Global Healthcare Analyst

Tina Banerjee

Equity Bottom-Up

<ul>
<li>
<a href="https://www.smartkarma.com/entities/yuhan-corp" target="_blank" data-smartkarma-citation="entities:10745:1" rel="noopener">Yuhan Corp (000100 KS)'s</a> R&amp;D investments have started contributing to revenue through outlicensing deals. The company signed five out-licensing deals totaling KRW 4 trillion over the past three years.</li>
<li>The company has launched one in-house developed oncology drug, lazertinib in Korea market this year. Other in-licensed marketed prescription drugs hold leadership positioning in their respective therapeutic areas.</li>
<li>Outlicesing partner Janssen is expected to file new drug application to the US FDA in 2022. Yuhan is entitled for double-digit royalty on commercialization of Lazertinib in global market.</li>
</ul>



Yuhan Corp (000100 KS)'s R&amp;D investments have started contributing to revenue through outlicensing deals. The company signed five out-licensing deals totaling KRW 4 trillion over the past three years.
The company has launched one in-house developed oncology drug, lazertinib in Korea market this year. Other in-licensed marketed prescription drugs hold leadership positioning in their respective therapeutic areas.
Outlicesing partner Janssen is expected to file new drug application to the US FDA in 2022. Yuhan is entitled for double-digit royalty on commercialization of Lazertinib in global market.


Yuhan Corp (000100 KS): R&D Endeavors Finally Began to Pay Back; Lazertinib to Drive Future Growth

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

KRX BBIG IndexThe KRX BBIG K-New Deal Index contains 12 stocks, listed either on the KOSPI or KOSDAQ market, three leading companies in each of the four industries. Each of the four industries also has its own index containing 10 constituents. So, we have one mother index (BBIG) and four sub-indices representing each of the four industries.
Secondary Battery

Bio

Internet

Game
Rebalancing: The top-three largest full market cap stocks from the Secondary Battery, Bio, Internet, and Game are selected for rebalancing in March and September. It is biannually reconstituted. Rebalancing occurs on the trading day following the last trading day of the March and September delivery month for KOSPI 200 futures contracts.





Rebalancing schedule

Rebalancing cycle
Semi-annually


Rebalancing month
March and September


Implementation date
The trading day following the last trading day for KOSPI 200 futures contracts


Next implementation date
September 10, 2021


Rebalancing trading
At the close on September 9, 2021


Screening base date
The last trading day of the month preceding the date of regular rebalancing


Screening period
The three months preceding the screening base date

Source: KRX &amp; WISE Index

Index weight: The BBIG Index is an equal-weight index in which each index constituent is allocated the same weight (8.33%) at each rebalancing. As for the four sub-indices, the top-three largest full market cap stocks are given the weight of 75%, in which each stock is allocated the same weight of 25% at each rebalancing. In contrast, the remaining seven constituents are given the remaining weight of 25%, where their float-adjusted market cap weights them.







Index calculations
BBIG
Four sub-indices


Number of constituents
12
10


Index weight
Equal-weighted at 8.33%

Top 3 (by full market cap): Equal-weighted at 25% The remaining 7: float-adjusted market cap-weighted totaling 25%



Source: KRX &amp; WISE Index

The mother index and battery sub-index have an AUM that is not small considering the number of constituents. BBIG has an AUM of ₩520B as of today, and its battery is ₩760B. Bio is about ₩100B. However, Internet and Game do not have meaningful AUMs.








ETFs tracking BBIG indices
Index
Ticker
AUM


Mirae Asset TIGER KRX BBIG K-New Deal ETF
BBIG
364960
₩480.9B


Hana Financial Investment Hana KRX BBIG K-New Deal ETN 3
700003
₩10.5B


TIMEFOLIO TIMEFOLIO BBIG Active ETF
385710
₩26.9B


- Total
-
₩518.3B


Mirae Asset TIGER KRX Second Battery K-NewDeal ETF
Secondary Battery
364980
₩759.7B


Mirae Asset TIGER KRX BIO K-New Deal ETF
Bio
364970
₩97.6B


Mirae Asset TIGER KRX Internet K-New Deal ETF
Internet
365000
₩49.2B


Mirae Asset TIGER KRX Game K-New Deal ETF
Game
364990
₩35.7B

Source: KRX

The screening period is the three months preceding the screening base date. So, the screening period this time is June 1 to August 31. Below is the daily average market cap from June 1 to July 19 and the index weight as of July 19.








