Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

Cross Asset Strategy

<p>KRX announced the rebalance to the KOSPI200 index today. There was not much surprise among the new 10 additions, which included stocks such as Samyang Foods, Zinus, and Kiwoom Securities. However, there was some surprises among the deletions including Unid, <a href="https://www.smartkarma.com/entities/dong-a-socio-holdings-co-ltd" target="_blank" data-smartkarma-citation="entities:4271:1" rel="noopener">Dong A Socio Holdings (000640 KS), </a>and <a href="https://www.smartkarma.com/entities/dong-a-st-co-ltd" target="_blank" data-smartkarma-citation="entities:16873:1" rel="noopener">Dong A St (170900 KS)</a>.</p><p>Among the newly included companies, in terms of their fundamental business outlook and reasonable valuations, we think Samyang Foods, Zinus, and Hanwha Systems fit into these categories. We would be cautious on Big Hit Entertainment, CS Wind, and Shinpoong Pharm as we think there could be some sellers on investors that trade on the "sell on news" strategy of being included in KOSPI 200.  </p>

KRX announced the rebalance to the KOSPI200 index today. There was not much surprise among the new 10 additions, which included stocks such as Samyang Foods, Zinus, and Kiwoom Securities. However, there was some surprises among the deletions including Unid, Dong A Socio Holdings (000640 KS), and Dong A St (170900 KS).Among the newly included companies, in terms of their fundamental business outlook and reasonable valuations, we think Samyang Foods, Zinus, and Hanwha Systems fit into these categories. We would be cautious on Big Hit Entertainment, CS Wind, and Shinpoong Pharm as we think there could be some sellers on investors that trade on the "sell on news" strategy of being included in KOSPI 200.  

KOSPI 200 Index Rebalances: No Surprises Among Additions, A Few Surprises Among Deletions

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

Brian Freitas

Pan-Asia Index Rebalances/ Events/ Delta One

Event-Driven

<p>The KRX has announced the list of inclusions and exclusions to 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> today. The rebalance is effective after the close of trading on 10 December.</p><p>There are 10 inclusions and 10 exclusions in the December 2020 review with an estimated one-way turnover of 1.06%.</p><p>The inclusions and exclusions are:</p><table class="table table-striped">
<colgroup><col span="4"></colgroup>
<tbody>
<tr>
<td colspan="2" style="text-align: center; width: 96pt;"><h3>Inclusions</h3></td>
<td colspan="2" style="text-align: center; width: 96pt;"><h3>Exclusions</h3></td>
</tr>
<tr>
<td><strong>Code</strong></td>
<td><strong>Name</strong></td>
<td><strong>Code</strong></td>
<td><strong>Name</strong></td>
</tr>
<tr>
<td>003090.KS</td>
<td>Daewoong Co Ltd</td>
<td>000640.KS</td>
<td>Dong-A Socio Holdings Co Ltd</td>
</tr>
<tr>
<td>003230.KS</td>
<td>Samyang Foods Co Ltd</td>
<td>001430.KS</td>
<td>SeAH Besteel Corp</td>
</tr>
<tr>
<td>008350.KS</td>
<td>Namsun Aluminium Co Ltd</td>
<td>002270.KS</td>
<td>Lotte Foods Co Ltd</td>
</tr>
<tr>
<td>013890.KS</td>
<td>Zinus Inc</td>
<td>014830.KS</td>
<td>Unid Co Ltd</td>
</tr>
<tr>
<td>019170.KS</td>
<td>Shinpoong Pharmaceutical Co Ltd</td>
<td>019680.KS</td>
<td>Daekyo Co Ltd</td>
</tr>
<tr>
<td>039490.KS</td>
<td>KIWOOM Securities Co Ltd</td>
<td>025860.KS</td>
<td>Namhae Chemical Corp</td>
</tr>
<tr>
<td>112610.KS</td>
<td>CS Wind Corp</td>
<td>027410.KS</td>
<td>BGF Co Ltd</td>
</tr>
<tr>
<td>272210.KS</td>
<td>Hanwha Systems Co Ltd</td>
<td>060980.KS</td>
<td>Halla Holdings Corp</td>
</tr>
<tr>
<td>336260.KS</td>
<td>Doosan Fuel Cell Co Ltd</td>
<td>093050.KS</td>
<td>LF Corp</td>
</tr>
<tr>
<td>352820.KS</td>
<td>Big Hit Entertainment Co Ltd</td>
<td>170900.KS</td>
<td>Dong-A ST Co Ltd</td>
</tr>
</tbody>
</table><p>There are 11 trading days to implementation and there are quite a few deletes that have over 3-4 days of ADV to trade. The impact on the inclusions is smaller but there will be a lot of active funds looking to buy the stocks so they don't deviate too much from their benchmark.</p>

