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

<p>KOSPI 200 December rebalancing's review period is May 1 to October 31.</p><h2>Adds</h2><p>Below is the list of the likely additions based on the average daily market cap from May 1 to yesterday. All of them have a pretty decent shot at joining KOSPI 200 at this point.</p><table class="table table-striped">
<colgroup>
<col width="100">
<col width="100">
<col width="100">
<col width="100">
<col width="100">
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<tbody>
<tr>
<td data-sheets-value='{"1":2,"2":"KOSPI 200 adds - screening"}'>KOSPI 200 adds - screening</td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"Ticker"}'>Ticker</td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"Cumulative average daily market cap"}'>Cumulative average daily market cap</td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"Average daily market cap ranking"}'>Average daily market cap ranking</td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"Cumulative average daily trading value"}'>Cumulative average daily trading value</td>
</tr>
<tr>
<td></td>
<td style="text-align: right;"></td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"&gt; 15th percentile"}'>&gt; 15th percentile</td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"&lt; 90.00%"}'>&lt; 90.00%</td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"&gt; 15th percentile"}'><div><div>&gt; 15th percentile</div></div></td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"PI Advanced Materials Co Ltd"}'><strong>PI Advanced Materials</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":178920}'>178920</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0.19436336904045193}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}'><strong>19.44%</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0.8148148148148148}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}'><strong>81.48%</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0.8313253012048193}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}'>83.13%</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Myoung Shin Industrial Co Ltd"}'><strong>Myoung Shin Industrial</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"009900"}'>009900</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0.18064633216832338}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}'><strong>18.06%</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0.6388888888888888}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}'><strong>63.89%</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0.9681528662420382}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}'>96.82%</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"SL Corp"}'><strong>SL Corp</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"005850"}'>005850</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0.16233071177081637}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}'><strong>16.23%</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0.7222222222222222}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}'><strong>72.22%</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0.6751592356687899}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}'>67.52%</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Meritz Financial Group Inc"}'><strong>Meritz Financial Group</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":138040}'>138040</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0.18331189030260275}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}'><strong>18.33%</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0.8947368421052632}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}'><strong>89.47%</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0.6268656716417911}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}'>62.69%</td>
</tr>
<tr><td colspan="5" rowspan="1" data-sheets-value='{"1":2,"2":"Source: KRX &amp; FnGuide"}'>Source: KRX &amp; FnGuide</td></tr>
</tbody>
</table><div class="content-highlight"><p>F&amp;F (383220), Iljin Hysolus (271940), and SD Biosensor (137310) are also meeting the inclusion screening requirements. But they do not meet the minimum listing period of 6 months, so they will not be included in the index for this rebalancing. At their current market caps, they will likely join KOSPI 200 in the June rebalancing next year.</p></div><p>Below are the passive inflow estimates for each likely addition. Meritz Financial Group and SL Corp are expected to experience significant passive inflow at 1.91x and 1.69x compared to ADTV, respectively.</p><table class="table table-striped">
<colgroup>
<col width="100">
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<col width="100">
<col width="100">
<col width="100">
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<tbody>
<tr>
