Smartkarma AI, Smartkarma

αSK

Smartkarma AI

Smartkarma

Smartkarma unites the fragmented investment industry, connecting institutional investors, independent research providers, and corporates within a single network.

Research Reinvented

Equity Bottom-Up

<ul>
 <li>
Dominant Market Position: <a href="https://smartkarma.com/entities/korea-ratings-corp">Korea Ratings</a> is one of the top three credit rating agencies in South Korea, an oligopolistic market with extremely high barriers to entry due to stringent licensing requirements and the need for a long-standing reputation.</li>
 <li>
Stable Financials with Strong Resilience: The company exhibits a flawless balance sheet, consistent profitability, and robust cash flow generation, underscored by a Smartkarma Resilience score of 5/5. Its business model is inherently tied to the recurring need for corporate debt issuance, providing a stable revenue base.</li>
 <li>
Strategic International Partnership: As a subsidiary of Fitch Ratings, Ltd., <a href="https://smartkarma.com/entities/korea-ratings-corp">Korea Ratings</a> benefits from global best practices, sophisticated rating methodologies, and an enhanced international network, strengthening its competitive edge in the domestic market.</li>
</ul>This content is AI-generated and displayed for general informational purposes only. Please verify independently before use.


  
Dominant Market Position: Korea Ratings is one of the top three credit rating agencies in South Korea, an oligopolistic market with extremely high barriers to entry due to stringent licensing requirements and the need for a long-standing reputation.
  
Stable Financials with Strong Resilience: The company exhibits a flawless balance sheet, consistent profitability, and robust cash flow generation, underscored by a Smartkarma Resilience score of 5/5. Its business model is inherently tied to the recurring need for corporate debt issuance, providing a stable revenue base.
  
Strategic International Partnership: As a subsidiary of Fitch Ratings, Ltd., Korea Ratings benefits from global best practices, sophisticated rating methodologies, and an enhanced international network, strengthening its competitive edge in the domestic market.
This content is AI-generated and displayed for general informational purposes only. Please verify independently before use.

Primer: Korea Ratings (034950 KS) - Oct 2025

Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

Douglas Research Advisory

<ul>
<li>Despite the higher probability of the cancellation of treasury shares by Lotte Corp, we believe that its worsening balance sheet is a greater concern. </li>
<li>There does not appear to be a rapid business turnaround of its major affiliates including Lotte Chemical. As a result, we are concerned about further credit downgrades in 2026/2027.</li>
<li>Our base case NAV valuation of Lotte Corp is market cap of 2.2 trillion won or target price of 20,918 won per share, which is 29% lower than current price.</li>
</ul>


Despite the higher probability of the cancellation of treasury shares by Lotte Corp, we believe that its worsening balance sheet is a greater concern. 
There does not appear to be a rapid business turnaround of its major affiliates including Lotte Chemical. As a result, we are concerned about further credit downgrades in 2026/2027.
Our base case NAV valuation of Lotte Corp is market cap of 2.2 trillion won or target price of 20,918 won per share, which is 29% lower than current price.


Lotte Corp: Worsening Balance Sheet Offset by Its High Treasury Shares Level

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

Index Rebalance

<ul>
<li>There will be 16 changes for the <a href="https://www.smartkarma.com/entities/kosdaq-150-index" target="_blank" data-smartkarma-citation="entities:31077:1" rel="noopener">KOSDAQ 150 Index (KOSDQ150 INDEX)</a> at the next rebalance to be implemented at the close on 11 December.</li>
<li>Making use of their discretionary powers, the index committee has not added <a href="https://www.smartkarma.com/entities/wonik-holdings-co-ltd" target="_blank" data-smartkarma-citation="entities:6485:1" rel="noopener">Wonik Holdings Co., Ltd (030530 KS)</a>, <a href="https://www.smartkarma.com/entities/samhyun-co-ltd" target="_blank" data-smartkarma-citation="entities:40872:1" rel="noopener">Samhyun (437730 KS)</a> and <a href="https://www.smartkarma.com/entities/fadu-inc" target="_blank" data-smartkarma-citation="entities:39896:1" rel="noopener">Fadu (440110 KS)</a> to the index.</li>
<li>The adds have outperformed the deletes and the <a href="https://www.smartkarma.com/entities/kosdaq-150-index" target="_blank" data-smartkarma-citation="entities:31077:1" rel="noopener">KOSDAQ 150 Index</a> over the last 6 months and there has been a short-term move higher too. Watch out for short covering.</li>
</ul>


