Korea / Special Sits, Pairs, Index Rebalancing, Clepsydra Capital

Sanghyun Park

Korea / Special Sits, Pairs, Index Rebalancing

Event-Driven

<p>Celltrion Healthcare is now in a -2σ territory on a 20D MA for the first time since early July.</p><table class="table table-striped">
<colgroup>
<col width="150">
<col width="150">
</colgroup>
<tbody>
<tr><td colspan="2" rowspan="1" data-sheets-value='{"1":2,"2":"% of sigma"}'>% of sigma</td></tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Today"}'>Today</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":-2.0477330543677903}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}' data-sheets-formula="=Data!R[-12]C[6]">-204.77%</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"T-1"}'>T-1</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":-1.4324802976051125}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}' data-sheets-formula="=Data!R[-12]C[6]">-143.25%</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"T-2"}'>T-2</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":-1.8234130821597085}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}' data-sheets-formula="=Data!R[-12]C[6]">-182.34%</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"T-3"}'>T-3</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":-0.7777620123928402}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}' data-sheets-formula="=Data!R[-12]C[6]">-77.78%</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"T-4"}'>T-4</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0.08448462037183145}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}' data-sheets-formula="=Data!R[-12]C[6]">8.45%</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"T-5"}'>T-5</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0.6457523679577317}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}' data-sheets-formula="=Data!R[-12]C[6]">64.58%</td>
</tr>
<tr><td colspan="2" rowspan="1" data-sheets-value='{"1":2,"2":"Source: KRX"}'>Source: KRX</td></tr>
</tbody>
</table><section class="figure"><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/170/067/original/chart%20%283%29.png?1604858977" class="editor-image img-responsive" data-smartkarma-image-id="170067"></figure></section><p>The price ratio sits at -3% below the 120D mean, almost in line with the 2-yr mean.</p><table class="table table-striped">
<colgroup>
<col width="300">
<col width="150">
<col width="150">
</colgroup>
<tbody>
<tr><td colspan="3" rowspan="1" data-sheets-value='{"1":2,"2":"Price ratio"}' data-sheets-numberformat='{"1":2,"2":"#,##0"}'>Price ratio</td></tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Today"}'>Today</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0.32972972972972975}' data-sheets-numberformat='{"1":2,"2":"#,##0.00000","3":1}' data-sheets-formula="=Data!R[-21]C[1]">0.32973</td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"-"}' data-sheets-numberformat='{"1":2,"2":"#,##0.00000","3":1}'>-</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"20D MA"}'>20D MA</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0.34578176858905396}' data-sheets-numberformat='{"1":2,"2":"#,##0.00000","3":1}' data-sheets-formula="=Data!R[-22]C[2]">0.34578</td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"-"}' data-sheets-numberformat='{"1":2,"2":"#,##0.00000","3":1}'>-</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"σ"}'>σ</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0.007838931361236468}' data-sheets-numberformat='{"1":2,"2":"#,##0.00000","3":1}' data-sheets-formula="=Data!R[-23]C[5]">0.00784</td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"-"}' data-sheets-numberformat='{"1":2,"2":"#,##0.00000","3":1}'>-</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"+1 σ"}' data-sheets-formula='="+1 σ"'>+1 σ</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0.35362069995029044}' data-sheets-numberformat='{"1":2,"2":"#,##0.00000","3":1}' data-sheets-formula="=Data!R[-24]C[3]">0.35362</td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"-"}' data-sheets-numberformat='{"1":2,"2":"#,##0.00000","3":1}'>-</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"-1 σ"}' data-sheets-formula='="-1 σ"'>-1 σ</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0.3379428372278175}' data-sheets-numberformat='{"1":2,"2":"#,##0.00000","3":1}' data-sheets-formula="=Data!R[-25]C[4]">0.33794</td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"-"}' data-sheets-numberformat='{"1":2,"2":"#,##0.00000","3":1}'>-</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"120D mean"}'><strong>120D mean</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0.3399254728112306}' data-sheets-numberformat='{"1":2,"2":"#,##0.00000","3":1}' data-sheets-formula="=average(Data!R2C3:R100C3)"><strong>0.33993</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":-0.029994054276605512}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}' data-sheets-formula="=(R23C[-1]-R[0]C[-1])/R[0]C[-1]"><strong>-3.00%</strong></td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"120D median"}'>120D median</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0.33824057450628364}' data-sheets-numberformat='{"1":2,"2":"#,##0.00000","3":1}' data-sheets-formula="=MEDIAN(Data!R2C3:R100C3)">0.33824</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":-0.025162104779939062}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}' data-sheets-formula="=(R23C[-1]-R[0]C[-1])/R[0]C[-1]">-2.52%</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"120D