Japan/Asia Long-Short, LightStream Research

Mio Kato

Japan/Asia Long-Short

Long-Short Analysis on Japan, Asia and the World

LightStream Research

LightStream conducts quantitatively rigorous and data-driven analysis with a focus on Japan and Asia.

We consistently cover the Tech, Consumer and Industrial sectors, and provide ECM and Events coverage more broadly.

We supplement traditional qualitative insights from company relationships with a robust quantitative foundation that examines as much historical data as is available.
We further refine the accuracy of our insights and calls through the use of alternative data to flesh out current trends, and through a valuation framework that emphasises non-superficial peer group selection and a proper attempt to understand the metrics and changes that have driven security valuations in the past.

Equity Bottom-Up

<p>While the battle for payment systems between Epic and Apple will continue with Epic filing an appeal, the rather mild ruling against Apple has some interesting implications, as do the responses of both companies to the ruling. In the context of regulatory upheaval in the key gaming space in China and a slew of regulatory moves in other Asian countries such as Japan and South Korea, there is plenty worth mulling as new winners and losers could emerge.</p>

While the battle for payment systems between Epic and Apple will continue with Epic filing an appeal, the rather mild ruling against Apple has some interesting implications, as do the responses of both companies to the ruling. In the context of regulatory upheaval in the key gaming space in China and a slew of regulatory moves in other Asian countries such as Japan and South Korea, there is plenty worth mulling as new winners and losers could emerge.

