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>Samsung Elec &amp; Hyundai Motor's high proportion of preferred stocks leads to their unusually high cost of capital, making themselves prime targets for the govt's Corporate Value Up policy.</li>
<li>Policy likely focuses on aggressive share buybacks, especially preferred stock repurchase, to improve PBR. Pension funds may invest heavily in ETFs, offsetting dilution effects.</li>
<li>Hyundai Motor may pursue more aggressive shareholder returns due to the India listing, possibly prioritizing preferred share repurchases as it introduces risks of value transfer controversies within Korea.</li>
</ul>


Samsung Elec &amp; Hyundai Motor's high proportion of preferred stocks leads to their unusually high cost of capital, making themselves prime targets for the govt's Corporate Value Up policy.
Policy likely focuses on aggressive share buybacks, especially preferred stock repurchase, to improve PBR. Pension funds may invest heavily in ETFs, offsetting dilution effects.
Hyundai Motor may pursue more aggressive shareholder returns due to the India listing, possibly prioritizing preferred share repurchases as it introduces risks of value transfer controversies within Korea.


Exploring Prioritized Buyback/Cancellation of Samsung Electronics & Hyundai Motor Prefs

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

Korea Stock Exchange KOSPI 200 / Event-Driven

<ul>
<li>Korea banned all short selling in March 2020 and resumed short selling only on <a href="https://www.smartkarma.com/entities/korea-stock-exchange-kospi-200" target="_blank" data-smartkarma-citation="entities:26021:1" rel="noopener">KOSPI 200</a> and <a href="https://www.smartkarma.com/entities/kosdaq-150-index" target="_blank" data-smartkarma-citation="entities:31077:1" rel="noopener">KOSDAQ 150</a> index constituents in May 2021.</li>
<li>News reports indicate that there could be another short sell ban as soon as the coming week. Indications are that the ban could last 6 months.</li>
<li>There are many implications of a total short sell ban including futures backwardation, market manipulation, and no emerging to developed market promotion.</li>
</ul>


Korea banned all short selling in March 2020 and resumed short selling only on KOSPI 200 and KOSDAQ 150 index constituents in May 2021.
News reports indicate that there could be another short sell ban as soon as the coming week. Indications are that the ban could last 6 months.
There are many implications of a total short sell ban including futures backwardation, market manipulation, and no emerging to developed market promotion.


Korea Short Sell Ban: Background, Manipulation, Holdings, Flows, Short Interest, Implications

Asia and Global Semiconductor and Tech Research

Andrew Lu

Equity Bottom-Up

<ul>
<li>Tesla is facing a dilemma whether to aggressively cut price to boost shipment but lose margins or to keep price stable with a more moderated shipment growth like 10-20% y/y. </li>
<li>Three challenges ahead: 1. Collapsing margin vs. rising margin for key competitors? 2. Cybertruck is selling at a loss, more margin downside? 3. Valuation reset for lower sales CAGR? </li>
<li>Cautious on Tesla as its sales/earnings CAGR is falling below 20% with a rich valuation until we see cost cut on Cybertruck, FSD AI breakthrough, and low price model introduction.</li>
</ul>


Tesla is facing a dilemma whether to aggressively cut price to boost shipment but lose margins or to keep price stable with a more moderated shipment growth like 10-20% y/y. 
Three challenges ahead: 1. Collapsing margin vs. rising margin for key competitors? 2. Cybertruck is selling at a loss, more margin downside? 3. Valuation reset for lower sales CAGR? 
Cautious on Tesla as its sales/earnings CAGR is falling below 20% with a rich valuation until we see cost cut on Cybertruck, FSD AI breakthrough, and low price model introduction.


Tesla (TSLA) No Longer Prevails, a Dilemma and Touch Challenges Ahead

Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

<ul>
<li>The fact that Tesla Korea is losing its market share significantly in Korea portends increased challenges for Tesla Motors on a global basis. </li>
<li>The number of new Tesla vehicles registered in Korea was 1,303 units in 1Q 2023, down 52% YoY. </li>
<li>In this insight, we provide three major reasons for Tesla's market share losses in Korea. We also provide Tesla Korea's 2022 results analysis.</li>
</ul>


The fact that Tesla Korea is losing its market share significantly in Korea portends increased challenges for Tesla Motors on a global basis. 
The number of new Tesla vehicles registered in Korea was 1,303 units in 1Q 2023, down 52% YoY. 
In this insight, we provide three major reasons for Tesla's market share losses in Korea. We also provide Tesla Korea's 2022 results analysis.


Market Share Loss for Tesla Korea Accelerating in 1Q 2023

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

Beijing Sinohytec   / Equity Capital Markets

<ul>
<li>
<a href="https://www.smartkarma.com/entities/beijing-sinohytec-co-ltd" target="_blank" data-smartkarma-citation="entities:34068:1" rel="noopener">Beijing Sinohytec Co Ltd (688339 CH)</a> (BSH) is looking to raise up to US$400m via its H-shares listing.</li>
<li>BSH provides fuel cell systems in China, focusing on the design, development and manufacture of fuel cell systems and stacks mainly for commercial vehicles, such as buses and trucks.</li>
<li>In this note, we talk about the company’s past performance and other deal dynamics.</li>
</ul>



Beijing Sinohytec Co Ltd (688339 CH) (BSH) is looking to raise up to US$400m via its H-shares listing.
BSH provides fuel cell systems in China, focusing on the design, development and manufacture of fuel cell systems and stacks mainly for commercial vehicles, such as buses and trucks.
In this note, we talk about the company’s past performance and other deal dynamics.


