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

<h2>Rebalancing results</h2><p>The review period for the KOSPI 200 December rebalancing ended on October 29. Below are the results of applying the screening criteria based on the average daily market cap of the review period (May 3 to October 29).</p><section class="figure"><section class="figure"><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/239/758/original/Screen+Shot+2021-11-04+at+7.22.44+PM.png?1636068186" class="editor-image img-responsive" data-smartkarma-image-id="239758"></figure></section><ul>
<li><strong>As a result of regular rebalancing, we can see four adds and four deletes.</strong></li>
<li><strong>In addition, Hyundai Heavy Industries and Kakao Pay are almost 100% likely to join the KOSPI 200 through Fast Entry. The joining date of both will be December 10, the same date as the regular rebalancing.</strong></li>
<li><strong>The stocks that will leave the KOSPI 200 for HHI and Kakao Pay will be Nexen Tire and Lotte Himart (the stocks with the lowest average daily market cap in the previous review period).</strong></li>
</ul>
<h2>Passive impact</h2>
<p>The following is a passive impact assuming KOSPI 200 tracking funds at ₩80T, including both local pensions and variable insurance index funds in addition to ETFs/index funds.</p>
<div class="content-highlight"><p><strong>Compared to the absolute size of the passive impact, Meritz Financial Group (add) and Nexen Tire (delete) are likely to face relatively large flow effects.</strong></p></div>
<section class="figure"><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/239/760/original/Screen+Shot+2021-11-04+at+7.29.44+PM.png?1636068621" class="editor-image img-responsive" data-smartkarma-image-id="239760"></figure></section><p>Below is a passive impact that we can expect if only ₩20T of funds from local ETFs/index funds are applied. This can be seen as a size that will occur on the implementation date (at the close on December 9).</p>
<section class="figure"><section class="figure"><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/239/764/original/Screen+Shot+2021-11-04+at+7.36.10+PM.png?1636068984" class="editor-image img-responsive" data-smartkarma-image-id="239764"></figure></section></section></section>

Rebalancing resultsThe review period for the KOSPI 200 December rebalancing ended on October 29. Below are the results of applying the screening criteria based on the average daily market cap of the review period (May 3 to October 29).
As a result of regular rebalancing, we can see four adds and four deletes.
In addition, Hyundai Heavy Industries and Kakao Pay are almost 100% likely to join the KOSPI 200 through Fast Entry. The joining date of both will be December 10, the same date as the regular rebalancing.
The stocks that will leave the KOSPI 200 for HHI and Kakao Pay will be Nexen Tire and Lotte Himart (the stocks with the lowest average daily market cap in the previous review period).

Passive impact
The following is a passive impact assuming KOSPI 200 tracking funds at ₩80T, including both local pensions and variable insurance index funds in addition to ETFs/index funds.
Compared to the absolute size of the passive impact, Meritz Financial Group (add) and Nexen Tire (delete) are likely to face relatively large flow effects.
Below is a passive impact that we can expect if only ₩20T of funds from local ETFs/index funds are applied. This can be seen as a size that will occur on the implementation date (at the close on December 9).


KOSPI 200 Rebalancing Update After the Review Period Ended

Equity Analyst, LightStream Research

Oshadhi Kumarasiri

Equity Analyst

Long-Short Analysis on Japan, Asia and the World

LightStream Research

LightStream conducts quantitatively rigorous and data-driven analysis with a focus on Japan and Asia.

We consistently cover the Tech, Consumer and Industrial sectors, and provide ECM and Events coverage more broadly.

We supplement traditional qualitative insights from company relationships with a robust quantitative foundation that examines as much historical data as is available.
We further refine the accuracy of our insights and calls through the use of alternative data to flesh out current trends, and through a valuation framework that emphasises non-superficial peer group selection and a proper attempt to understand the metrics and changes that have driven security valuations in the past.

Equity Capital Markets

<p><a href="https://www.smartkarma.com/entities/kakao-pay-corp" target="_blank" data-smartkarma-citation="entities:29675:1" rel="noopener">Kakao Pay (377300 KS)</a> had a stellar debut yesterday with the share price rising more than 114% from the IPO price to close the first trading session at 193,000 won per share. This first-day pop has taken Kakao Pay’s valuation to an extremely unreasonable level and we are expecting the share price to pull back over the course of the next six months alongside the expiry of voluntary lock-up periods.</p>

Kakao Pay (377300 KS) had a stellar debut yesterday with the share price rising more than 114% from the IPO price to close the first trading session at 193,000 won per share. This first-day pop has taken Kakao Pay’s valuation to an extremely unreasonable level and we are expecting the share price to pull back over the course of the next six months alongside the expiry of voluntary lock-up periods.