<td data-sheets-value='{"1":2,"2":"KOSPI 200 adds - passive inflow"}'>KOSPI 200 adds - passive inflow</td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"Ticker"}'>Ticker</td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"Estimated passive inflow"}'>Estimated passive inflow</td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"Shares in"}'>Shares-in</td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"Days to buy"}'>Days to buy (est. passive inflow / ADTV)</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"PI Advanced Materials Co Ltd"}'><strong>PI Advanced Materials</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":178920}'>178920</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":10.825840665461046}' data-sheets-numberformat='{"1":2,"2":"₩#,##0.0B"}'>₩10.8B</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":214798.42590200488}' data-sheets-numberformat='{"1":2,"2":"#,##0","3":1}'>214,798</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0.9039685638683741}' data-sheets-numberformat='{"1":2,"2":"#,##0.00x","3":1}'><strong>0.90x</strong></td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Myoung Shin Industrial Co Ltd"}'><strong>Myoung Shin Industrial</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"009900"}'>009900</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":10.991761963498126}' data-sheets-numberformat='{"1":2,"2":"₩#,##0.0B"}'>₩11.0B</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":427695.0180349466}' data-sheets-numberformat='{"1":2,"2":"#,##0","3":1}'>427,695</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0.30905100286068315}' data-sheets-numberformat='{"1":2,"2":"#,##0.00x","3":1}'><strong>0.31x</strong></td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"SL Corp"}'><strong>SL Corp</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"005850"}'>005850</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":6.550051172140481}' data-sheets-numberformat='{"1":2,"2":"₩#,##0.0B"}'>₩6.6B</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":254370.91930642645}' data-sheets-numberformat='{"1":2,"2":"#,##0","3":1}'>254,371</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":1.6851889200919719}' data-sheets-numberformat='{"1":2,"2":"#,##0.00x","3":1}'><strong>1.69x</strong></td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Meritz Financial Group Inc"}'><strong>Meritz Financial Group</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":138040}'>138040</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":15.155515711760314}' data-sheets-numberformat='{"1":2,"2":"₩#,##0.0B"}'>₩15.2B</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":470668.18980622094}' data-sheets-numberformat='{"1":2,"2":"#,##0","3":1}'>470,668</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":1.905338234034025}' data-sheets-numberformat='{"1":2,"2":"#,##0.00x","3":1}'><strong>1.91x</strong></td>
</tr>
<tr><td colspan="5" rowspan="1" data-sheets-value='{"1":2,"2":"Source: KRX &amp; FnGuide"}'>Source: KRX &amp; FnGuide</td></tr>
</tbody>
</table><h2>Deletes</h2><p>Below is the list of the likely deletions based on the average daily market cap from May 1 to yesterday. Of these five candidates, the first three have a higher chance of leaving the index. Then, one of the last two (Lotte Himart or LX Hausys) will likely join the rest to leave the index.</p><table class="table table-striped">
<colgroup>
<col width="100">
<col width="100">
<col width="100">
<col width="100">
<col width="100">
</colgroup>
<tbody>
<tr>
<td data-sheets-value='{"1":2,"2":"KOSPI 200 deletes - screening"}'>KOSPI 200 deletes - screening</td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"Ticker"}'>Ticker</td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"Cumulative average daily market cap"}'>Cumulative average daily market cap</td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"Average daily market cap ranking"}'>Average daily market cap ranking</td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"Cumulative average daily trading value"}'>Cumulative average daily trading value</td>
</tr>
<tr>
<td></td>
<td style="text-align: right;"></td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"&gt; 15th percentile"}'>&lt; 15th percentile</td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"&gt; 110.00%"}'>&gt; 110.00%</td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"&gt; 15th percentile"}'><div><div>&gt; 15th percentile</div></div></td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Samyang Foods Co Ltd"}'><strong>Samyang Foods</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"003230"}'>003230</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0.09118900815365227}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}'><strong>9.12%</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":1.2173913043478262}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}'><strong>121.74%</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0.5416666666666667}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}'>54.17%</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Ilyang Pharmaceutical Co., Ltd"}'><strong>Ilyang Pharmaceutical</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"007570"}'>007570</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0.05931317465504915}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}'><strong>5.93%</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":1.4444444444444444}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}'><strong>144.44%</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0.5614035087719298}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}'>56.14%</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"LX Holdings Corp"}'><strong>LX Holdings</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":383800}'>383800</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0.09812342876337998}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}'><strong>9.81%</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":1.2}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}'><strong>120.00%</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0.5176470588235293}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}'>51.76%</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"LOTTE