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

<p>STIC aims to raise around US$750m via selling all of its remaining stake in <a href="https://www.smartkarma.com/entities/big-hit-entertainment-co-ltd" target="_blank" data-smartkarma-citation="entities:28959:1" rel="noopener">HYBE (352820 KS)</a>. </p><p>This will be the first major selldown in the company, post its listing last year. In this note, we will run the deal through our ECM framework and talk about deal dynamics.</p>

STIC aims to raise around US$750m via selling all of its remaining stake in HYBE (352820 KS). This will be the first major selldown in the company, post its listing last year. In this note, we will run the deal through our ECM framework and talk about deal dynamics.

Hybe Block/Placement - Big Block for Big Hit

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

<h2>Subscription</h2><p>HYBE offers 2.227,848 shares in this offering. The main subscription reached 2,167,124 shares. We then had an additional 103,502 over-subscriptions, settling at a 0.587 allocation for each over-subscription.</p><p>So, we hit a final subscription rate of 101.92% at the target offering of 2,227,848 shares, leaving no forfeited share for a public subscription.</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":"Subscription"}'>Subscription</td></tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Offering"}'>Offering</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":2227848}' data-sheets-numberformat='{"1":2,"2":"#,##0","3":1}'>2,227,848 shares</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Main subscription"}'>Main subscription</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":2167124}' data-sheets-numberformat='{"1":2,"2":"#,##0","3":1}'>2,167,124 shares</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Over-subscription"}'><strong>Over-subscription</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":103502}' data-sheets-numberformat='{"1":2,"2":"#,##0","3":1}'><strong>103,502 shares</strong></td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":" - Total subscription"}'><strong>- Total subscription</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":2270626}' data-sheets-numberformat='{"1":2,"2":"#,##0","3":1}' data-sheets-formula="=R[-2]C[0]+R[-1]C[0]"><strong>2,270,626 shares</strong></td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":" - Final subscription rate"}'><strong>- Final subscription rate</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":1.0192}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}'><strong>101.92%</strong></td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":" - Allocation per over-subscription"}'>- Allocation per over-subscription</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0.586693976927982}' data-sheets-numberformat='{"1":2,"2":"0.00000000","3":1}'>0.58669398 share</td>
</tr>
<tr><td colspan="2" rowspan="1" data-sheets-value='{"1":2,"2":"Source: DART"}'>Source: DART</td></tr>
</tbody>
</table><h2>Shares outstanding</h2><p>It is now official that all of the offerings have found owners, resulting in a 6.25% increase in outstanding shares with a 5.89% shareholding dilution. The total shares are now 37,851,608 shares.</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":"Allocation"}'>Shares outstanding</td></tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Offering"}'>Offering</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":2227848}' data-sheets-numberformat='{"1":2,"2":"#,##0","3":1}'>2,227,848 shares</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Capital increase"}'><strong>Capital increase</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0.0625}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}'><strong>6.25%</strong></td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Dilution"}'>Dilution</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0.0589}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}'>5.89%</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Shares outstanding before the offering"}'>Shares outstanding before the offering</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":35623760}' data-sheets-numberformat='{"1":2,"2":"#,##0","3":1}'>35,623,760 shares</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Shares outstanding after the offering"}'><strong>Shares outstanding after the offering</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":37851608}' data-sheets-numberformat='{"1":2,"2":"#,##0","3":1}' data-sheets-formula="=R[-1]C[0]+R[-4]C[0]"><strong>37,851,608 shares</strong></td>
</tr>
<tr><td colspan="2" rowspan="1" data-sheets-value='{"1":2,"2":"Source: DART"}'>Source: DART</td></tr>
</tbody>
</table><h2>Non-float adjustment</h2><p>The regulatory filing doesn't disclose the information as to the major shareholder's participation in this offering. But the local news outlet, Hankyung, reported yesterday that both Bang Si-hyuk and Netmarblet took all the new shares allocated to them.</p><p>So, their shareholding won't change, and we should see a minimal change in the non-float, even if none of the special affiliated persons/the ESOP took any new share. </p><table class="table table-striped">
<colgroup>
<col width="200">
<col width="100">
<col width="100">