The KRX has announced the list of inclusions and exclusions to the Korea Stock Exchange Kospi 200 Index (KOSPI2 INDEX) today. The rebalance is effective after the close of trading on 10 December.There are 10 inclusions and 10 exclusions in the December 2020 review with an estimated one-way turnover of 1.06%.The inclusions and exclusions are:



Inclusions
Exclusions


Code
Name
Code
Name


003090.KS
Daewoong Co Ltd
000640.KS
Dong-A Socio Holdings Co Ltd


003230.KS
Samyang Foods Co Ltd
001430.KS
SeAH Besteel Corp


008350.KS
Namsun Aluminium Co Ltd
002270.KS
Lotte Foods Co Ltd


013890.KS
Zinus Inc
014830.KS
Unid Co Ltd


019170.KS
Shinpoong Pharmaceutical Co Ltd
019680.KS
Daekyo Co Ltd


039490.KS
KIWOOM Securities Co Ltd
025860.KS
Namhae Chemical Corp


112610.KS
CS Wind Corp
027410.KS
BGF Co Ltd


272210.KS
Hanwha Systems Co Ltd
060980.KS
Halla Holdings Corp


336260.KS
Doosan Fuel Cell Co Ltd
093050.KS
LF Corp


352820.KS
Big Hit Entertainment Co Ltd
170900.KS
Dong-A ST Co Ltd


There are 11 trading days to implementation and there are quite a few deletes that have over 3-4 days of ADV to trade. The impact on the inclusions is smaller but there will be a lot of active funds looking to buy the stocks so they don't deviate too much from their benchmark.