Himart Co Ltd"}'><strong>LOTTE Himart</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"071840"}'>071840</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0.09733771137498692}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}'><strong>9.73%</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":1.1388888888888888}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}'><strong>113.89%</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0.5605095541401274}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}'>56.05%</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"LX Hausys Ltd"}'><strong>LX Hausys</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":108670}'>108670</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0.10423769792069448}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}'><strong>10.42%</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":1.16}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}'><strong>116.00%</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0.6705882352941177}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}'>67.06%</td>
</tr>
<tr><td colspan="5" rowspan="1" data-sheets-value='{"1":2,"2":"Source: KRX &amp; FnGuide"}'>Source: KRX &amp; FnGuide</td></tr>
</tbody>
</table><p>Below are the passive outflow estimates for each likely deletion. Samyang Foods and Lotte Himart will likely suffer the harshest passive outflow at 2.40x and 2.12x compared to ADTV, respectively.</p><table class="table table-striped">
<colgroup>
<col width="100">
<col width="100">
<col width="100">
<col width="100">
<col width="100">
</colgroup>
<tbody>
<tr>
<td data-sheets-value='{"1":2,"2":"KOSPI 200 deletes - passive outflow"}'>KOSPI 200 deletes - passive outflow</td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"Ticker"}'>Ticker</td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"Estimated passive outflow"}'>Estimated passive outflow</td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"Shares-out"}'>Shares-out</td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"Days to cover"}'>Days to cover (est. passive outflow / ADTV)</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Samyang Foods Co Ltd"}'><strong>Samyang Foods</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"003230"}'>003230</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":4}' data-sheets-numberformat='{"1":2,"2":"₩#,##0.0B"}'>₩4.0B</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":46948.35680751174}' data-sheets-numberformat='{"1":2,"2":"#,##0","3":1}'>46,948</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":2.3955941922623576}' data-sheets-numberformat='{"1":2,"2":"#,##0.00x","3":1}'><strong>2.40x</strong></td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Ilyang Pharmaceutical Co., Ltd"}'><strong>Ilyang Pharmaceutical</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"007570"}'>007570</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":5.999999999999999}' data-sheets-numberformat='{"1":2,"2":"₩#,##0.0B"}'>₩6.0B</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":207972.27036395145}' data-sheets-numberformat='{"1":2,"2":"#,##0","3":1}'>207,972</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":1.1713189148648702}' data-sheets-numberformat='{"1":2,"2":"#,##0.00x","3":1}'><strong>1.17x</strong></td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"LX Holdings Corp"}'><strong>LX Holdings</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":383800}'>383800</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":5.999999999999999}' data-sheets-numberformat='{"1":2,"2":"₩#,##0.0B"}'>₩6.0B</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":673400.6734006733}' data-sheets-numberformat='{"1":2,"2":"#,##0","3":1}'>673,401</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":1.7705475669560264}' data-sheets-numberformat='{"1":2,"2":"#,##0.00x","3":1}'><strong>1.77x</strong></td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"LOTTE Himart Co Ltd"}'><strong>LOTTE Himart</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"071840"}'>071840</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":4}' data-sheets-numberformat='{"1":2,"2":"₩#,##0.0B"}'>₩4.0B</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":139616.05584642233}' data-sheets-numberformat='{"1":2,"2":"#,##0","3":1}'>139,616</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":2.1244720753282564}' data-sheets-numberformat='{"1":2,"2":"#,##0.00x","3":1}'><strong>2.12x</strong></td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"LX Hausys Ltd"}'><strong>LX Hausys</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":108670}'>108670</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":8}' data-sheets-numberformat='{"1":2,"2":"₩#,##0.0B"}'>₩8.0B</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":108695.65217391304}' data-sheets-numberformat='{"1":2,"2":"#,##0","3":1}'>108,696</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":1.2487943625014968}' data-sheets-numberformat='{"1":2,"2":"#,##0.00x","3":1}'><strong>1.25x</strong></td>
</tr>
<tr><td colspan="5" rowspan="1" data-sheets-value='{"1":2,"2":"Source: KRX &amp; FnGuide"}'>Source: KRX &amp; FnGuide</td></tr>
</tbody>
</table>

