Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

Event-Driven

<ul>
<li>In the past week, it was announced that Tving, a leading local OTT service provider in Korea, received 250 billion won in investment, valuing it at about 2 trillion won.</li>
<li>Previous to this investment, Tving was last valued at 350 billion won in July 2021. In other words, Tving's value surged by nearly 6x in the past seven months. </li>
<li>Our NAV per share of CJ ENM suggests a target price of 185,824 won, representing a 43% upside from current levels. </li>
</ul>


In the past week, it was announced that Tving, a leading local OTT service provider in Korea, received 250 billion won in investment, valuing it at about 2 trillion won.
Previous to this investment, Tving was last valued at 350 billion won in July 2021. In other words, Tving's value surged by nearly 6x in the past seven months. 
Our NAV per share of CJ ENM suggests a target price of 185,824 won, representing a 43% upside from current levels. 


Tving: Value Surges by Nearly 6x to 2 Trillion Won in 7 Months - Impact on CJ ENM

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>The biggest story should be LG Chem's complete deletion from the entire indexes. It's been said locally that KRX finally decided to remove LG Chem from the battery index.</li>
<li>AfreecaTV and Douzone Bizon will have the largest passive impacts, +1.72x and -3.89x ADTVs. The Chunbo and SoulBrain combo also seems in a sweet spot for a quick long/short setup.</li>
<li>LG Energy's inflow should be at least 0.33x ADTV. Yes, LG Chem's outflow deserves special attention. The combined impact is 0.6x ADTV, enough to make a splash on the price.</li>
</ul>


The biggest story should be LG Chem's complete deletion from the entire indexes. It's been said locally that KRX finally decided to remove LG Chem from the battery index.
AfreecaTV and Douzone Bizon will have the largest passive impacts, +1.72x and -3.89x ADTVs. The Chunbo and SoulBrain combo also seems in a sweet spot for a quick long/short setup.
LG Energy's inflow should be at least 0.33x ADTV. Yes, LG Chem's outflow deserves special attention. The combined impact is 0.6x ADTV, enough to make a splash on the price.


KRX K-New Deal Rebalancing: Latest Weight/Flow Update & LG Chem's Complete Deletion

<ul>
<li>In this insight, we discuss the end of the one month lock up period and more block selling ahead by major investors for LG Energy Solution in the weeks ahead.</li>
<li>There are 1.75 million shares under the one month lock-up period, representing 0.7% of outstanding shares. </li>
<li>At current price of 416,500 won, we believe there is an additional 11% downside risk to LG Energy Solution shares over the next 3-6 months (using the base case valuation).</li>
</ul>


In this insight, we discuss the end of the one month lock up period and more block selling ahead by major investors for LG Energy Solution in the weeks ahead.
There are 1.75 million shares under the one month lock-up period, representing 0.7% of outstanding shares. 
At current price of 416,500 won, we believe there is an additional 11% downside risk to LG Energy Solution shares over the next 3-6 months (using the base case valuation).


LG Energy Solution: End of the One Month Lock Up Period & More Selling Likely Ahead

<ul>
<li>The local street hears KRX has bumped it up to 14.68%. With the 1% rounding applied, it becomes 15%.</li>
<li>It is extremely rare for a Fast Entry to come in with a float market cap of +₩10T. So, we will see significant weight adjustments for the other constituents.</li>
<li>As we move towards the implementation date, we can consider basket-shorting those high-impact names for LG Energy's long hedge.</li>
</ul>


The local street hears KRX has bumped it up to 14.68%. With the 1% rounding applied, it becomes 15%.
It is extremely rare for a Fast Entry to come in with a float market cap of +₩10T. So, we will see significant weight adjustments for the other constituents.
As we move towards the implementation date, we can consider basket-shorting those high-impact names for LG Energy's long hedge.


LG Energy's KOSPI 200 Float Is 15%: Weight Adjustment Trading for Other Constituents

<ul>
<li>LG Energy's KOSPI 200 Fast Entry review period ended this Monday, and KRX immediately announced LG Energy's Fast Entry to KOSPI 200. Dongwon F&amp;B leaves the Index for LG Energy.</li>
<li>LG Energy's passive inflow is ₩202.2B at the close on March 10, 0.66x ADTV. On the other hand, Dongwon F&amp;B's passive outflow is ₩4.0B, representing 5.84x ADTV.</li>
<li>LG Energy's impact size is large enough to affect the price right before the implementation. In particular, since K-New Deal rebalancing occurs after March 10, the effect can be aggravated.</li>
</ul>


LG Energy's KOSPI 200 Fast Entry review period ended this Monday, and KRX immediately announced LG Energy's Fast Entry to KOSPI 200. Dongwon F&amp;B leaves the Index for LG Energy.
LG Energy's passive inflow is ₩202.2B at the close on March 10, 0.66x ADTV. On the other hand, Dongwon F&amp;B's passive outflow is ₩4.0B, representing 5.84x ADTV.
LG Energy's impact size is large enough to affect the price right before the implementation. In particular, since K-New Deal rebalancing occurs after March 10, the effect can be aggravated.


LG Energy KOSPI 200 Fast Entry: Passive Impact on March 10

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)

Tving: Value Surges by Nearly 6x to 2 Trillion Won in 7 Months - Impact on CJ ENM

Tving, a leading local OTT service provider in Korea, received 250 billion won in investment, valuing it at about 2 trillion won. up from its...

Douglas Kim

KRX K-New Deal Rebalancing: Latest Weight/Flow Update & LG Chem's Complete Deletion

This post provides the latest update on the weight adjustments and flow estimations for the KRX K-New Deal Index rebalancing.

Sanghyun Park

LG Energy Solution: End of the One Month Lock Up Period & More Selling Likely Ahead

In this insight, we discuss the end of the one month lock up period and more block selling ahead by major investors for LG Energy Solution in the...

Douglas Kim

LG Energy's KOSPI 200 Float Is 15%: Weight Adjustment Trading for Other Constituents

KRX has bumped up LG Energy's float to 15%. As a result, we will see a more substantial passive impact on LG Energy. Also, we should see...

Sanghyun Park

LG Energy KOSPI 200 Fast Entry: Passive Impact on March 10

KRX announced LG Energy's Fast Entry to KOSPI 200. Dongwon F&B leaves the Index. The passive impact on the implementation date, combined with K-New...

Sanghyun Park

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