KOSPI200 Index Rebalance: No Surprises Here, but Decent Impact Expected

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

Sanghyun Park

Korea / Special Sits, Pairs, Index Rebalancing

Equity Capital Markets

<p>CS Wind is the world's largest wind tower manufacturer and a very likely addition to the KOSPI 200 club next month.</p><p>It announced last Friday a ₩350B new share issuance at a 22% capital increase.</p><p>A 1:1 bonus share will follow to double the SO.</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":"Overview"}'>Overview</td></tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Issuer"}'>Issuer</td>
<td data-sheets-value='{"1":2,"2":"Cs Wind Corp"}' data-sheets-formula='=googlefinance(R[1]C[0], "name")'>Cs Wind Corp</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Ticker"}'>Ticker</td>
<td data-sheets-value='{"1":2,"2":"112610"}' data-sheets-formula='="112610"'>112610</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Target"}'>Target</td>
<td data-sheets-value='{"1":2,"2":"Pubic offering of forfeited shares after offering to stockholders"}'>A pubic offering of forfeited shares after offering to stockholders</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Transferability"}'>Transferability</td>
<td data-sheets-value='{"1":2,"2":"Renounceable"}'>Renounceable</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Volume"}'>Volume</td>
<td data-sheets-value='{"1":3,"3":3800000}' data-sheets-numberformat='{"1":2,"2":"#,##0","3":1}'>3,800,000</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Bonus issue volume"}'>Bonus issue volume</td>
<td data-sheets-value='{"1":3,"3":21062324}' data-sheets-numberformat='{"1":2,"2":"#,##0","3":1}'>21,062,324</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Preliminary price"}'>Preliminary price</td>
<td data-sheets-value='{"1":3,"3":92200}' data-sheets-numberformat='{"1":2,"2":"[$₩-412]#,##0","3":1}'>₩92,200</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Preliminary value"}'>Preliminary value</td>
<td data-sheets-value='{"1":3,"3":350360000000}' data-sheets-numberformat='{"1":2,"2":"[$₩-412]#,##0","3":1}' data-sheets-formula="=R[-3]C[0]*R[-1]C[0]">₩350,360,000,000</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Oversubscription privilege"}'>Oversubscription privilege</td>
<td data-sheets-value='{"1":3,"3":0.2}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}'>20.00%</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Banker"}'>Banker</td>
<td data-sheets-value='{"1":2,"2":"KB"}'>KB</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":" - Underwriting type"}'>- Underwriting type</td>
<td data-sheets-value='{"1":2,"2":"Standby"}'>Standby</td>
</tr>
<tr><td colspan="2" rowspan="1" data-sheets-value='{"1":2,"2":"Source: DART"}'>Source: DART</td></tr>
</tbody>
</table><p>No ESOP allocation here, so per-share allocation becomes 0.22, with a 1.0 allocation for bonus 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"}'>Allocation</td></tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Common"}'>Common</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":17285715}' data-sheets-numberformat='{"1":2,"2":"#,##0","3":1}' data-sheets-formula='=googlefinance(R[-13]C[0], "shares")'>17,285,715</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Pref (incl. RCPS &amp; CPS)"}'>Pref (incl. RCPS &amp; CPS)</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0}' data-sheets-numberformat='{"1":2,"2":"#,##0","3":1}'>0</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Total shares"}'>Total shares</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":17285715}' data-sheets-numberformat='{"1":2,"2":"#,##0","3":1}' data-sheets-formula="=R[-2]C[0]+R[-1]C[0]">17,285,715</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Treasury shares"}'>Treasury shares</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":32736}' data-sheets-numberformat='{"1":2,"2":"#,##0","3":1}'>32,736</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Total shares ex treasury shares"}'>Total shares ex treasury shares</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":17252979}' data-sheets-numberformat='{"1":2,"2":"#,##0","3":1}' data-sheets-formula="=R[-2]C[0]-R[-1]C[0]">17,252,979</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Offer volume"}'><strong>Offer volume</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":3800000}' data-sheets-numberformat='{"1":2,"2":"#,##0","3":1}' data-sheets-formula="=R[1]C[0]+R[2]C[0]"><strong>3,800,000</strong></td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":" - Common"}'>- Common</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":3800000}' data-sheets-numberformat='{"1":2,"2":"#,##0","3":1}' data-sheets-formula="=R[-16]C[0]">3,800,000</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":" - Pref"}'>- Pref</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0}' data-sheets-numberformat='{"1":2,"2":"#,##0","3":1}'>0</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Per-share allocation"}'><strong>Per-share allocation</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0.22013258}' data-sheets-numberformat='{"1":2,"2":"#,##0.0000000","3":1}'><strong>0.2201326</strong></td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Capital increase"}'>Capital