KOSPI 200 December rebalancing's review period is May 1 to October 31.AddsBelow is the list of the likely additions based on the average daily market cap from May 1 to yesterday. All of them have a pretty decent shot at joining KOSPI 200 at this point.









KOSPI 200 adds - screening
Ticker
Cumulative average daily market cap
Average daily market cap ranking
Cumulative average daily trading value




&gt; 15th percentile
&lt; 90.00%
&gt; 15th percentile


PI Advanced Materials
178920
19.44%
81.48%
83.13%


Myoung Shin Industrial
009900
18.06%
63.89%
96.82%


SL Corp
005850
16.23%
72.22%
67.52%


Meritz Financial Group
138040
18.33%
89.47%
62.69%

Source: KRX &amp; FnGuide

F&amp;F (383220), Iljin Hysolus (271940), and SD Biosensor (137310) are also meeting the inclusion screening requirements. But they do not meet the minimum listing period of 6 months, so they will not be included in the index for this rebalancing. At their current market caps, they will likely join KOSPI 200 in the June rebalancing next year.Below are the passive inflow estimates for each likely addition. Meritz Financial Group and SL Corp are expected to experience significant passive inflow at 1.91x and 1.69x compared to ADTV, respectively.









KOSPI 200 adds - passive inflow
Ticker
Estimated passive inflow
Shares-in
Days to buy (est. passive inflow / ADTV)


PI Advanced Materials
178920
₩10.8B
214,798
0.90x


Myoung Shin Industrial
009900
₩11.0B
427,695
0.31x


SL Corp
005850
₩6.6B
254,371
1.69x


Meritz Financial Group
138040
₩15.2B
470,668
1.91x

Source: KRX &amp; FnGuide

DeletesBelow is the list of the likely deletions based on the average daily market cap from May 1 to yesterday. Of these five candidates, the first three have a higher chance of leaving the index. Then, one of the last two (Lotte Himart or LX Hausys) will likely join the rest to leave the index.









KOSPI 200 deletes - screening
Ticker
Cumulative average daily market cap
Average daily market cap ranking
Cumulative average daily trading value




&lt; 15th percentile
&gt; 110.00%
&gt; 15th percentile


Samyang Foods
003230
9.12%
121.74%
54.17%


Ilyang Pharmaceutical
007570
5.93%
144.44%
56.14%


LX Holdings
383800
9.81%
120.00%
51.76%


LOTTE Himart
071840
9.73%
113.89%
56.05%


LX Hausys
108670
10.42%
116.00%
67.06%

Source: KRX &amp; FnGuide

Below are the passive outflow estimates for each likely deletion. Samyang Foods and Lotte Himart will likely suffer the harshest passive outflow at 2.40x and 2.12x compared to ADTV, respectively.









KOSPI 200 deletes - passive outflow
Ticker
Estimated passive outflow
Shares-out
Days to cover (est. passive outflow / ADTV)


