Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

Equity Bottom-Up

<ul>
<li>In this insight, we highlight the recent pricing gap divergences of the major Korean holdcos and opcos which could provide trading opportunities in 1Q 2024. </li>
<li>We highlight 38 pair trades that involve Korean holdcos and opcos.</li>
<li>Of the 38 pair trades, 26 of them involved holdcos outperforming opcos in the past six months and 12 of them involved opcos outperforming holdcos in the same period.</li>
</ul>


In this insight, we highlight the recent pricing gap divergences of the major Korean holdcos and opcos which could provide trading opportunities in 1Q 2024. 
We highlight 38 pair trades that involve Korean holdcos and opcos.
Of the 38 pair trades, 26 of them involved holdcos outperforming opcos in the past six months and 12 of them involved opcos outperforming holdcos in the same period.


Korean Holdcos Vs Opcos Gap Trading Opportunities in 1Q 2024

<ul>
<li>In this insight, we provide the major changes in NPS' stakes in 25 Korean companies in 3Q 2023.</li>
<li>In 3Q 2023, NPS reduced its stakes in the IT, construction, and contents related stocks. On the other hand, NPS increased its stakes in China's re-opening and cosmetics related stocks.</li>
<li>Five Korean cosmetics stocks that NPS net purchased in 3Q 2023 are up on average 12.8% from end of June 2023 to as of 6 October 2023. </li>
</ul>


In this insight, we provide the major changes in NPS' stakes in 25 Korean companies in 3Q 2023.
In 3Q 2023, NPS reduced its stakes in the IT, construction, and contents related stocks. On the other hand, NPS increased its stakes in China's re-opening and cosmetics related stocks.
Five Korean cosmetics stocks that NPS net purchased in 3Q 2023 are up on average 12.8% from end of June 2023 to as of 6 October 2023. 


<ul>
<li>Amorepacific Corp (090430 KS) is likely to be one of the biggest beneficiaries of the return of Chinese group tours in Korea.</li>
<li>Now that the Chinese government is allowing group tours to South Korea, this will likely lead to a sharp improvement in the company's sales and profits in 2023-2024.</li>
<li>We expect the consensus to raise sales estimates of Amorepacific Corp by about 3-5%+ and operating profit estimates by 20-30%+ in 2023 and 2024. </li>
</ul>


Amorepacific Corp (090430 KS) is likely to be one of the biggest beneficiaries of the return of Chinese group tours in Korea.
Now that the Chinese government is allowing group tours to South Korea, this will likely lead to a sharp improvement in the company's sales and profits in 2023-2024.
We expect the consensus to raise sales estimates of Amorepacific Corp by about 3-5%+ and operating profit estimates by 20-30%+ in 2023 and 2024. 


Amorepacific Corp: Return of the Korean Cosmetics King With End of Ban on Chinese Group Tours

Head of Research, IPOs & Placements, Aequitas Research

Sumeet Singh

Head of Research, IPOs & Placements

IPOs and Placements coverage across Asia Pacific

Aequitas Research

We cover all listing across the Asia Pacific along with follow-up placements. As of Dec 2020, our team had covered 539 IPOs with a hit rate of 73.5% and 685 placements with a hit rate of 66.8%.

We combine fundamental bottom-up views with our proprietary quantitative framework to provide a holistic coverage across new listings and placements. Our coverage includes pre-IPO notes before the deal is launched, follow-up analysis once the deal is live and post-listing trading analysis as well.

Equity Capital Markets

<ul>
<li>
<a href="https://www.smartkarma.com/entities/giant-biogene-holding-co-ltd" target="_blank" data-smartkarma-citation="entities:35950:1" rel="noopener">Giant Biogene (2367 HK)</a> aims to raise up to US$205m via a top-up placement.</li>
<li>We have followed the company since listing and its recent performance has been great. Although it doesn’t seem to need the cash.</li>
<li>In this note, we will run the deal through our ECM framework and talk about the recent updates.</li>
</ul>



Giant Biogene (2367 HK) aims to raise up to US$205m via a top-up placement.
We have followed the company since listing and its recent performance has been great. Although it doesn’t seem to need the cash.
In this note, we will run the deal through our ECM framework and talk about the recent updates.


