Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

Douglas Research Advisory

Event-Driven

<ul>
<li>We discuss the end of the mandatory lock-up periods for 49 stocks in Korea in September 2024, among which 3 are in KOSPI and 46 are in KOSDAQ.</li>
<li>These 49 stocks on average could be subject to further selling pressures in September and could underperform relative to the market.</li>
<li>The top three market cap stocks including those of which at least 1% of outstanding shares could be sold in September include <a href="https://www.smartkarma.com/entities/ls-materials-ltd" target="_blank" data-smartkarma-citation="entities:40292:1" rel="noopener">LS Materials, </a><a href="https://www.smartkarma.com/entities/creative-innovative-system" target="_blank" data-smartkarma-citation="entities:35622:1" rel="noopener">CIS, and </a><a href="https://www.smartkarma.com/entities/kyobo-securities-co-ltd" target="_blank" data-smartkarma-citation="entities:3224:1" rel="noopener">Kyobo Securities.</a>
</li>
</ul>


We discuss the end of the mandatory lock-up periods for 49 stocks in Korea in September 2024, among which 3 are in KOSPI and 46 are in KOSDAQ.
These 49 stocks on average could be subject to further selling pressures in September and could underperform relative to the market.
The top three market cap stocks including those of which at least 1% of outstanding shares could be sold in September include LS Materials, CIS, and Kyobo Securities.



End of Mandatory Lock-Up Periods for 49 Companies in Korea in September 2024

<ul>
<li>On 14 June, KeiStone Partners sold 2.51 million shares (3.7% of outstanding shares) of LS Materials at the block deal sales price of 26,350 won per share.</li>
<li>In the next several weeks/months, there will likely be increased concerns about additional selling of LS Materials by KeiStone Partners. </li>
<li>Due to recent block deal sale, higher short selling volume, and concerns about additional selling by Keistone Partners, LS Materials shares could face further weakness in the next 6-12 months. </li>
</ul>


On 14 June, KeiStone Partners sold 2.51 million shares (3.7% of outstanding shares) of LS Materials at the block deal sales price of 26,350 won per share.
In the next several weeks/months, there will likely be increased concerns about additional selling of LS Materials by KeiStone Partners. 
Due to recent block deal sale, higher short selling volume, and concerns about additional selling by Keistone Partners, LS Materials shares could face further weakness in the next 6-12 months. 


LS Materials: A Sharp Increase in Short Selling Post Block Deal Sale

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>LS Materials completed its 15-day review but hasn't been announced for fast entry, likely due to KRX's Korean document disclosing the effective date starting February 1, 2024.</li>
<li>LS Materials will be in the June rebalancing, having not met the 6-month listing requirement for the June review, thus subject to the special entry rule.</li>
<li>Hyundai Hyms, surging 300% from IPO, ranks 58th by market cap, poised for KOSDAQ 150 entry. If successful, Unitest will be removed.</li>
</ul>


LS Materials completed its 15-day review but hasn't been announced for fast entry, likely due to KRX's Korean document disclosing the effective date starting February 1, 2024.
LS Materials will be in the June rebalancing, having not met the 6-month listing requirement for the June review, thus subject to the special entry rule.
Hyundai Hyms, surging 300% from IPO, ranks 58th by market cap, poised for KOSDAQ 150 entry. If successful, Unitest will be removed.


Clarifying KOSDAQ 150 Fast Entry Confusions: LS Materials & Hyundai Hyms

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

<ul>
<li>With over 40% of the review period complete, there could be 15 changes for the <a href="https://www.smartkarma.com/entities/kosdaq-150-index" target="_blank" data-smartkarma-citation="entities:31077:1" rel="noopener">KOSDAQ 150 Index (KOSDQ150 INDEX)</a> at the June rebalance.</li>
<li>There could be two changes before that if <a href="https://www.smartkarma.com/entities/l-f-co-ltd" target="_blank" data-smartkarma-citation="entities:14300:1" rel="noopener">L&amp;F Co Ltd (066970 KS)</a> and <a href="https://www.smartkarma.com/entities/hlb-inc" target="_blank" data-smartkarma-citation="entities:16969:1" rel="noopener">HLB Inc (028300 KS)</a> complete their transfer from the KOSDAQ market to the KOSPI market.</li>
<li>The adds have outperformed the deletes and the <a href="https://www.smartkarma.com/entities/kosdaq-150-index" target="_blank" data-smartkarma-citation="entities:31077:1" rel="noopener">KOSDAQ 150 Index</a> since the start of the review period. The ban on short selling could lead to another leg up.</li>
</ul>


With over 40% of the review period complete, there could be 15 changes for the KOSDAQ 150 Index (KOSDQ150 INDEX) at the June rebalance.
There could be two changes before that if L&amp;F Co Ltd (066970 KS) and HLB Inc (028300 KS) complete their transfer from the KOSDAQ market to the KOSPI market.
The adds have outperformed the deletes and the KOSDAQ 150 Index since the start of the review period. The ban on short selling could lead to another leg up.


KOSDAQ150 Index Rebalance Preview: Potential Adds Soaring; Short Sell Ban Not Helping

Equity Capital Markets

<ul>
<li>LS Materials IPO price has been determined at 6,000 won per share, which is higher than the high end of the IPO price range (5,500 won). </li>
<li>A total 2,025 institutional investors participated in this IPO book building. The demand ratio was 396.8 to 1. The IPO offering amount is 87.8 billion won. </li>
<li>We believe that its share price is likely to trade higher than the high end of our valuation range (7,953 won per share) post IPO. </li>
</ul>


LS Materials IPO price has been determined at 6,000 won per share, which is higher than the high end of the IPO price range (5,500 won). 
A total 2,025 institutional investors participated in this IPO book building. The demand ratio was 396.8 to 1. The IPO offering amount is 87.8 billion won. 
We believe that its share price is likely to trade higher than the high end of our valuation range (7,953 won per share) post IPO. 


LS Materials IPO Bookbuilding Results Analysis

South Korea

LS materials.,Ltd. operates electronic equipment production businesses. The Company produces capacitors and other products. LS materials conducts businesses across worldwide.

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LS Materials (417200 KS)

End of Mandatory Lock-Up Periods for 49 Companies in Korea in September 2024

We discuss the end of the mandatory lock-up periods for 49 stocks in Korea in September 2024, among which 3 are in KOSPI and 46 are in KOSDAQ.

Douglas Kim

LS Materials: A Sharp Increase in Short Selling Post Block Deal Sale

Due to recent block deal sale, higher short selling volume, and concerns about additional selling by Keistone Partners, LS Materials shares could...

Douglas Kim

Clarifying KOSDAQ 150 Fast Entry Confusions: LS Materials & Hyundai Hyms

This post investigates the complexities of the newly introduced KOSDAQ 150 fast entry rules, addressing the ambiguity surrounding recent IPOs, LS...

Sanghyun Park

KOSDAQ150 Index Rebalance Preview: Potential Adds Soaring; Short Sell Ban Not Helping

There could be 15 changes for the KOSDAQ150 Index in June. The potential adds have outperformed the deletes and the index since the start of the...

Brian Freitas

LS Materials IPO Bookbuilding Results Analysis

LS Materials reported excellent bookbuilding results. We believe that its share price is likely to trade higher than the high end of our valuation...

Douglas Kim

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