Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

Event-Driven

<ul>
<li>Celltrion Inc, Celltrion Healthcare, and Celltrion Pharm all announced much higher dividend payments for this year as compared to last year. </li>
<li>Based on the new dividend payments, the dividend yields are as follows: (Celltrion Inc - 4.2%, Celltrion Healthcare - 4.2%, and Celltrion Pharm - 5%). </li>
<li>Merger of three companies is likely to have long-term positive impact on the their share prices. Although exact timing is uncertain, 2023 could be the year of this merger. </li>
</ul>


Celltrion Inc, Celltrion Healthcare, and Celltrion Pharm all announced much higher dividend payments for this year as compared to last year. 
Based on the new dividend payments, the dividend yields are as follows: (Celltrion Inc - 4.2%, Celltrion Healthcare - 4.2%, and Celltrion Pharm - 5%). 
Merger of three companies is likely to have long-term positive impact on the their share prices. Although exact timing is uncertain, 2023 could be the year of this merger. 


Celltrion Group Companies - Sharp Increase in Dividends

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 swap arb spread has been consistently within the 3% to 5% band since November 23, when arb trading should have actually started.</li>
<li>Meritz Financial's buyback seems to be making it difficult to build positions on expectations that the price gap relative to Fire and Securities will converge quickly with the swap ratio.</li>
<li>As the actual risk of repaying financial borrows is small, we should start building up positions two weeks before the end of January, aiming to exit in early or mid-February.</li>
</ul>


The swap arb spread has been consistently within the 3% to 5% band since November 23, when arb trading should have actually started.
Meritz Financial's buyback seems to be making it difficult to build positions on expectations that the price gap relative to Fire and Securities will converge quickly with the swap ratio.
As the actual risk of repaying financial borrows is small, we should start building up positions two weeks before the end of January, aiming to exit in early or mid-February.


Discussing Why Meritz Swap Spread Not Being Narrowed & When to Enter

<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

Equity Bottom-Up

<ul>
<li>There are four major reasons why we like JB Financial Group.</li>
<li>They include highest ROE among peers, highest dividend yield among peers, potential inclusion in KOSPI200 in 2023, and continued pressure by Align Partners to improve corporate governance.</li>
<li>One of the key risk factors of the company is that it is not a nationwide banking group but most of its operations are in the southwestern portion of Korea.</li>
</ul>


There are four major reasons why we like JB Financial Group.
They include highest ROE among peers, highest dividend yield among peers, potential inclusion in KOSPI200 in 2023, and continued pressure by Align Partners to improve corporate governance.
One of the key risk factors of the company is that it is not a nationwide banking group but most of its operations are in the southwestern portion of Korea.


JB Financial Group: Four Key Investment Merits

<ul>
<li>Meritz Financial Group's decision to delist Meritz Fire &amp; Marine Insurance and Meritz Securities in 1H 2023 will result in at least two new additions to KOSPI 200.</li>
<li>We highlight five companies which could be potential additions to KOSPI 200 in 1H 2023.</li>
<li>Five potential additions to KOSPI 200 in 1H 2023 include Jb Financial Group, Hyundai Construction Equipment, Dentium, Samyang Foods, and Lotte Rental. </li>
</ul>


Meritz Financial Group's decision to delist Meritz Fire &amp; Marine Insurance and Meritz Securities in 1H 2023 will result in at least two new additions to KOSPI 200.
We highlight five companies which could be potential additions to KOSPI 200 in 1H 2023.
Five potential additions to KOSPI 200 in 1H 2023 include Jb Financial Group, Hyundai Construction Equipment, Dentium, Samyang Foods, and Lotte Rental. 


KOSPI 200 Rebalance in 1H 2023 - Five Potential Additions Post Deletions of Meritz Affiliates

South Korea

Meritz Fire & Marine Insurance Co., Ltd. provides a variety of non-life insurance services.  The Company's services include auto, fire, casualty, health, travel, leisure, retirement, and pension insurance.

Meritz Fire & Marine Insurance (000060 KS)

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

Meritz Fire & Marine Insurance (000060 KS)

Celltrion Group Companies - Sharp Increase in Dividends

Celltrion Inc, Celltrion Healthcare, and Celltrion Pharm all announced much higher dividend payments for this year as compared to last year.

Douglas Kim

Discussing Why Meritz Swap Spread Not Being Narrowed & When to Enter

This post discusses why the Meritz swap arb yield is not being narrowed and when would be the ideal entry point to build up our positions.

Sanghyun Park

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

JB Financial Group: Four Key Investment Merits

The key investment merits of JB Financial Group include highest ROE and dividend yield among peers as well as potential inclusion in KOSPI200 in 2023.

Douglas Kim

KOSPI 200 Rebalance in 1H 2023 - Five Potential Additions Post Deletions of Meritz Affiliates

In this insight, we discuss potential additions to KOSPI 200 post likely deletions of Meritz F&M Insurance and Meritz Securities from KOSPI 200 in...

Douglas Kim

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)