Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

Equity Bottom-Up

<ul>
<li>In the past several days, there have been numerous new flow that the Chinese government is likely to allow group tours to South Korea and Japan in the coming days. </li>
<li>The group tours from China to South Korea which has been banned since March 2017, are expected to resume after six years, according to the Korean Embassy in China.</li>
<li>Nikkei Asia also reported on 9 August that the Chinese government is ready to allow group tours to Japan as early as this week.</li>
</ul>


In the past several days, there have been numerous new flow that the Chinese government is likely to allow group tours to South Korea and Japan in the coming days. 
The group tours from China to South Korea which has been banned since March 2017, are expected to resume after six years, according to the Korean Embassy in China.
Nikkei Asia also reported on 9 August that the Chinese government is ready to allow group tours to Japan as early as this week.


China to Finally Allow Group Tours to Korea and Japan?

Asia Pac IPO & Placement Research, China biotech, Aequitas Research

Ke Yan, CFA, FRM

Asia Pac IPO & Placement Research, China biotech

IPOs and Placements coverage across Asia Pacific

Aequitas Research

We cover all listing across the Asia Pacific along with follow-up placements. As of Dec 2020, our team had covered 539 IPOs with a hit rate of 73.5% and 685 placements with a hit rate of 66.8%.

We combine fundamental bottom-up views with our proprietary quantitative framework to provide a holistic coverage across new listings and placements. Our coverage includes pre-IPO notes before the deal is launched, follow-up analysis once the deal is live and post-listing trading analysis as well.

Quantitative Analysis

<ul>
<li>We analyzed the changes in short interest of KRX Stocks as of Jun 21st which has an aggregated short interest worth USD5.8bn.</li>
<li>We tabulate league table for top short by value and short as multiple of ADT, as well as weekly increases &amp; decreases in short value, short as multiple of ADT.</li>
<li>We highlight short interest changes in Sk Hynix, Samsung Electronics, Hyundai Motor, Kia, Enchem.</li>
</ul>


We analyzed the changes in short interest of KRX Stocks as of Jun 21st which has an aggregated short interest worth USD5.8bn.
We tabulate league table for top short by value and short as multiple of ADT, as well as weekly increases &amp; decreases in short value, short as multiple of ADT.
We highlight short interest changes in Sk Hynix, Samsung Electronics, Hyundai Motor, Kia, Enchem.


KRX Short Interest Weekly (Jun 21st): Sk Hynix, Samsung Electronics, Hyundai Motor, Kia, Enchem

Thematic (Sector/Industry)

<ul>
<li>There are three major reasons why we believe Korean casinos are likely to continue to outperform the market this year.</li>
<li>Three main reasons include hedge against rising inflation, Korea and other major countries are opening up for travel, and continued decline in gambling revenues in Macau.</li>
<li>Finally, among the four major Korean casino stocks, we have Positive views on GKL, Paradise, and Kangwon Land. We have Negative view on Lotte Tour Development due to valuation.</li>
</ul>


There are three major reasons why we believe Korean casinos are likely to continue to outperform the market this year.
Three main reasons include hedge against rising inflation, Korea and other major countries are opening up for travel, and continued decline in gambling revenues in Macau.
Finally, among the four major Korean casino stocks, we have Positive views on GKL, Paradise, and Kangwon Land. We have Negative view on Lotte Tour Development due to valuation.


Three Major Reasons Why Korean Casinos Are Likely to Outperform the Market This Year

<ul>
<li>There were 128k visitors to South Korea in April, up 32% MoM which was the biggest jump in MoM change in visitors to South Korea in the past year.</li>
<li>There were 215k outbound people from South Korea in April 2022, up 48% MoM and up 202% YoY.</li>
<li>Among the 21 major reopening plays in Korea, we prefer certain sectors including casino related plays (GKL, Paradise, and Kangwon Land) as well as F&amp;B related (Hitejinro and CJ Cheiljedang).</li>
</ul>


There were 128k visitors to South Korea in April, up 32% MoM which was the biggest jump in MoM change in visitors to South Korea in the past year.
There were 215k outbound people from South Korea in April 2022, up 48% MoM and up 202% YoY.
Among the 21 major reopening plays in Korea, we prefer certain sectors including casino related plays (GKL, Paradise, and Kangwon Land) as well as F&amp;B related (Hitejinro and CJ Cheiljedang).


Significant MoM Increase in Inbound & Outbound Visitors in Korea in April 2022

<ul>
<li>On 19 April, the US CDC stated that the national mask requirement on public transportation is no longer in effect in the United States.</li>
<li><strong>The CDC lifting the mask mandate is a key catalyst and other major countries are likely to follow the US in the coming months. </strong></li>
<li><em>Will the world likely to become more like Shanghai and enforce even greater lockdown policies or will they become more like the US and drop social distancing and mask mandates?  </em></li>
</ul>


On 19 April, the US CDC stated that the national mask requirement on public transportation is no longer in effect in the United States.
The CDC lifting the mask mandate is a key catalyst and other major countries are likely to follow the US in the coming months. 
Will the world likely to become more like Shanghai and enforce even greater lockdown policies or will they become more like the US and drop social distancing and mask mandates?  


