Asian Equities Analyst, Logistics & Transport, Tracking Traffic

Daniel Hellberg

Asian Equities Analyst, Logistics & Transport

Tracking Traffic

Focusing on Asian logistics, transportation, and travel companies

Equity Bottom-Up

<ul>
<li>Our measures of momentum and profitability suggest industry bottomed in Q1 2023</li>
<li>In addition, shares of container shipping stocks have stopped reacting to (plentiful) bad news</li>
<li>Outcome of ongoing rate negotiations and Q1 earnings calls will drive near-term performance</li>
</ul>


Our measures of momentum and profitability suggest industry bottomed in Q1 2023
In addition, shares of container shipping stocks have stopped reacting to (plentiful) bad news
Outcome of ongoing rate negotiations and Q1 earnings calls will drive near-term performance


TRACKING TRAFFIC/Container Shipping: Momentum Bottomed | Shares Stabilized | Focus on May News

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

Brian Freitas

Pan-Asia Index Rebalances/ Events/ Delta One

Periscope Analytics

Periscope Analytics focuses on event-driven trades across Asia Pacific and provides comprehensive, timely and systematic coverage of index changes to major Asia Pacific indices in a structured manner.

The analysis includes forecasted inclusions and exclusions to all major Asian indices that have significant amount of tracking assets, including estimates of passive buy/sell flow on the stocks. The service also provides commentary and impact of market consultations, ground rule changes, and other events (IPOs, spin-offs, M&A) that could lead to index changes and passive flow.

Periscope Analytics works with multi-strategy hedge funds, proprietary trading firms, stat arb trading groups and long-only investors that invest and trade in the Asia Pacific region with the data being used to trade index rebalances, avoid pre-positioning and passive flow, and to time entry into and exit from stocks.

Event-Driven Trades Across Asia Pacific

Quantitative Analysis

<ul>
<li>Total short interest in Hong Kong is HK$435.1bn, marginally higher from end-December. Short notional has moved in line with the <a href="https://www.smartkarma.com/entities/hong-kong-hang-seng-index" target="_blank" data-smartkarma-citation="entities:22899:1" rel="noopener">Hong Kong Hang Seng Index (HSI INDEX)</a>. </li>
<li>Total short notional of the KOSPI and KOSDAQ market has moved up since end-December and is in line with the move higher in the <a href="https://www.smartkarma.com/entities/korea-stock-exchange-kospi-200-index" target="_blank" data-smartkarma-citation="entities:26021:1" rel="noopener">KOSPI2 INDEX</a> and <a href="https://www.smartkarma.com/entities/kosdaq-150-index" target="_blank" data-smartkarma-citation="entities:31077:1" rel="noopener">KOSDAQ 150 Index</a>.</li>
<li>Short notional in Taiwan is lower over the quarter even as the <a href="https://www.smartkarma.com/entities/taiwan-stock-exchange-weighted-index" target="_blank" data-smartkarma-citation="entities:26056:1" rel="noopener">TWSE INDEX</a> has moved higher over the period. There has been big short covering on some stocks.</li>
</ul>


Total short interest in Hong Kong is HK$435.1bn, marginally higher from end-December. Short notional has moved in line with the Hong Kong Hang Seng Index (HSI INDEX). 
Total short notional of the KOSPI and KOSDAQ market has moved up since end-December and is in line with the move higher in the KOSPI2 INDEX and KOSDAQ 150 Index.
Short notional in Taiwan is lower over the quarter even as the TWSE INDEX has moved higher over the period. There has been big short covering on some stocks.


Short Interest Movements (Q1 2023): HK, Korea, Taiwan, Australia

Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

Event-Driven

<ul>
<li>On 30 March, it was announced that Hyun Jeong-Eun (Chairwoman of the Hyundai Group) lost a final lawsuit against the Schindler Group.</li>
<li>The Supreme Court upheld an appeal court ruling that Chairwoman Hyun needs to pay 170 billion won (US$131 million) and delayed interest payments to Hyundai Elevator. </li>
<li>Although this major lawsuit loss for Chairwoman Hyun is a tremendous catalyst, the downturn in the construction sector and uncertainty in the reduction in Chairwoman's stake remain key negatives. </li>
</ul>


On 30 March, it was announced that Hyun Jeong-Eun (Chairwoman of the Hyundai Group) lost a final lawsuit against the Schindler Group.
The Supreme Court upheld an appeal court ruling that Chairwoman Hyun needs to pay 170 billion won (US$131 million) and delayed interest payments to Hyundai Elevator. 
Although this major lawsuit loss for Chairwoman Hyun is a tremendous catalyst, the downturn in the construction sector and uncertainty in the reduction in Chairwoman's stake remain key negatives. 