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/meituan-dianping" target="_blank" data-smartkarma-citation="entities:26970:1" rel="noopener">Meituan (3690 HK)</a>, <a href="https://www.smartkarma.com/entities/li-ning-co-ltd" target="_blank" data-smartkarma-citation="entities:6047:1" rel="noopener">Li Ning (2331 HK)</a>, <a href="https://www.smartkarma.com/entities/china-merchants-bank-co-ltd-3388a037-4214-4997-b45d-520518cfdb57" target="_blank" data-smartkarma-citation="entities:10987:1" rel="noopener">China Merchants Bank H (3968 HK)</a>, <a href="https://www.smartkarma.com/entities/dongyue-group-ltd" target="_blank" data-smartkarma-citation="entities:20429:1" rel="noopener">Dongyue Group (189 HK)</a> and <a href="https://www.smartkarma.com/entities/beijing-kuaishou-technology-co-ltd" target="_blank" data-smartkarma-citation="entities:29725:1" rel="noopener">Kuaishou Technology (1024 HK)</a> while there was short covering 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/sunny-optical-tech" target="_blank" data-smartkarma-citation="entities:13363:1" rel="noopener">Sunny Optical (2382 HK)</a>, <a href="https://www.smartkarma.com/entities/xiaomi-corp" target="_blank" data-smartkarma-citation="entities:24409:1" rel="noopener">Xiaomi Corp (1810 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>. Shorts increased in the Communication Services and Materials sectors while decreasing in the Financials, Information Technology and Health Care sectors.</p></div><div><p>In Japan, stocks increased on <a href="https://www.smartkarma.com/entities/pan-pacific-international-holdings-corporation" target="_blank" data-smartkarma-citation="entities:13475:1" rel="noopener">Pan Pacific International Holdings (7532 JP)</a>, <a href="https://www.smartkarma.com/entities/sekisui-house-ltd" target="_blank" data-smartkarma-citation="entities:4508:1" rel="noopener">Sekisui House (1928 JP)</a>, <a href="https://www.smartkarma.com/entities/toshiba-corp" target="_blank" data-smartkarma-citation="entities:637:1" rel="noopener">Toshiba Corp (6502 JP)</a>, <a href="https://www.smartkarma.com/entities/toyo-seikan-group-holdings-l" target="_blank" data-smartkarma-citation="entities:11858:1" rel="noopener">Toyo Seikan Group Holdings L (5901 JP)</a> and <a href="https://www.smartkarma.com/entities/canon-inc" target="_blank" data-smartkarma-citation="entities:1:1" rel="noopener">Canon Inc (7751 JP)</a> while there was short covering on <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/eneos-holdings-inc" target="_blank" data-smartkarma-citation="entities:638:1" rel="noopener">ENEOS Holdings (5020 JP)</a>, <a href="https://www.smartkarma.com/entities/sbi-holdings-inc" target="_blank" data-smartkarma-citation="entities:10928:1" rel="noopener">SBI Holdings (8473 JP)</a>, <a href="https://www.smartkarma.com/entities/yamaha-corp" target="_blank" data-smartkarma-citation="entities:17841:1" rel="noopener">Yamaha Corp (7951 JP)</a> and <a href="https://www.smartkarma.com/entities/lasalle-logiport-reit" target="_blank" data-smartkarma-citation="entities:22658:1" rel="noopener">Lasalle Logiport REIT (3466 JP)</a>. Shorts increased in most sectors led by the Consumer Discretionary, Industrials, Real Estate, Information Technology and Materials stocks.</p></div><div><p>In Korea, shorts increased on <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/kakao-corp" target="_blank" data-smartkarma-citation="entities:15002:1" rel="noopener">Kakao Corp (035720 KS)</a>, <a href="https://www.smartkarma.com/entities/hmm-co-ltd" target="_blank" data-smartkarma-citation="entities:13494:1" rel="noopener">HMM Co., Ltd. (011200 KS)</a>, <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> and <a href="https://www.smartkarma.com/entities/shinpoong-pharmaceutical-co-ltd" target="_blank" data-smartkarma-citation="entities:7296:1" rel="noopener">Shinpoong Pharmaceutical (019170 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/hanwha-solutions" target="_blank" data-smartkarma-citation="entities:8656:1" rel="noopener">Hanwha Solutions (009830 KS)</a>, <a href="https://www.smartkarma.com/entities/kt-corp" target="_blank" data-smartkarma-citation="entities:1112:1" rel="noopener">KT Corp (030200 KS)</a>, <a href="https://www.smartkarma.com/entities/lg-chem-ltd" target="_blank" data-smartkarma-citation="entities:3583:1" rel="noopener">LG Chem Ltd (051910 KS)</a> and <a href="https://www.smartkarma.com/entities/ncsoft-corp" target="_blank" data-smartkarma-citation="entities:5169:1" rel="noopener">NCSOFT Corp (036570 KS)</a>.</p></div><div><p>In Taiwan, shorts increased on <a href="https://www.smartkarma.com/entities/wan-hai-lines-ltd" target="_blank" data-smartkarma-citation="entities:14262:1" rel="noopener">Wan Hai Lines (2615 TT)</a>, <a href="https://www.smartkarma.com/entities/taiwan-semiconductor-manufacturing-company" target="_blank" data-smartkarma-citation="entities:11230:1" rel="noopener">TSMC (2330 TT)</a>, <a href="https://www.smartkarma.com/entities/fubon-financial-holding-co" target="_blank" data-smartkarma-citation="entities:11869:1" rel="noopener">Fubon Financial Holding Co (2881 TT)</a>, <a href="https://www.smartkarma.com/entities/mediatek-inc" target="_blank" data-smartkarma-citation="entities:772:1" rel="noopener">Mediatek Inc (2454 TT)</a> and <a href="https://www.smartkarma.com/entities/novatek-microelectronics-corp" target="_blank" data-smartkarma-citation="entities:10904:1" rel="noopener">Novatek Microelectronics Corp (3034 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/catcher-technology-co-ltd" target="_blank" data-smartkarma-citation="entities:4957:1" rel="noopener">Catcher Technology (2474 TT)</a>, <a href="https://www.smartkarma.com/entities/focaltech-systems-co-ltd" target="_blank" data-smartkarma-citation="entities:11240:1" rel="noopener">Focaltech Systems (3545 TT)</a>, <a href="https://www.smartkarma.com/entities/nuvoton-technology-corp" target="_blank" data-smartkarma-citation="entities:15913:1" rel="noopener">Nuvoton Technology (4919 TT)</a> and <a href="https://www.smartkarma.com/entities/chailease-holding-co-ltd" target="_blank" data-smartkarma-citation="entities:6579:1" rel="noopener">Chailease Holding (5871 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 Meituan (3690 HK), Li Ning (2331 HK), China Merchants Bank H (3968 HK), Dongyue Group (189 HK) and Kuaishou Technology (1024 HK) while there was short covering on Alibaba Group (9988 HK), Ping An Insurance (H) (2318 HK), Sunny Optical (2382 HK), Xiaomi Corp (1810 HK) and JD Health (6618 HK). Shorts increased in the Communication Services and Materials sectors while decreasing in the Financials, Information Technology and Health Care sectors.In Japan, stocks increased on Pan Pacific International Holdings (7532 JP), Sekisui House (1928 JP), Toshiba Corp (6502 JP), Toyo Seikan Group Holdings L (5901 JP) and Canon Inc (7751 JP) while there was short covering on Money Forward (3994 JP), ENEOS Holdings (5020 JP), SBI Holdings (8473 JP), Yamaha Corp (7951 JP) and Lasalle Logiport REIT (3466 JP). Shorts increased in most sectors led by the Consumer Discretionary, Industrials, Real Estate, Information Technology and Materials stocks.In Korea, shorts increased on Amorepacific Corp (090430 KS), Kakao Corp (035720 KS), HMM Co., Ltd. (011200 KS), LG Electronics (066570 KS) and Shinpoong Pharmaceutical (019170 KS)   while shorts were covered on Samsung Electronics (005930 KS), Hanwha Solutions (009830 KS), KT Corp (030200 KS), LG Chem Ltd (051910 KS) and NCSOFT Corp (036570 KS).In Taiwan, shorts increased on Wan Hai Lines (2615 TT), TSMC (2330 TT), Fubon Financial Holding Co (2881 TT), Mediatek Inc (2454 TT) and Novatek Microelectronics Corp (3034 TT)     while shorts covered on United Microelectronics Corp (2303 TT), Catcher Technology (2474 TT), Focaltech Systems (3545 TT), Nuvoton Technology (4919 TT) and Chailease Holding (5871 TT).