<col width="100">
<col width="100">
</colgroup>
<tbody>
<tr>
<td data-sheets-value='{"1":2,"2":"Shareholding"}'>Non-float adjustment</td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"Before offering"}'>Before the offering</td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"%"}'>%</td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"After offering"}'>After the offering</td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"%"}'>%</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Bang Si-hyuk"}'><strong>Bang Si-hyuk</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":12377337}' data-sheets-numberformat='{"1":2,"2":"#,##0","3":1}'><strong>12,377,337</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0.34744611461563857}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}' data-sheets-formula="=R[0]C[-1]/R7C4"><strong>34.74%</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":13151402}' data-sheets-numberformat='{"1":2,"2":"#,##0","3":1}'><strong>13,151,402</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0.3474463224917684}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}' data-sheets-formula="=R[0]C[-1]/R8C4"><strong>34.74%</strong></td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Netmarble"}'><strong>Netmarble</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":7087569}' data-sheets-numberformat='{"1":2,"2":"#,##0","3":1}'><strong>7,087,569</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0.19895623033615767}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}' data-sheets-formula="=R[0]C[-1]/R7C4"><strong>19.90%</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":7530542.0625}' data-sheets-numberformat='{"1":2,"2":"#,##0","3":1}' data-sheets-formula="=R[0]C[-2]*(1+R[-17]C[0])"><strong>7,530,542</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0.19894906611365096}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}' data-sheets-formula="=R[0]C[-1]/R8C4"><strong>19.89%</strong></td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Special affiliated persons"}'>Special affiliated persons</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":1260244}' data-sheets-numberformat='{"1":2,"2":"#,##0","3":1}' data-sheets-formula="=20725150-R[-2]C[0]-R[-1]C[0]">1,260,244</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0.03537650152594785}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}' data-sheets-formula="=R[0]C[-1]/R7C4">3.54%</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":1260244}' data-sheets-numberformat='{"1":2,"2":"#,##0","3":1}' data-sheets-formula="=R[0]C[-2]">1,260,244</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0.03329433190790732}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}' data-sheets-formula="=R[0]C[-1]/R8C4">3.33%</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"ESOP"}'>ESOP</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":1421691}' data-sheets-numberformat='{"1":2,"2":"#,##0","3":1}'>1,421,691</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0.03990850488550338}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}' data-sheets-formula="=R[0]C[-1]/R7C4">3.99%</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":1421691}' data-sheets-numberformat='{"1":2,"2":"#,##0","3":1}'>1,421,691</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0.03755959324105861}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}' data-sheets-formula="=R[0]C[-1]/R8C4">3.76%</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":" - Non-float"}'><strong>- Non-float</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":22146841}' data-sheets-numberformat='{"1":2,"2":"#,##0","3":1}' data-sheets-formula="=sum(R[-4]C[0]:R[-1]C[0])"><strong>22,146,841</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0.6216873513632475}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}' data-sheets-formula="=R[0]C[-1]/R7C4"><strong>62.17%</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":23363879.0625}' data-sheets-numberformat='{"1":2,"2":"#,##0","3":1}' data-sheets-formula="=sum(R[-4]C[0]:R[-1]C[0])"><strong>23,363,879</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0.6172493137543853}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}' data-sheets-formula="=R[0]C[-1]/R8C4"><strong>61.72%</strong></td>
</tr>
<tr><td colspan="5" rowspan="1" data-sheets-value='{"1":2,"2":"Source: DART"}'>Source: DART</td></tr>
</tbody>
</table>

SubscriptionHYBE offers 2.227,848 shares in this offering. The main subscription reached 2,167,124 shares. We then had an additional 103,502 over-subscriptions, settling at a 0.587 allocation for each over-subscription.So, we hit a final subscription rate of 101.92% at the target offering of 2,227,848 shares, leaving no forfeited share for a public subscription.





Subscription

Offering
2,227,848 shares


Main subscription
2,167,124 shares


Over-subscription
103,502 shares


- Total subscription
2,270,626 shares


- Final subscription rate
101.92%


- Allocation per over-subscription
0.58669398 share

Source: DART

Shares outstandingIt is now official that all of the offerings have found owners, resulting in a 6.25% increase in outstanding shares with a 5.89% shareholding dilution. The total shares are now 37,851,608 shares.