Beijing SinoHytec A/H Listing - A Whole Lot of Promise but Not Much Earnings to Show for It Yet

South Korea

Hyundai Motor Company manufactures, sells, and exports passenger cars, trucks, and commercial vehicles. The Company also sells various auto parts and operates auto repair service centers throughout South Korea. Hyundai Motor provides financial services through its subsidiaries.

Kia Corporation manufactures, sells, and exports passenger cars, mini-buses, trucks and commercial vehicles. The Company also manufactures auto-parts and tools using hybrid electric and fuel cell technology. Kia markets its products worldwide.

KG Mobility Corp. manufactures and distributes automobiles. The Company produces passenger vehicles, sports utility vehicles, automotive engine, heavy equipment and auto parts, and other related products. KG Mobility markets its products worldwide.

Hyundai Mobis Co., Ltd. manufactures and markets automotive parts and equipment, such as  automotive service components, modules, and systems. The Company also contractsenvironmental projects, including sewage treatment plant and industrial waste water treatment plant construction.

Hankook Tire & Technology Co. Ltd. develops and manufactures radial tires for passenger cars, light trucks, trucks, and buses.  The Company also produces batteries and aluminum alloy wheels and operates real estate business.

HL Mando Corp manufactures and markets automotive parts and equipments.  The Company's product line includes brake systems, suspension systems, and steering systems.

Hanon Systems manufactures a variety of automotive air control equipment.  The Company's products include air conditioners, heaters, cooling modules, compressors, radiators, fans, evaporators, and condensers. Hanon Systems distributes its products on an original equipment manufacturing (OEM) basis.

SL Corp. designs and manufactures head lamps, chassis, and power trains for autos and motorcycles.  The Company exports its products to overseas market such as North America and Australia.

Sebang Global Battery Co., Ltd. specializes in manufacturing storage batteries used in automobiles, motorcycles, electric vehicles, and industrial machinery such as excavators and bulldozers.  The Company provides its products to domestic and overseas markets.

Kumho Tire Co., Inc. designs and produces tires.  The Company's main products include various automobile tires and tubes used in sedan, SUV, RV, truck, and bus.  Kumho Tire also provides racing tires.

PT Astra International Tbk assembles and distributes automobiles, motorcycles, and their related spare parts.  Through its subsidiaries, the Company also operates in the mining, development of plantations, financial and information technology.

NISSAN MOTOR CO., LTD. manufactures and distributes automobiles and related parts. It also provides financing services. Nissan delivers a comprehensive range of products under various brands. The Company manufactures in Japan, the United States, Mexico, the United Kingdom and many other countries.

Geely Automobile Holdings Limited operates as a passenger vehicles manufacturing company. The Company provides passenger vehicles development, manufacturing, sales, and other services. Geely Automobile Holdings also exports passenger vehicles.

Great Wall Motor Company Limited, through its subsidiaries, manufactures and sells pick-up trucks and sport-utility vehicles (SUVs) in China under branded names. The Company also researches and develops, and manufactures principal automotive parts and components for use in the assembly of pick-up trucks and SUVs.

Honda Motor Co., Ltd. develops, manufactures, and distributes motorcycles, automobiles, and power products such as generators and farm machinery. The Company also operates a financial credit business. Honda Motor has manufacturing facilities in the US, Canada, the UK, France, Italy, Spain, Brazil, Mexico, India, and Thailand.

Tata Motors Limited manufactures cars and commercial automotive vehicles in India. The Company designs, manufactures and sells heavy commercial, medium commercial and small commercial vehicles including trucks, tankers, vans, buses, ambulances and minibuses. Tata also manufactures small cars and sports utility vehicles.

Suzuki Motor Corporation manufactures automobiles, motorcycles, and their related parts. The Company has production facilities in USA, Japan, Taiwan, India, Pakistan, Indonesia, Thailand, and Hungary.

Maruti Suzuki India Limited manufactures and exports automobiles. Maruti collaborated with Suzuki of Japan to produce affordable cars for the average Indian.

Hero MotoCorp Ltd. designs, manufactures and distributes motorcycles. The Company's products also include motorcycle parts and accessories.

Bajaj Auto Limited manufactures and distributes motorized two-wheeled and three-wheeled scooters, motorcycles and mopeds.

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Hyundai Motor (005385 KS)

Exploring Prioritized Buyback/Cancellation of Samsung Electronics & Hyundai Motor Prefs

This post intends to flag the imminent likelihood of prioritized buyback and cancellation of preferred shares by Samsung Electronics and Hyundai...

Sanghyun Park

Korea Short Sell Ban: Background, Manipulation, Holdings, Flows, Short Interest, Implications

Media reports indicate that there could be a temporary short sell ban in Korea. This could lead to futures backwardation, market manipulation and a...

Brian Freitas

Tesla (TSLA) No Longer Prevails, a Dilemma and Touch Challenges Ahead

Tesla No Longer Prevails, a Dilemma and Three Touch Challenges Ahead: 1. Collapsing margin vs. rising margin for peers; 2. Cybertruck is selling at...

Andrew Lu

Beijing SinoHytec A/H Listing - A Whole Lot of Promise but Not Much Earnings to Show for It Yet

Beijing Sinohytec Co Ltd (688339 CH) (BSH) is looking to raise up to US$400m via its H-shares listing. In this note, we talk about the deal dynamics.

Sumeet Singh

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