<p>The KRX officially confirms that Kakao Pay's listing date is <strong>November 3rd</strong>. And the ticker is <strong>377300</strong>.</p><section class="figure"><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/239/176/original/Screen+Shot+2021-11-02+at+1.32.52+AM.png?1635831271" class="editor-image img-responsive" data-smartkarma-image-id="239176"></figure></section><div class="content-caption">(Source: KRX)</div><hr><p><strong>Then, what will the stock price be like immediately after Kakao Pay's listing?</strong></p><p>Opinions differ from the fundamental point of view of Kakao Pay. However, in terms of short-term flow, Kakao Pay is in an advantageous position. It is because the immediate float rate is likely to stay at 6.2%.</p>

The KRX officially confirms that Kakao Pay's listing date is November 3rd. And the ticker is 377300.(Source: KRX)Then, what will the stock price be like immediately after Kakao Pay's listing?Opinions differ from the fundamental point of view of Kakao Pay. However, in terms of short-term flow, Kakao Pay is in an advantageous position. It is because the immediate float rate is likely to stay at 6.2%.

Kakao Pay Listing: Day 1 Preview with Extremely Tight Float Situation

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.

<div><p>Kakao Pay (KP), one of South Korea’s largest payment and financial services apps, raised US$1.3bn in its South Korean IPO. Kakao held a 55% stake prior to listing, with Ant Financial holding the balance 45% stake.</p></div><div><p>We have covered most aspects of the deal in our earlier notes:</p></div><div><ul style="list-style-type: disc;">
<li><a href="https://www.smartkarma.com/insights/kakao-pay-ipo-guided-by-ant-financial-to-be-a-mini-ant" target="_blank" rel="noopener">Kakao Pay IPO - Guided by Ant Financial to be a mini Ant,</a></li>
<li><a href="https://www.smartkarma.com/insights/kakao-pay-ipo-peer-comparison-local-and-international" target="_blank" rel="noopener">Kakao Pay IPO - Peer comparison - local and international, and</a></li>
</ul></div><div><ul style="list-style-type: disc;"><li><a href="https://www.smartkarma.com/insights/kakao-pay-ipo-valuation-and-likely-impact-of-latest-announcement" target="_blank" rel="noopener">Kakao Pay IPO - Valuation and Likely Impact of Latest Announcement</a></li></ul></div><div><ul style="list-style-type: disc;">
<li><a href="https://www.smartkarma.com/insights/kakao-pay-ipo-low-end-still-appear-reasonable-but-stock-will-more-likely-be-driven-by-sentiment" target="_blank" rel="noopener">Kakao Pay IPO - Low-End Still Appear Reasonable but Stock Will More Likely Be Driven by Sentiment</a></li>
<li><a href="https://www.smartkarma.com/insights/kakao-pay-ipo-comparison-with-kakao-bank-and-an-alternate-look-at-valuation" target="_blank" rel="noopener">Kakao Pay IPO - Comparison with Kakao Bank and an Alternate Look at Valuation</a></li>
</ul></div><p>In this note, we will talk about the deal's trading dynamics.</p>

Kakao Pay (KP), one of South Korea’s largest payment and financial services apps, raised US$1.3bn in its South Korean IPO. Kakao held a 55% stake prior to listing, with Ant Financial holding the balance 45% stake.We have covered most aspects of the deal in our earlier notes:
Kakao Pay IPO - Guided by Ant Financial to be a mini Ant,
Kakao Pay IPO - Peer comparison - local and international, and
Kakao Pay IPO - Valuation and Likely Impact of Latest Announcement
Kakao Pay IPO - Low-End Still Appear Reasonable but Stock Will More Likely Be Driven by Sentiment
Kakao Pay IPO - Comparison with Kakao Bank and an Alternate Look at Valuation
In this note, we will talk about the deal's trading dynamics.