Samyang Foods
003230
₩4.0B
46,948
2.40x


Ilyang Pharmaceutical
007570
₩6.0B
207,972
1.17x


LX Holdings
383800
₩6.0B
673,401
1.77x


LOTTE Himart
071840
₩4.0B
139,616
2.12x


LX Hausys
108670
₩8.0B
108,696
1.25x

Source: KRX &amp; FnGuide



KOSPI 200 December Rebalancing: 5 Adds/Deletes & Special Considerations

<p>KRX officially announced today that it would not apply the volatility interruption on the first day of listing for newly listed stocks from <strong>October 18th</strong>.</p><p><strong>Both dynamic VI and static VI do not apply on the listing date.</strong> However, in the case of a transfer listing from the KOSDAQ to the KOSPI or a transfer listing from the KOSPI to the KOSDAQ, the current VI continues to apply. However, it won't apply for a transfer from KONEX to KOSDAQ.</p><section class="figure"><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/232/793/original/1.png?1632975345" class="editor-image img-responsive" data-smartkarma-image-id="232793"></figure></section><div class="content-caption">(Source: KRX)</div><div class="content-highlight"><p>Attached below is the full version of the press release by the KRX.</p></div><p>KRX cited as the reason for this rule change that, although it is a natural phenomenon that price fluctuations accompany the process of finding a fair price on the listing date, the VI was excessively triggered in the recent listings, which undermines transaction continuity.</p><p>In particular, there has been frequent VI activation immediately after the opening, where many investors participated, caused many problems by stopping trading and delaying the discovery of a fair price. Therefore, through this measure, KRX expects to improve the process of finding a fair price for newly listed stocks by increasing transaction continuity on the listing date.</p>

KRX officially announced today that it would not apply the volatility interruption on the first day of listing for newly listed stocks from October 18th.Both dynamic VI and static VI do not apply on the listing date. However, in the case of a transfer listing from the KOSDAQ to the KOSPI or a transfer listing from the KOSPI to the KOSDAQ, the current VI continues to apply. However, it won't apply for a transfer from KONEX to KOSDAQ.(Source: KRX)Attached below is the full version of the press release by the KRX.KRX cited as the reason for this rule change that, although it is a natural phenomenon that price fluctuations accompany the process of finding a fair price on the listing date, the VI was excessively triggered in the recent listings, which undermines transaction continuity.In particular, there has been frequent VI activation immediately after the opening, where many investors participated, caused many problems by stopping trading and delaying the discovery of a fair price. Therefore, through this measure, KRX expects to improve the process of finding a fair price for newly listed stocks by increasing transaction continuity on the listing date.

No VI (Volatility Interruption) Applies to Korean IPO Stocks on the Listing Date After October 18

Equity Capital Markets

<h2>Key revisions</h2><p>Kakao Pay submitted a revised registration statement (prospectus) on Friday afternoon. It plans to start bookbuilding on October 20-21 and subscription on the 25th. It then plans to go public in early November (tentatively November 3rd). However, Kakao Pay did not change the offering price.</p><section class="figure"><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/231/611/original/2.png?1632487425" class="editor-image img-responsive" data-smartkarma-image-id="231611"></figure></section><p>The grace period for the registration statement to take effect is 15 business days. During this period, the Financial Supervisory Service (FSS) will undergo a final review. An issuer cannot do marketing during the grace period. After 15 business days from today (September 24th), it becomes October 20th. So, the start date of bookbuilding was decided on October 20th.</p><section class="figure"><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/231/612/original/1.png?1632487478" class="editor-image img-responsive" data-smartkarma-image-id="231612"></figure></section><p>Contrary to expectations, Kakao Pay maintained its offering price at 60,000-90,000 won as before. The market capitalization based on the top of the indicative price band is 11.73 trillion won. The institutional allocation rate remains the same at 55-75%.</p><section class="figure"><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/231/613/original/3.png?1632487969" class="editor-image img-responsive" data-smartkarma-image-id="231613"></figure></section><p>Kakao Pay added government regulatory risk to this revised report. It stated that it had suspended those services that violated the Financial Consumer Protection Act (the services concluded as financial product brokerage, not advertising).</p><p>However, Kakao Pay explained that the portion of sales of the discontinued services was only 1.2% of the total sales. Therefore, Kakao Pay said it did not feel the need to change its IPO valuation (the offering price).</p><section class="figure"><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/231/614/original/4.png?1632488385" class="editor-image img-responsive" data-smartkarma-image-id="231614"></figure></section>