CDC Ends Public Transportation Mask Mandate & Will the World Follow Shanghai or Vice Versa?

South Korea

Hana Tour Service Inc. wholesales a variety of travel related services.  The Company provides outbound, inbound and domestic travel packages and cooperates with credit card companies and Internet shopping malls to market its services. Hana Tour Service also works as general sales agency (GSA) of overseas cruise and rail passes.

Lotte Tour Development Co., Ltd. provides various tour package service. The Company franchises travel agencies, offers home-based travel businesses, and provides leisure-travel information.  The Company also engages in property development and building management and operates duty-free shop business.

Lotte Tour Development Co, Ltd. (032350 KS)

Grand Korea Leisure Co., Ltd. operates casino business.

Ananti Inc. operates as leisure clubs. The Company provides ananti penthouses, ananti coves, ananti clubs, hilton hotels, and other clubs. Ananti offers services throughout South Korea.

E-World owns and operates an amusement park.  The Company's services include theme park rides, movie theaters, concerts, and restaurants.

Modetour Network Inc. provides a wide range of travel services. The Company's main services include overseas bookings, package tours, air courier services, and discount airline ticketing services.

Shinsegae Food Co., Ltd. caters company restaurants, schools, and hospitals. The Company also markets and provides various groceries to food companies and restaurants.  Shinsegae Food operates family restaurants as well.

SM Culture & Contents Co., Ltd. develops, manufactures, and markets various golf balls and other golf related products.  Volvik mainly provides its products to Korea, the U.S., and Japan.

Yong Pyong Resort Co., Ltd. operates recreational resorts.  The resorts feature guest rooms and suits, golf course, ski course, water park, and other water sports facilities.  The Company also engages in real estate business focused on leisure facilities.

ME2ON Co., Ltd. focuses on game entertainment.  The Company's business engages in video game, arcade game, online game, mobile game, PC game and social casino games.

PLENUS Co., Ltd. sells take-out boxed meals through a franchise system as well as operates Japanese restaurants.  The Company also sells foodstuff, packaging material, and business uniforms.

LiJiang YuLong Tourism Co., Ltd. provides travel services in Lijiang, Yunnan. The Company provides cableway transportation, bus transportation, food and beverages services, and other related tourism services.

Hna-Caissa Travel Group is in the business of public transportation catering service, including airline catering and railway catering services. It also provides hotel catering services.

Ruth's Hospitality Group Inc. operates a chain of upscale steak houses. The Company's restaurants are located throughout the United States and in several international locations.

ARCLAND SERVICE CO., LTD. operates a restaurant chain based in Tokyo. The Company mainly serves pork cutlets and barbecue.

HIDAY HIDAKA Corp. operates a chain of Oriental noodle and Chinese restaurants mainly in Saitama Prefecture.  The Company produces noodles, soup, and dumplings at its own factory.

China Travel International Investment Hong Kong Limited, through its subsidiaries, operates tourist attractions, golf clubs, hotels, and other travel related activities.  The Company also provides passenger transportation as well as freight forwarding and cargo services.

China Travel International Investment Hong Kong (308 HK)

China Travel International Investment Hong Kong

Collins Foods Ltd. operates fast-food restaurants.  The Company operates chains of steak and chicken restaurants in Australia.

Formosa International Hotels Corporation operates hotels in Taipei.  The Company provides health club, laundry, business meeting, and other hotel services. In addition, Formosa operates restaurants, night clubs, and hotel management consulting.

Chuy's Holdings Inc. is a full-service restaurant concept offering a distinct menu of authentic Mexican food.  The Company operates chains throughout Texas, Alabama, Indiana, Kentucky, and Tennessee.

Paradise Co., Ltd. is a gaming company that operates casino facilities in South Korea and Kenya.  The Company offers games, such as roulette, black jack, baccarat, and big wheel.  Paradise, through its subsidiaries, operates retail and hotel business.

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Paradise Co Ltd (034230 KS)

China to Finally Allow Group Tours to Korea and Japan?

The group tours from China to South Korea which has been banned since March 2017, are expected to resume after six years, according to the Korean...

Douglas Kim

KRX Short Interest Weekly (Jun 21st): Sk Hynix, Samsung Electronics, Hyundai Motor, Kia, Enchem

We analyzed KRX short interest report for the past week and highlighted short interest changes in Sk Hynix, Samsung Electronics, Hyundai Motor,...

Ke Yan, CFA, FRM

Three Major Reasons Why Korean Casinos Are Likely to Outperform the Market This Year

We discuss three main reasons why we believe Korean casinos are likely to continue to outperform the market this year including a hedge against...

Douglas Kim

Significant MoM Increase in Inbound & Outbound Visitors in Korea in April 2022

There were 128k visitors to South Korea in April, up 32% MoM. There were 215k outbound people from South Korea in April 2022, up 48% MoM.

Douglas Kim

CDC Ends Public Transportation Mask Mandate & Will the World Follow Shanghai or Vice Versa?

The CDC lifting the mask mandate is a key catalyst and other major countries are likely to follow the US in the coming months.

Douglas Kim

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