increase</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0.21983470165972308}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}' data-sheets-formula="=R[-4]C[0]/R[-7]C[0]">21.98%</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Dilution"}'>Dilution</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0.18021679606311666}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}' data-sheets-formula="=R[-5]C[0]/(R[-8]C[0]+R[-5]C[0])">18.02%</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Total shares after rights offer"}'>Total shares after rights offer</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":21085715}' data-sheets-numberformat='{"1":2,"2":"#,##0","3":1}' data-sheets-formula="=R[1]C[0]+R[2]C[0]">21,085,715</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":" - Common"}'>- Common</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":21085715}' data-sheets-numberformat='{"1":2,"2":"#,##0","3":1}' data-sheets-formula="=R[-12]C[0]+R[-7]C[0]">21,085,715</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":" - Pref"}'>- Pref</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0}' data-sheets-numberformat='{"1":2,"2":"#,##0","3":1}' data-sheets-formula="=R[-12]C[0]">0</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Bonus issue"}'><strong>Bonus issue</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":21062324}' data-sheets-numberformat='{"1":2,"2":"#,##0","3":1}' data-sheets-formula="=R[1]C[0]+R[2]C[0]"><strong>21,062,324</strong></td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":" - Common"}'>- Common</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":21062324}' data-sheets-numberformat='{"1":2,"2":"#,##0","3":1}' data-sheets-formula="=R[-24]C[0]">21,062,324</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":" - Pref"}'>- Pref</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0}' data-sheets-numberformat='{"1":2,"2":"#,##0","3":1}'>0</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Per-share allocation"}'><strong>Per-share allocation</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":1.0004438801748674}' data-sheets-numberformat='{"1":2,"2":"#,##0.0000000","3":1}' data-sheets-formula="=R[-3]C[0]/(R[-6]C[0]-R[-14]C[0])"><strong>1.0004439</strong></td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Total shares after bonus issue"}'>Total shares after bonus issue</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":42148039}' data-sheets-numberformat='{"1":2,"2":"#,##0","3":1}' data-sheets-formula="=R[1]C[0]+R[2]C[0]">42,148,039</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":" - Common"}'>- Common</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":42148039}' data-sheets-numberformat='{"1":2,"2":"#,##0","3":1}' data-sheets-formula="=R[-7]C[0]+R[-4]C[0]">42,148,039</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":" - Pref"}'>- Pref</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0}' data-sheets-numberformat='{"1":2,"2":"#,##0","3":1}' data-sheets-formula="=R[-7]C[0]+R[-4]C[0]">0</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"ESOP allocation"}'>ESOP allocation</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0}' data-sheets-numberformat='{"1":2,"2":"#,##0","3":1}'>0</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":" - %"}'>- %</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}' data-sheets-formula="=R[-1]C[0]/R[-17]C[0]">0.00%</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Stockholder allocation"}'>Stockholder allocation</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":3800000}' data-sheets-numberformat='{"1":2,"2":"#,##0","3":1}' data-sheets-formula="=R[-18]C[0]-R[-2]C[0]">3,800,000</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":" - %"}'>- %</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":1}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}' data-sheets-formula="=R[-1]C[0]/R[-19]C[0]">100.00%</td>
</tr>
<tr><td colspan="2" rowspan="1" data-sheets-value='{"1":2,"2":"Source: DART"}'>Source: DART</td></tr>
</tbody>
</table><p>The schedule is tricky. The 1st-round pricing is on December 11, the same day as the KOSPI 200 rebalancing effective date. The subscription rights trading will follow right after the new year.</p><p>The subscription is on January 21. Bonus shares will get a fixation two weeks later, on February 2.</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":"Timetable"}'>Timetable</td></tr>
<tr>
<td data-sheets-value='{"1":2,"2":"BOD meeting"}'>BOD meeting</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":44155}' data-sheets-numberformat='{"1":5,"2":"yyyy. m. d","3":1}'>2020. 11. 20</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Preliminary pricing"}'><strong>Preliminary pricing</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":44176}' data-sheets-numberformat='{"1":5,"2":"yyyy. m. d","3":1}'><strong>2020. 12. 11</strong></td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Ex-rights date"}'>Ex-rights date</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":44180}' data-sheets-numberformat='{"1":5,"2":"yyyy. m. d","3":1}'>2020. 12. 15</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Record date"}'>Record date</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":44181}' data-sheets-numberformat='{"1":5,"2":"yyyy. m. d","3":1}'>2020. 12. 16</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Subscription rights trade beginning"}'><strong>Subscription rights trade beginning</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":44202}' data-sheets-numberformat='{"1":5,"2":"yyyy. m. d","3":1}'><strong>2021. 1. 