Key revisionsKakao Pay submitted a revised registration statement (prospectus) on Friday afternoon. It plans to start bookbuilding on October 20-21 and subscription on the 25th. It then plans to go public in early November (tentatively November 3rd). However, Kakao Pay did not change the offering price.The grace period for the registration statement to take effect is 15 business days. During this period, the Financial Supervisory Service (FSS) will undergo a final review. An issuer cannot do marketing during the grace period. After 15 business days from today (September 24th), it becomes October 20th. So, the start date of bookbuilding was decided on October 20th.Contrary to expectations, Kakao Pay maintained its offering price at 60,000-90,000 won as before. The market capitalization based on the top of the indicative price band is 11.73 trillion won. The institutional allocation rate remains the same at 55-75%.Kakao Pay added government regulatory risk to this revised report. It stated that it had suspended those services that violated the Financial Consumer Protection Act (the services concluded as financial product brokerage, not advertising).However, Kakao Pay explained that the portion of sales of the discontinued services was only 1.2% of the total sales. Therefore, Kakao Pay said it did not feel the need to change its IPO valuation (the offering price).

Kakao Pay IPO Revised Prospectus Out: Key Revisions & Talking Points

Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

<p><strong><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> provided a new timeline of its IPO after the market close today.</strong> The book building for the institutional investors will now start on <strong>20 October.</strong> Previously, this was supposed to start on 29 September. Despite another delay in the IPO schedule, the company has maintained the IPO price range of 60,000 won to 90,000 won. The IPO base deal size ranges from $871 million to $1.3 billion.</p><p>According to the bankers' valuation, the expected market cap of Kakao Pay is expected to range from 8.2 trillion won to 12.2 trillion won. Kakao Pay IPO is expected to start trading on <strong>3 November. </strong></p><div class="content-highlight">
<div>We maintain our base case valuation of EV of 10.1 trillion won, implied market cap of 12.2 trillion won, and target price per share of 89,739 won per share. This is based on an EV/S multiple of 10.6x using our estimated sales of 954 billion won for the company in 2022.</div>
<div></div>
<div>At the high end of the IPO price range (90,000 won), we see limited upside as compared to our base case valuation. On the other hand, at the low or mid end of the IPO price range (60,000 won to 75,000 won per share), we see a solid upside as compared to our target price. </div>
</div>

Kakao Pay (377300 KS) provided a new timeline of its IPO after the market close today. The book building for the institutional investors will now start on 20 October. Previously, this was supposed to start on 29 September. Despite another delay in the IPO schedule, the company has maintained the IPO price range of 60,000 won to 90,000 won. The IPO base deal size ranges from $871 million to $1.3 billion.According to the bankers' valuation, the expected market cap of Kakao Pay is expected to range from 8.2 trillion won to 12.2 trillion won. Kakao Pay IPO is expected to start trading on 3 November. 
We maintain our base case valuation of EV of 10.1 trillion won, implied market cap of 12.2 trillion won, and target price per share of 89,739 won per share. This is based on an EV/S multiple of 10.6x using our estimated sales of 954 billion won for the company in 2022.

At the high end of the IPO price range (90,000 won), we see limited upside as compared to our base case valuation. On the other hand, at the low or mid end of the IPO price range (60,000 won to 75,000 won per share), we see a solid upside as compared to our target price. 


