Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

Event-Driven

<ul>
<li>After the market close on 12 January, OCI Holdings (010060 KS) announced that it plans to acquire a 27.03% stake in Hanmi Science (008930 KS) for 770 billion won. </li>
<li>Through this investment and integration between OCI Holdings and Hanmi Science, the OCI Group and Hanmi Pharmaceutical Group plans to establish a joint management system.</li>
<li><strong>This deal between OCI Holdings and Hanmi Science is not over and it could lead to an M&amp;A fight for the control of Hanmi Science by its family members. </strong></li>
</ul>


After the market close on 12 January, OCI Holdings (010060 KS) announced that it plans to acquire a 27.03% stake in Hanmi Science (008930 KS) for 770 billion won. 
Through this investment and integration between OCI Holdings and Hanmi Science, the OCI Group and Hanmi Pharmaceutical Group plans to establish a joint management system.
This deal between OCI Holdings and Hanmi Science is not over and it could lead to an M&amp;A fight for the control of Hanmi Science by its family members. 


OCI Holdings Plans to Acquire a 27% In Hanmi Science - To Spark a Family Feud?

Global Healthcare Analyst

Tina Banerjee

Equity Bottom-Up

Bukwang Pharmaceutical / Equity Bottom-Up

<ul>
<li>
<a href="https://www.smartkarma.com/entities/bukwang-pharmaceutical-co-ltd" target="_blank" data-smartkarma-citation="entities:15076:1" rel="noopener">Bukwang Pharmaceutical (003000 KS)</a> has reported operating loss of KRW1.2 billion in 2022 due to the increased R&amp;D cost, driven by the clinical progress of JM-010.</li>
<li>Bukwang’s subsidiary, Contera Pharma, is developing JM-010 as a treatment for dyskinesia in patients with Parkinson’s disease. JM-010 is in phase 2 clinical trial in the U.S. and Europe.</li>
<li>Bukwang has been aiming to list Contera Pharma to secure funds for clinical research, which has still not materialized. With current low-risk appetite, Contera Pharma IPO may not sail smooth.</li>
</ul>



Bukwang Pharmaceutical (003000 KS) has reported operating loss of KRW1.2 billion in 2022 due to the increased R&amp;D cost, driven by the clinical progress of JM-010.
Bukwang’s subsidiary, Contera Pharma, is developing JM-010 as a treatment for dyskinesia in patients with Parkinson’s disease. JM-010 is in phase 2 clinical trial in the U.S. and Europe.
Bukwang has been aiming to list Contera Pharma to secure funds for clinical research, which has still not materialized. With current low-risk appetite, Contera Pharma IPO may not sail smooth.


Bukwang Pharmaceutical (003000 KS): High R&D Cost Put Pressure on Profit; Pain to Continue in Future

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>NPS said it would add 50 KOSPI stocks to KOSPI 200 for direct management. However, the key was when this would be implemented and which ones would be included.</li>
<li>SBS, one of Korea's major networks, exclusively reported that NPS finalized the constituent stocks of the NPS-KR250 and started rebalancing trading on the 50 additional KOSPI stocks from January.</li>
<li>Hence, tracing and identifying who these additional 50 KOSPI stocks are is becoming the hottest topic in Korea's local market at this point.</li>
</ul>


NPS said it would add 50 KOSPI stocks to KOSPI 200 for direct management. However, the key was when this would be implemented and which ones would be included.
SBS, one of Korea's major networks, exclusively reported that NPS finalized the constituent stocks of the NPS-KR250 and started rebalancing trading on the 50 additional KOSPI stocks from January.
Hence, tracing and identifying who these additional 50 KOSPI stocks are is becoming the hottest topic in Korea's local market at this point.


Korea NPS Reportedly Finalized Additional 50 KOSPI Stocks in Its BM for Direct Management

<ul>
<li>As expected, most of the KOSPI 200 deletions, except for Bukwang Pharm, significantly outperformed the KOSPI index today.</li>
<li>Those that fit the pattern shown in the last rebalancing are CJ CGV and Bukwang. The problem, however, is that they have potential events triggering their price to fall.</li>
<li>So, I suggest paying attention to Yungjin Pharm and SK Discovery, which also have a sizable level of short interest and are expected to have stable short-coverings by end-June.</li>
</ul>


As expected, most of the KOSPI 200 deletions, except for Bukwang Pharm, significantly outperformed the KOSPI index today.
Those that fit the pattern shown in the last rebalancing are CJ CGV and Bukwang. The problem, however, is that they have potential events triggering their price to fall.
So, I suggest paying attention to Yungjin Pharm and SK Discovery, which also have a sizable level of short interest and are expected to have stable short-coverings by end-June.


Short-Covering Trend of KOSPI 200 Deletions by Month-End

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

<ul>
<li>There are 7 adds and 7 deletes for the <a href="https://www.smartkarma.com/entities/korea-stock-exchange-kospi-200-index" target="_blank" data-smartkarma-citation="entities:26021:1" rel="noopener">Korea Stock Exchange Kospi 200 Index (KOSPI2 INDEX)</a> rebalance to be implemented at the close on 9 June.</li>
<li>There are also a bunch of stocks that will have changes applied to their free float. There were announced last week and are much less tracked.</li>
<li>The flows and impact on some of the float change names are significant and pre-positioning and passive flows could move the stocks over the next few days.</li>
</ul>


There are 7 adds and 7 deletes for the Korea Stock Exchange Kospi 200 Index (KOSPI2 INDEX) rebalance to be implemented at the close on 9 June.
There are also a bunch of stocks that will have changes applied to their free float. There were announced last week and are much less tracked.
The flows and impact on some of the float change names are significant and pre-positioning and passive flows could move the stocks over the next few days.


KOSPI200 Index Rebalance: Float Changes, Flows & Trades

South Korea

Bukwang Pharmaceutical Co., Ltd. produces oral hygienic, and pharmaceutical products.  The Company's products include over-the-counter drugs, toothpastes, and toothbrushes.

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Bukwang Pharmaceutical (003000 KS)

OCI Holdings Plans to Acquire a 27% In Hanmi Science - To Spark a Family Feud?

After the market close on 12 January, OCI Holdings (010060 KS) announced that it plans to acquire a 27.03% stake in Hanmi Science (008930 KS) for...

Douglas Kim