6</strong></td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Subscription rights trade ending"}'><strong>Subscription rights trade ending</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":44208}' data-sheets-numberformat='{"1":5,"2":"yyyy. m. d","3":1}'><strong>2021. 1. 12</strong></td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Final pricing"}'>Final pricing</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":44214}' data-sheets-numberformat='{"1":5,"2":"yyyy. m. d","3":1}'>2021. 1. 18</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Stockholder subscription"}'>Stockholder subscription</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":44217}' data-sheets-numberformat='{"1":5,"2":"yyyy. m. d","3":1}'>2021. 1. 21</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Public subscription"}'>Public subscription</td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"-"}'>-</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Payment"}'>Payment</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":44225}' data-sheets-numberformat='{"1":5,"2":"yyyy. m. d","3":1}'>2021. 1. 29</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Listing"}'>Listing</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":44242}' data-sheets-numberformat='{"1":5,"2":"yyyy. m. d","3":1}'>2021. 2. 15</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Record date - bonus shares"}'><strong>Record date - bonus shares</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":44229}' data-sheets-numberformat='{"1":5,"2":"yyyy. m. d","3":1}'><strong>2021. 2. 2</strong></td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Listing - bonus shares"}'>Listing - bonus shares</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":44252}' data-sheets-numberformat='{"1":5,"2":"yyyy. m. d","3":1}'>2021. 2. 25</td>
</tr>
<tr><td colspan="2" rowspan="1" data-sheets-value='{"1":2,"2":"Source: DART"}'>Source: DART</td></tr>
</tbody>
</table><p>We have the usual 20% discount. Other than that, it uses a 1D VWAP on the reference date instead of a closing price. </p><table class="table table-striped">
<colgroup>
<col width="300">
<col width="400">
</colgroup>
<tbody>
<tr><td colspan="2" rowspan="1" data-sheets-value='{"1":2,"2":"Pricing"}'>Pricing</td></tr>
<tr>
<td data-sheets-value='{"1":2,"2":"1st round"}'>1st round</td>
<td data-sheets-value='{"1":2,"2":"RP × (1 - 20%) / [1 + (21.98% × 20%)]"}' data-sheets-formula='="RP × (1 - "&amp;(R[11]C[0]*100&amp;"%")&amp;") / [1 + ("&amp;(R[12]C[0]*100&amp;"%"&amp;" × "&amp;(R[11]C[0]*100&amp;"%"&amp;")]"))'>RP × (1 - 20%) / [1 + (21.98% × 20%)]</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":" - Reference price (RP)"}'>- Reference price (RP)</td>
<td data-sheets-value='{"1":2,"2":"Min [Close, Avg (1D VWAP, 1W VWAP, 1M VWAP)]"}'><strong>Min [Close, Avg (1D VWAP, 1W VWAP, 1M VWAP)]</strong></td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":" - Reference date"}'>- Reference date</td>
<td data-sheets-value='{"1":3,"3":44176}' data-sheets-numberformat='{"1":5,"2":"yyyy. m. d","3":1}' data-sheets-formula="=Terms!R[41]C[0]">2020. 12. 11</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Ex-rights base price"}'>Ex-rights base price</td>
<td data-sheets-value='{"1":2,"2":"[RP + (1st × 21.98%)] / (1 + 21.98%)"}' data-sheets-formula='="[RP + (1st × "&amp;R[9]C[0]*100&amp;"%"&amp;")] / (1 + "&amp;R[9]C[0]*100&amp;"%"&amp;")"'>[RP + (1st × 21.98%)] / (1 + 21.98%)</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":" - Reference price (RP)"}'>- Reference price (RP)</td>
<td data-sheets-value='{"1":2,"2":"Previous close"}'>Previous close</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":" - Reference date"}'>- Reference date</td>
<td data-sheets-value='{"1":3,"3":44180}' data-sheets-numberformat='{"1":5,"2":"yyyy. m. d","3":1}' data-sheets-formula="=Terms!R[39]C[0]">2020. 12. 15</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"2nd round"}'>2nd round</td>
<td data-sheets-value='{"1":2,"2":"RP × (1 - 20%)"}' data-sheets-formula='="RP × (1 - "&amp;(R[5]C[0]*100&amp;"%")&amp;")"'>RP × (1 - 20%)</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":" - Reference price (RP)"}'>- Reference price (RP)</td>
<td data-sheets-value='{"1":2,"2":"Min [Close, Avg (1D VWAP, 1W VWAP)]"}'><strong>Min [Close, Avg (1D VWAP, 1W VWAP)]</strong></td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":" - Reference date"}'>- Reference date</td>
<td data-sheets-value='{"1":3,"3":44214}' data-sheets-numberformat='{"1":5,"2":"yyyy. m. d","3":1}' data-sheets-formula="=Terms!R[40]C[0]">2021. 1. 18</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Final"}'>Final</td>
<td data-sheets-value='{"1":2,"2":"Max [Min (1st, 2nd), 3D VWAP × 60%]"}'>Max [Min (1st, 2nd), 3D VWAP × 60%]</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":" - Reference date"}'>- Reference date</td>
<td data-sheets-value='{"1":3,"3":44214}' data-sheets-numberformat='{"1":5,"2":"yyyy. m. d","3":1}' data-sheets-formula="=Terms!R[38]C[0]">2021. 1. 18</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Discount rate"}'>Discount rate</td>
<td data-sheets-value='{"1":3,"3":0.2}' data-sheets-numberformat='[null,3,"0.00%",1]'>20.00%</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Capital increase rate"}'>Capital increase rate</td>
<td data-sheets-value='{"1":3,"3":0.2198}' data-sheets-numberformat='[null,3,"0.00%",1]' data-sheets-formula="=LEFT(Terms!R[11]C[0],6)*100/100">21.98%</td>
</tr>
<tr><td colspan="2" rowspan="1" data-sheets-value='{"1":2,"2":"Source: DART"}'>Source: DART</td></tr>
</tbody>
</table>