high"}'>120D high</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0.37744107744107747}' data-sheets-numberformat='{"1":2,"2":"#,##0.00000","3":1}' data-sheets-formula="=MAX(Data!R2C3:R100C3)">0.37744</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":-0.1264074065144538}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}' data-sheets-formula="=(R23C[-1]-R[0]C[-1])/R[0]C[-1]">-12.64%</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"120D low"}'>120D low</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0.3186119873817035}' data-sheets-numberformat='{"1":2,"2":"#,##0.00000","3":1}' data-sheets-formula="=MIN(Data!R2C3:R100C3)">0.31861</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0.0348943002408349}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}' data-sheets-formula="=(R23C[-1]-R[0]C[-1])/R[0]C[-1]">3.49%</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"1Y mean"}'>1Y mean</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0.3464734166014965}' data-sheets-numberformat='{"1":2,"2":"#,##0.00000","3":1}' data-sheets-formula="=average(Data!R2C3:R248C3)">0.34647</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":-0.04832603619637822}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}' data-sheets-formula="=(R23C[-1]-R[0]C[-1])/R[0]C[-1]">-4.83%</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"1Y median"}'>1Y median</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0.34324324324324323}' data-sheets-numberformat='{"1":2,"2":"#,##0.00000","3":1}' data-sheets-formula="=MEDIAN(Data!R2C3:R248C3)">0.34324</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":-0.0393700787401574}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}' data-sheets-formula="=(R23C[-1]-R[0]C[-1])/R[0]C[-1]">-3.94%</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"1Y high"}'>1Y high</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0.4381609195402299}' data-sheets-numberformat='{"1":2,"2":"#,##0.00000","3":1}' data-sheets-formula="=MAX(Data!R2C3:R248C3)">0.43816</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":-0.24746887496100506}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}' data-sheets-formula="=(R23C[-1]-R[0]C[-1])/R[0]C[-1]">-24.75%</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"1Y low"}'>1Y low</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0.2738872403560831}' data-sheets-numberformat='{"1":2,"2":"#,##0.00000","3":1}' data-sheets-formula="=MIN(Data!R2C3:R248C3)">0.27389</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0.20388861233931665}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}' data-sheets-formula="=(R23C[-1]-R[0]C[-1])/R[0]C[-1]">20.39%</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"2Y mean"}'><strong>2Y mean</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0.33116303056023466}' data-sheets-numberformat='{"1":2,"2":"#,##0.00000","3":1}' data-sheets-formula="=average(Data!R2C3:R476C3)"><strong>0.33116</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":-0.004328082238165811}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}' data-sheets-formula="=(R23C[-1]-R[0]C[-1])/R[0]C[-1]"><strong>-0.43%</strong></td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"2Y median"}'>2Y median</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0.3368421052631579}' data-sheets-numberformat='{"1":2,"2":"#,##0.00000","3":1}' data-sheets-formula="=MEDIAN(Data!R2C3:R476C3)">0.33684</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":-0.021114864864864788}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}' data-sheets-formula="=(R23C[-1]-R[0]C[-1])/R[0]C[-1]">-2.11%</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"2Y high"}'>2Y high</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0.4381609195402299}' data-sheets-numberformat='{"1":2,"2":"#,##0.00000","3":1}' data-sheets-formula="=MAX(Data!R2C3:R476C3)">0.43816</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":-0.24746887496100506}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}' data-sheets-formula="=(R23C[-1]-R[0]C[-1])/R[0]C[-1]">-24.75%</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"2Y low"}'>2Y low</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0.26405228758169935}' data-sheets-numberformat='{"1":2,"2":"#,##0.00000","3":1}' data-sheets-formula="=MIN(Data!R2C3:R476C3)">0.26405</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0.24872892694674878}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}' data-sheets-formula="=(R23C[-1]-R[0]C[-1])/R[0]C[-1]">24.87%</td>
</tr>
<tr><td colspan="3" rowspan="1" data-sheets-value='{"1":2,"2":"Source: KRX"}'>Source: KRX</td></tr>
</tbody>
</table><section class="figure"><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/170/068/original/chart%20%284%29.png?1604858990" class="editor-image img-responsive" data-smartkarma-image-id="170068"></figure></section><p>The merger announced in late September triggered a Healthcare-favored diversion that lasted nearly a month.</p><p>We then saw a reversion attempt lately that almost brought it back to the pre-merger announcement level.</p><section class="figure"><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/170/069/original/chart.png?1604859238" class="editor-image img-responsive" data-smartkarma-image-id="170069"></figure></section>

Celltrion Healthcare is now in a -2σ territory on a 20D MA for the first time since early July.





