Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

Douglas Research Advisory

Event-Driven

<ul>
<li>On 26 September, the Korea Exchange announced that it is considering a <em><strong>"special rebalancing"</strong></em> of the Korea Value-Up Index in December 2024.</li>
<li>In our view, the probability of this special rebalancing occurring by the end of this year is high at about 85%+.</li>
<li>If there is a special rebalancing, KB Financial, Hana Financial, Samsung Life Insurance, SK Telecom, and KT could be considered the top candidates for inclusion. </li>
</ul>


On 26 September, the Korea Exchange announced that it is considering a "special rebalancing" of the Korea Value-Up Index in December 2024.
In our view, the probability of this special rebalancing occurring by the end of this year is high at about 85%+.
If there is a special rebalancing, KB Financial, Hana Financial, Samsung Life Insurance, SK Telecom, and KT could be considered the top candidates for inclusion. 


A Special Rebalancing Of Korea Value-Up Index Is Likely in December 2024

<ul>
<li>In this insight, we review the major equity indices in Korea in 2024 including KOSPI 200 and Korea Value Up Index. </li>
<li>Some alpha generating performances continue in terms of adding stocks to be included in the KOSPI 200 and reducing stocks that could be excluded.</li>
<li>Korea Value Up Index has been heavily promoted by the Korean Exchange this year. Korea Exchange plans to make special changes to the Korea Value-Up Index constituents on 20 December. </li>
</ul>


In this insight, we review the major equity indices in Korea in 2024 including KOSPI 200 and Korea Value Up Index. 
Some alpha generating performances continue in terms of adding stocks to be included in the KOSPI 200 and reducing stocks that could be excluded.
Korea Value Up Index has been heavily promoted by the Korean Exchange this year. Korea Exchange plans to make special changes to the Korea Value-Up Index constituents on 20 December. 


A Review of Major Equity Indices in Korea in 2024

Chief Executive Officer, Emmer Capital Partners Limited

Manishi Raychaudhuri

Chief Executive Officer

Emmer Capital Partners Limited

Emmer Capital Partners is an Asia Pacific focused financial advisory firm engaging in strategic financial asset allocation advice, bespoke thematic research and advising early-stage companies and connecting them to investors. Emmer Capital provides macro-economic and multi-asset investment strategy inputs to institutions, family offices, private wealth managers, private equity, and corporate boards directly and through independent research platforms. Emmer Capital also advises a wide range of startup companies on fund raising and business strategy. Emmer Capital's active engagement with the print and electronic media reaches a broad spectrum of investors across the globe.

Equity Bottom-Up

Contemporary Amperex Technology (CATL) / Equity Bottom-Up

<ul>
<li>Change in earnings estimate directions, especially when estimates start increasing after a long period of decline, are what we call "inflections". These, we believe, are the strongest share price catalysts. </li>
<li>We identify nine market-sectors across Asia ex Japan exhibiting upward earnings inflections. Four are from financials, two from telecoms and one each from utilities, consumer durables and industrials.</li>
<li>These market-sectors are from HK/China (3), Korea (1), ASEAN (5). Financials' domination indicates that a broader Asian macroeconomic recovery could be under way. Eight companies are primarily driving the upgrades.</li>
</ul>


Change in earnings estimate directions, especially when estimates start increasing after a long period of decline, are what we call "inflections". These, we believe, are the strongest share price catalysts. 
We identify nine market-sectors across Asia ex Japan exhibiting upward earnings inflections. Four are from financials, two from telecoms and one each from utilities, consumer durables and industrials.
These market-sectors are from HK/China (3), Korea (1), ASEAN (5). Financials' domination indicates that a broader Asian macroeconomic recovery could be under way. Eight companies are primarily driving the upgrades.


Asian Equities: Keep an Eye on These Earnings Inflections

Research and consultancy, Tabbush Report

Daniel Tabbush

Research and consultancy

Tabbush Report

We provide research and consultancy on Asian banks. Our focus is on what we call “Asian bank research, without the noise.” We are interested in the most critical swing-factors for banks, the NPL and credit cycle, and where we believe there is a gap between perception and reality. We often focus on the less studied components of bank financial statements.  Our research is highly thematic, sometimes examining unlisted banks and companies as a window on mainstream banks. 

Being independent allows us to look at smaller banks, often overlooked by others. Analysis of BIS bank guidelines in the context of Asia, is also a focal point, while we also analyze global banks operating in the region. We use what we believe is the most comprehensive, reliable financials database, SNL Financial. S&P Capital IQ augments our database, with corporate data and CEIC, with economics. 

Asian bank research, without the noise.