BBIG
Weight, as of July 19
Average daily full market cap (June 1~July 19)
30-day average daily trade value


Kakao Corp
12.34%
₩66,478.6B
₩846.3B


Kakao Games Corp
11.59%
₩4,805.8B
₩244.2B


Naver Corp
8.96%
₩65,954.1B
₩388.6B


Samsung Biologics Co Ltd
9.13%
₩56,359.3B
₩77.4B


Samsung SDI Co Ltd
8.15%
₩46,995.6B
₩216.7B


Netmarble Corp
8.18%
₩11,730.2B
₩52.7B


SK Biopharmaceuticals
7.70%
₩9,681.8B
₩55.4B


SK Innovation Co Ltd
7.38%
₩25,451.8B
₩256.9B


LG Chem Ltd
7.11%
₩58,759.0B
₩197.2B


Celltrion, Inc.
6.61%
₩33,438.9B
₩149.8B


Douzone Bizon Co Ltd
6.22%
₩2,600.1B
₩21.1B


NCSoft Corp
6.57%
₩18,199.9B
₩70.1B

Source: KRX &amp; TIGER ETF











Sub-indices
Weight, as of July 19
Average daily full market cap (June 1~July 19
Float-adjusted market cap
30-day average daily trade value

Battery

LG Chem Ltd
21.89%
₩58,759.0B
₩38,763.3B
₩197.2B


Samsung SDI Co Ltd
25.07%
₩46,995.6B
₩34,335.0B
₩216.7B


SK Innovation Co Ltd
22.75%
₩25,451.8B
₩14,161.4B
₩256.9B


Posco Chemical Co Ltd
8.25%
₩9,112.5B
₩3,413.5B
₩63.8B


SKC Co Ltd
6.00%
₩5,640.2B
₩3,014.7B
₩57.0B


Ecopro BM Co Ltd
5.13%
₩4,604.0B
₩3,037.2B
₩71.4B


Iljin Materials Co Ltd
2.93%
₩3,269.7B
₩1,518.1B
₩24.5B


L&amp;F Co., Ltd.
3.52%
₩2,639.3B
₩1,564.8B
₩75.3B


SoulBrain Co Ltd
2.49%
₩2,539.3B
₩1,358.8B
₩10.2B


Chunbo Co Ltd
1.87%
₩1,929.2B
₩799.1B
₩30.8B

Bio

Samsung Biologics Co Ltd
29.94%
₩56,359.3B
₩13,954.6B
₩77.4B


Celltrion, Inc.
21.64%
₩37,030.6B
₩28,069.2B
₩149.8B


Celltrion HealthCare Co Ltd
10.06%
₩18,089.2B
₩10,956.6B
₩91.0B


SK Biopharmaceuticals Co Ltd
25.20%
₩9,681.8B
₩3,291.8B
₩55.4B


Celltrion Pharm Inc
2.35%
₩5,629.5B
₩2,512.4B
₩76.2B


Hanmi Science Co Ltd
1.56%
₩5,073.4B
₩1,610.3B
₩34.6B


Yuhan Corp
3.00%
₩4,454.7B
₩3,331.2B
₩14.6B


Shinpoong Pharmaceutical Co Ltd
2.07%
₩3,919.5B
₩2,390.5B
₩395.7B


Green Cross Corp
1.61%
₩3,808.6B
₩1,754.3B
₩23.1B


Seegene Inc
2.53%
₩3,927.5B
₩2,664.4B
₩289.6B

Internet

Kakao Corp
34.95%
₩66,478.6B
₩48,502.8B
₩846.3B


Naver Corp
25.47%
₩65,954.1B
₩53,106.2B
₩388.6B


Douzone Bizon Co Ltd
17.72%
₩2,600.1B
₩1,613.4B
₩21.1B


KMW Co Ltd
6.08%
₩2,144.3B
₩1,353.5B
₩13.0B


NHN KCP Corp
3.21%
₩1,365.8B
₩730.7B
₩9.5B


AfreecaTV Co Ltd
4.68%
₩1,294.1B
₩891.0B
₩16.8B


Ace Technologies Corp.
2.45%
₩786.2B
₩600.2B
₩11.5B


Seojin System Co Ltd
2.31%
₩811.4B
₩544.8B
₩11.1B


Ahnlab Inc
1.77%
₩703.2B
₩409.1B
₩7.2B


Rsupport Co Ltd
1.34%
₩497.3B
₩261.1B
₩29.1B

Game

NCSoft Corp
18.73%
₩18,199.9B
₩7,753.2B
₩70.1B


Netmarble Corp
23.34%
₩11,730.2B
₩3,657.5B
₩52.7B


PearlAbyss Corp
9.46%
₩4,587.3B
₩3,755.6B
₩45.2B


Kakao Games Corp
33.10%
₩4,805.8B
₩2,047.3B
₩244.2B


Com2uS Corp
3.91%
₩1,627.3B
₩1,022.8B
₩19.8B


NHN Corp
3.08%
₩1,552.2B
₩708.1B
₩9.6B


Doubleu Games Co Ltd
2.06%
₩1,160.4B
₩567.4B
₩7.6B


Webzen Inc
2.48%
₩1,094.4B
₩641.6B
₩9.5B


Wemade Co Ltd
2.00%
₩949.2B
₩505.4B
₩16.0B


Neptune Co
1.76%
₩815.4B
₩420.4B
₩6.5B

Source: KRX &amp; TIGER ETF



KRX BBIG Rebalancing Complete Preview: SK Bioscience, SK IE Tech, Krafton, Kakao Games, & Kakao Pay