Shares outstanding

Offering
2,227,848 shares


Capital increase
6.25%


Dilution
5.89%


Shares outstanding before the offering
35,623,760 shares


Shares outstanding after the offering
37,851,608 shares

Source: DART

Non-float adjustmentThe regulatory filing doesn't disclose the information as to the major shareholder's participation in this offering. But the local news outlet, Hankyung, reported yesterday that both Bang Si-hyuk and Netmarblet took all the new shares allocated to them.So, their shareholding won't change, and we should see a minimal change in the non-float, even if none of the special affiliated persons/the ESOP took any new share. 









Non-float adjustment
Before the offering
%
After the offering
%


Bang Si-hyuk
12,377,337
34.74%
13,151,402
34.74%


Netmarble
7,087,569
19.90%
7,530,542
19.89%


Special affiliated persons
1,260,244
3.54%
1,260,244
3.33%


ESOP
1,421,691
3.99%
1,421,691
3.76%


- Non-float
22,146,841
62.17%
23,363,879
61.72%

Source: DART



HYBE Offering: Over-Subscription Allocation, Non-Float Change, & Trading Schedule

<p>The KRX defines the free float of a stock as the proportion of outstanding shares that is deemed available for purchase in the stock market.</p><p><strong>The KRX includes the following types of shares in free float for all its indices:</strong></p><ul>
<li>Stakes held by the major shareholder and the special affiliated persons</li>
<li>Stakes held by the government agencies, excluding the Korea NPS</li>
<li>Treasury shares</li>
<li>Stakes hed by the ESOP</li>
<li>Stakes under a lock-up agreement by court order</li>
</ul><p>A free float change cycle is every 6 months. That is, the KRX reflects free float changes in the bi-annual rebalancing.</p><p><strong>But if a change is less than ±5%pt, there will be no change. The KRX will continue to apply the previous free float rates.</strong></p><div class="content-highlight"><p><em>The KRX may reflect a free-float change before a bi-annual rebalancing if a change is substantially large. The KRX considers the following factors: company size, rebalancing size and subsequent market impact, and index tracking convenience.</em></p></div><hr><h2>Likely names with a ±5%pt free float change</h2><p>This rebalancing will likely feature a total of 9 constituents having a ±5%pt free float change: 6 names with a 5%pt or greater change and 3 names with a -5%pt or harsher change.</p><p>Doosan Fuel Cell tops the list with +18.74%pt, followed by CS Wind with +15.56%pt and HYBE with +14.66%pt. On the other hand, DL Holdings will likely lose -30.69%pt in its free-float rate. SK Discovery and Korean Air are also expected to suffer a reduction, -9.50%pt and -8.50%pt, respectively.</p><table class="table table-striped">
<colgroup>
<col width="200">
<col width="70">
<col width="70">
<col width="70">
<col width="70">
<col width="200">
</colgroup>
<tbody>
<tr>
<td data-sheets-value='{"1":2,"2":"Name"}'>Name</td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"Ticker"}'>Ticker</td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"Previous free float rate"}'>Current free float rate (est.)</td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"Current free float rate"}'>New free float rate (est.)</td>
<td data-sheets-value='{"1":2,"2":"Free float change"}'>Free float change</td>
<td style="text-align: left;" data-sheets-value='{"1":2,"2":"Note"}'>Note</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Korean Air Lines Co Ltd"}' data-sheets-formula='=googlefinance(R[0]C[1], "name")'><strong>Korean Air Lines Co Ltd</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"003490"}' data-sheets-formula='=if(len(R[0]C[7])=2, "0000"&amp;R[0]C[7], if(len(R[0]C[7])=3, "000"&amp;R[0]C[7], if(LEN(R[0]C[7])=4, "00"&amp;R[0]C[7], if(len(R[0]C[7])=5, "0"&amp;R[0]C[7], if(len(R[0]C[7])=6, R[0]C[7], 0)))))'>003490</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0.6079702177328681}' data-sheets-formula='=indirect("KODEX 200!G"&amp;R[0]C[7])'>60.80%</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0.5229999999999999}' data-sheets-formula="=61.04%-(R[0]C[8]-R[0]C[7])">52.30%</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":-0.08497021773286817}' data-sheets-numberformat='{"1":3,"2":"0.00%p"}' data-sheets-formula="=R[0]C[-1]-R[0]C[-2]"><strong>-8.50%p</strong></td>