Asia Shorts: Meituan, CMB, Li Ning, Sekisui, Toyo Seikan, Toshiba, Kakao, HMM, LGE, Wan Hai, TSMC

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

<p>NCsoft has announced that it would buy back 300,000 ordinary shares openly in the market. The buyback period is from September 8th to December 7th. This is a total of 60 trading days. The bankers are NH and Mirae Asset.</p><section class="figure"><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/228/368/original/Screen+Shot+2021-09-07+at+10.59.53+AM.png?1631026818" class="editor-image img-responsive" data-smartkarma-image-id="228368"></figure></section><p>This is 1.37% of the total issued stock and 5.80% of the equity. When this treasury stock buyback is completed, the treasury stock ratio will rise to 7.50% of the total number of issued shares.</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":"Buyback overview"}'>Target volume</td></tr>
<tr>
<td data-sheets-value='{"1":2,"2":" - % of SO"}'><strong>Target volume as a % of SO</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0.013664922081247801}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}' data-sheets-formula="=R[-1]C[0]/R[-7]C[0]"><strong>1.37%</strong></td>
</tr>
<tr>
<td>Target value at the last close as a % of equity</td>
<td style="text-align: right;">5.80%</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Treasury shares after buyback"}'>Treasury shares after buyback</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":1646583}' data-sheets-numberformat='{"1":2,"2":"#,##0"}' data-sheets-formula="=R[-11]C[0]+R[-8]C[0]">1,646,583</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":" - % of SO"}'><strong>Treasury shares as a % of SO</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0.0750014279843575}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}' data-sheets-formula="=R[-1]C[0]/R[-15]C[0]"><strong>7.50%</strong></td>
</tr>
<tr><td colspan="2" data-sheets-value='{"1":2,"2":"Source: DART"}'>Source: DART</td></tr>
</tbody>
</table><p>The maximum daily stock buyback volume is 79,976 shares. This is 0.35x 30-day ADTV, which is 26.66% of the target volume. The daily equal-weighted buyback volume is 5,000 shares, representing 0.02x ADTV, which is 1.66% of the target volume.</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":"Execution"}'>Execution</td></tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Daily limit"}'>Daily limit</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":79976}' data-sheets-numberformat='{"1":2,"2":"#,##0"}'>79,976</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":" - % of 30-day average daily trade volume"}'><strong>- x 30-day ADTV</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0.3467944409513692}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}' data-sheets-formula='=R[-1]C[0]/googlefinance(R[-38]C[0], "volumeavg")'><strong>0.35x</strong></td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Daily equal-weighted buyback qty."}'>Daily equal-weighted buyback volume</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":5000}' data-sheets-numberformat='{"1":2,"2":"#,##0"}' data-sheets-formula="=R[-35]C[0]/R[-1]C[0]">5,000</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":" - % of 30-day average daily trade volume"}'><strong>- x 30-day ADTV</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0.021681156906532533}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}' data-sheets-formula='=R[-1]C[0]/googlefinance(R[-43]C[0], "volumeavg")'><strong>0.02x</strong></td>
</tr>
<tr><td colspan="2" data-sheets-value='{"1":2,"2":"Source: DART"}'>Source: DART</td></tr>
</tbody>
</table>

