in mind is bonus issues. Post-bonus issue price correction will likely be more substantial this time.

 We should aim at outright shorting as moving into the bonus issue ex-rights date while watching Ecopro's share price upward trend and volatility during this event.


Ecopro BM Offering: Deal Summary & Trading Dynamics

Equity Capital Markets

<ul>
<li>After the market close today, Ecopro BM announced a rights offering worth 500 billion won as well as a bonus issue of three new shares for one existing share.</li>
<li>The tentative rights offering price is 310,300 won, which is 27% lower than current price of 423,800 won.</li>
<li>Ecopro BM's valuations remain stretched with its shares trading at high multiples and we believe there could be some further weakness in its share price in the coming weeks. </li>
</ul>


After the market close today, Ecopro BM announced a rights offering worth 500 billion won as well as a bonus issue of three new shares for one existing share.
The tentative rights offering price is 310,300 won, which is 27% lower than current price of 423,800 won.
Ecopro BM's valuations remain stretched with its shares trading at high multiples and we believe there could be some further weakness in its share price in the coming weeks. 


Ecopro BM Rights Offering Worth 500 Billion Won

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)

TIGER Theme ETF "Secondary Cell" Rebalancing Projections: SKIET, Ecopro BM, SKI, SKC, & Ecopro

This post projects the upcoming rebalancing of the TIGER Theme ETF "Secondary Cell": SKIET, Ecopro BM, SKI, SKC, & Ecopro.

Sanghyun Park

Joe Biden's Visit to South Korea: Hyundai Motor Ready to Announce $7 Billion Investment in EVs in US

Hyundai Motor is likely to announce investments of nearly $7 billion for building a mega EV facility in Georgia which was leaked in the media in...

Douglas Kim

FnGuide Secondary Battery Index (KODEX ETF) Rebalancing Preview

This post previews the FnGuide Secondary Battery Index rebalancing in June. The tradable names at this point are SK Innovation, SKIET, Ecopro BM,...

Sanghyun Park

Ecopro BM Offering: Deal Summary & Trading Dynamics

This post details Ecopro BM's ₩0.5T rights offering with a 1-to-3 bonus share issuance, announced late yesterday. It then discusses trading...

Sanghyun Park

Ecopro BM Rights Offering Worth 500 Billion Won

After the market close today, Ecopro BM announced a rights offering worth 500 billion won as well as a bonus issue of three new shares for one...

Douglas Kim

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