Technical Analyst, Vermilion Research

Joe Jasper

Technical Analyst

Technical and Quantitative Research

Vermilion Research

Vermilion’s objective is to deliver timely, actionable, and unique technical research to professional investors through the application of our various technical indicators.

Our research strategists seek to highlight securities which we believe are at major inflection points, based on our various technical and quantitative indicators, and offer asymmetric risk/return profiles. Our unique research methodology, centered on relative strength, enables our strategists to deliver superior investment recommendations.

Our process begins by organizing the universe of actively traded stocks into discrete sectors, then into industry groups. We then apply our technical and quantitative tools to identify developing price trends. Once attractive trends are identified within a selected sector or group, we screen for individual stocks which we believe offer the best risk/reward profile. We provide a historical perspective that often reveals, through our long-term charts, how price patterns often repeat themselves over time.

Technical Analysis

iShares MSCI ACWI ETF / Technical Analysis

<ul>
<li>In last week's Int'l Compass (Aug. 18) we discussed that global equities are going through a bottoming process, but that the real test will come during the eventual pullback.</li>
<li>We are getting the pullback now, but so far, there has yet to be any failed breakouts among the indexes discussed over the past month -- a positive sign.</li>
<li>Worth noting- further breakout attempts have failed on some of the leading market indexes, notably the Nasdaq 100 and India's SENSEX, but they remain well-above their breakout levels from July.</li>
</ul>


In last week's Int'l Compass (Aug. 18) we discussed that global equities are going through a bottoming process, but that the real test will come during the eventual pullback.
We are getting the pullback now, but so far, there has yet to be any failed breakouts among the indexes discussed over the past month -- a positive sign.
Worth noting- further breakout attempts have failed on some of the leading market indexes, notably the Nasdaq 100 and India's SENSEX, but they remain well-above their breakout levels from July.


Pullback Underway; Buy Ideas: Energy, Materials, Japan/India Motor Vehicles, Japan Health Care

IPOs and Catalysts/Events, Global Equity Research Ltd

Arun George

IPOs and Catalysts/Events

Uncompromised, Independent, Conflict-Free Research

Global Equity Research Ltd

Global Equity Research was started in 2017 by a group of experienced research professionals. It was founded on a passionate belief in the importance and the need for uncompromised, independent, conflict-free research. We aim to provide differentiated and actionable primary and bottom up fundamental research.

Equity Capital Markets

<ul>
<li>
<a href="https://www.smartkarma.com/entities/wcp-co-ltd" target="_blank" data-smartkarma-citation="entities:36076:1" rel="noopener">WCP (WCP KS)</a>, a lithium-ion batteries separator company, has released an updated prospectus for its IPO of KRW900 billion (US$692 million).  </li>
<li>The updated prospectus discloses 1H22 results and a marginal increase in the syndicate’s intrinsic value. Revenue growth and margin improved in 1Q22. </li>
<li>The IPO price range of KRW80,000-100,000 remains unchanged. While the fundamentals are sound, the IPO price range remains unattractive.</li>
</ul>



WCP (WCP KS), a lithium-ion batteries separator company, has released an updated prospectus for its IPO of KRW900 billion (US$692 million).  
The updated prospectus discloses 1H22 results and a marginal increase in the syndicate’s intrinsic value. Revenue growth and margin improved in 1Q22. 
The IPO price range of KRW80,000-100,000 remains unchanged. While the fundamentals are sound, the IPO price range remains unattractive.


WCP IPO: Updated Prospectus, Solid 1H22, Unchanged and Unattractive Price Range

Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

Event-Driven

<ul>
<li>On 12 August, POSCO Holdings announced that it will cancel treasury shares worth 3% of outstanding shares involving 2.6 million shares worth 672 billion won.</li>
<li>The cancellation of treasury shares is a shareholder friendly policy that will improve the company's ROE and P/E ratios. The treasury shares cancellation will be completed on 22 August 2022. </li>
<li>The combination of treasury shares cancellation and high dividend yield is likely to lead to higher probability of POSCO Holdings outperforming KOSPI on a total returns basis this year.</li>
</ul>


On 12 August, POSCO Holdings announced that it will cancel treasury shares worth 3% of outstanding shares involving 2.6 million shares worth 672 billion won.
The cancellation of treasury shares is a shareholder friendly policy that will improve the company's ROE and P/E ratios. The treasury shares cancellation will be completed on 22 August 2022. 
The combination of treasury shares cancellation and high dividend yield is likely to lead to higher probability of POSCO Holdings outperforming KOSPI on a total returns basis this year.