<h2>Swap overview</h2><p>This merger swap is very similar to the recent case of GS Retail &amp; GS Home Shopping. Green Cross Lab Cell will merge with Green Cross Cell through a stock swap. The Green Cross Cell shareholders will get 0.4023542 Green Cross Lab Cell shares for each Green Cross Cell share.</p><table class="table table-striped">
<colgroup>
<col width="300">
<col width="300">
</colgroup>
<tbody>
<tr><td colspan="2" rowspan="1" data-sheets-value='{"1":2,"2":"Swap overview"}'>Swap overview</td></tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Type"}'>Type</td>
<td data-sheets-value='{"1":2,"2":"Stock swap"}'>Stock swap</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Acquirer"}'>Acquirer</td>
<td data-sheets-value='{"1":2,"2":"Green Cross Lab Cell Corp (144510)"}'>Green Cross Lab Cell Corp (144510)</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Target company"}'>Target company</td>
<td data-sheets-value='{"1":2,"2":"Green Cross Cell Corp (031390)"}'>Green Cross Cell Corp (031390)</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Swap price for Green Cross Lab Cell"}'><strong>Swap price for Green Cross Lab Cell</strong></td>
<td data-sheets-value='{"1":3,"3":102882}'><strong>₩102,882</strong></td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Swap price for Green Cross Cell"}'><strong>Swap price for Green Cross Cell</strong></td>
<td data-sheets-value='{"1":3,"3":41395}'><strong>₩41,395</strong></td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Swap ratio"}'><strong>Swap ratio</strong></td>
<td data-sheets-value='{"1":3,"3":0.40235415330184093}' data-sheets-numberformat='{"1":2,"2":"#,##0.0000000","3":1}' data-sheets-formula="=R[-1]C[0]/R[-2]C[0]"><strong>0.4023542</strong></td>
</tr>
<tr><td colspan="2" rowspan="1" data-sheets-value='{"1":2,"2":"Source: DART"}'>Source: DART</td></tr>
</tbody>
</table><h2>Schedule</h2><p>The record date for securing voting rights at the general shareholders' meeting is August 2nd. The last day to secure the purchase right was yesterday. If you have purchased stocks by yesterday, you can exercise your stock purchase right by notifying your dissenting opinion between August 27 and September 13.</p><p>The exercise period of the stock appraisal right is from September 13th to October 4th. Trading of Green Cross Cell will be suspended from October 28th to November 11th, and new shares of Green Cross Lab Cell will be listed on November 12th.</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":"Schedule"}' data-sheets-note="Sang Hyun Park: We have to buy shares until BOD+1 to be eligible to receive stock purchase rights. We then have to notify our dissenting opinion until the end of dissenting opinion notice period.">Schedule</td></tr>
<tr>
<td><span data-sheets-value='{"1":2,"2":"Last day to own stock purchase rights"}' data-sheets-userformat='{"2":15041,"3":{"1":0},"9":0,"10":1,"12":0,"14":{"1":2,"2":4408131},"15":"Courier New","16":9}'>Last day to own stock purchase rights</span></td>
<td><span data-sheets-value='{"1":3,"3":44031}' data-sheets-userformat='{"2":15041,"3":{"1":5,"2":"yyyy. mm. dd","3":1},"9":2,"10":1,"12":0,"14":{"1":2,"2":4408131},"15":"Courier New","16":9}'>2020. 07. 19</span></td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Record date of shareholder register"}'>Record date of the shareholder register</td>
<td data-sheets-value='{"1":3,"3":44045}' data-sheets-numberformat='{"1":5,"2":"yyyy. mm. dd","3":1}'>2020. 08. 02</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Dissenting opinion notice"}'><strong>Dissenting opinion notice</strong></td>
<td data-sheets-value='{"1":2,"2":"2020. 08. 27 ~ 09. 13"}'><strong>2020. 08. 27 ~ 09. 13</strong></td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Shareholder meeting"}'><strong>Shareholder meeting</strong></td>
<td data-sheets-value='{"1":3,"3":44087}' data-sheets-numberformat='{"1":5,"2":"yyyy. mm. dd","3":1}'><strong>2020. 09. 13</strong></td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Stock purchase right exercise"}'><strong>Stock purchase right exercise</strong></td>