<div><p><a href="https://www.smartkarma.com/entities/paytm-mobile-solutions-pvt-ltd" target="_blank" data-smartkarma-citation="entities:26149:1" rel="noopener">Paytm (PAYTM IN)</a> plans to raise around US$2.5bn via selling a mix of primary and secondary shares in its India IPO. The company is backed by <a href="https://www.smartkarma.com/entities/ant-group-co-ltd" target="_blank" data-smartkarma-citation="entities:24240:1" rel="noopener">Ant Financial Services Group (6688 HK)</a> (<a href="https://www.smartkarma.com/entities/alibaba-group-holding-ltd" target="_blank" data-smartkarma-citation="entities:787:1" rel="noopener">Alibaba Group (BABA US)</a>), <a href="https://www.smartkarma.com/entities/softbank-group-corp" target="_blank" data-smartkarma-citation="entities:315:1" rel="noopener">Softbank Group (9984 JP)</a> and counts <a href="https://www.smartkarma.com/entities/berkshire-hathaway-inc-cl-a" target="_blank" data-smartkarma-citation="entities:1044:1" rel="noopener">Berkshire Hathaway Inc Cl A (BRK/A US)</a> among its investors.</p></div><div><p>Paytm offers payment services, commerce and cloud services, and financial services to 333m consumers and over 21m merchants, as of Mar 21. It offers consumers a wide selection of payment options on the Paytm app. It also offers merchants solutions that allow them to accept payments, acquire and retain consumers, improve their business operations and access financial services.</p></div><div><p>We covered the deal background in our earlier notes:</p></div><div><ul style="list-style-type: disc;">
<li><a href="https://www.smartkarma.com/insights/paytm-one-97-pre-ipo-the-positives-will-be-one-of-india-s-largest-ipos" target="_blank" rel="noopener">Paytm (One 97) Pre-IPO - The Positives - Will Be One of India’s Largest IPOs</a></li>
<li><a href="https://www.smartkarma.com/insights/paytm-one-97-pre-ipo-the-negatives-asking-valuations-a-long-shot" target="_blank" rel="noopener">Paytm (One 97) Pre-IPO - The Negatives - Asking Valuations a Long Shot</a></li>
<li><a href="https://www.smartkarma.com/insights/paytm-one-97-ipo-rhp-updates-better-disclosures-signs-of-turning-around" target="_blank" rel="noopener">Paytm (One 97) IPO - RHP Updates - Better Disclosures, Signs of Turning Around</a></li>
</ul></div><div><p>In this note, we will talk about the valuations.</p></div>

Paytm (PAYTM IN) plans to raise around US$2.5bn via selling a mix of primary and secondary shares in its India IPO. The company is backed by Ant Financial Services Group (6688 HK) (Alibaba Group (BABA US)), Softbank Group (9984 JP) and counts Berkshire Hathaway Inc Cl A (BRK/A US) among its investors.Paytm offers payment services, commerce and cloud services, and financial services to 333m consumers and over 21m merchants, as of Mar 21. It offers consumers a wide selection of payment options on the Paytm app. It also offers merchants solutions that allow them to accept payments, acquire and retain consumers, improve their business operations and access financial services.We covered the deal background in our earlier notes:
Paytm (One 97) Pre-IPO - The Positives - Will Be One of India’s Largest IPOs
Paytm (One 97) Pre-IPO - The Negatives - Asking Valuations a Long Shot
Paytm (One 97) IPO - RHP Updates - Better Disclosures, Signs of Turning Around
In this note, we will talk about the valuations.

Paytm IPO - Still Needs a Whole Lot of Hope to Justify Valuation. Index Might Hold It up Briefly

South Korea

Kakao Pay Corp. operates financial businesses. The Company provides online payment, currency encryption, and other services. Kakao Pay conducts businesses in South Korea.

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

Kakaopay (377300 KS)

KOSPI 200 Rebalancing Update After the Review Period Ended

This post is the latest update of the KOSPI 200 December rebalancing after the 6-month review period ended: rebalancing results, passive impact,...

Sanghyun Park

Kakao Pay IPO Trading: Time to Cash In

A tight free float and an unprecedented demand during book building saw Kakao Pay’s shares rise more than 114% from the IPO price on day one....

Oshadhi Kumarasiri

Kakao Pay Listing: Day 1 Preview with Extremely Tight Float Situation

Opinions differ from the fundamental point of view of Kakao Pay. However, in terms of short-term flow, it is in an advantageous position because...

Sanghyun Park

Kakao Pay IPO Trading - Won't Be Chasing

Kakao Pay, one of South Korea’s largest payment and financial services apps, raised around US$1.3bn in its South Korean IPO. Kakao held a 55% stake...

Sumeet Singh

Paytm IPO - Still Needs a Whole Lot of Hope to Justify Valuation. Index Might Hold It up Briefly

Paytm (PAYTM IN) plans to raise around US$2.5bn in its India IPO. The company is backed by Ant Fin (Alibaba Group (BABA US)), Softbank Group (9984...

Sumeet Singh

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)