<td style="text-align: left;" data-sheets-value='{"1":2,"2":"New issue"}'>New issue</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"SK Biopharmaceuticals Co Ltd"}' data-sheets-formula='=googlefinance(R[0]C[1], "name")'><strong>SK Biopharmaceuticals Co Ltd</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":326030}' data-sheets-formula='=if(len(R[0]C[7])=2, "0000"&amp;R[0]C[7], if(len(R[0]C[7])=3, "000"&amp;R[0]C[7], if(LEN(R[0]C[7])=4, "00"&amp;R[0]C[7], if(len(R[0]C[7])=5, "0"&amp;R[0]C[7], if(len(R[0]C[7])=6, R[0]C[7], 0)))))'>326030</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0.22696431504105483}' data-sheets-formula='=indirect("KODEX 200!G"&amp;R[0]C[7])'>22.70%</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0.34}'>34.00%</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0.1130356849589452}' data-sheets-numberformat='{"1":3,"2":"0.00%p"}' data-sheets-formula="=R[0]C[-1]-R[0]C[-2]"><strong>11.30%p</strong></td>
<td style="text-align: left;" data-sheets-value='{"1":2,"2":"The major shareholder selldown"}'>The major shareholder selldown</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Industrial Bank of Korea"}' data-sheets-formula='=googlefinance(R[0]C[1], "name")'><strong>Industrial Bank of Korea</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"024110"}' data-sheets-formula='=if(len(R[0]C[7])=2, "0000"&amp;R[0]C[7], if(len(R[0]C[7])=3, "000"&amp;R[0]C[7], if(LEN(R[0]C[7])=4, "00"&amp;R[0]C[7], if(len(R[0]C[7])=5, "0"&amp;R[0]C[7], if(len(R[0]C[7])=6, R[0]C[7], 0)))))'>024110</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0.28784600849134395}' data-sheets-formula='=indirect("KODEX 200!G"&amp;R[0]C[7])'>28.78%</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0.3614}'>36.14%</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0.07355399150865605}' data-sheets-numberformat='{"1":3,"2":"0.00%p"}' data-sheets-formula="=R[0]C[-1]-R[0]C[-2]"><strong>7.36%p</strong></td>
<td style="text-align: left;" data-sheets-value='{"1":2,"2":"New issue"}'>New issue</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Doosan Fuel Cell Co Ltd"}' data-sheets-formula='=googlefinance(R[0]C[1], "name")'><strong>Doosan Fuel Cell Co Ltd</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":336260}' data-sheets-formula='=if(len(R[0]C[7])=2, "0000"&amp;R[0]C[7], if(len(R[0]C[7])=3, "000"&amp;R[0]C[7], if(LEN(R[0]C[7])=4, "00"&amp;R[0]C[7], if(len(R[0]C[7])=5, "0"&amp;R[0]C[7], if(len(R[0]C[7])=6, R[0]C[7], 0)))))'>336260</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0.4198990285604666}' data-sheets-formula='=indirect("KODEX 200!G"&amp;R[0]C[7])'>41.99%</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0.6073}'>60.73%</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0.18740097143953333}' data-sheets-numberformat='{"1":3,"2":"0.00%p"}' data-sheets-formula="=R[0]C[-1]-R[0]C[-2]"><strong>18.74%p</strong></td>
<td style="text-align: left;" data-sheets-value='{"1":2,"2":"New issue &amp; the major shareholder selldown"}'>New issue &amp; the major shareholder selldown</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Cs Wind Corp"}' data-sheets-formula='=googlefinance(R[0]C[1], "name")'><strong>Cs Wind Corp</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":112610}' data-sheets-formula='=if(len(R[0]C[7])=2, "0000"&amp;R[0]C[7], if(len(R[0]C[7])=3, "000"&amp;R[0]C[7], if(LEN(R[0]C[7])=4, "00"&amp;R[0]C[7], if(len(R[0]C[7])=5, "0"&amp;R[0]C[7], if(len(R[0]C[7])=6, R[0]C[7], 0)))))'>112610</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0.40763635199851167}' data-sheets-formula='=indirect("KODEX 200!G"&amp;R[0]C[7])'>40.76%</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0.5632}'>56.32%</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0.15556364800148836}' data-sheets-numberformat='{"1":3,"2":"0.00%p"}' data-sheets-formula="=R[0]C[-1]-R[0]C[-2]"><strong>15.56%p</strong></td>
