Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

<ul>
<li>Korean EV battery unit play <a href="https://www.smartkarma.com/entities/lg-energy-solution" target="_blank" data-smartkarma-citation="entities:33464:1" rel="noopener">LG Energy Solution (373220 KS)</a> briefly doubled on its debut yesterday before closing 65.8% higher. </li>
<li>Following that gain, LG Energy is now the second-largest company in KOSPI after <a href="https://www.smartkarma.com/entities/samsung-electronics-co-ltd" target="_blank" data-smartkarma-citation="entities:191:1" rel="noopener">Samsung Electronics (005930 KS)</a>.</li>
<li>
<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> has given back all its gains from earlier this month, and currently trades at ~60% discount to NAV. </li>
</ul>


Korean EV battery unit play LG Energy Solution (373220 KS) briefly doubled on its debut yesterday before closing 65.8% higher. 
Following that gain, LG Energy is now the second-largest company in KOSPI after Samsung Electronics (005930 KS).

LG Chem Ltd (051910 KS) has given back all its gains from earlier this month, and currently trades at ~60% discount to NAV. 


LG Chem: Still Cheap After LG Energy's Big Debut

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 rebalancing cycle of the KODEX Secondary Battery ETF was changed from semi-annual to quarterly. Also, the rebalancing trading takes place for three trading days instead of one trading day.</li>
<li>
This passive impact will be different from the previous rebalancing. LG Energy and SK Innovation will likely experience a significant passive outflow. Then, most small-cap constituents will receive an inflow. </li>
<li>
Among the top weighting stocks, Samsung SDI and SKIET deserve attention. Sangsin Energy, E&amp;D, and TSI will face exclusion, while C&amp;I, Sang-A Frontec, and Enchem will likely join the ETF.</li>
</ul>



The rebalancing cycle of the KODEX Secondary Battery ETF was changed from semi-annual to quarterly. Also, the rebalancing trading takes place for three trading days instead of one trading day.

This passive impact will be different from the previous rebalancing. LG Energy and SK Innovation will likely experience a significant passive outflow. Then, most small-cap constituents will receive an inflow. 

Among the top weighting stocks, Samsung SDI and SKIET deserve attention. Sangsin Energy, E&amp;D, and TSI will face exclusion, while C&amp;I, Sang-A Frontec, and Enchem will likely join the ETF.


KODEX Battery ETF Rebalancing Cycle Changed to Quarterly: Preview for March Rebalancing

Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

Equity Capital Markets

LG Energy Solution / Equity Capital Markets

<ul>
<li>In this insight, we discuss the first day trading strategy of LG Energy Solution amid market turmoil.</li>
<li>Due to the recent risk-off sentiment, the prudent course of action would be to take a more moderate upside view on how much LG Energy Solution's stock price could overshoot.</li>
<li>Our base case valuation for LG Energy Solution (373220 KS) remains 424,093 won per share, which is 41% higher than the IPO price of 300,000 won.</li>
</ul>


In this insight, we discuss the first day trading strategy of LG Energy Solution amid market turmoil.
Due to the recent risk-off sentiment, the prudent course of action would be to take a more moderate upside view on how much LG Energy Solution's stock price could overshoot.
Our base case valuation for LG Energy Solution (373220 KS) remains 424,093 won per share, which is 41% higher than the IPO price of 300,000 won.


LG Energy Solution IPO: First Day Trading Strategy Amid Market Turmoil

<ul>
<li>The LG Energy listing will likely distort the overall market flow. One is replacement trading with LG Chem in the local battery ETFs.
</li>
<li>One sure thing is that KODEX and TIGER will do this replacement trading. And these ETF operators will reportedly conduct it for three trading days from February 9-11. 
</li>
<li>LG Chem has recently undergone a significant share price correction, this amount of passive outflow is highly likely to directly impact share price movement during the 3-day rebalancing trading window. 
</li>
</ul>


The LG Energy listing will likely distort the overall market flow. One is replacement trading with LG Chem in the local battery ETFs.

One sure thing is that KODEX and TIGER will do this replacement trading. And these ETF operators will reportedly conduct it for three trading days from February 9-11. 

LG Chem has recently undergone a significant share price correction, this amount of passive outflow is highly likely to directly impact share price movement during the 3-day rebalancing trading window. 



Head of Research, IPOs & Placements, Aequitas Research

Sumeet Singh

Head of Research, 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.

<ul>
<li>
<a href="https://www.smartkarma.com/entities/lg-energy-solution" target="_blank" data-smartkarma-citation="entities:33464:1" rel="noopener">LG Energy Solution (373220 KS)</a> (LGES) raised US$10.8bn in its South Korea IPO, after pricing at the top-end of  the IPO price range .</li>
<li>LGES is the EV battery unit of LG Chem and it was spun off in December last year. The company is a major supplier to customers including Tesla and GM.</li>
<li>LGES will be included into MSCI and KOSPI. But MSCI’s fast entry could likely be scheduled with February’s quarterly review which will be effective only on 1st of March.</li>
</ul>



LG Energy Solution (373220 KS) (LGES) raised US$10.8bn in its South Korea IPO, after pricing at the top-end of  the IPO price range .
LGES is the EV battery unit of LG Chem and it was spun off in December last year. The company is a major supplier to customers including Tesla and GM.
LGES will be included into MSCI and KOSPI. But MSCI’s fast entry could likely be scheduled with February’s quarterly review which will be effective only on 1st of March.


LG Energy IPO Trading - Allocations, Index, and Updates

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)

LG Chem: Still Cheap After LG Energy's Big Debut

Go outright long in L Chem or hedge against a basket of domestic chemical peers. LGES won't be shortable until the 11 March.

David Blennerhassett

KODEX Battery ETF Rebalancing Cycle Changed to Quarterly: Preview for March Rebalancing

The rebalancing cycle of the KODEX Secondary Battery ETF was changed from semi-annual to quarterly. This post previews the upcoming rebalancing...

Sanghyun Park

LG Energy Solution IPO: First Day Trading Strategy Amid Market Turmoil

We discuss the first day trading strategy of LG Energy Solution amid market turmoil. Our base case valuation for LG Energy Solution remains 424,093...

Douglas Kim

LG Chem Passive Outflow Summary

The LG Energy listing will likely distort the overall market flow. One is replacement trading with LG Chem in the local battery ETFs. This post...

Sanghyun Park

LG Energy IPO Trading - Allocations, Index, and Updates

LG Energy Solution (LGES) raised US$10.8bn in its South Korea IPO, after pricing at the top-end of the IPO price range. LGES will be included into...

Sumeet Singh

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