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>Names with a significant impact: <a href="https://www.smartkarma.com/entities/kt-corp" target="_blank" data-smartkarma-citation="entities:1112:1" rel="noopener">KT (030200)</a>, <a href="https://www.smartkarma.com/entities/shinhan-financial-group-ltd" target="_blank" data-smartkarma-citation="entities:6978:1" rel="noopener">Shinhan Financial (055550)</a>, <a href="https://www.smartkarma.com/entities/korean-air-lines-co-ltd" target="_blank" data-smartkarma-citation="entities:11048:1" rel="noopener">Korean Air (003490)</a>, <a href="https://www.smartkarma.com/entities/lg-energy-solution" target="_blank" data-smartkarma-citation="entities:33464:1" rel="noopener">LG Energy (373220)</a>, <a href="https://www.smartkarma.com/entities/dongwon-industries-co-ltd" target="_blank" data-smartkarma-citation="entities:1783:1" rel="noopener">Dongwon Industries (006040)</a>, <a href="https://www.smartkarma.com/entities/lotte-fine-chemical-co-ltd" target="_blank" data-smartkarma-citation="entities:507:1" rel="noopener">Lotte Fine Chemical (004000)</a>, <a href="https://www.smartkarma.com/entities/meritz-fire-marine-insurance-co-ltd" target="_blank" data-smartkarma-citation="entities:20468:1" rel="noopener">Meritz Fire (000060)</a>, &amp; <a href="https://www.smartkarma.com/entities/mirae-asset-daewoo-co-ltd-b50c4d95-1687-46cb-9b58-f79ce0e72670" target="_blank" data-smartkarma-citation="entities:12061:1" rel="noopener">Mirae Asset (006800)</a> </li>
<li>Limiting the target size of our flow trading to only the fund size that directly mirrors it (₩17.8T) on T-1 Effective will increase our winning rate.</li>
<li>Lately, local pensions have been seen as rather taking advantage of flow trading in index rebalancing events, so I also recommend keeping the trading window fairly tight.</li>
</ul>


Names with a significant impact: KT (030200), Shinhan Financial (055550), Korean Air (003490), LG Energy (373220), Dongwon Industries (006040), Lotte Fine Chemical (004000), Meritz Fire (000060), &amp; Mirae Asset (006800) 
Limiting the target size of our flow trading to only the fund size that directly mirrors it (₩17.8T) on T-1 Effective will increase our winning rate.
Lately, local pensions have been seen as rather taking advantage of flow trading in index rebalancing events, so I also recommend keeping the trading window fairly tight.


KOSPI 200 Up/Down Weights: Official Results & Passive Impacts on T-1 Effective

<ul>
<li>LG Energy's virtually locked-up shares rise to nearly 95%. This should at least partially explain why its price has substantially outperformed the KOSPI in recent months, showing strong downward rigidity.</li>
<li>Additional long-term money equivalent to 2-3% of SO can come in for 5% float shares. There is no precedent for a float crunch of this magnitude among top-cap local stocks.</li>
<li>It seems necessary to reconsider taking a shorting position for LG Energy even after the 9th of next month when the short-term passives inflow situation is completed.</li>
</ul>


LG Energy's virtually locked-up shares rise to nearly 95%. This should at least partially explain why its price has substantially outperformed the KOSPI in recent months, showing strong downward rigidity.
Additional long-term money equivalent to 2-3% of SO can come in for 5% float shares. There is no precedent for a float crunch of this magnitude among top-cap local stocks.
It seems necessary to reconsider taking a shorting position for LG Energy even after the 9th of next month when the short-term passives inflow situation is completed.


Assessing LG Energy Solution's Flow Imbalance Situation

Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

Equity Bottom-Up

<ul>
<li>This past week, I had an interview with Lee Sanghyun, the founder and CEO of Flashlight Capital Partners (FCP) which is currently an activist investor on KT&amp;G Corporation (033780 KS).</li>
<li>Our interview focused on five key issues including valuation, buyback &amp; dividends, ginseng business spin-off, investment horizon, and aligning management's interests with those of its shareholders.</li>
<li>FCP's shareholder return plan is to 3x higher than the one currently proposed by the company. For further details, see FCP's website https://flashlightcap.com/. </li>
</ul>


This past week, I had an interview with Lee Sanghyun, the founder and CEO of Flashlight Capital Partners (FCP) which is currently an activist investor on KT&amp;G Corporation (033780 KS).
Our interview focused on five key issues including valuation, buyback &amp; dividends, ginseng business spin-off, investment horizon, and aligning management's interests with those of its shareholders.
FCP's shareholder return plan is to 3x higher than the one currently proposed by the company. For further details, see FCP's website https://flashlightcap.com/. 