<td style="text-align: left;" data-sheets-value='{"1":2,"2":"New issue"}'>New issue</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Hyundai Rotem Co"}' data-sheets-formula='=googlefinance(R[0]C[1], "name")'><strong>Hyundai Rotem Co</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"064350"}' data-sheets-formula='=if(len(R[0]C[7])=2, "0000"&amp;R[0]C[7], if(len(R[0]C[7])=3, "000"&amp;R[0]C[7], if(LEN(R[0]C[7])=4, "00"&amp;R[0]C[7], if(len(R[0]C[7])=5, "0"&amp;R[0]C[7], if(len(R[0]C[7])=6, R[0]C[7], 0)))))'>064350</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0.5505147484042126}' data-sheets-formula='=indirect("KODEX 200!G"&amp;R[0]C[7])'>55.05%</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0.6589}'>65.89%</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0.10838525159578749}' data-sheets-numberformat='{"1":3,"2":"0.00%p"}' data-sheets-formula="=R[0]C[-1]-R[0]C[-2]"><strong>10.84%p</strong></td>
<td style="text-align: left;" data-sheets-value='{"1":2,"2":"CB conversion"}'>CB conversion</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"DL Holdings Co Ltd"}' data-sheets-formula='=googlefinance(R[0]C[1], "name")'><strong>DL Holdings Co Ltd</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"000210"}' data-sheets-formula='=if(len(R[0]C[7])=2, "0000"&amp;R[0]C[7], if(len(R[0]C[7])=3, "000"&amp;R[0]C[7], if(LEN(R[0]C[7])=4, "00"&amp;R[0]C[7], if(len(R[0]C[7])=5, "0"&amp;R[0]C[7], if(len(R[0]C[7])=6, R[0]C[7], 0)))))'>000210</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0.8713222556320805}' data-sheets-formula='=indirect("KODEX 200!G"&amp;R[0]C[7])'>87.13%</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0.5643999999999999}' data-sheets-formula="=76.88%-(R[0]C[8]-R[0]C[7])">56.44%</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":-0.30692225563208064}' data-sheets-numberformat='{"1":3,"2":"0.00%p"}' data-sheets-formula="=R[0]C[-1]-R[0]C[-2]"><strong>-30.69%p</strong></td>
<td style="text-align: left;" data-sheets-value='{"1":2,"2":"Tender offer"}'>Tender offer</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"SK Discovery Co Ltd"}' data-sheets-formula='=googlefinance(R[0]C[1], "name")'><strong>SK Discovery Co Ltd</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"006120"}' data-sheets-formula='=if(len(R[0]C[7])=2, "0000"&amp;R[0]C[7], if(len(R[0]C[7])=3, "000"&amp;R[0]C[7], if(LEN(R[0]C[7])=4, "00"&amp;R[0]C[7], if(len(R[0]C[7])=5, "0"&amp;R[0]C[7], if(len(R[0]C[7])=6, R[0]C[7], 0)))))'>006120</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0.6193005803932952}' data-sheets-formula='=indirect("KODEX 200!G"&amp;R[0]C[7])'>61.93%</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0.5243}'>52.43%</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":-0.09500058039329518}' data-sheets-numberformat='{"1":3,"2":"0.00%p"}' data-sheets-formula="=R[0]C[-1]-R[0]C[-2]"><strong>-9.50%p</strong></td>
<td style="text-align: left;" data-sheets-value='{"1":2,"2":"The major shareholder buying"}'>The major shareholder buying</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Hybe Co Ltd"}' data-sheets-formula='=googlefinance(R[0]C[1], "name")'><strong>HYBE Co Ltd</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":352820}' data-sheets-formula='=if(len(R[0]C[7])=2, "0000"&amp;R[0]C[7], if(len(R[0]C[7])=3, "000"&amp;R[0]C[7], if(LEN(R[0]C[7])=4, "00"&amp;R[0]C[7], if(len(R[0]C[7])=5, "0"&amp;R[0]C[7], if(len(R[0]C[7])=6, R[0]C[7], 0)))))'>352820</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0.2683143580142878}' data-sheets-formula='=indirect("KODEX 200!G"&amp;R[0]C[7])'>26.83%</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0.4149}'>41.49%</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0.14658564198571217}' data-sheets-numberformat='{"1":3,"2":"0.00%p"}' data-sheets-formula="=R[0]C[-1]-R[0]C[-2]"><strong>14.66%p</strong></td>
<td style="text-align: left;" data-sheets-value='{"1":2,"2":"Lockup release"}'>Lockup release</td>
</tr>
<tr><td colspan="6" data-sheets-value='{"1":2,"2":"Source: KRX"}'>Source: KRX</td></tr>
</tbody>
</table>