Hyundai Elevator: Chairwoman Hyun Jeong-Eun Loses A Major Lawsuit Against Schindler Group

<ul>
<li>After peaking in H122, container rates have tumbled back to pre-Covid levels in Q123</li>
<li>We believe core profitability has also declined to pre-Covid levels for some carriers</li>
<li>
<a href="https://www.smartkarma.com/entities/evergreen-marine-corp-ltd" target="_blank" data-smartkarma-citation="entities:15428:1" rel="noopener">Evergreen Marine Corp (2603 TT)</a> no longer looks expensive, trading at 70-75% of replacement  cost.</li>
</ul>


After peaking in H122, container rates have tumbled back to pre-Covid levels in Q123
We believe core profitability has also declined to pre-Covid levels for some carriers

Evergreen Marine Corp (2603 TT) no longer looks expensive, trading at 70-75% of replacement  cost.


TRACKING TRAFFIC / Container Shipping: End of the Rollercoaster Ride

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.

<ul>
<li>KDB recently initiated the process of selecting an advisory firm to sell its stake in HMM, which will likely be the first to implement the mandatory offer rule.</li>
<li>Potential bidders include Hyundai Glovis, LX Holdings, and Samsung SDS. As for POSCO Holdings, it recently said that it is not considering acquiring HMM.</li>
<li>Given that HMM is the only national shipping company, there is a good chance that multiple bidders will appear, which will lead to a premium to the market price.</li>
</ul>


KDB recently initiated the process of selecting an advisory firm to sell its stake in HMM, which will likely be the first to implement the mandatory offer rule.
Potential bidders include Hyundai Glovis, LX Holdings, and Samsung SDS. As for POSCO Holdings, it recently said that it is not considering acquiring HMM.
Given that HMM is the only national shipping company, there is a good chance that multiple bidders will appear, which will lead to a premium to the market price.


HMM Is Likely the First to Be Subject to the Mandatory Offer that Comes into Force

South Korea

HMM Co., Ltd. provides marine transportation services.  The Company commands different types of vessels including full container vessels, oil tankers, car carriers, LNG carriers, bulk carriers, and tramps.

Price Gauge
52-week Range	0.00 - 0.00
Market Cap (USDm)	0.00
P/E	0.00
Dividend (Yield)	0.00

HMM Co., Ltd. (011200 KS)

TRACKING TRAFFIC/Container Shipping: Momentum Bottomed | Shares Stabilized | Focus on May News

Container shipping industry momentum bottomed in Q1, and related shares have stopped reacting to bad news. News and commentary from industry...

Tracking Traffic

Short Interest Movements (Q1 2023): HK, Korea, Taiwan, Australia

The Insight looks at movements in short interest across HK, Korea, Taiwan and Australia stocks over Q1 and highlights large increases/decreases in...

Brian Freitas

Hyundai Elevator: Chairwoman Hyun Jeong-Eun Loses A Major Lawsuit Against Schindler Group

On 30 March, the Supreme Court upheld an appeal court ruling that Chairwoman Hyun needs to pay 170 billion won (US$131 million) and delayed...

Douglas Kim

TRACKING TRAFFIC / Container Shipping: End of the Rollercoaster Ride

For container rates and profitability, it's been a wild rollercoaster ride over the past three years. But now shares of pure play Evergreen Marine...

Tracking Traffic

HMM Is Likely the First to Be Subject to the Mandatory Offer that Comes into Force

This post investigates KDB's HMM stake sale reportedly initiated last week and discusses the possibility that this deal will be the first to be...

Sanghyun Park

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)