An Interview with Flashlight Capital Partners CEO Lee Sanghyun on KT&G

<ul>
<li>We have seven constituents of KOSPI 200, which are subject to a float rate adjustment due to major shareholder stake sales and lockup release in the upcoming rebalancing in December</li>
<li>In terms of passive impact x ADTV, LG Energy Solution, KT Corp, and Shinhan Financial are expected to receive the most attention from flow traders.</li>
<li>The preemptive setups of flow traders will likely be more inclined toward these float rate changes since this December rebalance will have the lowest number of constituent changes ever.</li>
</ul>


We have seven constituents of KOSPI 200, which are subject to a float rate adjustment due to major shareholder stake sales and lockup release in the upcoming rebalancing in December
In terms of passive impact x ADTV, LG Energy Solution, KT Corp, and Shinhan Financial are expected to receive the most attention from flow traders.
The preemptive setups of flow traders will likely be more inclined toward these float rate changes since this December rebalance will have the lowest number of constituent changes ever.


KOSPI 200 Index Review: Names Subject to Float Rate Adjustment

APAC IPOs & Placements, Aequitas Research

Clarence Chu

APAC IPOs & Placements

IPOs and Placements coverage across Asia Pacific

Aequitas Research

We cover all listing across the Asia Pacific along with follow-up placements. As of Dec 2020, our team had covered 539 IPOs with a hit rate of 73.5% and 685 placements with a hit rate of 66.8%.

We combine fundamental bottom-up views with our proprietary quantitative framework to provide a holistic coverage across new listings and placements. Our coverage includes pre-IPO notes before the deal is launched, follow-up analysis once the deal is live and post-listing trading analysis as well.

Equity Capital Markets

<ul>
<li>
<a href="https://www.smartkarma.com/entities/bionote-inc" target="_blank" data-smartkarma-citation="entities:36446:1" rel="noopener">Bionote (377740 KS)</a> is looking to raise approximately US$200m in its Korean IPO. The IPO would consist of both a primary and secondary selldown.</li>
<li>Bionote is an integrated producer of diagnostics test products and biocontent products. Based on its unique recombinant antigen and antibody manufacturing technology, the firm researches and develops diagnostic reagent products. </li>
<li>In this note, we look at peers and undertake a peer comparison.</li>
</ul>



Bionote (377740 KS) is looking to raise approximately US$200m in its Korean IPO. The IPO would consist of both a primary and secondary selldown.
Bionote is an integrated producer of diagnostics test products and biocontent products. Based on its unique recombinant antigen and antibody manufacturing technology, the firm researches and develops diagnostic reagent products. 
In this note, we look at peers and undertake a peer comparison.


Bionote Pre-IPO Peer Comp - Larger Segment Leads in Margins, but Trend Could Be Reversing

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.

Price Gauge
52-week Range	0.00 - 0.00
Market Cap (USDm)	0.00
P/E	0.00
Dividend (Yield)	0.00

LG Energy Solution (373220 KS)

KOSPI 200 Up/Down Weights: Official Results & Passive Impacts on T-1 Effective

This post details the official results of the KOSPI 200 up/down weights and examines the passive impacts on T-1 Effective, which is December 8.

Sanghyun Park

Assessing LG Energy Solution's Flow Imbalance Situation

This post assesses LG Energy Solution's flow imbalance situation, which seems to lead to pricing independent of fundamentals.

Sanghyun Park

An Interview with Flashlight Capital Partners CEO Lee Sanghyun on KT&G

This past week, I had an interview with Lee Sanghyun, the founder and CEO of Flashlight Capital Partners (FCP) which is currently an activist...

Douglas Kim

KOSPI 200 Index Review: Names Subject to Float Rate Adjustment

This post investigates the names subject to a free float rate adjustment in the upcoming rebalancing of the KOSPI 200 in December.

Sanghyun Park

Bionote Pre-IPO Peer Comp - Larger Segment Leads in Margins, but Trend Could Be Reversing

Bionote is looking to raise approximately US$200m in its Korean IPO. The IPO would consist of both a primary and secondary selldown. In this note,...

Clarence Chu

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)