The KRX defines the free float of a stock as the proportion of outstanding shares that is deemed available for purchase in the stock market.The KRX includes the following types of shares in free float for all its indices:
Stakes held by the major shareholder and the special affiliated persons
Stakes held by the government agencies, excluding the Korea NPS
Treasury shares
Stakes hed by the ESOP
Stakes under a lock-up agreement by court order
A free float change cycle is every 6 months. That is, the KRX reflects free float changes in the bi-annual rebalancing.But if a change is less than ±5%pt, there will be no change. The KRX will continue to apply the previous free float rates.The KRX may reflect a free-float change before a bi-annual rebalancing if a change is substantially large. The KRX considers the following factors: company size, rebalancing size and subsequent market impact, and index tracking convenience.Likely names with a ±5%pt free float changeThis rebalancing will likely feature a total of 9 constituents having a ±5%pt free float change: 6 names with a 5%pt or greater change and 3 names with a -5%pt or harsher change.Doosan Fuel Cell tops the list with +18.74%pt, followed by CS Wind with +15.56%pt and HYBE with +14.66%pt. On the other hand, DL Holdings will likely lose -30.69%pt in its free-float rate. SK Discovery and Korean Air are also expected to suffer a reduction, -9.50%pt and -8.50%pt, respectively.










Name
Ticker
Current free float rate (est.)
New free float rate (est.)
Free float change
Note


Korean Air Lines Co Ltd
003490
60.80%
52.30%
-8.50%p
New issue


SK Biopharmaceuticals Co Ltd
326030
22.70%
34.00%
11.30%p
The major shareholder selldown


Industrial Bank of Korea
024110
28.78%
36.14%
7.36%p
New issue


Doosan Fuel Cell Co Ltd
336260
41.99%
60.73%
18.74%p
New issue &amp; the major shareholder selldown


