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>Nine constituents will likely face an increase in the float rate: five stocks for the sale of the majority shareholder's shares and four names for the IPO lockup release.</li>
<li>Kakao Bank (6.35x), LG Corp (003550 KS) (2.62x), Krafton (2.09x), and Woori Financial Group (316140 KS) (1.74x) are expected to have the most significant impact.</li>
<li>In general, float rate changes show price movement by passive flow similar to new changes (adds/deletes). So, we need to consider gradually building up positions two months before the rebalancing.</li>
</ul>


Nine constituents will likely face an increase in the float rate: five stocks for the sale of the majority shareholder's shares and four names for the IPO lockup release.
Kakao Bank (6.35x), LG Corp (003550 KS) (2.62x), Krafton (2.09x), and Woori Financial Group (316140 KS) (1.74x) are expected to have the most significant impact.
In general, float rate changes show price movement by passive flow similar to new changes (adds/deletes). So, we need to consider gradually building up positions two months before the rebalancing.


KOSPI 200 Index Rebalancing: Constituents Subject to Float Rate Increase

HD Hyundai Heavy Industries  / Event-Driven

<ul>
<li>KOSPI has seven lockup release events that are likely to hit the market. And all of them are IPO institutional and ESOP lockups.</li>
<li>Whether these IPO institutional/ESOP lockups will hit the market directly correlates with the return size from the offering price. And most of them are still far above the offering price.</li>
<li>Therefore, it is highly likely that a meaningful share price correction will occur on each release date. This correlation pattern has been more pronounced in recent lockup release events.</li>
</ul>


KOSPI has seven lockup release events that are likely to hit the market. And all of them are IPO institutional and ESOP lockups.
Whether these IPO institutional/ESOP lockups will hit the market directly correlates with the return size from the offering price. And most of them are still far above the offering price.
Therefore, it is highly likely that a meaningful share price correction will occur on each release date. This correlation pattern has been more pronounced in recent lockup release events.


KOSPI Lockup Releases & Likelihood of Hitting the Market

Head of Research, IPOs & Placements, Aequitas Research

Sumeet Singh

Head of Research, IPOs & Placements

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.

Equity Capital Markets

HD Hyundai Heavy Industries  / Equity Capital Markets

<ul>
<li>Hyundai Heavy Industries (HHI) was listed on Korea Exchange on 17th September, 2021. Its six month IPO lock-up will expire on 17th March, 2022.</li>
<li>Hyundai Heavy Industries (HHI) is a South Korean shipbuilder. The company is majority owned by Korea Shipbuilding &amp; Offshore Engineering (009540 KS) after the latter’s spin-off in 2019.</li>
<li>In this note, we will talk about the upcoming lock-up expiry, along with recent updates.</li>
</ul>


Hyundai Heavy Industries (HHI) was listed on Korea Exchange on 17th September, 2021. Its six month IPO lock-up will expire on 17th March, 2022.
Hyundai Heavy Industries (HHI) is a South Korean shipbuilder. The company is majority owned by Korea Shipbuilding &amp; Offshore Engineering (009540 KS) after the latter’s spin-off in 2019.
In this note, we will talk about the upcoming lock-up expiry, along with recent updates.


Hyundai Heavy IPO Lock-Up - Last of the Insti Lock-Ups, Parent’s Shares Out of Lock-Up as Well

Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

Cross Asset Strategy

<ul>
<li>In this insight, we discuss the end of the mandatory lock-up periods for 43 stocks in Korea in March 2022. </li>
<li>Among these 43 stocks, 5 stocks are in KOSPI and 38 stocks are in KOSDAQ.</li>
<li>These 43 stocks could be subject to further selling pressures in March and could on average underperform relative to the market. </li>
</ul>


In this insight, we discuss the end of the mandatory lock-up periods for 43 stocks in Korea in March 2022. 
Among these 43 stocks, 5 stocks are in KOSPI and 38 stocks are in KOSDAQ.
These 43 stocks could be subject to further selling pressures in March and could on average underperform relative to the market. 


End of Mandatory Lock-Up Periods for 43 Stocks in Korea in March 2022

<ul>
<li>The stocks worth our attention are mostly IPO institutional lockup releases. In particular, LG Energy, Iljin HySolus, and Hyundai Heavy Industries will be of the most interest.</li>
<li>Most of these have undergone significant price corrections. Nevertheless, current prices significantly outperform the offering prices. So, the incentives for IPO institutional investors to realize profits should be pretty intense.</li>
<li>Kakao Pay's volume isn't that much. Even with a heavier release last time, it didn't meet our expectations. Probably it is because it is bottoming out at the current level.</li>
</ul>


The stocks worth our attention are mostly IPO institutional lockup releases. In particular, LG Energy, Iljin HySolus, and Hyundai Heavy Industries will be of the most interest.
Most of these have undergone significant price corrections. Nevertheless, current prices significantly outperform the offering prices. So, the incentives for IPO institutional investors to realize profits should be pretty intense.
Kakao Pay's volume isn't that much. Even with a heavier release last time, it didn't meet our expectations. Probably it is because it is bottoming out at the current level.


KOSPI Lockup Releases: Details & Trading Approaches

South Korea

HD Hyundai Heavy Industries Co., Ltd. operates as a shipbuilding company. The Company provides naval shipbuilding, industrial shipbuilding, crude oil tanker, bulk carrier, container carrier, and other related services. HD Hyundai Heavy Industries also offers offshore and engineering, engine and machinery, offshore, industrial, and marine plant services.

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HD Hyundai Heavy Industries (329180 KS)

KOSPI 200 Index Rebalancing: Constituents Subject to Float Rate Increase

This post investigates those among the KOSPI 200 constituents, which will face an increase in the float rate, thereby attracting a meaningful level...

Sanghyun Park

KOSPI Lockup Releases & Likelihood of Hitting the Market

This post details the KOSPI lockup releases from now to the end of May. Seven lockup release events are considered a high likelihood of hitting the...

Sanghyun Park

Hyundai Heavy IPO Lock-Up - Last of the Insti Lock-Ups, Parent’s Shares Out of Lock-Up as Well

Hyundai Heavy Industries (HHI) was listed on Korea Exchange on 17th September, 2021. Its six month IPO lock-up will expire on 17th March, 2022.

Sumeet Singh

End of Mandatory Lock-Up Periods for 43 Stocks in Korea in March 2022

In this insight, we discuss the end of the mandatory lock-up periods for 43 stocks in Korea in March 2022. These 43 stocks could be subject to...

Douglas Kim

KOSPI Lockup Releases: Details & Trading Approaches

This post details KOSPI lockup releases from February 20 to early May. And it discusses trading approaches for the stocks of the most interest.

Sanghyun Park

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