<td data-sheets-value='{"1":2,"2":"2020. 09. 13 ~ 10. 04"}'><strong>2020. 09. 13 ~ 10. 04</strong></td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Trade suspension (only Green Cross Cell)"}'><strong>Trade suspension (only Green Cross Cell)</strong></td>
<td data-sheets-value='{"1":2,"2":"2020. 10. 28 ~ 11. 11"}'><strong>2020. 10. 28 ~ 11. 11</strong></td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Listing"}'>Listing</td>
<td data-sheets-value='{"1":3,"3":44147}' data-sheets-numberformat='{"1":5,"2":"yyyy. mm. dd","3":1}'>2020. 11. 12</td>
</tr>
<tr><td colspan="2" data-sheets-value='{"1":2,"2":"Source: DART"}'>Source: DART</td></tr>
</tbody>
</table><div>
<h2>Stock purchase rights</h2>
<p>The stock purchase cost ceiling is set at ₩150.0B combined for both. The exercise prices are currently 6.31% and 5.91% below the current share prices of GS Retail and GS Home Shopping. </p>
<table class="table table-striped">
<colgroup>
<col width="200">
<col width="200">
<col width="200">
</colgroup>
<tbody>
<tr>
<td data-sheets-value='{"1":2,"2":"Spread - stock purchase"}'>Spread - stock purchase</td>
<td style="text-align: center;" data-sheets-value='{"1":2,"2":"Green Cross Lab Cell Corp"}' data-sheets-formula="=R[-52]C[0]">Green Cross Lab Cell Corp</td>
<td style="text-align: center;" data-sheets-value='{"1":2,"2":"Green Cross Cell Corp"}' data-sheets-formula="=R[-49]C[-1]">Green Cross Cell Corp</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Current price"}'>Current price</td>
<td style="text-align: center;" data-sheets-value='{"1":3,"3":110200}' data-sheets-numberformat='{"1":2,"2":"[$₩-412]#,##0","3":1}' data-sheets-formula='=googlefinance(Terms!R[-52]C[0], "price")'>₩110,200</td>
<td style="text-align: center;" data-sheets-value='{"1":3,"3":43750}' data-sheets-numberformat='{"1":2,"2":"[$₩-412]#,##0","3":1}' data-sheets-formula='=googlefinance(Terms!R[-49]C[-1], "price")'>₩43,750</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Exercise price"}'><strong>Exercise price</strong></td>
<td style="text-align: center;" data-sheets-value='{"1":3,"3":103244}' data-sheets-numberformat='{"1":2,"2":"[$₩-412]#,##0","3":1}' data-sheets-formula="=R[-43]C[0]"><strong>₩103,244</strong></td>
<td style="text-align: center;" data-sheets-value='{"1":3,"3":41163}' data-sheets-numberformat='{"1":2,"2":"[$₩-412]#,##0","3":1}' data-sheets-formula="=R[-42]C[-1]"><strong>₩41,163</strong></td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Premium/discount to the current price"}'><strong>Premium/discount to the current price</strong></td>
<td style="text-align: center;" data-sheets-value='{"1":3,"3":-0.06312159709618875}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}' data-sheets-formula="=(R[-1]C[0]-R[-2]C[0])/R[-2]C[0]"><strong>-6.31%</strong></td>
<td style="text-align: center;" data-sheets-value='{"1":3,"3":-0.05913142857142857}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}' data-sheets-formula="=(R[-1]C[0]-R[-2]C[0])/R[-2]C[0]"><strong>-5.91%</strong></td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Stock purchase ceiling condition"}'><strong>Stock purchase ceiling condition</strong></td>
<td colspan="2" rowspan="1" style="text-align: center;" data-sheets-value='{"1":3,"3":150}' data-sheets-numberformat='{"1":2,"2":"₩#,##0.0B"}' data-sheets-formula="=R[-46]C[0]"><strong>₩150.0B</strong></td>
</tr>
<tr><td colspan="3" rowspan="1" data-sheets-value='{"1":2,"2":"Source: DART &amp; KRX"}'>Source: DART &amp; KRX</td></tr>
</tbody>
</table>
<hr>
<h2>Price calculations</h2>
<p>Below is the calculation of swap prices and stock purchase rights exercise prices for reference.</p>
<table class="table table-striped">
<colgroup>
<col width="300">
<col width="100">
<col width="100">
<col width="100">
</colgroup>
<tbody>
<tr>
