Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

Event-Driven

<ul>
<li>We provide an update of the potential KOSPI200 rebalance candidates in June 2024. </li>
<li>The bottom 5% market caps in KOSPI200 could be excluded from the KOSPI200 rebalance in June 2024. These 10 stocks are down on average 12.6% YTD. </li>
<li>We identified seven potential inclusion candidates. Among them, those that have low PBR multiples including HHI and Dongwon Industries could continue to outperform the market leading up to rebalance announcement. </li>
</ul>


We provide an update of the potential KOSPI200 rebalance candidates in June 2024. 
The bottom 5% market caps in KOSPI200 could be excluded from the KOSPI200 rebalance in June 2024. These 10 stocks are down on average 12.6% YTD. 
We identified seven potential inclusion candidates. Among them, those that have low PBR multiples including HHI and Dongwon Industries could continue to outperform the market leading up to rebalance announcement. 


An Update of the Potential KOSPI200 Rebalance Candidates in June 2024

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

<ul>
<li>The last week was a very busy one. The coming week has some announcements and implementations but is a relatively quieter one.</li>
<li>The <a href="https://www.smartkarma.com/entities/sse-science-and-technology-innovation-board-50-index" target="_blank" data-smartkarma-citation="entities:29279:1" rel="noopener">SSE STAR50 (STAR50 INDEX)</a> and STAR100 Index changes for March will be implemented at the close on Friday, the 8th.</li>
<li>Another week of inflows for the <a href="https://www.smartkarma.com/entities/ishares-msci-emerging-markets-223f5da3-7054-4e4f-bc55-b7f0852c2581" target="_blank" data-smartkarma-citation="entities:31998:1" rel="noopener">iShares Emerging Markets ex-China (EMXC US)</a> ETF as creations cross US$2bn for 2024. ETF AUM has gone from US$420m in 2021 to US$11bn now!</li>
</ul>


The last week was a very busy one. The coming week has some announcements and implementations but is a relatively quieter one.
The SSE STAR50 (STAR50 INDEX) and STAR100 Index changes for March will be implemented at the close on Friday, the 8th.
Another week of inflows for the iShares Emerging Markets ex-China (EMXC US) ETF as creations cross US$2bn for 2024. ETF AUM has gone from US$420m in 2021 to US$11bn now!


Index Rebalance & ETF Flow Recap: STAR50/100, FXI, NIFTY/NEXT50, S&P500, KOSPI, Goodman, Ecopro BM

<ul>
<li>
<a href="https://www.smartkarma.com/entities/ecopro-bm-co-ltd" target="_blank" data-smartkarma-citation="entities:27873:1" rel="noopener">Ecopro BM (247540 KS)</a>'s Board has approved the delisting of the stock from the KOSDAQ market and to list on the KOSPI market. The shareholder meeting is on 26 March. </li>
<li>Historically, the KRX has taken an average of 64 days from application to approve the listing to transfer from the KOSDAQ market to the KOSPI market.</li>
<li>
<a href="https://www.smartkarma.com/entities/ecopro-bm-co-ltd" target="_blank" data-smartkarma-citation="entities:27873:1" rel="noopener">Ecopro BM (247540 KS)</a> will be deleted from 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> on its last trading day and inclusion in the <a href="https://www.smartkarma.com/entities/korea-stock-exchange-kospi-200" target="_blank" data-smartkarma-citation="entities:26021:1" rel="noopener">KOSPI 200 Index</a> could take place in September.</li>
</ul>



Ecopro BM (247540 KS)'s Board has approved the delisting of the stock from the KOSDAQ market and to list on the KOSPI market. The shareholder meeting is on 26 March. 
Historically, the KRX has taken an average of 64 days from application to approve the listing to transfer from the KOSDAQ market to the KOSPI market.

Ecopro BM (247540 KS) will be deleted from the KOSDAQ 150 Index on its last trading day and inclusion in the KOSPI 200 Index could take place in September.


Ecopro BM (247540 KS): Index Impact of KOSDAQ to KOSPI Transfer

<ul>
<li>The review period for the March rebalance of the KOSPI Size Indices started 1 December and will end 29 February. The changes will be implemented at the close 14 March.</li>
<li>We see 3 migrations from MidCap to LargeCap, 4 new adds to LargeCap, 7 migrations from LargeCap to MidCap, and 11 migrations from SmallCap to MidCap.</li>
<li>On average, stocks migrating from SmallCap to MidCap have the lowest price to book value and have historically outperformed stocks migrating between other categories.</li>
</ul>


The review period for the March rebalance of the KOSPI Size Indices started 1 December and will end 29 February. The changes will be implemented at the close 14 March.
We see 3 migrations from MidCap to LargeCap, 4 new adds to LargeCap, 7 migrations from LargeCap to MidCap, and 11 migrations from SmallCap to MidCap.
On average, stocks migrating from SmallCap to MidCap have the lowest price to book value and have historically outperformed stocks migrating between other categories.