Cs Wind Corp
112610
40.76%
56.32%
15.56%p
New issue


Hyundai Rotem Co
064350
55.05%
65.89%
10.84%p
CB conversion


DL Holdings Co Ltd
000210
87.13%
56.44%
-30.69%p
Tender offer


SK Discovery Co Ltd
006120
61.93%
52.43%
-9.50%p
The major shareholder buying


HYBE Co Ltd
352820
26.83%
41.49%
14.66%p
Lockup release

Source: KRX



KOSPI 200 Rebalancing: Constituents with a ±5%pt Free Float Change

<p>HYBE subscription rights trading is in full action starting today. The price opened at ₩31,050. It fell to ₩ 30,000 and then soared to ₩34,450.</p><table class="table table-striped">
<colgroup>
<col width="100">
<col width="100">
</colgroup>
<tbody>
<tr><td colspan="2" rowspan="1" data-sheets-value='{"1":2,"2":"Subscription rights price movement"}'>Subscription rights price movement</td></tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Opening"}'><strong>Opening</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":31050}' data-sheets-numberformat='{"1":4,"2":"[$₩]#,##0"}'><strong>₩31,050</strong></td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"High"}'>High</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":34450}' data-sheets-numberformat='{"1":4,"2":"[$₩]#,##0"}'>₩34,450</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Low"}'>Low</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":30000}' data-sheets-numberformat='{"1":4,"2":"[$₩]#,##0"}'>₩30,000</td>
</tr>
<tr><td colspan="2" rowspan="1" data-sheets-value='{"1":2,"2":"Source: KRX"}'>Source: KRX</td></tr>
</tbody>
</table><p>The current arb yield is 2.79% at a spot price of ₩239,500 and the ceiling offering price of ₩200,000, the 1st round price.</p><table class="table table-striped">
<colgroup>
<col width="100">
<col width="100">
</colgroup>
<tbody>
<tr><td colspan="2" rowspan="1" data-sheets-value='{"1":2,"2":"Arb trade yield"}'>Arb trade yield</td></tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Subscription rights"}'><strong>Subscription rights</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":33000}' data-sheets-numberformat='{"1":4,"2":"[$₩]#,##0"}'><strong>₩33,000</strong></td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Spot price"}'><strong>Spot price</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":239500}' data-sheets-numberformat='{"1":4,"2":"[$₩]#,##0"}' data-sheets-formula='=googlefinance(Terms!R[0]C[0], "price")'><strong>₩239,500</strong></td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Offering price at the ceiling"}'>Offering price at the ceiling</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":200000}' data-sheets-numberformat='{"1":4,"2":"[$₩]#,##0"}' data-sheets-formula="=Pricing!R[20]C[0]">₩200,000</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Arb trade yield"}'><strong>Arb trade yield</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0.027896995708154508}' data-sheets-numberformat='[null,3,"0.00%",1]' data-sheets-formula="=(R[-2]C[0]-(R[-1]C[0]+R[-3]C[0]))/(R[-3]C[0]+R[-1]C[0])"><strong>2.79%</strong></td>
</tr>
<tr><td colspan="2" rowspan="1" data-sheets-value='{"1":2,"2":"Source: KRX"}'>Source: KRX</td></tr>
</tbody>
</table><p>However, if you can manage to get a full 20% oversubscription, your arb trade yield will rise to 5.27%, again at the ceiling offering price of ₩200,000.</p><table class="table table-striped">
<colgroup>
<col width="100">
<col width="100">
</colgroup>
<tbody>
<tr><td colspan="2" rowspan="1" style="width: 724.167px;" data-sheets-value='{"1":2,"2":"Arb trade yield"}'>Arb trade yield at a full 20% oversubscription</td></tr>
<tr>
<td style="width: 369.167px;" data-sheets-value='{"1":2,"2":"Subscription rights at a full 120% oversubscription"}'><strong>Subscription rights at a full 20% oversubscription</strong></td>
<td style="text-align: right; width: 334.167px;" data-sheets-value='{"1":3,"3":27500}' data-sheets-numberformat='{"1":4,"2":"[$₩]#,##0"}' data-sheets-formula="=33000/1.2"><strong>₩27,500</strong></td>
</tr>
<tr>
<td style="width: 369.167px;" data-sheets-value='{"1":2,"2":"Spot price"}'><strong>Spot price</strong></td>
<td style="text-align: right; width: 334.167px;" data-sheets-value='{"1":3,"3":239500}' data-sheets-numberformat='{"1":4,"2":"[$₩]#,##0"}' data-sheets-formula="=R[0]C[-3]"><strong>₩239,500</strong></td>
</tr>
<tr>
<td style="width: 369.167px;" data-sheets-value='{"1":2,"2":"Offering price at the ceiling"}'>Offering price at the ceiling</td>
<td style="text-align: right; width: 334.167px;" data-sheets-value='{"1":3,"3":200000}' data-sheets-numberformat='{"1":4,"2":"[$₩]#,##0"}' data-sheets-formula="=R[0]C[-3]">₩200,000</td>
</tr>
<tr>
<td style="width: 369.167px;" data-sheets-value='{"1":2,"2":"Arb trade yield"}'><strong>Arb trade yield</strong></td>
<td style="text-align: right; width: 334.167px;" data-sheets-value='{"1":3,"3":0.05274725274725275}' data-sheets-numberformat='[null,3,"0.00%",1]' data-sheets-formula="=(R[-2]C[0]-(R[-1]C[0]+R[-3]C[0]))/(R[-3]C[0]+R[-1]C[0])"><strong>5.27%</strong></td>
</tr>
<tr><td colspan="2" rowspan="1" style="width: 724.167px;" data-sheets-value='{"1":2,"2":"Source: KRX"}'>Source: KRX</td></tr>
</tbody>
</table>

