Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

Douglas Research Advisory

Cross Asset Strategy

<ul>
<li>There are some major surprises (both inclusions and exclusions) in the Korea Value Up index. </li>
<li>In particular, the telecom sector (SK Telecom and KT) and large cap holding companies (Samsung C&amp;T and LG Corp) are surprising exclusions in the index.</li>
<li>There are many surprising inclusions in the Korea Value Up Index. We provide 30 companies are surprising inclusions in the Korea Value Up Index (19 KOSDAQ and 11 KOSPI listed).</li>
</ul>


There are some major surprises (both inclusions and exclusions) in the Korea Value Up index. 
In particular, the telecom sector (SK Telecom and KT) and large cap holding companies (Samsung C&amp;T and LG Corp) are surprising exclusions in the index.
There are many surprising inclusions in the Korea Value Up Index. We provide 30 companies are surprising inclusions in the Korea Value Up Index (19 KOSDAQ and 11 KOSPI listed).


Korea Value Up Index - Surprising Inclusions and Exclusions

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.

Event-Driven

<ul>
<li>The reshuffle results align with expectations, but the decision to list 11 KOSDAQ Global stocks in April is surprising. Local authorities seem to prioritize boosting the derivatives market for liquidity.</li>
<li>Ecopro Materials' SSF listing, earlier than expected, attracts attention, potentially leading to an unusual basis pattern, coinciding with a major lockup release on May 17th.</li>
<li>We should also be wary of a pattern akin to last July's in KOSDAQ stocks. Spot prices of recent SSFs showed a pronounced short-term uptrend, especially in KOSDAQ, versus KOSPI.</li>
</ul>


The reshuffle results align with expectations, but the decision to list 11 KOSDAQ Global stocks in April is surprising. Local authorities seem to prioritize boosting the derivatives market for liquidity.
Ecopro Materials' SSF listing, earlier than expected, attracts attention, potentially leading to an unusual basis pattern, coinciding with a major lockup release on May 17th.
We should also be wary of a pattern akin to last July's in KOSDAQ stocks. Spot prices of recent SSFs showed a pronounced short-term uptrend, especially in KOSDAQ, versus KOSPI.


KRX's Official SSF/SSO Reshuffle Results: Trading Considerations

<ul>
<li>
<strong><a href="https://www.smartkarma.com/entities/bh-co-ltd" target="_blank" data-smartkarma-citation="entities:3933:1" rel="noopener">BH Co Ltd (090460 KS)</a></strong> will likely complete the transfer listing by early May, suggesting an ad-hoc change may occur before the regular rebalancing of the KOSDAQ 150 in June.</li>
<li>BH's GICS sector is INFORMATION TECHNOLOGY. It means the top reserved issue at the previous review gets to replace BH. At this point, it will be <strong>HFR Inc (230240 KS)</strong>.</li>
<li>We should build up a Long position on HFR right after KRX approves BH's transfer and then close it on the next trading day after the KQ150 corporate action announcement.</li>
</ul>



BH Co Ltd (090460 KS) will likely complete the transfer listing by early May, suggesting an ad-hoc change may occur before the regular rebalancing of the KOSDAQ 150 in June.
BH's GICS sector is INFORMATION TECHNOLOGY. It means the top reserved issue at the previous review gets to replace BH. At this point, it will be HFR Inc (230240 KS).
We should build up a Long position on HFR right after KRX approves BH's transfer and then close it on the next trading day after the KQ150 corporate action announcement.


An Exposed Target for Flow Trading on KQ150 Ad-Hoc Change by BH's KOSPI Transfer Listing

Equity Capital Markets

<ul>
<li>Our base case valuation of Gigavis IPO is target price of 61,755 won per share, representing 56% higher than the high end of the IPO price range.</li>
<li>We estimate the company to generate sales of 126.6 billion won (up 27% YoY) in 2023 and 150.9 billion won (up 19.2% YoY) in 2024.</li>
<li>Our base case valuation is based on 21.8x P/E using our estimated net profit of 35.9 billion won in 2023.</li>
</ul>


Our base case valuation of Gigavis IPO is target price of 61,755 won per share, representing 56% higher than the high end of the IPO price range.
We estimate the company to generate sales of 126.6 billion won (up 27% YoY) in 2023 and 150.9 billion won (up 19.2% YoY) in 2024.
Our base case valuation is based on 21.8x P/E using our estimated net profit of 35.9 billion won in 2023.


<ul>
<li>NICE I&amp;S will likely complete the transfer schedule in early May, meaning that an ad-hoc change may occur before the regular rebalancing of the KOSDAQ 150 in June.</li>
<li>If this gets completed before SK Oceanplant's transfer listing schedule, the top reserved issue in NICE's GICS sector (INDUSTRIALS) will be included. It is Sun Kwang (003100 KS).</li>
<li>As evidenced in the case of LX Semicon, we should set up a preemptive position for potential ADDITION at the time of the T or T-1 KRX corporate action announcement.</li>
</ul>


NICE I&amp;S will likely complete the transfer schedule in early May, meaning that an ad-hoc change may occur before the regular rebalancing of the KOSDAQ 150 in June.
If this gets completed before SK Oceanplant's transfer listing schedule, the top reserved issue in NICE's GICS sector (INDUSTRIALS) will be included. It is Sun Kwang (003100 KS).
As evidenced in the case of LX Semicon, we should set up a preemptive position for potential ADDITION at the time of the T or T-1 KRX corporate action announcement.


Target & Timing for Flow Trading Position Setup in NICE I&S KOSPI Transfer Event

South Korea

NEXTIN, Inc. manufactures and distributes semiconductor devices. The Company produces process defect detection equipment, cube scan equipment, and other related products. NEXTIN markets its products worldwide.

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

Nextin (348210 KS)

Korea Value Up Index - Surprising Inclusions and Exclusions

There are many surprising inclusions and exclusions in the Korea Value Up Index. We provide 30 companies that are surprising inclusions and 10...

Douglas Kim

KRX's Official SSF/SSO Reshuffle Results: Trading Considerations

As pointed out in this post, considering KOSDAQ additions as a long basket is suitable. However, stocks with high pre-reshuffle price appreciation...

Sanghyun Park

An Exposed Target for Flow Trading on KQ150 Ad-Hoc Change by BH's KOSPI Transfer Listing

This post investigates the target of flow trading on KOSDAQ 150 ad-hoc change resulting from BH Co's transfer of listing from KOSDAQ to KOSPI.

Sanghyun Park

Gigavis IPO Valuation Analysis

Our base case valuation of Gigavis IPO is target price of 61,755 won per share, representing 56% higher than the high end of the IPO price range.

Douglas Kim

Target & Timing for Flow Trading Position Setup in NICE I&S KOSPI Transfer Event

This post offers a detailed guide about the target and timing of a flow trading position setup in NICE Information Service's KOSPI transfer listing...

Sanghyun Park

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)