Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

Event-Driven

<ul>
<li>Chosun Business Daily reported today that Enchem is considering on conducting a block deal sale of nearly 14% of its outstanding shares, representing about 160 billion won.</li>
<li>Brahman PS Investment is the likely seller in this block deal sale. If the block deal sale is successful, Brahman will have gained more than 6x on its original investment.</li>
<li>We would not be buyers of the block deal sale mainly due to unattractive valuations, volatile profitability, and not enough block deal sale discount. </li>
</ul>


Chosun Business Daily reported today that Enchem is considering on conducting a block deal sale of nearly 14% of its outstanding shares, representing about 160 billion won.
Brahman PS Investment is the likely seller in this block deal sale. If the block deal sale is successful, Brahman will have gained more than 6x on its original investment.
We would not be buyers of the block deal sale mainly due to unattractive valuations, volatile profitability, and not enough block deal sale discount. 


Enchem: Block Deal Sale of 14% of Outstanding Shares

<ul>
<li>Korea Exchange announced the KOSPI 200, KOSDAQ 150, and KRX 300 rebalance changes today. Lotte Confectionery will be added and Samyang Holdings will be deleted from the KOSPI 200 index.</li>
<li>The rebalances of these Korean indices are regularly updated twice a year. The changes to these indices will be effective starting 9 December. </li>
<li>The potential exclusion candidates for KOSPI 200 in 2023 include K Car, Handsome, HS Enterprise, Zinus, and Hyundai Home Shopping. </li>
</ul>


Korea Exchange announced the KOSPI 200, KOSDAQ 150, and KRX 300 rebalance changes today. Lotte Confectionery will be added and Samyang Holdings will be deleted from the KOSPI 200 index.
The rebalances of these Korean indices are regularly updated twice a year. The changes to these indices will be effective starting 9 December. 
The potential exclusion candidates for KOSPI 200 in 2023 include K Car, Handsome, HS Enterprise, Zinus, and Hyundai Home Shopping. 


KOSPI 200 & KOSDAQ 150 Rebalance Changes + KOSPI 200 & KOSDAQ 150 Exclusion Candidates in 2023

<ul>
<li>We discuss end of the mandatory lock-up periods for 54 stocks in Korea in November 2022, among which 2 are in KOSPI and 52 are in KOSDAQ.</li>
<li>These 54 stocks on average could be subject to further selling pressures in November and could underperform relative to the market. </li>
<li>Among these 54 stocks, the top 5 market cap stocks include Enchem, Sebit Chem, DearU, Sillajen, and Sampyo Cement. They could be exposed to greater selling pressures in November. </li>
</ul>


We discuss end of the mandatory lock-up periods for 54 stocks in Korea in November 2022, among which 2 are in KOSPI and 52 are in KOSDAQ.
These 54 stocks on average could be subject to further selling pressures in November and could underperform relative to the market. 
Among these 54 stocks, the top 5 market cap stocks include Enchem, Sebit Chem, DearU, Sillajen, and Sampyo Cement. They could be exposed to greater selling pressures in November. 


End of Mandatory Lock-Up Periods for 54 Companies in Korea in November 2022

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.

Mirae Asset TIGER Secondary Cell ETF / Event-Driven

<ul>
<li>The rebalancing trading will be at the close on October 13. The AUM currently amounts to ₩1.32T with 28 constituents, implying that the passive impacts wouldn't be insignificant.</li>
<li>It will likely show a similar pattern to the last rebalancing. With no constituent change, weight adjustment by 10% cap of top stocks leads to weight adjustment of the rest.</li>
<li>An important variable here is the entry of newly listed stocks. <strong>SungEel Hitech</strong> and <strong>Sebitchem</strong>, the two larger cap stocks, appear to have a reasonably high inclusion probability.</li>
</ul>


The rebalancing trading will be at the close on October 13. The AUM currently amounts to ₩1.32T with 28 constituents, implying that the passive impacts wouldn't be insignificant.
It will likely show a similar pattern to the last rebalancing. With no constituent change, weight adjustment by 10% cap of top stocks leads to weight adjustment of the rest.
An important variable here is the entry of newly listed stocks. SungEel Hitech and Sebitchem, the two larger cap stocks, appear to have a reasonably high inclusion probability.


TIGER Battery ETF (WISE) Rebalancing in October

<ul>
<li>I recommend focusing on the ceiling regression play. In this regard, SK Innovation has the most notable regression spread, and we should use Samsung SDI as a hedge against it.</li>
<li>As for constituent change, SungEel HiTech is firmly positioned with a market cap of ₩1.34T and a float rate of 50%. And it belongs to the Waste batteries keyword.</li>
<li>But, it is unclear whether SungEel will be in the top 25 in scoring. We should patiently wait until confirmation as it's still a worthy candidate requiring our attention.</li>
</ul>


I recommend focusing on the ceiling regression play. In this regard, SK Innovation has the most notable regression spread, and we should use Samsung SDI as a hedge against it.
As for constituent change, SungEel HiTech is firmly positioned with a market cap of ₩1.34T and a float rate of 50%. And it belongs to the Waste batteries keyword.
But, it is unclear whether SungEel will be in the top 25 in scoring. We should patiently wait until confirmation as it's still a worthy candidate requiring our attention.


KODEX FnGuide Battery ETF Rebalancing Checkup

South Korea

Kumho Petrochemical Co., Ltd. manufactures synthetic rubbers, synthetic resins, and rubber chemicals.  The Company's products include styrene butadiene, acrylonitrile butadiene, polystyrene, expandable polystyrene, and antioxidant.  Kumho Petrochemical provides construction, transportation, and financial services through its subsidiaries.