NCsoft has announced that it would buy back 300,000 ordinary shares openly in the market. The buyback period is from September 8th to December 7th. This is a total of 60 trading days. The bankers are NH and Mirae Asset.This is 1.37% of the total issued stock and 5.80% of the equity. When this treasury stock buyback is completed, the treasury stock ratio will rise to 7.50% of the total number of issued shares.





Target volume

Target volume as a % of SO
1.37%


Target value at the last close as a % of equity
5.80%


Treasury shares after buyback
1,646,583


Treasury shares as a % of SO
7.50%

Source: DART

The maximum daily stock buyback volume is 79,976 shares. This is 0.35x 30-day ADTV, which is 26.66% of the target volume. The daily equal-weighted buyback volume is 5,000 shares, representing 0.02x ADTV, which is 1.66% of the target volume.





Execution

Daily limit
79,976


- x 30-day ADTV
0.35x


Daily equal-weighted buyback volume
5,000


- x 30-day ADTV
0.02x

Source: DART



NCsoft Buyback & Short Squeezing Possibilities

Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

<p>After the market close today, <a href="https://www.smartkarma.com/entities/ncsoft-corp" target="_blank" data-smartkarma-citation="entities:5169:1" rel="noopener">NCSOFT Corp (036570 KS)</a> announced that it will buy back 300,000 shares. At current prices, this represents 190 billion won. The purchase period is from 8 September to 7 December. NCsoft's share price has fallen 42% since the peak in early February 2021 and 25% since the end of July.</p><p>The average daily trading volume (ADTV) for NCsoft has been 517k in the past 10 days. As a result, although the share buyback may not result in a sharply rebounding share price for the company, it may be able to stop the share price bleeding it has experienced in the past month. </p><p><em><strong>Valuation gap between NCsoft and Krafton likely to narrow</strong></em> - <em>With NCsoft buying back shares and Krafton joining the KOSPI200 index on September 10th which will allow investors to short the stock, these events are likely to lead to closing the valuation gaps between the two stocks in the coming days. In other words, we believe NCsoft's share price could outperform Krafton's share price in the coming weeks. </em></p>

After the market close today, NCSOFT Corp (036570 KS) announced that it will buy back 300,000 shares. At current prices, this represents 190 billion won. The purchase period is from 8 September to 7 December. NCsoft's share price has fallen 42% since the peak in early February 2021 and 25% since the end of July.The average daily trading volume (ADTV) for NCsoft has been 517k in the past 10 days. As a result, although the share buyback may not result in a sharply rebounding share price for the company, it may be able to stop the share price bleeding it has experienced in the past month. Valuation gap between NCsoft and Krafton likely to narrow - With NCsoft buying back shares and Krafton joining the KOSPI200 index on September 10th which will allow investors to short the stock, these events are likely to lead to closing the valuation gaps between the two stocks in the coming days. In other words, we believe NCsoft's share price could outperform Krafton's share price in the coming weeks. 