HYBE subscription rights trading is in full action starting today. The price opened at ₩31,050. It fell to ₩ 30,000 and then soared to ₩34,450.





Subscription rights price movement

Opening
₩31,050


High
₩34,450


Low
₩30,000

Source: KRX

The current arb yield is 2.79% at a spot price of ₩239,500 and the ceiling offering price of ₩200,000, the 1st round price.





Arb trade yield

Subscription rights
₩33,000


Spot price
₩239,500


Offering price at the ceiling
₩200,000


Arb trade yield
2.79%

Source: KRX

However, if you can manage to get a full 20% oversubscription, your arb trade yield will rise to 5.27%, again at the ceiling offering price of ₩200,000.





Arb trade yield at a full 20% oversubscription

Subscription rights at a full 20% oversubscription
₩27,500


Spot price
₩239,500


Offering price at the ceiling
₩200,000


Arb trade yield
5.27%

Source: KRX



HYBE Subscription Rights at a Decent Arb Yield: Why Not Trading It

<p>Korea had been one of the few countries that allowed short sellers to participate in a rights offering.</p><p>Even if you shorted the shares of a company after it had announced a rights offer, you could still <span>subscribe to new rights and repay the shorted shares with new rights.</span></p><p><span>Now, starting April 6, this practice is no longer allowed.</span></p><p><span>There had been several attempts to close this loophole in the past. But none of these attempts </span><span>hadn't even passed the parliament's preliminary session.</span></p><p><span>Finally, this time, obviously to sweeten the public-angering short-selling resumption on May 3, the latest attempt by the Korea FSC got the lawmakers' approval.</span></p><div class="content-highlight">
<p><em><a href="https://www.korea.kr/news/pressReleaseView.do?newsId=156443917" target="_blank" rel="noopener">Here is the link to the Capital Market and Financial Investment Business Act Enforcement Decree, containing the closing of this practice.</a></em></p>
<p><em>(Source: www.Korea.kr)</em></p>
</div>

Korea had been one of the few countries that allowed short sellers to participate in a rights offering.Even if you shorted the shares of a company after it had announced a rights offer, you could still subscribe to new rights and repay the shorted shares with new rights.Now, starting April 6, this practice is no longer allowed.There had been several attempts to close this loophole in the past. But none of these attempts hadn't even passed the parliament's preliminary session.Finally, this time, obviously to sweeten the public-angering short-selling resumption on May 3, the latest attempt by the Korea FSC got the lawmakers' approval.
Here is the link to the Capital Market and Financial Investment Business Act Enforcement Decree, containing the closing of this practice.
(Source: www.Korea.kr)


Korea's New Short Selling Restriction to Close the Loophole for Arb Trading on a Rights Offer

South Korea

HYBE Co., Ltd. operates as an entertainment company. The Company provides music production, album distribution, entertainers management, publicity, planning, training, and other services. HYBE also makes television shows.

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

HYBE (352820 KS)

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This post looks into KOSPI 200 constituents with a potential ±5%pt free float change in the upcoming rebalancing. It then examines the extent of...

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Korea's New Short Selling Restriction to Close the Loophole for Arb Trading on a Rights Offer

This post details the newly introduced short-selling restriction to close the loophole for arb trading on a rights offer in Korea.

Sanghyun Park

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52-week Range

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