<td data-sheets-value='{"1":2,"2":"Swap prices"}'>Swap prices</td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"Green Cross Lab Cell Corp"}' data-sheets-formula="=Terms!R[2]C[0]">Green Cross Lab Cell Corp</td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"Green Cross Cell Corp"}' data-sheets-formula="=Terms!R[5]C[-1]">Green Cross Cell Corp</td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"Note"}'>Note</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"1-month VWAP (June 16~July 15, 2021)"}'>1-month VWAP (June 16~July 15, 2021)</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":104418}'>₩104,418</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":41268}'>₩41,268</td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"A"}'>A</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"1-week VWAP (July 9~July 15, 2021)"}'>1-week VWAP (July 9~July 15, 2021)</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":104029}'>₩104,029</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":41068}'>₩41,068</td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"B"}'>B</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"1-day close (July 15, 2021)"}'>1-day close (July 15, 2021)</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":100200}'>₩100,200</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":41850}'>₩41,850</td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"C"}'>C</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Swap price"}'><strong>Swap price</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":102882.33333333333}' data-sheets-formula="=sum(R[-3]C[0]:R[-1]C[0])/3"><strong>₩102,882</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":41395.333333333336}' data-sheets-formula="=sum(R[-3]C[0]:R[-1]C[0])/3"><strong>₩41,395</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"(A+B+C)/3"}'><strong>(A+B+C)/3</strong></td>
</tr>
<tr><td colspan="4" rowspan="1" data-sheets-value='{"1":2,"2":"Source: DART &amp; KRX"}'>Source: DART &amp; KRX</td></tr>
</tbody>
</table>
</div><table class="table table-striped">
<colgroup>
<col width="300">
<col width="100">
<col width="100">
<col width="100">
</colgroup>
<tbody>
<tr>
<td data-sheets-value='{"1":2,"2":"Stock purchase rights"}'>Stock purchase rights</td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"Green Cross Lab Cell Corp"}' data-sheets-formula="=Terms!R[-5]C[0]">Green Cross Lab Cell Corp</td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"Green Cross Cell Corp"}' data-sheets-formula="=Terms!R[-2]C[-1]">Green Cross Cell Corp</td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"Note"}'>Note</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"2-month VWAP (May 17~July 15, 2021)"}'>2-month VWAP (May 17~July 15, 2021)</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":101285}'>₩101,285</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":41154}'>₩41,154</td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"A"}'>A</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"1-month VWAP (June 16~July 15, 2021)"}'>1-month VWAP (June 16~July 15, 2021)</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":104418}'>₩104,418</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":41268}'>₩41,268</td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"B"}'>B</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"1-week VWAP (July 9~July 15, 2021)"}'>1-week VWAP (July 9~July 15, 2021)</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":104029}'>₩104,029</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":41068}'>₩41,068</td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"C"}'>C</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Swap price"}'><strong>Swap price</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":103244}' data-sheets-formula="=sum(R[-3]C[0]:R[-1]C[0])/3"><strong>₩103,244</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":41163.333333333336}' data-sheets-formula="=sum(R[-3]C[0]:R[-1]C[0])/3"><strong>₩41,163</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"(A+B+C)/3"}'><strong>(A+B+C)/3</strong></td>
</tr>
<tr><td colspan="4" rowspan="1" data-sheets-value='{"1":2,"2":"Source: DART &amp; KRX"}'>Source: DART &amp; KRX</td></tr>
</tbody>
</table>

