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.

Equity Capital Markets

LG Energy Solution / Equity Capital Markets

<ul>
<li>Given the AUM of the Global X Lithium Battery ETF (ticker: LIT), the potential passive impact on LG Energy and LG Chem should be worthy of our careful attention.</li>
<li>If LIT revises its methodology, the timing to include LG Energy is expected to be the April rebalancing.</li>
<li>LG Energy will have a 2-3% index weight, welcoming a passive inflow of ₩130-200B (0.2-0.3% of SO). In contrast, ₩232.1B from LIT will likely escape LG Chem, 0.5% of SO.</li>
</ul>


Given the AUM of the Global X Lithium Battery ETF (ticker: LIT), the potential passive impact on LG Energy and LG Chem should be worthy of our careful attention.
If LIT revises its methodology, the timing to include LG Energy is expected to be the April rebalancing.
LG Energy will have a 2-3% index weight, welcoming a passive inflow of ₩130-200B (0.2-0.3% of SO). In contrast, ₩232.1B from LIT will likely escape LG Chem, 0.5% of SO.


LG Energy Passive Flow from Overseas ETFs: Global X Lithium & Battery (LIT)

Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

<ul>
<li>Korean EV battery unit play <strong><a href="https://www.smartkarma.com/entities/lg-energy-solution" target="_blank" data-smartkarma-citation="entities:33464:1" rel="noopener">LG Energy (LGENERGY KS)</a></strong> has now opened its books to raise up to US$10.7bn, which will be the country's largest-ever IPO.</li>
<li>Shares are expected to be sold in a price range of ₩257,000 to ₩300,000 per share, in line with information released last month.</li>
<li>Separately, <strong><a href="https://www.smartkarma.com/entities/lg-chem-ltd" target="_blank" data-smartkarma-citation="entities:3583:1" rel="noopener">LG Chem Ltd (051910 KS)</a></strong> is trading at its widest indicative discount to NAV in the past twelve months. </li>
</ul>


Korean EV battery unit play LG Energy (LGENERGY KS) has now opened its books to raise up to US$10.7bn, which will be the country's largest-ever IPO.
Shares are expected to be sold in a price range of ₩257,000 to ₩300,000 per share, in line with information released last month.
Separately, LG Chem Ltd (051910 KS) is trading at its widest indicative discount to NAV in the past twelve months. 


LG Chem Trading Cheap As LG Energy Opens Its Books

Alpha-Centric ESG Research

Kyle Rudden

<ul>
<li>LG Energy Solution leads an industry that is, quite literally, powering a critical climate-change mitigation and transition pathway – decarbonising the global transportation sector.</li>
<li>The company embraces this role and is fully in charge. CHARGE... the acronym (and perhaps even a battle cry) for LGES's comprehensive sustainability/ESG vision and strategy.</li>
<li>Lately, pre-IPO ESG research has been digging through corporate dirt for ESG landmines before someone steps on one. Dare I say it, but LGES is more ESG-opportunity than ESG-risk.</li>
</ul>


LG Energy Solution leads an industry that is, quite literally, powering a critical climate-change mitigation and transition pathway – decarbonising the global transportation sector.
The company embraces this role and is fully in charge. CHARGE... the acronym (and perhaps even a battle cry) for LGES's comprehensive sustainability/ESG vision and strategy.
Lately, pre-IPO ESG research has been digging through corporate dirt for ESG landmines before someone steps on one. Dare I say it, but LGES is more ESG-opportunity than ESG-risk.


LG Energy Solution (Pre-IPO ESG Analysis): Powering a Primary Pathway to Preserving the Planet

<ul>
<li>The ETF operators (KODEX and TIGER) applied to KRX for approval of a special change for an early swap between LG Chem and LG Energy.</li>
<li>KRX will likely approve this special change application, and the effective date should be immediately after listing. I will update when the exact implementation date of each index is released.</li>
<li>We also detect a trend spreading in the local industry that many local active managers decided to sell all other secondary battery stocks to raise funds to purchase LG Energy.</li>
</ul>


The ETF operators (KODEX and TIGER) applied to KRX for approval of a special change for an early swap between LG Chem and LG Energy.
KRX will likely approve this special change application, and the effective date should be immediately after listing. I will update when the exact implementation date of each index is released.
We also detect a trend spreading in the local industry that many local active managers decided to sell all other secondary battery stocks to raise funds to purchase LG Energy.


LG Energy: Sector ETFs Special Rule Change & Local Active Managers' Preemptive Trading

<ul>
<li>The bankers began to receive pre-orders from overseas institutions from the 7th of this month. And it had already far exceeded the amount allocated to the institutions within a week.</li>
<li>But the market is genuinely concerned that the cause of the fire has not yet been clearly identified, which leads to concerns about whether this risk can be structurally prolonged.</li>
<li>It seems that the valuation attractiveness and the flow imbalance due to the tight float seem to offset concerns about the risks associated with NCM batteries.</li>
</ul>


The bankers began to receive pre-orders from overseas institutions from the 7th of this month. And it had already far exceeded the amount allocated to the institutions within a week.
But the market is genuinely concerned that the cause of the fire has not yet been clearly identified, which leads to concerns about whether this risk can be structurally prolonged.
It seems that the valuation attractiveness and the flow imbalance due to the tight float seem to offset concerns about the risks associated with NCM batteries.


LG Energy IPO: Great Pre-Order Success, but Still Worrying Aspects

South Korea

LG Chem Ltd. is a chemical manufacturer.  The Company's products include petrochemicals, plastic resins, and engineering plastics.  LG Chem also produces industrial and electronic materials.

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LG Chem Ltd (051910 KS)

LG Energy Passive Flow from Overseas ETFs: Global X Lithium & Battery (LIT)

There is another factor worth noting from the perspective of LG Energy's post-listing passive flow. This is LG Chem/LG Energy swapping in the...

Sanghyun Park

LG Chem Trading Cheap As LG Energy Opens Its Books

Potentially go outright long or, until LG Energy lists, hedge against a basket of domestic chemical peers, all of whom have outperformed LG Chem...

David Blennerhassett

LG Energy Solution (Pre-IPO ESG Analysis): Powering a Primary Pathway to Preserving the Planet

Decarbonising transportation is climate-critical. Electric vehicles are cast for the lead role. Without power, the show can't go on. That puts...

Kyle Rudden

LG Energy: Sector ETFs Special Rule Change & Local Active Managers' Preemptive Trading

I summarize the situation in which the local sector ETF operators applied to KRX for a rule change to include LG Energy early and how local active...

Sanghyun Park

LG Energy IPO: Great Pre-Order Success, but Still Worrying Aspects

This post summarizes investors' reactions to the LG Energy IPO. Specifically, it outlines the nature of investors' fundamental interests and the...

Sanghyun Park

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