Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

Thematic (Sector/Industry)

<ul>
<li>There are three major reasons why we believe Korean casinos are likely to continue to outperform the market this year.</li>
<li>Three main reasons include hedge against rising inflation, Korea and other major countries are opening up for travel, and continued decline in gambling revenues in Macau.</li>
<li>Finally, among the four major Korean casino stocks, we have Positive views on GKL, Paradise, and Kangwon Land. We have Negative view on Lotte Tour Development due to valuation.</li>
</ul>


There are three major reasons why we believe Korean casinos are likely to continue to outperform the market this year.
Three main reasons include hedge against rising inflation, Korea and other major countries are opening up for travel, and continued decline in gambling revenues in Macau.
Finally, among the four major Korean casino stocks, we have Positive views on GKL, Paradise, and Kangwon Land. We have Negative view on Lotte Tour Development due to valuation.


Three Major Reasons Why Korean Casinos Are Likely to Outperform the Market This Year

Equity Bottom-Up

<ul>
<li>There were 128k visitors to South Korea in April, up 32% MoM which was the biggest jump in MoM change in visitors to South Korea in the past year.</li>
<li>There were 215k outbound people from South Korea in April 2022, up 48% MoM and up 202% YoY.</li>
<li>Among the 21 major reopening plays in Korea, we prefer certain sectors including casino related plays (GKL, Paradise, and Kangwon Land) as well as F&amp;B related (Hitejinro and CJ Cheiljedang).</li>
</ul>


There were 128k visitors to South Korea in April, up 32% MoM which was the biggest jump in MoM change in visitors to South Korea in the past year.
There were 215k outbound people from South Korea in April 2022, up 48% MoM and up 202% YoY.
Among the 21 major reopening plays in Korea, we prefer certain sectors including casino related plays (GKL, Paradise, and Kangwon Land) as well as F&amp;B related (Hitejinro and CJ Cheiljedang).


Significant MoM Increase in Inbound & Outbound Visitors in Korea in April 2022

<ul>
<li>On 19 April, the US CDC stated that the national mask requirement on public transportation is no longer in effect in the United States.</li>
<li><strong>The CDC lifting the mask mandate is a key catalyst and other major countries are likely to follow the US in the coming months. </strong></li>
<li><em>Will the world likely to become more like Shanghai and enforce even greater lockdown policies or will they become more like the US and drop social distancing and mask mandates?  </em></li>
</ul>


On 19 April, the US CDC stated that the national mask requirement on public transportation is no longer in effect in the United States.
The CDC lifting the mask mandate is a key catalyst and other major countries are likely to follow the US in the coming months. 
Will the world likely to become more like Shanghai and enforce even greater lockdown policies or will they become more like the US and drop social distancing and mask mandates?  


CDC Ends Public Transportation Mask Mandate & Will the World Follow Shanghai or Vice Versa?

<ul>
<li>In this insight, we discuss two major issues impacting the Korean hotels, travel, duty free shops, cosmetics, leisure, &amp; casino related companies.</li>
<li>First is that the South Korean government announced that it will drop quarantine requirement for international arrivals from 21 March.</li>
<li>Second is the potential ramifications of Yoon Suk-Yeol (newly elected South Korean President) who has a relatively hard line stance on North Korea. </li>
</ul>


In this insight, we discuss two major issues impacting the Korean hotels, travel, duty free shops, cosmetics, leisure, &amp; casino related companies.
First is that the South Korean government announced that it will drop quarantine requirement for international arrivals from 21 March.
Second is the potential ramifications of Yoon Suk-Yeol (newly elected South Korean President) who has a relatively hard line stance on North Korea. 


Korea Drops Quarantine Requirements Vs. Yoon Suk-Yeol's Hard Line Stance on North Korea

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>The TIGER Tour Leisure ETF shows the fastest AUM growth among the local themed ETFs in Korea. It seems clear that this is due to the reopening expectations.</li>
<li>The absolute size of AUM seems small. But the number of components is only 19, and most of them are small caps. So the actual passive impact is not small.</li>
<li>Another noteworthy aspect is that the rebalancing is pretty straightforward. It primarily relies on the float-adjusted market caps. So, the rebalancing estimation visibility is relatively high.</li>
</ul>


The TIGER Tour Leisure ETF shows the fastest AUM growth among the local themed ETFs in Korea. It seems clear that this is due to the reopening expectations.
The absolute size of AUM seems small. But the number of components is only 19, and most of them are small caps. So the actual passive impact is not small.
Another noteworthy aspect is that the rebalancing is pretty straightforward. It primarily relies on the float-adjusted market caps. So, the rebalancing estimation visibility is relatively high.


TIGER WISE Tour Leisure ETF Rebalancing Preview

South Korea

Kangwon Land Inc. is a casino and hotel services provider located in the Kangwon province area of South Korea.  The Company develops abandoned mines and builds gaming and entertainment facilities.  Kangwon Land operates a number of game tables and slot machines for domestic and international customers under its gaming licenses.

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Kangwon Land (035250 KS)

Three Major Reasons Why Korean Casinos Are Likely to Outperform the Market This Year

We discuss three main reasons why we believe Korean casinos are likely to continue to outperform the market this year including a hedge against...

Douglas Kim

Significant MoM Increase in Inbound & Outbound Visitors in Korea in April 2022

There were 128k visitors to South Korea in April, up 32% MoM. There were 215k outbound people from South Korea in April 2022, up 48% MoM.

Douglas Kim

CDC Ends Public Transportation Mask Mandate & Will the World Follow Shanghai or Vice Versa?

The CDC lifting the mask mandate is a key catalyst and other major countries are likely to follow the US in the coming months.

Douglas Kim

Korea Drops Quarantine Requirements Vs. Yoon Suk-Yeol's Hard Line Stance on North Korea

The South Korean government announced that it will drop quarantine requirement for international arrivals from 21 March which should boost travel,...

Douglas Kim

TIGER WISE Tour Leisure ETF Rebalancing Preview

TIGER Tour Leisure ETF's passive impact should be of a meaningful level given its AUM size. So, we need to consider a long/short setup as a basket...

Sanghyun Park

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