Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

Douglas Research Advisory

Equity Bottom-Up

<ul>
<li>The Trump administration proposed a new 100% tariffs at movies produced outside the United States. Korean contents account for about 8-9% of total viewing hours on Netflix globally.</li>
<li>Top three listed film/drama production companies in Korea including Studio Dragon, CJ ENM, and ContentreeJoongAng are likely to be negatively impacted by the new major tariffs imposed by the U.S.</li>
<li>Economics of making a movie is much cheaper in South Korea versus the U.S. Producing a film in South Korea can cost 30–70% less than in the United States.</li>
</ul>


The Trump administration proposed a new 100% tariffs at movies produced outside the United States. Korean contents account for about 8-9% of total viewing hours on Netflix globally.
Top three listed film/drama production companies in Korea including Studio Dragon, CJ ENM, and ContentreeJoongAng are likely to be negatively impacted by the new major tariffs imposed by the U.S.
Economics of making a movie is much cheaper in South Korea versus the U.S. Producing a film in South Korea can cost 30–70% less than in the United States.


A 100% Tariffs on Films Produced Outside the U.S. - Negative on Korean Film Production Companies

<ul>
<li>One of the big thematic events on the Korean stock market has been the expectation that China could lift ban on Korean popular culture (Hallyu) as early as May 2025. </li>
<li>China's President Xi recently stated <em>"Cultural exchanges are a valuable part of our bilateral relations [between China and Korea]. We should avoid any problems occurring in handling such matters.” </em>
</li>
<li>We provide a list of 40 stocks in Korea that could most benefit from the end of lifting ban of Korean popular culture. </li>
</ul>


One of the big thematic events on the Korean stock market has been the expectation that China could lift ban on Korean popular culture (Hallyu) as early as May 2025. 
China's President Xi recently stated "Cultural exchanges are a valuable part of our bilateral relations [between China and Korea]. We should avoid any problems occurring in handling such matters.” 

We provide a list of 40 stocks in Korea that could most benefit from the end of lifting ban of Korean popular culture. 


China Could Lift Ban on Korean Popular Culture (Hallyu) As Early As May 2025

Asia Pac IPO & Placement Research, China biotech, Aequitas Research

Ke Yan, CFA, FRM

Asia Pac IPO & Placement Research, China biotech

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.

Quantitative Analysis

<ul>
<li>We analyzed the changes in short interest of KRX stocks as of Oct 18th which has an aggregated short interest worth USD5.0bn.</li>
<li>We tabulate league table for top short by value and short as multiple of ADT, as well as weekly increases &amp; decreases in short value, short as multiple of ADT.</li>
<li>We highlight short interest changes in Samsung Electronics, Sk Hynix, KB Financial, Shinhan Group, Hana Financial.</li>
</ul>


We analyzed the changes in short interest of KRX stocks as of Oct 18th which has an aggregated short interest worth USD5.0bn.
We tabulate league table for top short by value and short as multiple of ADT, as well as weekly increases &amp; decreases in short value, short as multiple of ADT.
We highlight short interest changes in Samsung Electronics, Sk Hynix, KB Financial, Shinhan Group, Hana Financial.


KRX Short Interest Weekly (Oct 18th): Samsung Electronics, Sk Hynix, KB Financial, Shinhan Group

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

<ul>
<li>This block deal has an unusual PSR (price swap return) contract at ₩58,200, the July 10th closing price, likely preventing Netmarble's typical stock price correction today.</li>
<li>In 2022, a similar-sized local PSR transaction involved Doosan Bobcat Inc, with 9.9 million shares and a PSR swap price of ₩37,500.</li>
<li>As for Doosan Bobcat, the stock initially dropped but rebounded near the PSR swap price, prompting local brokerages, focused on PSR fee income, to sell rather than realize capital gains.</li>
</ul>


This block deal has an unusual PSR (price swap return) contract at ₩58,200, the July 10th closing price, likely preventing Netmarble's typical stock price correction today.
In 2022, a similar-sized local PSR transaction involved Doosan Bobcat Inc, with 9.9 million shares and a PSR swap price of ₩37,500.
As for Doosan Bobcat, the stock initially dropped but rebounded near the PSR swap price, prompting local brokerages, focused on PSR fee income, to sell rather than realize capital gains.


Trading Setup Targeting the Netmarble PSR Contract, as Seen in the Case of Doosan Bobcat

<ul>
<li>SK Square announced it will not exercise the call option to repurchase minority stake in 11 Street. This is likely to have a positive impact on the company. </li>
<li>SK Square does not need to pay 500 billion won plus 3.5% annualized interest to the financial investors of 11 Street. This will also accelerate sale of 11 Street.</li>
<li>In addition, SK Square announced the merger of TVing and Wavve OTT services. </li>
</ul>


SK Square announced it will not exercise the call option to repurchase minority stake in 11 Street. This is likely to have a positive impact on the company. 
SK Square does not need to pay 500 billion won plus 3.5% annualized interest to the financial investors of 11 Street. This will also accelerate sale of 11 Street.
In addition, SK Square announced the merger of TVing and Wavve OTT services. 


SK Square: Drag Along Rights To Be Exercised to Sell 11 Street + Merger of TVing and Wavve

South Korea

CJ ENM, Ltd. retails clothes, kitchen utensils, home appliances, and jewelry.  The Company sells its merchandise through TV home shopping channels, catalogs, and the Internet shopping mall.  CJ ENM operates cable television business through a subsidiary.

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CJ ENM (035760 KS)

A 100% Tariffs on Films Produced Outside the U.S. - Negative on Korean Film Production Companies

Top three listed film/drama production companies in Korea including Studio Dragon, CJ ENM, and ContentreeJoongAng are likely to be negatively...

Douglas Kim

China Could Lift Ban on Korean Popular Culture (Hallyu) As Early As May 2025

One of the big thematic events that have impacted the Korean stock market this week has been the expectation that China could lift ban on Korean...

Douglas Kim

KRX Short Interest Weekly (Oct 18th): Samsung Electronics, Sk Hynix, KB Financial, Shinhan Group

We analyzed KRX short interest report for the past week and highlighted short interest changes in Samsung Electronics, Sk Hynix, KB Financial,...

Ke Yan, CFA, FRM

Trading Setup Targeting the Netmarble PSR Contract, as Seen in the Case of Doosan Bobcat

This post discusses trade setups targetting the Netmarble PSR contract, disclosed yesterday by CJ ENM, drawing parallels from the Doosan Bobcat...

Sanghyun Park

SK Square: Drag Along Rights To Be Exercised to Sell 11 Street + Merger of TVing and Wavve

According to Chosun Business Daily, the financial investors (Nile Holdings Consortium) want to sell 11st at about 600 billion won (100% stake),...

Douglas Kim

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