Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

Equity Capital Markets

<ul>
<li>Almac is getting ready to complete its IPO on KOSDAQ in June. Almac is one of the leading aluminum parts company for the electric vehicles. </li>
<li>The company ranks first in domestic market share in the aluminum extruded module cases that protect batteries from external shocks.</li>
<li>The company is offering 1 million new shares in this IPO. The IPO price range is from 40,000 won to 45,000 won.</li>
</ul>


Almac is getting ready to complete its IPO on KOSDAQ in June. Almac is one of the leading aluminum parts company for the electric vehicles. 
The company ranks first in domestic market share in the aluminum extruded module cases that protect batteries from external shocks.
The company is offering 1 million new shares in this IPO. The IPO price range is from 40,000 won to 45,000 won.


Equity Bottom-Up

<ul>
<li>One of the biggest breakthroughs in the global EV rechargeable battery industry this year has been CATL and BYD's launch of hybrid sodium-ion and lithium-ion batteries in 2H 2023.</li>
<li>This is expected to take away market share from Korean EV battery makers including LG Energy Solution and Samsung SDI.</li>
<li>It is expected that eventually, that sodium-ion batteries could be about 30-40% cheaper than conventional lithium-ion batteries.</li>
</ul>


One of the biggest breakthroughs in the global EV rechargeable battery industry this year has been CATL and BYD's launch of hybrid sodium-ion and lithium-ion batteries in 2H 2023.
This is expected to take away market share from Korean EV battery makers including LG Energy Solution and Samsung SDI.
It is expected that eventually, that sodium-ion batteries could be about 30-40% cheaper than conventional lithium-ion batteries.


CATL & BYD's Hybrid Sodium-Ion/ Lithium-Ion Batteries to Take Away Share from Korean Battery Makers

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

Event-Driven

<ul>
<li>The review period for the September rebalance ends on 31 July, the changes will be announced towards end August and implemented at the close of trading on 7 September.</li>
<li>There are potential changes to some of the indices and then there are close changes that will result in big flows if they eventuate.</li>
<li>The March rebalance saw some funky moves on the stocks that had big flows and we could see more of that at the September rebalance.</li>
</ul>


The review period for the September rebalance ends on 31 July, the changes will be announced towards end August and implemented at the close of trading on 7 September.
There are potential changes to some of the indices and then there are close changes that will result in big flows if they eventuate.
The March rebalance saw some funky moves on the stocks that had big flows and we could see more of that at the September rebalance.


KRX New Deal Index Rebalance Preview: Potential & Close Changes in September

<ul>
<li>On 20 April, Chile's government announced that it will be nationalizing the country's lithium industry. Chile is the second largest producer of lithium in the world. </li>
<li>The nationalization of the lithium industry in Chile will likely have a long-term negative impact on the rechargeable batteries related companies in Korea.</li>
<li>This is mainly due to greater challenges of getting access to lithium at more affordable prices. </li>
</ul>


On 20 April, Chile's government announced that it will be nationalizing the country's lithium industry. Chile is the second largest producer of lithium in the world. 
The nationalization of the lithium industry in Chile will likely have a long-term negative impact on the rechargeable batteries related companies in Korea.
This is mainly due to greater challenges of getting access to lithium at more affordable prices. 


Nationalization of Lithium Industry in Chile - Impact on Korean Rechargeable Batteries Value Chain

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.

<ul>
<li>We now have an environment that allows Korea's battery ETFs to include LG Chem in upcoming reviews. KODEX is in June, and TIGER is in July.</li>
<li>If LG Chem is included in each review, the expected one-day inflow is at 0.7-0.8x DTV, which can lead to a price impact similar to that of SKIET in 2021.</li>
<li>We should consider setups targeting this, including Long Short, which utilizes LG Energy Solution or LG Corp as a hedge.</li>
</ul>


We now have an environment that allows Korea's battery ETFs to include LG Chem in upcoming reviews. KODEX is in June, and TIGER is in July.
If LG Chem is included in each review, the expected one-day inflow is at 0.7-0.8x DTV, which can lead to a price impact similar to that of SKIET in 2021.
We should consider setups targeting this, including Long Short, which utilizes LG Energy Solution or LG Corp as a hedge.


Flow Trading Opportunities on LG Chem with Potential Inclusion in Battery ETFs

South Korea

LG Energy Solution produces and sells batteries. The Company manufactures and sells automobile batteries, small batteries, energy storage system batteries, and other products. LG Energy Solution markets its products worldwide.

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LG Energy Solution (373220 KS)

Almac IPO Preview

Almac is getting ready to complete its IPO on KOSDAQ in June. Almac is one of the leading aluminum parts company for the electric vehicles.

Douglas Kim

KRX New Deal Index Rebalance Preview: Potential & Close Changes in September

There were big moves on stocks that were changes at the March rebalance. We take a look at expected and close changes at the September rebalance....

Brian Freitas

Nationalization of Lithium Industry in Chile - Impact on Korean Rechargeable Batteries Value Chain

The nationalization of the lithium industry in Chile will likely have a long-term negative impact on the rechargeable batteries related companies...

Douglas Kim

Flow Trading Opportunities on LG Chem with Potential Inclusion in Battery ETFs

This post looks at the flow trading opportunities on LG Chem, as it will likely be included in Korea's two battery ETFs in the upcoming reviews.

Sanghyun Park

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Almac IPO Preview

Almac is getting ready to complete its IPO on KOSDAQ in June. Almac is one of the leading aluminum parts company for the electric vehicles.

Douglas Kim

CATL & BYD's Hybrid Sodium-Ion/ Lithium-Ion Batteries to Take Away Share from Korean Battery Makers

CATL and BYD's launch of hybrid sodium-ion and lithium-ion batteries in 2H 2023 is likely to result in market share losses for Korean rechargeable...

Douglas Kim

KRX New Deal Index Rebalance Preview: Potential & Close Changes in September

There were big moves on stocks that were changes at the March rebalance. We take a look at expected and close changes at the September rebalance....

Brian Freitas

Nationalization of Lithium Industry in Chile - Impact on Korean Rechargeable Batteries Value Chain

The nationalization of the lithium industry in Chile will likely have a long-term negative impact on the rechargeable batteries related companies...

Douglas Kim

Flow Trading Opportunities on LG Chem with Potential Inclusion in Battery ETFs

This post looks at the flow trading opportunities on LG Chem, as it will likely be included in Korea's two battery ETFs in the upcoming reviews.

Sanghyun Park