Swap overviewThis merger swap is very similar to the recent case of GS Retail &amp; GS Home Shopping. Green Cross Lab Cell will merge with Green Cross Cell through a stock swap. The Green Cross Cell shareholders will get 0.4023542 Green Cross Lab Cell shares for each Green Cross Cell share.





Swap overview

Type
Stock swap


Acquirer
Green Cross Lab Cell Corp (144510)


Target company
Green Cross Cell Corp (031390)


Swap price for Green Cross Lab Cell
₩102,882


Swap price for Green Cross Cell
₩41,395


Swap ratio
0.4023542

Source: DART

ScheduleThe record date for securing voting rights at the general shareholders' meeting is August 2nd. The last day to secure the purchase right was yesterday. If you have purchased stocks by yesterday, you can exercise your stock purchase right by notifying your dissenting opinion between August 27 and September 13.The exercise period of the stock appraisal right is from September 13th to October 4th. Trading of Green Cross Cell will be suspended from October 28th to November 11th, and new shares of Green Cross Lab Cell will be listed on November 12th.





Schedule

Last day to own stock purchase rights
2020. 07. 19


Record date of the shareholder register
2020. 08. 02


Dissenting opinion notice
2020. 08. 27 ~ 09. 13


Shareholder meeting
2020. 09. 13


Stock purchase right exercise
2020. 09. 13 ~ 10. 04


Trade suspension (only Green Cross Cell)
2020. 10. 28 ~ 11. 11


Listing
2020. 11. 12

Source: DART


Stock purchase rights
The stock purchase cost ceiling is set at ₩150.0B combined for both. The exercise prices are currently 6.31% and 5.91% below the current share prices of GS Retail and GS Home Shopping. 








Spread - stock purchase
Green Cross Lab Cell Corp
Green Cross Cell Corp


Current price
₩110,200
₩43,750


Exercise price
₩103,244
₩41,163


Premium/discount to the current price
-6.31%
-5.91%


Stock purchase ceiling condition
₩150.0B

Source: DART &amp; KRX



Price calculations
Below is the calculation of swap prices and stock purchase rights exercise prices for reference.









