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

Event-Driven

<ul>
<li>Following the two tender offers, Han &amp; Co now holds more than 90% of the common shares in <a href="https://www.smartkarma.com/entities/lutronic-corp" target="_blank" data-smartkarma-citation="entities:2250:1" rel="noopener">Lutronic Corp (085370 KS)</a> and is looking to buy the remaining shares.</li>
<li>
<a href="https://www.smartkarma.com/entities/lutronic-corp" target="_blank" data-smartkarma-citation="entities:2250:1" rel="noopener">Lutronic Corp (085370 KS)</a> is a member of 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> and delisting would mean an index replacement. <a href="https://www.smartkarma.com/entities/value-added-technologies" target="_blank" data-smartkarma-citation="entities:9946:1" rel="noopener">Value Added Technologies (043150 KS)</a> is a potential inclusion.</li>
<li>
<a href="https://www.smartkarma.com/entities/value-added-technologies" target="_blank" data-smartkarma-citation="entities:9946:1" rel="noopener">Value Added Technologies (043150 KS)</a> has underperformed its peers and trades cheaper on nearly all valuation parameters.</li>
</ul>


Following the two tender offers, Han &amp; Co now holds more than 90% of the common shares in Lutronic Corp (085370 KS) and is looking to buy the remaining shares.

Lutronic Corp (085370 KS) is a member of the KOSDAQ 150 Index and delisting would mean an index replacement. Value Added Technologies (043150 KS) is a potential inclusion.

Value Added Technologies (043150 KS) has underperformed its peers and trades cheaper on nearly all valuation parameters.


KOSDAQ150 Ad Hoc Index Rebalance Preview: VAT Could Replace Lutronic

Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

Equity Bottom-Up

<ul>
<li>Sindoh Co Ltd (029530 KS) is the 24th company in our Korea Small Cap Gems series. </li>
<li>Sindoh has one of the highest net cash/market cap ratios in the entire Korean stock market. Net cash at end of 1Q 2023 was 226% of its market cap. </li>
<li>Sindoh's operations turned around in 1Q 2023. It had sales of 105.5 billion won (up 26.6% YoY) and operating profit of 9.8 billion won (turned black) in 1Q 2023.</li>
</ul>


Sindoh Co Ltd (029530 KS) is the 24th company in our Korea Small Cap Gems series. 
Sindoh has one of the highest net cash/market cap ratios in the entire Korean stock market. Net cash at end of 1Q 2023 was 226% of its market cap. 
Sindoh's operations turned around in 1Q 2023. It had sales of 105.5 billion won (up 26.6% YoY) and operating profit of 9.8 billion won (turned black) in 1Q 2023.


Korea Small Cap Gem #24: Sindoh Co [Net Cash More than 220% of Market Cap]

Cross Asset Strategy

<ul>
<li>As a result of the likely implementation of the changes to the block deal pre-disclosure rules in Korea, numerous block deal sales are likely in the next 2-3 months.</li>
<li>Block deal sales worth 50 billion won or more totaled 5.2 trillion won in 2022. As of 17 July 2023, it was 1.1 trillion won.</li>
<li>We provide shareholding structures of the top 20 stocks in KOSDAQ and a few companies in this list could announce block deal sales in 2H 2023. </li>
</ul>


As a result of the likely implementation of the changes to the block deal pre-disclosure rules in Korea, numerous block deal sales are likely in the next 2-3 months.
Block deal sales worth 50 billion won or more totaled 5.2 trillion won in 2022. As of 17 July 2023, it was 1.1 trillion won.
We provide shareholding structures of the top 20 stocks in KOSDAQ and a few companies in this list could announce block deal sales in 2H 2023. 


Block Deals Pre-Disclosure Rule Changes in Korea Likely to Be Implemented Around October 2023

Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

<ul>
<li>On 9 June, skin and cosmetic treatment play <strong><a href="https://www.smartkarma.com/entities/lutronic-corp" target="_blank" data-smartkarma-citation="entities:2250:1" rel="noopener">Lutronic Corp (085370 KS)</a></strong> announced a Tender Offer from Korean PE outfit Hahn &amp; Company.</li>
<li>After acquiring 19.41% from Lutronic's CEO at ₩ 36,700, Hahn will launch an Offer for all remaining shares at the same price. </li>
<li>This Offer Price is a lifetime high. There is no minimum tendering condition. </li>
</ul>


On 9 June, skin and cosmetic treatment play Lutronic Corp (085370 KS) announced a Tender Offer from Korean PE outfit Hahn &amp; Company.
After acquiring 19.41% from Lutronic's CEO at ₩ 36,700, Hahn will launch an Offer for all remaining shares at the same price. 
This Offer Price is a lifetime high. There is no minimum tendering condition. 


Lutronic (085370 KS): Hahn & Co Tender Offer

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>Retail investors hold the majority of shares at 60%, and they may be interested in participating in the second tender offer based on their accumulated learning effect.</li>
<li>Based on the observed behavior of Hahn &amp; Co, it's unlikely that they will walk away from the delisting plan.</li>
<li>We need to consider going long on the potential upward adjustment of the second tendering price. This play can be viewed as a call option with a floor at ₩36,700.</li>
</ul>


Retail investors hold the majority of shares at 60%, and they may be interested in participating in the second tender offer based on their accumulated learning effect.
Based on the observed behavior of Hahn &amp; Co, it's unlikely that they will walk away from the delisting plan.
We need to consider going long on the potential upward adjustment of the second tendering price. This play can be viewed as a call option with a floor at ₩36,700.


Trading Plays for the Unexpected Tender Offer to Lutronic Corp Shareholders

South Korea

Osstem Implant Co., Ltd. manufactures dental implant system. The Company also markets dental management software. Osstem Implant provides products for dental surgery and exports abroad.

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

Osstem Implant (048260 KS)

KOSDAQ150 Ad Hoc Index Rebalance Preview: VAT Could Replace Lutronic

HanCo holds over 90% of the shares in Lutronic. if Lutronic is delisted, Value Added Tech could be added to the KOSDAQ150 Index. Value Added Tech...

Brian Freitas

Korea Small Cap Gem #24: Sindoh Co [Net Cash More than 220% of Market Cap]

Sindoh has one of the highest net cash/market cap ratios in the entire Korean stock market. Net cash at end of 1Q 2023 was 226% of its market cap.

Douglas Kim

Block Deals Pre-Disclosure Rule Changes in Korea Likely to Be Implemented Around October 2023

As a result of the likely implementation of the changes to the block deal pre-disclosure rules in Korea, numerous block deal sales are likely in...

Douglas Kim

Lutronic (085370 KS): Hahn & Co Tender Offer

Buy the deal at the price where it makes sense. The current gross/annualised is ~1%/10.5%. If you are a LO investor still holding, and you are...

David Blennerhassett

Trading Plays for the Unexpected Tender Offer to Lutronic Corp Shareholders

This post examines potential trading plays for the unexpected tendering offer to the Lutronic Corp shareholders announced this morning by Hahn & Co.

Sanghyun Park

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)