<h2>Listing schedule</h2><p>First, it was confirmed that the Financial Supervisory Service discussed the scope of correction and listing schedule with Kakao Pay during the Chuseok holiday.</p><p>The results of this discussion have not yet been leaked to the market. However, the local street's general view is that the listing schedule will not be substantially delayed. Kakao Pay's listing schedule has already been postponed once, and delaying it until next year could be a significant burden for the Financial Supervisory Service as well.</p><div class="content-highlight"><p><strong>The majority view in the local market is that Kakao Pay will submit a revised securities declaration at the end of September (likely sometime next week). </strong><strong>And the bookbuilding will begin around mid-October after the 15 business day grace period. </strong><strong>In this case, the listing date is likely to be around mid-November.</strong></p></div><h2>What changes are to be added?</h2><p>Kakao Pay has so far provided a service that recommends insurance or financial investment products that meet individual needs through the app. The FSC concluded that this was a product brokerage service, not an advertisement.</p><p>Of course, a business license is required to broker financial products in the Korean market. An insurance broker license is required to broker insurance, and a brokerage license is needed to broker financial investment products under the Capital Market Act.</p><p>Currently, Kakao Pay does not have these licenses. Instead, Kakao Pay's subsidiaries, KP Insurance Service, and Kakao Pay Securities, hold these financial product brokerage licenses. However, the FSC raised the issue, saying that this is a license owned by a subsidiary, not a license of Kakao Pay.</p><p>Therefore, the FSC requested Kakao Pay to immediately stop these services from September 25, when the guidance period of the Financial Consumer Protection Act ends. In this regard, Kakao Pay has already temporarily suspended insurance product brokerage services such as car insurance, companion animal insurance, and overseas travel insurance.</p><p>Kakao Pay has no choice but to include the newly changed regulatory environment and the resulting temporary suspension of services in the revised securities report. Then, the question is whether a lowering of the offering price is inevitable.</p><div class="content-highlight">
<p><strong>The general view of the local market is that a downward revision of the offering price is inevitable. As 32% of sales in the first half of this year were from the brokerage of financial products, future growth and sales estimates will have to be revised down.</strong></p>
<p><strong>Of course, Kakao Pay can resume these financial product brokerage services under the name of its subsidiaries or by directly obtaining a license. However, the problem is that the cost structure will be significantly different if it becomes a financial product brokerage service rather than an advertisement. That is, it is inevitable </strong><strong>to make a major revision to whether Kakao Pay can achieve the previously estimated sales/profit growth rate with this cost structure.</strong></p>
</div>

Listing scheduleFirst, it was confirmed that the Financial Supervisory Service discussed the scope of correction and listing schedule with Kakao Pay during the Chuseok holiday.The results of this discussion have not yet been leaked to the market. However, the local street's general view is that the listing schedule will not be substantially delayed. Kakao Pay's listing schedule has already been postponed once, and delaying it until next year could be a significant burden for the Financial Supervisory Service as well.The majority view in the local market is that Kakao Pay will submit a revised securities declaration at the end of September (likely sometime next week). And the bookbuilding will begin around mid-October after the 15 business day grace period. In this case, the listing date is likely to be around mid-November.What changes are to be added?Kakao Pay has so far provided a service that recommends insurance or financial investment products that meet individual needs through the app. The FSC concluded that this was a product brokerage service, not an advertisement.Of course, a business license is required to broker financial products in the Korean market. An insurance broker license is required to broker insurance, and a brokerage license is needed to broker financial investment products under the Capital Market Act.Currently, Kakao Pay does not have these licenses. Instead, Kakao Pay's subsidiaries, KP Insurance Service, and Kakao Pay Securities, hold these financial product brokerage licenses. However, the FSC raised the issue, saying that this is a license owned by a subsidiary, not a license of Kakao Pay.Therefore, the FSC requested Kakao Pay to immediately stop these services from September 25, when the guidance period of the Financial Consumer Protection Act ends. In this regard, Kakao Pay has already temporarily suspended insurance product brokerage services such as car insurance, companion animal insurance, and overseas travel insurance.Kakao Pay has no choice but to include the newly changed regulatory environment and the resulting temporary suspension of services in the revised securities report. Then, the question is whether a lowering of the offering price is inevitable.
The general view of the local market is that a downward revision of the offering price is inevitable. As 32% of sales in the first half of this year were from the brokerage of financial products, future growth and sales estimates will have to be revised down.
Of course, Kakao Pay can resume these financial product brokerage services under the name of its subsidiaries or by directly obtaining a license. However, the problem is that the cost structure will be significantly different if it becomes a financial product brokerage service rather than an advertisement. That is, it is inevitable to make a major revision to whether Kakao Pay can achieve the previously estimated sales/profit growth rate with this cost structure.


Kakao Pay IPO Schedule Update & Short Trading Idea on Kakao Bank

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.

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Kakaopay (377300 KS)

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