% of sigma

Today
-204.77%


T-1
-143.25%


T-2
-182.34%


T-3
-77.78%


T-4
8.45%


T-5
64.58%

Source: KRX

The price ratio sits at -3% below the 120D mean, almost in line with the 2-yr mean.






Price ratio

Today
0.32973
-


20D MA
0.34578
-


σ
0.00784
-


+1 σ
0.35362
-


-1 σ
0.33794
-


120D mean
0.33993
-3.00%


120D median
0.33824
-2.52%


120D high
0.37744
-12.64%


120D low
0.31861
3.49%


1Y mean
0.34647
-4.83%


1Y median
0.34324
-3.94%


1Y high
0.43816
-24.75%


1Y low
0.27389
20.39%


2Y mean
0.33116
-0.43%


2Y median
0.33684
-2.11%


2Y high
0.43816
-24.75%


2Y low
0.26405
24.87%

Source: KRX

The merger announced in late September triggered a Healthcare-favored diversion that lasted nearly a month.We then saw a reversion attempt lately that almost brought it back to the pre-merger announcement level.

Celltrion Pair: Entry Point on Latest Diversion

Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

Cross Asset Strategy

<h2>Review of Top 10 Issues Related to Korean Stock Market, Economy, &amp; Politics in September 2020</h2><ul>
<li><div class="content-highlight"><strong>Value &amp; GARP outperforming Growth</strong></div></li>
<li><strong>Big Hit Entertainment IPO </strong></li>
<li><strong>Kakao Games IPO </strong></li>
<li><strong>IPOs of Kakao Pay, Kakao Bank, &amp; Kakao Page in 2021 </strong></li>
<li><strong>A merger of the three Celltrion companies </strong></li>
<li><strong>LG Chem's carve-out of its rechargeable battery business </strong></li>
<li><strong>Big rights offerings by Doosan Heavy Industries &amp; Doosan Fuel Cell </strong></li>
<li><strong>HDC Hyundai Development gives up on Asiana Airlines </strong></li>
<li><strong>Nikola's founder resigns - Impact on Hanwha Solutions</strong></li>
<li><strong>Samsung Electronics (Dividends) </strong></li>
</ul>

Review of Top 10 Issues Related to Korean Stock Market, Economy, &amp; Politics in September 2020
Value &amp; GARP outperforming Growth
Big Hit Entertainment IPO 
Kakao Games IPO 
IPOs of Kakao Pay, Kakao Bank, &amp; Kakao Page in 2021 
A merger of the three Celltrion companies 
LG Chem's carve-out of its rechargeable battery business 
Big rights offerings by Doosan Heavy Industries &amp; Doosan Fuel Cell 
HDC Hyundai Development gives up on Asiana Airlines 
Nikola's founder resigns - Impact on Hanwha Solutions
Samsung Electronics (Dividends) 


Korea Stock Market Monthly Recap #52 (September 2020)

<p>Celltrion finally gives us a three-way merger plan in a regulatory filing.</p><p>Below is the link to the regulatory filing published at DART last Friday after the market closed.</p><p><a href="http://dart.fss.or.kr/dsaf001/main.do?rcpNo=20200925800449" target="_blank" rel="noopener">http://dart.fss.or.kr/dsaf001/main.do?rcpNo=20200925800449</a></p><p>The filing is brief and straightforward.</p><ul>
<li>First, there will be a new company named Celltrion Healthcare Holdings. Then, Seo Jung-jin, Founder, will invest his stake of Healthcare into this entity through in-kind investment.</li>
<li>Second, they will merge Celltrion Holdings and Celltrion Healthcare Holdings. The deadline for this merger is December 31, 2021.</li>
<li>Lastly, there will be another merger between Celltrion, Celltrion Healthcare, and Celltrion Pharm. * <em>But the deadline is yet to be announced. Also, the merger mechanism is subject to change depending on the outcome of each company's board and shareholder meeting.</em>
</li>
</ul><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/161/915/original/1.png?1601171221" class="editor-image img-responsive" data-smartkarma-image-id="161915"></figure><p></p><div class="content-caption">(Source: DART)</div>

Celltrion finally gives us a three-way merger plan in a regulatory filing.Below is the link to the regulatory filing published at DART last Friday after the market closed.http://dart.fss.or.kr/dsaf001/main.do?rcpNo=20200925800449The filing is brief and straightforward.
First, there will be a new company named Celltrion Healthcare Holdings. Then, Seo Jung-jin, Founder, will invest his stake of Healthcare into this entity through in-kind investment.
Second, they will merge Celltrion Holdings and Celltrion Healthcare Holdings. The deadline for this merger is December 31, 2021.
Lastly, there will be another merger between Celltrion, Celltrion Healthcare, and Celltrion Pharm. * But the deadline is yet to be announced. Also, the merger mechanism is subject to change depending on the outcome of each company's board and shareholder meeting.