Capro Corporation manufactures and exports caprolactam, a key raw material for nylon.  The Company's customers include nylon manufacturers such as Hyosung Corporation, Kolon Industries, and  Taekwang Industrial.  In addition, Capro also produces ammonia sulfate fertilizer for industrial and agricultural uses.

Hanwha Solution Corporation is a chemical manufacturer.  The Company's products include a line of chlorine alkali chemicals, such as caustic soda, chlorine, and hydrochloric acid.  Hanwha also produces resins including low density polyethylene (LDPE) and polyvinyl chloride (PVC).

Lotte Chemical Corporation manufactures a wide range of petrochemical products such as high density polyethylene, polypropylene, and ethylene glycol. The Company's products are used in manufacturing general housewares, pipes, films, fabrics, bottles, containers, and automotive parts.

Kum Yang Co., Ltd. specializes in manufacturing blowing agents to foam rubber products and polymers.  The Company also produces other basic fine chemicals, such as sulphur products.

SKC Co., Ltd. manufactures a variety of films, including polyester films, silicon coated films, and inkjet films.  The Company also produces chemical products, such as propylene oxide, propylene glycol, and styrene monomer. In addition, SKC provides materials for photovoltaic.

OCI Holdings Company Ltd. operates chemical business. The Company manufactures inorganic chemicals, petroleum and coal chemicals, fine chemicals, renewable energy and insulation materials. OCI Holdings markets its products primarily throughout Korea with limited overseas.

Hansol Chemical Co., Ltd. manufactures chemical products such as hydrogen peroxide, benzol peroxide, urea resin, polyacrylamide, trimethylolpropane, and latex.  The Company supplies its products to the paper, textile, and food industries.

Dongjin Semichem Co., Ltd. produces fine chemicals for semiconductor and liquid crystal display (LCD) manufacturing.  The Company's products include photoresist materials and epoxy molding compounds.  In addition, Dongjin Semichem also produces chemical foaming agents for plastic and rubber applications.

LOTTE Fine Chemical Co., Ltd. produces general and fine chemicals. The Company produces ammonia, epichlorohydrin, caustic soda, and dimethylformamide. LOTTE Fine Chemical also manufactures chemicals used in pharmaceutical and paint manufacturing areas.

NOF CORPORATION is a diversified chemical producer whose products include processed oil/fats, explosives and other chemical products. The Company has manufacturing/sales subsidiaries in US, Indonesia and China.

K+S AG manufactures and markets within the fertilizer division standard and speciality fertilizers to the agricultural and industrial industries worldwide. In its salt business, the company produces de-icing salt, food grade salt, industrial salt and salt for chemical use.

Hangzhou Oxygen Plant Group Co.,Ltd. manufactures industrial gas machinery products. The Company produces air separation equipment, small-scale air separation equipment, liquefied nitrogen wash cold boxes, liquefied natural gas separation equipment, and other products. Hangzhou Oxygen Plant Group markets its products worldwide.

Finolex Industries Limited manufactures PVC pipes and fittings, which are sold primarily to businesses in the agricultural sector.  The Company also manufactures PVC resins, which are used as raw materials for PVC pipes and fittings.

Castrol (India) Limited manufactures and markets automotive and industrial lubricants and specialty products. The Company's products include lubricating oils, greases and brake fluids. The Company also manufactures cable filling compounds, jellies, waxes and other items.

Quaker Chemical Corporation produces, develops, and markets custom-formulated chemical specialty products.  The Company also provides fluid management services for manufacturers around the world, primarily in the steel, automotive, and can industries.

Kingfa Sci. & Tech. Co., Ltd. manufactures and markets modified plastic products, including fire resistant resin, reinforced resin, plastic alloy, and other related products.

ADEKA CORPORATION manufactures basic chemicals and foodstuffs.  The Company's products include resin products, insulators, and processed fat/oil products.

Navin Fluorine International Limited manufactures fluorochemicals. The Company produces benzotrifuoride derivatives, fluoro benzene derivatives, fluoro toluene derivatives, and aliphatic fluoro compounds.

Hengyi Petrochemical Co., Ltd. manufactures polyester and other petrochemical products.

ENCHEM Co.,Ltd. produces and sells electrolyte and functional additives. The Company develops, manufactures and markets lithium rechargeable batteries electrolytes, polymer batteries electrolytes, high functionality additives, and other products. ENCHEM markets its products primarily throughout Korea with limited overseas.

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Enchem (348370 KS)

Enchem: Block Deal Sale of 14% of Outstanding Shares

Chosun Business Daily reported today that Enchem is considering on conducting a block deal sale of nearly 14% of its outstanding shares,...

Douglas Kim

KOSPI 200 & KOSDAQ 150 Rebalance Changes + KOSPI 200 & KOSDAQ 150 Exclusion Candidates in 2023

Korea Exchange announced the KOSPI 200, KOSDAQ 150, and KRX 300 rebalance changes today. Lotte Confectionery will be added and Samyang Holdings...

Douglas Kim

End of Mandatory Lock-Up Periods for 54 Companies in Korea in November 2022

We discuss end of the mandatory lock-up periods for 54 stocks in Korea in November 2022, among which 2 are in KOSPI and 52 are in KOSDAQ.

Douglas Kim

TIGER Battery ETF (WISE) Rebalancing in October

This post investigates the upcoming rebalancing situation of the TIGER Secondary Cell ETF (WISE Index), with a focus on the entry possibility of...

Sanghyun Park

KODEX FnGuide Battery ETF Rebalancing Checkup

This post previews the KODEX FnGuide Secondary Battery ETF rebalancing in September. It is Korea's largest-AUM local battery ETF.

Sanghyun Park

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