POSCO Holdings: Treasury Shares Cancellation Worth 3% of Outstanding Shares

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.

Thematic (Sector/Industry)

<ul>
<li>Money is again pouring into local rechargeable battery-themed ETFs. The AUMs of the major battery ETFs have increased by 20-35% over the past month.</li>
<li>The passive flow added in the past month to x ADTV was significant. The increase in the ETF AUM must have acted as a factor that aggravated the sector rally.</li>
<li>The current rally will closely correlate with AUM's growth pace. A 10% increase in AUM introduces a passive flow, on average, equivalent to 0.3-0.4x ADTV.</li>
</ul>


Money is again pouring into local rechargeable battery-themed ETFs. The AUMs of the major battery ETFs have increased by 20-35% over the past month.
The passive flow added in the past month to x ADTV was significant. The increase in the ETF AUM must have acted as a factor that aggravated the sector rally.
The current rally will closely correlate with AUM's growth pace. A 10% increase in AUM introduces a passive flow, on average, equivalent to 0.3-0.4x ADTV.


Investigating a Surge in AUM of Local Battery ETFs & Ongoing Sector Rally

<ul>
<li>
<a href="https://www.smartkarma.com/entities/wcp-co-ltd" target="_blank" data-smartkarma-citation="entities:36076:1" rel="noopener">WCP (WCP KS)</a>, a lithium-ion batteries separator company, has pushed back its KRW900 billion (US$692 million) KRX IPO timeline from August to mid-September.</li>
<li>We previously discussed the IPO In <a href="https://www.smartkarma.com/insights/wcp-ipo-hooked-on-lithium" target="_blank" data-smartkarma-citation="insights:72863" rel="noopener">WCP IPO: Hooked on Lithium</a> and <a href="https://www.smartkarma.com/insights/wcp-ipo-valuation-insights" target="_blank" data-smartkarma-citation="insights:73042" rel="noopener">WCP IPO: Valuation Insights</a>. </li>
<li>In this note, we benchmark WCP vs its peers in terms of historical and forecasted financials along with multiples. Our valuation analysis suggests that the IPO price range remains unattractive.</li>
</ul>



WCP (WCP KS), a lithium-ion batteries separator company, has pushed back its KRW900 billion (US$692 million) KRX IPO timeline from August to mid-September.
We previously discussed the IPO In WCP IPO: Hooked on Lithium and WCP IPO: Valuation Insights. 
In this note, we benchmark WCP vs its peers in terms of historical and forecasted financials along with multiples. Our valuation analysis suggests that the IPO price range remains unattractive.


WCP IPO: Kicking the Can Down the Road Through a Revised IPO Timetable

South Korea

Posco Future M Co., Ltd. manufactures and distributes energy materials. The Company produces battery materials, advanced chemical materials, basic industrial materials, and other related products. Posco Future M also produces lime chemical and refractory products.

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Posco Future M (003670 KS)

Pullback Underway; Buy Ideas: Energy, Materials, Japan/India Motor Vehicles, Japan Health Care

Pullback Underway; Problem: U.S. Dollar $DXY, Global 10-Yr Sovereign Yields, and Commodities All on the Rise Again; Actionable Themes: Energy,...

Vermilion Research

WCP IPO: Updated Prospectus, Solid 1H22, Unchanged and Unattractive Price Range

The updated prospectus discloses 1H22 results but an unchanged IPO price range of KRW80,000-100,000. While the fundamentals are sound, the IPO...

Arun George

POSCO Holdings: Treasury Shares Cancellation Worth 3% of Outstanding Shares

On 12 August, POSCO Holdings announced that it will cancel treasury shares worth 3% of outstanding shares involving 2.6 million shares worth 672...

Douglas Kim

Investigating a Surge in AUM of Local Battery ETFs & Ongoing Sector Rally

This post investigates a recent surge in AUM of Korea's local secondary battery ETFs and how it may correlate with the ongoing sector rally.

Sanghyun Park

WCP IPO: Kicking the Can Down the Road Through a Revised IPO Timetable

We benchmark WCP vs its peers in terms of historical and forecasted financials along with multiples. Our valuation analysis suggests that the IPO...

Arun George

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