CS Wind is the world's largest wind tower manufacturer and a very likely addition to the KOSPI 200 club next month.It announced last Friday a ₩350B new share issuance at a 22% capital increase.A 1:1 bonus share will follow to double the SO.





Overview

Issuer
Cs Wind Corp


Ticker
112610


Target
A pubic offering of forfeited shares after offering to stockholders


Transferability
Renounceable


Volume
3,800,000


Bonus issue volume
21,062,324


Preliminary price
₩92,200


Preliminary value
₩350,360,000,000


Oversubscription privilege
20.00%


Banker
KB


- Underwriting type
Standby

Source: DART

No ESOP allocation here, so per-share allocation becomes 0.22, with a 1.0 allocation for bonus shares.





Allocation

Common
17,285,715


Pref (incl. RCPS &amp; CPS)
0


Total shares
17,285,715


Treasury shares
32,736


Total shares ex treasury shares
17,252,979


Offer volume
3,800,000


- Common
3,800,000


- Pref
0


Per-share allocation
0.2201326


Capital increase
21.98%


Dilution
18.02%


Total shares after rights offer
21,085,715


- Common
21,085,715


- Pref
0


Bonus issue
21,062,324


- Common
21,062,324


- Pref
0


Per-share allocation
1.0004439


Total shares after bonus issue
42,148,039


- Common
42,148,039


- Pref
0


ESOP allocation
0


- %
0.00%


Stockholder allocation
3,800,000


- %
100.00%

Source: DART

The schedule is tricky. The 1st-round pricing is on December 11, the same day as the KOSPI 200 rebalancing effective date. The subscription rights trading will follow right after the new year.The subscription is on January 21. Bonus shares will get a fixation two weeks later, on February 2.





Timetable

BOD meeting
2020. 11. 20


Preliminary pricing
2020. 12. 11


Ex-rights date
2020. 12. 15


Record date
2020. 12. 16


Subscription rights trade beginning
2021. 1. 6


Subscription rights trade ending
2021. 1. 12


Final pricing
2021. 1. 18


Stockholder subscription
2021. 1. 21


Public subscription
-


Payment
2021. 1. 29


Listing
2021. 2. 15


Record date - bonus shares
2021. 2. 2


Listing - bonus shares
2021. 2. 25

Source: DART

We have the usual 20% discount. Other than that, it uses a 1D VWAP on the reference date instead of a closing price. 





Pricing

1st round
RP × (1 - 20%) / [1 + (21.98% × 20%)]


- Reference price (RP)
Min [Close, Avg (1D VWAP, 1W VWAP, 1M VWAP)]


- Reference date
2020. 12. 11


Ex-rights base price
[RP + (1st × 21.98%)] / (1 + 21.98%)


- Reference price (RP)
Previous close


- Reference date
2020. 12. 15


2nd round
RP × (1 - 20%)


- Reference price (RP)
Min [Close, Avg (1D VWAP, 1W VWAP)]


- Reference date
2021. 1. 18


Final
Max [Min (1st, 2nd), 3D VWAP × 60%]


- Reference date
2021. 1. 18


Discount rate
20.00%


Capital increase rate
21.98%

Source: DART



CS Wind Rights Offer: A Rare Event to Outright-Trade Subscription Rights

<div class="content-highlight">
<p>After the market close on 20 November, <a href="https://www.smartkarma.com/entities/cs-wind-corp" target="_blank" rel="noopener" data-smartkarma-citation="entities:4883:1">Cs Wind Corp (112610 KS)</a> announced a rights offering worth 350 billion won ($307 million). Despite the company's business firing at all cylinders, we believe that this rights offering will have a negative impact on the company's share price as the new shares could dilute existing shareholders and the rights offering could act as a major overhang on its share price in the next several weeks.</p>
<p>However, the company has picked a good time in trying to complete its rights offering as it has been one of the best performing stocks in the Korean stock market this year (up 232% YTD). It appears that a lot of the positive factors including the Korean New Green Deal and a solid growth of new wind power installations in 2020 have already been reflected in CS Wind's stock price. </p>
</div>


After the market close on 20 November, Cs Wind Corp (112610 KS) announced a rights offering worth 350 billion won ($307 million). Despite the company's business firing at all cylinders, we believe that this rights offering will have a negative impact on the company's share price as the new shares could dilute existing shareholders and the rights offering could act as a major overhang on its share price in the next several weeks.
However, the company has picked a good time in trying to complete its rights offering as it has been one of the best performing stocks in the Korean stock market this year (up 232% YTD). It appears that a lot of the positive factors including the Korean New Green Deal and a solid growth of new wind power installations in 2020 have already been reflected in CS Wind's stock price. 


