Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

Equity Bottom-Up

<ul>
<li>We believe BGF Retail and GS Retail are strong turnaround plays amid the end of the social distancing policies in Korea.</li>
<li>These CVS plays are well positioned to withstand higher inflation rates and higher product price increases among the various retail channels in Korea.</li>
<li>Valuation multiples of GS Retail have declined significantly in the past five years. Their valuations have become more attractive as compared to lofty levels 4-5 years ago. </li>
</ul>


We believe BGF Retail and GS Retail are strong turnaround plays amid the end of the social distancing policies in Korea.
These CVS plays are well positioned to withstand higher inflation rates and higher product price increases among the various retail channels in Korea.
Valuation multiples of GS Retail have declined significantly in the past five years. Their valuations have become more attractive as compared to lofty levels 4-5 years ago. 


BGF Retail & GS Retail: Korean CVS Plays Likely to Better Withstand Higher Inflation

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>Three local indexes in Korea face rebalancing trading on March 10, supposedly at the close.</li>
<li>They are 1. KOSPI 200 Fast Entry for LG Energy Solution, 2. KOSPI Size Index Series biannual rebalancing, and 3. KRX BBIG K-New Deal biannual rebalancing.</li>
<li>There are 18 stocks in total, which have an estimated passive flow of ±0.5x ADTV &amp; an average daily trade value of +₩5.0B.</li>
</ul>


Three local indexes in Korea face rebalancing trading on March 10, supposedly at the close.
They are 1. KOSPI 200 Fast Entry for LG Energy Solution, 2. KOSPI Size Index Series biannual rebalancing, and 3. KRX BBIG K-New Deal biannual rebalancing.
There are 18 stocks in total, which have an estimated passive flow of ±0.5x ADTV &amp; an average daily trade value of +₩5.0B.


Combined Rebalancing Flow Estimations of Three Indexes in Korea on March 10

<ul>
<li>KRX officially announced the rebalancing results of the KOSPI Size Index Series. The effective date is March 11.</li>
<li>Of these, new MidCap entrants are what matter the most. This rebalancing delivers a total of 26 new MidCap entrants.</li>
<li>The three stocks shown below have ADTV of over ₩5B and passive flow x ADTV of 1.0x or higher: CJ Logistics, GS Retail, and Lotte Rental.</li>
</ul>


KRX officially announced the rebalancing results of the KOSPI Size Index Series. The effective date is March 11.
Of these, new MidCap entrants are what matter the most. This rebalancing delivers a total of 26 new MidCap entrants.
The three stocks shown below have ADTV of over ₩5B and passive flow x ADTV of 1.0x or higher: CJ Logistics, GS Retail, and Lotte Rental.


KOSPI Size Index Series Rebalancing: Official Results & Passive Impacts

<ul>
<li>On 22 February, the KRX announced that LG Energy Solution (373220 KS) will be included in numerous local indices including KOSPI 200, KOSPI 100, and KRX 100 effective 3/11/2022.</li>
<li>This has been widely expected by the market. Due to the inclusion in KOSPI 200, investors will be able to short LG Energy Solution starting 11 March. </li>
<li>Once Dongwon F&amp;B is excluded from the KOSPI 200 index, this could be a key buying opportunity on this stock, given the company's solid fundamentals. </li>
</ul>


On 22 February, the KRX announced that LG Energy Solution (373220 KS) will be included in numerous local indices including KOSPI 200, KOSPI 100, and KRX 100 effective 3/11/2022.
This has been widely expected by the market. Due to the inclusion in KOSPI 200, investors will be able to short LG Energy Solution starting 11 March. 
Once Dongwon F&amp;B is excluded from the KOSPI 200 index, this could be a key buying opportunity on this stock, given the company's solid fundamentals. 


KOSPI 200: LG Energy Solution Inclusion and Dongwon F&B Exclusion

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

Brian Freitas

Pan-Asia Index Rebalances/ Events/ Delta One

<ul>
<li>KRX has announced the Fast Entry inclusion of <a href="https://www.smartkarma.com/entities/lg-energy-solution" target="_blank" data-smartkarma-citation="entities:33464:1" rel="noopener">LG Energy Solution (373220 KS)</a> in the KOSPI200 Index at the close on 10 March. <a href="https://www.smartkarma.com/entities/dongwon-f-b-co-ltd" target="_blank" data-smartkarma-citation="entities:3274:1" rel="noopener">Dongwon F&amp;B (049770 KS)</a> will be deleted.</li>
<li>
<a href="https://www.smartkarma.com/entities/lg-energy-solution" target="_blank" data-smartkarma-citation="entities:33464:1" rel="noopener">LG Energy Solution (373220 KS)</a>'s inclusion in the KRX Secondary Battery Index and the BBIG Index should be announced in the next few days. That will add to passive buying.</li>
<li>Local institutions have been buyers on <a href="https://www.smartkarma.com/entities/lg-energy-solution" target="_blank" data-smartkarma-citation="entities:33464:1" rel="noopener">LG Energy Solution (373220 KS)</a> since listing while retail and foreign investors have been sellers. There is a biggish lock up expiry coming up.</li>
</ul>


KRX has announced the Fast Entry inclusion of LG Energy Solution (373220 KS) in the KOSPI200 Index at the close on 10 March. Dongwon F&amp;B (049770 KS) will be deleted.

LG Energy Solution (373220 KS)'s inclusion in the KRX Secondary Battery Index and the BBIG Index should be announced in the next few days. That will add to passive buying.
Local institutions have been buyers on LG Energy Solution (373220 KS) since listing while retail and foreign investors have been sellers. There is a biggish lock up expiry coming up.