<ul>
<li>Headline NPL figures at <a href="https://www.smartkarma.com/entities/kb-financial-group-inc" target="_blank" data-smartkarma-citation="entities:718:1" rel="noopener">KB Financial (105560 KS)</a> are already of major concern rising by 49% in the past year to 3Q24</li>
<li>Granular loan classification data is of even greater concern, where substandard loans are up from KRW1,153bn to KRW1,715bn over the same period</li>
<li>This more benign bucket of NPLs well overshadows loss loans, can migration can mean a substantial rise in credit costs</li>
</ul>


Headline NPL figures at KB Financial (105560 KS) are already of major concern rising by 49% in the past year to 3Q24
Granular loan classification data is of even greater concern, where substandard loans are up from KRW1,153bn to KRW1,715bn over the same period
This more benign bucket of NPLs well overshadows loss loans, can migration can mean a substantial rise in credit costs


KB Financial - NPLs from KRW2.1tr to KRW3.1tr YoY Vs +6% Loans. Substandard Loans: Big Issue

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>This post dives into the official details of the Korea Value-Up Index methodology that I obtained from KRX. Plus, it has the official weights and free-float rates for each constituent.</li>
<li>The 3rd and 4th Phases led to surprising stocks entering the index, causing drops for KB and Hana, while SK Hynix benefited from the Exception Application rule.</li>
<li>The index’s straightforward methodology suggests low rebalancing uncertainty, but flexible Special Entry rules and upcoming December changes may add unpredictability, targeting bank stocks like KB, Hana, and JB.</li>
</ul>


This post dives into the official details of the Korea Value-Up Index methodology that I obtained from KRX. Plus, it has the official weights and free-float rates for each constituent.
The 3rd and 4th Phases led to surprising stocks entering the index, causing drops for KB and Hana, while SK Hynix benefited from the Exception Application rule.
The index’s straightforward methodology suggests low rebalancing uncertainty, but flexible Special Entry rules and upcoming December changes may add unpredictability, targeting bank stocks like KB, Hana, and JB.


Korea Value-Up Index: Detailed Methodology, Weights, Float Rates, & Passive Impacts Obtained

South Korea

KB Financial Group Inc. (the "Company"), in accordance with Financial Holding Companies Act, was established on September 29, 2008, through stock transfer with the former shareholders of its subsidiaries including Kookmin Bank in order to provide management services and financing to associated companies. The headquarters are located at Seoul, Korea

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KB Financial (105560 KS)

A Special Rebalancing Of Korea Value-Up Index Is Likely in December 2024

KRX announced announced that a special rebalancing of 5 stocks to be included in the ‘Korea Value Up Index’ - KB Financial, Hana Financial, Hyundai...

Douglas Kim

A Review of Major Equity Indices in Korea in 2024

We review the major equity indices in Korea in 2024 including KOSPI 200 and Korea Value Up Index. KRX plans to make special changes to the Korea...

Douglas Kim

Asian Equities: Keep an Eye on These Earnings Inflections

Earnings inflections, ie EPS est rising after long period of decline, are selectively underway in Asia. We identify 9 market-sectors - 3 from HK...

Manishi Raychaudhuri

KB Financial - NPLs from KRW2.1tr to KRW3.1tr YoY Vs +6% Loans. Substandard Loans: Big Issue

KB Financial shows relatively benign credit costs, but NPLs are surging, and its substandard loan growth is especially high. Risks remain for much...

Daniel Tabbush

Korea Value-Up Index: Detailed Methodology, Weights, Float Rates, & Passive Impacts Obtained

This post provides the detailed methodology of the Korea Value-Up Index, which I obtained from KRX, along with the latest weights, free-float...

Sanghyun Park

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

A Special Rebalancing Of Korea Value-Up Index Is Likely in December 2024

KRX announced announced that a special rebalancing of 5 stocks to be included in the ‘Korea Value Up Index’ - KB Financial, Hana Financial, Hyundai...

Douglas Kim

A Review of Major Equity Indices in Korea in 2024

We review the major equity indices in Korea in 2024 including KOSPI 200 and Korea Value Up Index. KRX plans to make special changes to the Korea...

Douglas Kim

Asian Equities: Keep an Eye on These Earnings Inflections

​Earnings inflections, ie EPS est rising after long period of decline, are selectively underway in Asia. We identify 9 market-sectors - 3 from HK...

Manishi Raychaudhuri

KB Financial - NPLs from KRW2.1tr to KRW3.1tr YoY Vs +6% Loans. Substandard Loans: Big Issue

KB Financial shows relatively benign credit costs, but NPLs are surging, and its substandard loan growth is especially high. Risks remain for much...

Daniel Tabbush

Korea Value-Up Index: Detailed Methodology, Weights, Float Rates, & Passive Impacts Obtained

This post provides the detailed methodology of the Korea Value-Up Index, which I obtained from KRX, along with the latest weights, free-float...

Sanghyun Park

Earnings inflections, ie EPS est rising after long period of decline, are selectively underway in Asia. We identify 9 market-sectors - 3 from HK...