There will be 16 changes for the KOSDAQ 150 Index (KOSDQ150 INDEX) at the next rebalance to be implemented at the close on 11 December.
Making use of their discretionary powers, the index committee has not added Wonik Holdings Co., Ltd (030530 KS), Samhyun (437730 KS) and Fadu (440110 KS) to the index.
The adds have outperformed the deletes and the KOSDAQ 150 Index over the last 6 months and there has been a short-term move higher too. Watch out for short covering.


KOSDAQ150 Index Rebalance: 16 Changes a Side; Fadu a Casualty Yet Again

<ul>
<li>With the review period for the December rebalance complete, we highlight 17 potential changes for the <a href="https://www.smartkarma.com/entities/kosdaq-150-index" target="_blank" data-smartkarma-citation="entities:31077:1" rel="noopener">KOSDAQ 150 Index (KOSDQ150 INDEX)</a>. </li>
<li>The estimated impact on the potential inclusions ranges from 0.1-3.2 days of ADV while the impact on the potential deletions varies from 0.7-11.2 days of ADV.</li>
<li>The forecast adds have outperformed the forecast deletes over the last 6 months with a big move higher in the last couple of months. Trim positions into strength.</li>
</ul>


With the review period for the December rebalance complete, we highlight 17 potential changes for the KOSDAQ 150 Index (KOSDQ150 INDEX). 
The estimated impact on the potential inclusions ranges from 0.1-3.2 days of ADV while the impact on the potential deletions varies from 0.7-11.2 days of ADV.
The forecast adds have outperformed the forecast deletes over the last 6 months with a big move higher in the last couple of months. Trim positions into strength.


KOSDAQ150 Index Rebalance Preview: Large Number of Changes Likely in December; Huge Outperformance

<ul>
<li>FnGuide has been able to capitalize on its excellent brand name in the financial industry (especially for research used in equity trading) to profitably expand into the index development business.</li>
<li>Although the index business accounted for 25% of its sales in 2024, it has been the fastest growing business in the past six years. </li>
<li>Valuations are reasonable and it is trading at 27% below four year historical EV/EBITDA basis. We like FnGuide as a long-term investment story. </li>
</ul>


FnGuide has been able to capitalize on its excellent brand name in the financial industry (especially for research used in equity trading) to profitably expand into the index development business.
Although the index business accounted for 25% of its sales in 2024, it has been the fastest growing business in the past six years. 
Valuations are reasonable and it is trading at 27% below four year historical EV/EBITDA basis. We like FnGuide as a long-term investment story. 


Korea Small Cap Gem #36: FnGuide [Increasing Moat for Its Index Business]

South Korea

Korea Ratings Corp. provides credit rating services to the domestic and international clients.  The Company issues ratings on corporate and government bonds, commercial papers, structured financings, and guarantee institutions. Korea Ratings also offers consulting on finance, business, and management as well as business related information services.

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Korea Ratings (034950 KS)

Primer: Korea Ratings (034950 KS) - Oct 2025

Dominant Market Position: Korea Ratings is one of the top three credit rating agencies in South Korea, an oligopolistic market with extremely...

αSK

Lotte Corp: Worsening Balance Sheet Offset by Its High Treasury Shares Level

Despite the higher probability of the cancellation of treasury shares by Lotte Corp, we believe that its worsening balance sheet is a greater concern.

Douglas Kim

KOSDAQ150 Index Rebalance: 16 Changes a Side; Fadu a Casualty Yet Again

There are 16 changes a side for the KOSDAQ150 in Dec. The index committee has decided not to add Fadu for yet another review. Short interest is...

Brian Freitas

KOSDAQ150 Index Rebalance Preview: Large Number of Changes Likely in December; Huge Outperformance

There could be 17 changes for the KOSDAQ150 Index in Dec. Use of discretion could lead to fewer changes. The forecast adds have hugely outperformed...

Brian Freitas

Korea Small Cap Gem #36: FnGuide [Increasing Moat for Its Index Business]

FnGuide has been able to capitalize on its excellent brand name in the financial industry (especially for research used in equity trading) to...

Douglas Kim

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