KOSPI200 Index Rebalance (March): LG Energy IN; Dongwon F&B Out

South Korea

Dongsuh Companies Inc. imports, manufactures, processes, markets and distributes general food products such as vegetable cooking oils. The Company also produces packaging materials and ceramic products including food and oil containers. Dongsuh has a cooperative relationship with Kraft Foods Inc.

BGF Retail Co., Ltd. operates convenience stores. The Company retails delicatessen, sweets, snacks, beverages, tobacco, and other related products. BGF Retail markets its products throughout South Korea.

E-MART Inc. operates E-Mart discount stores. The Company retails food, clothing, household goods, electronics, and other items through several branch stores.

Hyundai G.F. Holdings Co., Ltd. operates as a office furniture distribution company. The Company produces built in furniture, upcycling waste materials bottles furniture, wood furniture, and other related products. Hyundai G.F. Holdings also offers food, information and technology, groceries sale, and food materials distribution services.

BGF Retail Co. Ltd. operates convenience store chains called CU in South Korea. The Company, through company owned stores or franchise, sells general groceries such as food and beverage.  The Company also offers ticketing, parcel pick-up, ATM machine and bill payment service.

CJ Freshway Corp. markets and provides various groceries to food service companies and restaurants.  The Company also caters to company's restaurants, schools, airports, and private restaurants and processes agricultural products.

LG H&H Co., Ltd. manufactures and distributes cosmetics. The Company produces whoo, o hui, sum 37, basic cosmetics, color cosmetics, and other related products. LG H&H also produces toothpaste, soap, detergents, healthy, personal care, and refreshing products.

AMOREPACIFIC Group is an investment holding company. The Company, through its subsidiaries, produce cosmetics and toiletries.

Cosmax, Inc. is a cosmetics manufacturer. The Company develops and produces a variety of cosmetics for men and women, such as basic and special skin care, makeup, hair care, and other beauty products. Cosmax manufactures its products on original equipment manufacturing (OEM) basis.

Ottogi Corporation manufactures food seasonings and instant food, such as mayonnaise, ketchup, salad dressing, sesame and cooking oils, and instant curry. The Company also produces frozen salads, fruit preservatives, instant noodles, and canned tuna.

Sun Art Retail Group Ltd. operates hypermarkets.  The Company retails food and offers amenities such as restaurants, automated teller machines, pharmacies and dry cleaners.

Chefs' Warehouse Inc. is a premier distributor of specialty food products in the United States. The Company is focused on serving the specific needs of chefs who own and/or operate restaurants, fine dining establishments, country clubs, hotels, caterers, culinary schools and specialty food stores.

The Andersons, Inc. merchandises grain, operates grain elevator facilities, distributes wholesale agricultural fertilizer, and distributes agricultural inputs to dealers and farmers.  The Company also manufactures lawn fertilizer and corncob-based products, and purchases, sells, repairs, and leases railcars. In addition, The Andersons operates retail stores and a distribution center.

Sheng Siong Group Ltd is a retailer in Singapore.  The Company operates a groceries chain across Singapore. Sheng Siong's stores provide fresh and chilled produce, seafood, meat and vegetables, processed, packaged and preserved food products as well as general merchandise such as toiletries and essential household items.

Ingles Markets, Incorporated operates a supermarket chain in the southeastern United States.  The Company also owns and operates neighborhood shopping centers.

CREATE SD HOLDINGS Co Ltd operates a chain of drug stores based in Kanagawa. The Company sells medical supplies, cosmetics, foodstuff, baby products and daily goods. CREATE SD HOLDINGS also sells prescription medicine.

Mitsubishi Shokuhin Co.,Ltd. is a wholesaler of processed food. The Company sells a varietyof groceries including canned products, dried food, frozen food, pet food, beverages, and liquors.

Casino Guichard-Perrachon SA operates a wide range of hypermarkets, supermarkets, and  convenience stores.  The Company operates in Asia and Europe.

Metro AG operates retail stores and markets products over the Internet.  The Company operates cash and carry stores, supermarkets and hypermarkets, consumer electronics stores, department stores, theme stores, and online sales services.

Philippine Seven Corporation licenses to operate 7-Eleven stores in the Philippines. The Company also leased commercial properties and constructed retail store building.

GS Retail Co., Ltd. operates a chain of retail stores. The Company provides beauty and skincare products, candles, gifts, perfumes, ornaments, bathroom accessories, and other products. GS Retail serves its customers in the Republic of South Korea.

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GS Retail (007070 KS)

BGF Retail & GS Retail: Korean CVS Plays Likely to Better Withstand Higher Inflation

BGF Retail and GS Retail are strong turnaround plays amid the end of the social distancing policies in Korea. These CVS plays are well positioned...

Douglas Kim

Combined Rebalancing Flow Estimations of Three Indexes in Korea on March 10

This post estimates the combined rebalancing flows of Korea's three local indexes, which should be seen on March 10, supposedly at the close.

Sanghyun Park

KOSPI Size Index Series Rebalancing: Official Results & Passive Impacts

KRX officially announced the rebalancing results of the KOSPI Size Index Series. This post specifically estimates the passive impacts of those new...

Sanghyun Park

KOSPI 200: LG Energy Solution Inclusion and Dongwon F&B Exclusion

On 22 February, the KRX announced that LG Energy Solution (373220 KS) will be included in numerous local indices including KOSPI 200, KOSPI 100,...

Douglas Kim

KOSPI200 Index Rebalance (March): LG Energy IN; Dongwon F&B Out

LG Energy will be added to the KOSPI200 Index at the close on 10 March, while Dongwon F&B will be deleted. There will be a large KOSPI200 basket...

Brian Freitas

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