CS Wind Announces A Rights Offering Worth 350 Billion Won: #1 Player in Korea in Wind Towers

<p>The Korea Exchange (KRX) will announce the results of the December 2020 review of 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> in November. The constituent changes will be effective from the open on 11 December 2020 and the rebalancing trades will need to be done at the closing auction on 10 December 2020.</p><p>At the current time, we see nine stocks being added to and deleted from the index with another three stocks as very close adds and deletes. There could be an additional change with <a href="https://www.smartkarma.com/entities/big-hit-entertainment" target="_blank" data-smartkarma-citation="entities:28959:1" rel="noopener">Big Hit Entertainment (352820 KS)</a> getting index inclusion as a Fast Entry - this change could be announced ahead of the regular review announcement or as a part of the regular announcement, though the implementation will be at the same time as the December review.</p><p>The potential inclusions have outperformed the potential exclusions by a wide margin over the last 6 months though the performance has been subdued over the last 2 months. With the short sell ban still in force, we could see the potential inclusions continue to outperform the potential exclusions after this period of consolidation, especially once the announcement of the changes has been made.</p><p>In the Insight, we look at the expected changes, the impact of the changes on the stocks, the performance of the stocks and the short interest, the behaviour of the inclusions/exclusions at the June review and recommend some trades going forward.</p>

The Korea Exchange (KRX) will announce the results of the December 2020 review of the Korea Stock Exchange Kospi 200 Index (KOSPI2 INDEX) in November. The constituent changes will be effective from the open on 11 December 2020 and the rebalancing trades will need to be done at the closing auction on 10 December 2020.At the current time, we see nine stocks being added to and deleted from the index with another three stocks as very close adds and deletes. There could be an additional change with Big Hit Entertainment (352820 KS) getting index inclusion as a Fast Entry - this change could be announced ahead of the regular review announcement or as a part of the regular announcement, though the implementation will be at the same time as the December review.The potential inclusions have outperformed the potential exclusions by a wide margin over the last 6 months though the performance has been subdued over the last 2 months. With the short sell ban still in force, we could see the potential inclusions continue to outperform the potential exclusions after this period of consolidation, especially once the announcement of the changes has been made.In the Insight, we look at the expected changes, the impact of the changes on the stocks, the performance of the stocks and the short interest, the behaviour of the inclusions/exclusions at the June review and recommend some trades going forward.

KOSPI200 Index Rebalance Preview: Review Period Nearly Complete, Nine (Or Ten) Possible Changes

South Korea

CS Wind Corporation operates as a wind tower company. The Company manufactures and exports steel wind towers, while also offering aluminum platforms for wind towers. CS Wind extends its products and services globally.

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CS Wind Corp (112610 KS)

KOSPI 200 Index Rebalances: No Surprises Among Additions, A Few Surprises Among Deletions

KRX anounced its KOSPI200 index rebalance. There were no surprises among the new additions but a few surprises among the deletions.

Douglas Kim

KOSPI200 Index Rebalance: No Surprises Here, but Decent Impact Expected

There are 10 inclusions and exclusions in the KOSPI200 and there is significant impact expected some of the stocks. We feel the inclusions could...

Brian Freitas

CS Wind Rights Offer: A Rare Event to Outright-Trade Subscription Rights

CS Wind, not only the world's largest wind tower maker but also a likely addition to KOSPI 200 next month, offers ₩350B worth of new shares (22%...

Sanghyun Park

CS Wind Announces A Rights Offering Worth 350 Billion Won: #1 Player in Korea in Wind Towers

We believe that this rights offering by CS Wind (350 billion won) will have a negative impact on the company's share price as the new shares could...

Douglas Kim

KOSPI200 Index Rebalance Preview: Review Period Nearly Complete, Nine (Or Ten) Possible Changes

The KOSPI200 index review will be announced in the next 4 weeks. We see 9 inclusions/ exclusions and significant volume to sell on the deletions....

Brian Freitas

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