(Source: DART)

Celltrion Merger Announcement: Details, Questionable Aspects, & Trading Dynamics

Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

Last Week in Event SPACE: Vedanta, Evergrande Auto, Cocokara, Leyou, Mitsu Lease/Hitachi Cap

<div class="content-highlight">
<p>After the market close today, there was a major announcement in the healthcare sector in Korea. <a href="https://www.smartkarma.com/entities/celltrion-inc" target="_blank" data-smartkarma-citation="entities:991:1" rel="noopener">Celltrion Inc (068270 KS)</a>, <a href="https://www.smartkarma.com/entities/celltrion-healthcare" target="_blank" data-smartkarma-citation="entities:23641:1" rel="noopener">Celltrion Healthcare (091990 KS)</a>, and <a href="https://www.smartkarma.com/entities/celltrion-pharm-inc" target="_blank" data-smartkarma-citation="entities:992:1" rel="noopener">Celltrion Pharm (068760 KS)</a> will be <strong>MERGED</strong> into one company. Plus, a <strong>NEWCO</strong> called <strong>Celltrion Healthcare Holdings</strong> is established.</p>
<p>Overall, we believe that this will be<strong> positive</strong> for the three Celltrion Group companies over a 6-12 months view. However, the overall impact is not likely to be overly significant since early this year, the Celltrion Group Chairman Seo Jung-Jin <strong>already hinted</strong> that there could be a merger among these three companies.</p>
<p>One of the main reasons why the Celltrion Group stocks have done well so far this year has been due to the expectation of the formal merger announcement. As a result, there could be some investors that may actually try to sell the three Celltrion Group related stocks on this news in the<strong> near-term.</strong> </p>
</div>


After the market close today, there was a major announcement in the healthcare sector in Korea. Celltrion Inc (068270 KS), Celltrion Healthcare (091990 KS), and Celltrion Pharm (068760 KS) will be MERGED into one company. Plus, a NEWCO called Celltrion Healthcare Holdings is established.
Overall, we believe that this will be positive for the three Celltrion Group companies over a 6-12 months view. However, the overall impact is not likely to be overly significant since early this year, the Celltrion Group Chairman Seo Jung-Jin already hinted that there could be a merger among these three companies.
One of the main reasons why the Celltrion Group stocks have done well so far this year has been due to the expectation of the formal merger announcement. As a result, there could be some investors that may actually try to sell the three Celltrion Group related stocks on this news in the near-term. 


A Merger of Three Celltrion Group Companies + Formation of a Celltrion Healthcare Holdings

South Korea

Celltrion Healthcare Co.,Ltd develops and manufactures pharmaceutical biologics and chemically synthesized drugs. The Company specializes in the development of drugs for breast cancer, arthritis, leukemia, psoriasis, human rabies prevention, and influenza. Celltrion Healthcare markets its products to customers internationally.

Price Gauge
52-week Range	0.00 - 0.00
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Celltrion Healthcare (091990 KS)

Celltrion Pair: Entry Point on Latest Diversion

Celltrion H is at -2σ for the first time since early July. I expect a quick reversion: the COVID-19 vaccine and block deal risk are a neutral...

Sanghyun Park

Korea Stock Market Monthly Recap #52 (September 2020)

Review of Top 10 Issues Related to Korean Stock Market, Economy, Politics in September 2020

Douglas Kim

Celltrion Merger Announcement: Details, Questionable Aspects, & Trading Dynamics

Celltrion finally ga

Sanghyun Park

Last Week in Event SPACE: Vedanta, Evergrande Auto, Cocokara, Leyou, Mitsu Lease/Hitachi Cap

Last Week in Event SPACE ... Plus, other events, CCASS movements and Mood Spins. (This insight covers specific insights & comments...

David Blennerhassett

A Merger of Three Celltrion Group Companies + Formation of a Celltrion Healthcare Holdings

Overall, we believe that this will be positive for the three Celltrion Group companies over a 6-12 months view. However, the overall impact is not...

Douglas Kim

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)