Swap prices
Green Cross Lab Cell Corp
Green Cross Cell Corp
Note


1-month VWAP (June 16~July 15, 2021)
₩104,418
₩41,268
A


1-week VWAP (July 9~July 15, 2021)
₩104,029
₩41,068
B


1-day close (July 15, 2021)
₩100,200
₩41,850
C


Swap price
₩102,882
₩41,395
(A+B+C)/3

Source: DART &amp; KRX











Stock purchase rights
Green Cross Lab Cell Corp
Green Cross Cell Corp
Note


2-month VWAP (May 17~July 15, 2021)
₩101,285
₩41,154
A


1-month VWAP (June 16~July 15, 2021)
₩104,418
₩41,268
B


1-week VWAP (July 9~July 15, 2021)
₩104,029
₩41,068
C


Swap price
₩103,244
₩41,163
(A+B+C)/3

Source: DART &amp; KRX



Green Cross Merger Swap Summary & Arb Spread Status

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

Brian Freitas

Pan-Asia Index Rebalances/ Events/ Delta One

<p>The KRX will announce the results of the September review of the BBIG indices in August and the changes will become effective after the close of trading on 9 September.</p><p>The BBIG (secondary <strong>B</strong>attery, <strong>B</strong>io, <strong>I</strong>nternet and <strong>G</strong>aming sectors) indices were launched late last year. ETFs were subsequently launched on the 5 indices and the BBIG ETF and the Secondary Battery ETF have gathered a significant amount of assets since then.</p><p>At the September rebalance we expect the following changes:</p><ul>
<li>Secondary Battery ETF: <a href="https://www.smartkarma.com/entities/sk-ie-technology" target="_blank" data-smartkarma-citation="entities:29207:1" rel="noopener">SK IE Technology (361610 KS)</a> replaces <a href="https://www.smartkarma.com/entities/chunbo-co-ltd" target="_blank" data-smartkarma-citation="entities:27848:1" rel="noopener">Chunbo Co Ltd (278280 KS)</a>
</li>
<li>Bio ETF: <a href="https://www.smartkarma.com/entities/sk-bioscience-co-ltd" target="_blank" data-smartkarma-citation="entities:31484:1" rel="noopener">SK Bioscience (302440 KS)</a> joins the index and the top 3 stocks. This moves <a href="https://www.smartkarma.com/entities/sk-biopharmaceuticals-co-ltd" target="_blank" data-smartkarma-citation="entities:28966:1" rel="noopener">SK Biopharmaceuticals Co Ltd (326030 KS)</a> to the plus group; <a href="https://www.smartkarma.com/entities/hanmi-pharm-co-ltd" target="_blank" data-smartkarma-citation="entities:12476:1" rel="noopener">Hanmi Pharm (128940 KS)</a> joins the index and <a href="https://www.smartkarma.com/entities/seegene-inc" target="_blank" data-smartkarma-citation="entities:11483:1" rel="noopener">Seegene Inc (096530 KS)</a> and <a href="https://www.smartkarma.com/entities/green-cross-corp" target="_blank" data-smartkarma-citation="entities:2969:1" rel="noopener">Green Cross (006280 KS)</a> are deleted.</li>
<li>Internet ETF: <a href="https://www.smartkarma.com/entities/kg-inicis-co-ltd" target="_blank" data-smartkarma-citation="entities:5234:1" rel="noopener">KG Inicis Co Ltd (035600 KS)</a> replaces <a href="https://www.smartkarma.com/entities/rsupport-co-ltd" target="_blank" data-smartkarma-citation="entities:14783:1" rel="noopener">Rsupport Co Ltd (131370 KS)</a> </li>
<li>Game ETF: <a href="https://www.smartkarma.com/entities/devsisters-co-ltd" target="_blank" data-smartkarma-citation="entities:14096:1" rel="noopener">Devsisters (194480 KS)</a> replaces <a href="https://www.smartkarma.com/entities/neptune-company" target="_blank" data-smartkarma-citation="entities:28826:1" rel="noopener">Neptune Company (217270 KS)</a>.</li>
<li>BBIG ETF: <a href="https://www.smartkarma.com/entities/sk-bioscience-co-ltd" target="_blank" data-smartkarma-citation="entities:31484:1" rel="noopener">SK Bioscience (302440 KS)</a> replaces <a href="https://www.smartkarma.com/entities/sk-biopharmaceuticals-co-ltd" target="_blank" data-smartkarma-citation="entities:28966:1" rel="noopener">SK Biopharmaceuticals Co Ltd (326030 KS)</a> </li>
</ul><p>There could be more interesting changes if <a href="https://www.smartkarma.com/entities/krafton-inc" target="_blank" data-smartkarma-citation="entities:28956:1" rel="noopener"> Krafton Inc (1486402D KS)</a> lists before end July as expected.</p><p>The first rebalance of the index took place in February this year and the inclusions outperformed the exclusions by nearly 8% between announcement of the changes and implementation. So this rebalance is something worth looking at.</p>

The KRX will announce the results of the September review of the BBIG indices in August and the changes will become effective after the close of trading on 9 September.The BBIG (secondary Battery, Bio, Internet and Gaming sectors) indices were launched late last year. ETFs were subsequently launched on the 5 indices and the BBIG ETF and the Secondary Battery ETF have gathered a significant amount of assets since then.At the September rebalance we expect the following changes:
Secondary Battery ETF: SK IE Technology (361610 KS) replaces Chunbo Co Ltd (278280 KS)

Bio ETF: SK Bioscience (302440 KS) joins the index and the top 3 stocks. This moves SK Biopharmaceuticals Co Ltd (326030 KS) to the plus group; Hanmi Pharm (128940 KS) joins the index and Seegene Inc (096530 KS) and Green Cross (006280 KS) are deleted.
Internet ETF: KG Inicis Co Ltd (035600 KS) replaces Rsupport Co Ltd (131370 KS) 
Game ETF: Devsisters (194480 KS) replaces Neptune Company (217270 KS).
BBIG ETF: SK Bioscience (302440 KS) replaces SK Biopharmaceuticals Co Ltd (326030 KS) 
There could be more interesting changes if  Krafton Inc (1486402D KS) lists before end July as expected.The first rebalance of the index took place in February this year and the inclusions outperformed the exclusions by nearly 8% between announcement of the changes and implementation. So this rebalance is something worth looking at.