NCsoft - Announces a Buyback Worth 190 Billion Won To Stop Share Price Bleeding

Founder/CEO of ROK Advisory, ROK Advisory LLC

Ken S. Kim

Founder/CEO of ROK Advisory

ROK Advisory LLC

ROK is an independent research advisory firm. We guide you to minimize the information gap between foreign and local investors in Northeast Asia with a focus in Korea, Taiwan and Japan.

Independent Research Advisory Firm

<div id="x_divRplyFwdMsg"><div>NCSoft (036570 KS) has been hammered as brokers downgrade on the poor reception to their new game,  Blade &amp; Soul 2, is far below anticipated in terms of both user feedback and use.  </div></div><div>
<div>The worry here is that now all the eggs are in one basket again (Lineage) as dependency on one game and failure to diversify is a big concern. </div>
<div></div>
<div>When Lineage 2M launched Nov 27th 2019 stock was down 7% on disappointing numbers vs. St estimates and the current fall in Apple AppStore ranking was based on the first 4-5 hrs mind you the Google App user score is 2 out of 5 stars which is concerning.</div>
</div>

NCSoft (036570 KS) has been hammered as brokers downgrade on the poor reception to their new game,  Blade &amp; Soul 2, is far below anticipated in terms of both user feedback and use.  
The worry here is that now all the eggs are in one basket again (Lineage) as dependency on one game and failure to diversify is a big concern. 

When Lineage 2M launched Nov 27th 2019 stock was down 7% on disappointing numbers vs. St estimates and the current fall in Apple AppStore ranking was based on the first 4-5 hrs mind you the Google App user score is 2 out of 5 stars which is concerning.


South Korea

NCSOFT Corporation develops and markets on-line games that enable users to play over the Internet and computer software, such as web editing software.  The Company also designs and constructs databases, Intranet, and commercial Internet access systems.

Price Gauge
52-week Range	0.00 - 0.00
Market Cap (USDm)	0.00
P/E	0.00
Dividend (Yield)	0.00

NCSOFT Corp (036570 KS)

Not an Epic Ruling Against Apple

We examine developments in Epic's legal battle with Apple to identify potential long-term implications and winners and losers.

Mio Kato

Asia Shorts: Meituan, CMB, Li Ning, Sekisui, Toyo Seikan, Toshiba, Kakao, HMM, LGE, Wan Hai, TSMC

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

Brian Freitas

NCsoft Buyback & Short Squeezing Possibilities

This post details NCsoft's share buyback announced yesterday and examines short squeezing possibilities resulting from it.

Sanghyun Park

Is NCSoft Permanently Broken?

Is Ncsoft permanently broken? stock is down 40% from high and either everyone is tossing in the towel or they are not getting any recognition for...

Ken S. Kim

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

Not an Epic Ruling Against Apple

We examine developments in Epic's legal battle with Apple to identify potential long-term implications and winners and losers.

Mio Kato

Asia Shorts: Meituan, CMB, Li Ning, Sekisui, Toyo Seikan, Toshiba, Kakao, HMM, LGE, Wan Hai, TSMC

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

Brian Freitas

NCsoft Buyback & Short Squeezing Possibilities

This post details NCsoft's share buyback announced yesterday and examines short squeezing possibilities resulting from it.

Sanghyun Park

NCsoft - Announces a Buyback Worth 190 Billion Won To Stop Share Price Bleeding

After the market close today, NCSOFT announced that it will buy back 0.3mn shares worth 190 billion won. This buyback should help to stop the share...

Douglas Kim

Is NCSoft Permanently Broken?

Is Ncsoft permanently broken? stock is down 40% from high and either everyone is tossing in the towel or they are not getting any recognition for...

Ken S. Kim