Giant Biogene Placement - Has Been Doing Well but Doesn’t Need the Cash

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

Brian Freitas

Pan-Asia Index Rebalances/ Events/ Delta One

Periscope Analytics

Periscope Analytics focuses on event-driven trades across Asia Pacific and provides comprehensive, timely and systematic coverage of index changes to major Asia Pacific indices in a structured manner.

The analysis includes forecasted inclusions and exclusions to all major Asian indices that have significant amount of tracking assets, including estimates of passive buy/sell flow on the stocks. The service also provides commentary and impact of market consultations, ground rule changes, and other events (IPOs, spin-offs, M&A) that could lead to index changes and passive flow.

Periscope Analytics works with multi-strategy hedge funds, proprietary trading firms, stat arb trading groups and long-only investors that invest and trade in the Asia Pacific region with the data being used to trade index rebalances, avoid pre-positioning and passive flow, and to time entry into and exit from stocks.

Event-Driven Trades Across Asia Pacific

Event-Driven

<ul>
<li>Following the short sell ban announced on the weekend, the <a href="https://www.smartkarma.com/entities/korea-stock-exchange-kospi-200" target="_blank" data-smartkarma-citation="entities:26021:1" rel="noopener">KOSPI 200</a> and <a href="https://www.smartkarma.com/entities/kosdaq-150-index" target="_blank" data-smartkarma-citation="entities:31077:1" rel="noopener">KOSDAQ 150</a> opened higher on Monday and rallied through the day.</li>
<li>A lot of the intraday gains on Monday have been given up over the next two trading days. Surprisingly, KRX data indicates that not a lot of shorts have covered.</li>
<li>Foreigners have been net cash buyers since Monday (could indicate covering of offshore borrow) while retail were big sellers on Monday.</li>
</ul>


Following the short sell ban announced on the weekend, the KOSPI 200 and KOSDAQ 150 opened higher on Monday and rallied through the day.
A lot of the intraday gains on Monday have been given up over the next two trading days. Surprisingly, KRX data indicates that not a lot of shorts have covered.
Foreigners have been net cash buyers since Monday (could indicate covering of offshore borrow) while retail were big sellers on Monday.


Korea Short Sell Ban: Not a Lot Covered on Monday; Shorts Holding On?

South Korea

Amorepacific Corp. develops, manufactures, and exports skin care, make-up, and fragrance products. The Company also produces and markets personal care and health-related products, such as shampoos, soaps, toothpastes, and health teas.

Amorepacific Corp (Preferred) (090435 KS)

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Amorepacific Corp (Preferred) (090435 KS)

Korean Holdcos Vs Opcos Gap Trading Opportunities in 1Q 2024

In this insight, we highlight the recent pricing gap divergences of the major Korean holdcos and opcos which could provide trading opportunities in...

Douglas Kim

What Did NPS Buy and Sell in 3Q 2023?

In this insight, we provide the major changes in NPS' stakes in 25 Korean companies in 3Q 2023. In 3Q 2023, NPS reduced its stakes in the IT,...

Douglas Kim

Amorepacific Corp: Return of the Korean Cosmetics King With End of Ban on Chinese Group Tours

We expect the consensus to raise sales estimates of Amorepacific Corp by about 3-5%+ and operating profit estimates by 20-30%+ in 2023 and 2024.

Douglas Kim

Giant Biogene Placement - Has Been Doing Well but Doesn’t Need the Cash

Giant Biogene (2367 HK) aims to raise up to US$205m via a top-up placement. In this note, we talk about the deal dynamics and run the deal through...

Sumeet Singh

Korea Short Sell Ban: Not a Lot Covered on Monday; Shorts Holding On?

Not a lot of shorts were covered on Monday. There could be more covering in the near term as the market drifts lower. KOSPI200 underperformed...

Brian Freitas

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52-week Range

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