Pan-Asia Index Rebalances/ Events/ Delta One, Periscope Analytics

Brian Freitas

Pan-Asia Index Rebalances/ Events/ Delta One

Event-Driven

<ul>
<li>The review period for the June rebalance of the <a href="https://www.smartkarma.com/entities/korea-stock-exchange-kospi-200-index" target="_blank" data-smartkarma-citation="entities:26021:1" rel="noopener">KOSPI2 INDEX</a> ends 30 April. The KRX will announce the changes in May with implementation at the close on 9 June.</li>
<li>
<a href="https://www.smartkarma.com/entities/lg-energy-solution" target="_blank" data-smartkarma-citation="entities:33464:1" rel="noopener">LG Energy Solution (LGENERGY KS)</a> could get Fast Entry to the KOSPI200 Index in March. <a href="https://www.smartkarma.com/entities/hyundai-engineering-co-ltd" target="_blank" data-smartkarma-citation="entities:33008:1" rel="noopener">Hyundai Engineering Co Ltd (HEC KS)</a> needs a price jump to get Fast Entry.</li>
<li>We see 6 potential changes to the KOSPI200 in June; most of these are high probability. The potential adds are already outperforming the potential deletes - there should be more.</li>
</ul>


The review period for the June rebalance of the KOSPI2 INDEX ends 30 April. The KRX will announce the changes in May with implementation at the close on 9 June.

LG Energy Solution (LGENERGY KS) could get Fast Entry to the KOSPI200 Index in March. Hyundai Engineering Co Ltd (HEC KS) needs a price jump to get Fast Entry.
We see 6 potential changes to the KOSPI200 in June; most of these are high probability. The potential adds are already outperforming the potential deletes - there should be more.


KOSPI200 June Index Rebalance Preview: High Probability Adds/Deletes

Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

Equity Bottom-Up

<ul>
<li>Why has LG Chem's share price fallen so much in the past two months and why is this falling trend likely to be near its end? </li>
<li>With the IPO bookbuilding of LG Energy Solution only a week away, many investors are placing a greater positive emphasis on the potential value of LG Energy Solution.</li>
<li>Our base case NAV analysis of LG Chem is 744,246 won, which is 20.4% higher than the current price. We assume 424,093 won for LG Energy Solution target price. </li>
</ul>


Why has LG Chem's share price fallen so much in the past two months and why is this falling trend likely to be near its end? 
With the IPO bookbuilding of LG Energy Solution only a week away, many investors are placing a greater positive emphasis on the potential value of LG Energy Solution.
Our base case NAV analysis of LG Chem is 744,246 won, which is 20.4% higher than the current price. We assume 424,093 won for LG Energy Solution target price. 


NAV Analysis of LG Chem Suggests Excessive Selling Overdone

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

<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>After its IPO, <a href="https://www.smartkarma.com/entities/lg-energy-solution" target="_blank" data-smartkarma-citation="entities:33464:1" rel="noopener">LG Energy Solution (LGENERGY KS)</a> is destined for inclusion in various indexes, from broad market indexes to countless sustainable/ESG niche indexes.</li>
<li>The sustainable/ESG index niche includes a growing number of EV/EV battery-themes indexes in large part because of the climate-importance of decarbonising transportation.</li>
<li>Indexing leader <a href="https://www.smartkarma.com/entities/msci-inc" target="_blank" data-smartkarma-citation="entities:17865:1" rel="noopener">MSCI (MSCI US)</a> publishes a number general sustainable/ESG indexes relevant to LGES, and small number of thematic indexes like the Future Mobility Index.</li>
</ul>


After its IPO, LG Energy Solution (LGENERGY KS) is destined for inclusion in various indexes, from broad market indexes to countless sustainable/ESG niche indexes.
The sustainable/ESG index niche includes a growing number of EV/EV battery-themes indexes in large part because of the climate-importance of decarbonising transportation.
Indexing leader MSCI (MSCI US) publishes a number general sustainable/ESG indexes relevant to LGES, and small number of thematic indexes like the Future Mobility Index.


LG Energy Solution (Pre-IPO ESG Analysis): Relevant Thematic Sustainable/ESG Indices from MSCI

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)

KOSPI200 June Index Rebalance Preview: High Probability Adds/Deletes

There could be 2 changes to the KOSPI200 in March & then another 6 in June. Historically, the adds outperform the deletes and the first couple of...

Brian Freitas

NAV Analysis of LG Chem Suggests Excessive Selling Overdone

We believe LG Chem's share price has fallen too excessively in the past two months. Our base case NAV analysis of LG Chem is 744,246 won, which is...

Douglas Kim

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): Relevant Thematic Sustainable/ESG Indices from MSCI

LG Energy Solution is destined for inclusion in countless indexes, from broad market indexes to thematic sustainable/ESG indexes such as MSCI's...

Kyle Rudden

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