KRX BBIG Index Rebalance Preview: Worth a Look

Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

<div class="content-highlight"><p>In this insight, we highlight the closing of the pricing gaps between the major Korean holdcos and opcos, especially with the upcoming end of the ban on the short selling of shares in Korea in May. In this insight, we highlight 26 pair trades that involve Korean holdcos and opcos.</p></div><p>Just a reminder that the ban on short selling of KOSPI 200 and KOSDAQ 150 included stocks will remain in place until May 2nd and investors will be able to resume their shorting on these 350 stocks starting on May 3rd. Once this ban on short selling of stocks ends, there could be more investors that may look to add to the holdco shares and short the opco shares (especially among the pairs where the holdco shares have underperformed the opco shares in the past year). However, some of these moves have already started to take place in the past few weeks, which could reduce the overall profits on the pair trades. </p><p>Traditionally, the pair trades involving Korean holdcos and opcos have been a trading strategy that many hedge funds have employed for many years. However, the ban on short selling of stocks in Korea have prevented many of these funds from employing these pair trade strategies. Once the ban ends, you will likely see these funds becoming more active in these trading methods once again. </p><div class="content-highlight">
<p>In the section below, we separated the pair trades into two different sections. The first table involves major opcos outperforming holdcos (regular and quasi) in the past year. Of the 26 pair trade strategies mentioned in this insight, this section I involves 19 of them (73% of total). The section II (which involve holdcos outperforming the opcos in the past year) involves 7 pair trade strategies (27% of total).</p>
<p>In other words, the opcos in general have vastly outperformed the holdcos in the past year, especially due to the ban on the short selling of stocks in Korea. Because the opcos tend to be the bigger company than the holdcos in terms of market cap, many fund managers (both active and passive) have tended to just invest in the opcos and pay less attention to the holdcos.  </p>
</div><p>Also, we described the holdcos as either regular or quasi. SK Telecom and Samsung C&amp;T would be examples of "quasi" holdcos whereas Orion Holdings and Hanjin Kal would be examples of regular holdcos. </p>

In this insight, we highlight the closing of the pricing gaps between the major Korean holdcos and opcos, especially with the upcoming end of the ban on the short selling of shares in Korea in May. In this insight, we highlight 26 pair trades that involve Korean holdcos and opcos.Just a reminder that the ban on short selling of KOSPI 200 and KOSDAQ 150 included stocks will remain in place until May 2nd and investors will be able to resume their shorting on these 350 stocks starting on May 3rd. Once this ban on short selling of stocks ends, there could be more investors that may look to add to the holdco shares and short the opco shares (especially among the pairs where the holdco shares have underperformed the opco shares in the past year). However, some of these moves have already started to take place in the past few weeks, which could reduce the overall profits on the pair trades. Traditionally, the pair trades involving Korean holdcos and opcos have been a trading strategy that many hedge funds have employed for many years. However, the ban on short selling of stocks in Korea have prevented many of these funds from employing these pair trade strategies. Once the ban ends, you will likely see these funds becoming more active in these trading methods once again. 
In the section below, we separated the pair trades into two different sections. The first table involves major opcos outperforming holdcos (regular and quasi) in the past year. Of the 26 pair trade strategies mentioned in this insight, this section I involves 19 of them (73% of total). The section II (which involve holdcos outperforming the opcos in the past year) involves 7 pair trade strategies (27% of total).
In other words, the opcos in general have vastly outperformed the holdcos in the past year, especially due to the ban on the short selling of stocks in Korea. Because the opcos tend to be the bigger company than the holdcos in terms of market cap, many fund managers (both active and passive) have tended to just invest in the opcos and pay less attention to the holdcos.  
Also, we described the holdcos as either regular or quasi. SK Telecom and Samsung C&amp;T would be examples of "quasi" holdcos whereas Orion Holdings and Hanjin Kal would be examples of regular holdcos. 

Closing the Gap: Korean Holdcos Vs. Opcos

South Korea

Green Cross Corporation manufactures household medical drugs. The Company's product includes medicines for cold and fever, nutrition, antiseptic drug, and a lip balm.

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Green Cross (006280 KS)

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Green Cross Merger Swap Summary & Arb Spread Status

This merger swap is very similar to the recent case of the GS merger swap. So, we are likely to face a rather juicy swap spread opening probably 2...

Sanghyun Park

KRX BBIG Index Rebalance Preview: Worth a Look

There are lots of changes expected to the KRX BBIG indices at the September review. With a large amount of assets tracking the indices, some of the...

Brian Freitas

Closing the Gap: Korean Holdcos Vs. Opcos

In this insight, we highlight the closing of the pricing gaps between the major Korean holdcos and opcos, especially with the upcoming end of the...

Douglas Kim

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