KOSPI Size Indices - Potential Migrations as Focus Is on Price to Book

<ul>
<li>
<a href="https://www.smartkarma.com/entities/hyosung-corporation" target="_blank" data-smartkarma-citation="entities:20712:1" rel="noopener">Hyosung Corporation (004800 KS)</a> has announced that it is spinning off part of its business holdings to Hyosung New Holding Corporation in a 0.818:0.182 ratio.</li>
<li>The stock will remain suspended from late June to late July. We expect <a href="https://www.smartkarma.com/entities/hyosung-corporation" target="_blank" data-smartkarma-citation="entities:20712:1" rel="noopener">Hyosung Corporation (004800 KS)</a> to maintain its index membership while the New Entity will not be added.</li>
<li>The dynamics between listed ETFs and non-listed passive trackers differ and we take a look at the potential index flows.</li>
</ul>



Hyosung Corporation (004800 KS) has announced that it is spinning off part of its business holdings to Hyosung New Holding Corporation in a 0.818:0.182 ratio.
The stock will remain suspended from late June to late July. We expect Hyosung Corporation (004800 KS) to maintain its index membership while the New Entity will not be added.
The dynamics between listed ETFs and non-listed passive trackers differ and we take a look at the potential index flows.


Hyosung Corp (004800 KS): Spin-Off & KOSPI200 Index Implications

South Korea

Hyundai Autoever Corp. provides information technology services. The Company offers system integration, system management, information system development, and other services. Hyundai Autoever offers services worldwide.

Cafe24 Corp. provides electronic commerce services. The Company offers web hosting, server hosting, e-commerce hosting, e-commerce marketing consulting, and other web services. Cafe24 provides services worldwide.

KCP Co., Ltd. concentrates on developing enterprise-wide technology solutions to the retail industry.  The Company offers fully integrated retail automation solutions, including point of sale solutions (POS), back office management systems, goods storage managements.  KCP also provides POS related hardware such as bar-scanners as a Korean agency of IBM.

Lotte Data Communication Company provides information technology services. The Company offers digital transformation, cloud computing, data processing, automation, and analysis solutions. Lotte Data Communication serves customers globally.

Korea Information & Communications Co Ltd develops and provides transaction-based online services such as automatic transfer of credit sales and electronic deposit and withdrawal.  The Company applies these services for all types of credit cards, debit cards, and department store cards.

KG Inicis Co., Ltd. develops and provides e-commerce settlement processing services through the electronic payment software used in Internet shopping malls.  The Company also operates an online marketplace, which allows online shopping and auction.

Danal Co., Ltd. specializes in developing and providing cellular mobile telephone services.  The Company's products include ring tones, games, color graphics, instant messenger and entertainment, and mobile payments through Internet and mobile devices.

Korea Digital Communications Corp. designs, installs, and maintains local access networks (LANs).  The Company also manufactures networking products and data transmission devices, such as modems, multiplexers, and remote access servers. KDC also offers networking solutions.

DB Inc. provides IT services including application outsourcing, infrastructure outsourcing, cloud service and integrated maintenance and repair. The Company also operates trading business and manufacures electronic material s such as adhesives and magnetic powder cores.

KGMobilians Co Ltd develops and offers electronic payment solutions. The Company's services include agency business for payment settlement through general phone, cellular phone, and Internet.

NS Solutions Corporation operates system consulting services and proposal of solutions.  The Company also manages operation and maintenance of engineering systems and develops software.

Teradata Corp operates as a database management company in the technology industry. The company offers analytic data solutions through integrated data warehousing, big data analytics, and business applications.  Teradata Corp collaborates with leading innovators in software, technology, and integration services.

GMO Payment Gateway, Inc. provides credit card transaction services for electronic commerce firms.

Nihon Unisys, Ltd. wholesales and leases computers and peripheral equipment, and also develops various types of computer software.  The Company's main products include server systems and various type of software for financial, engineering, retail, and manufacturing industries.

TIS Inc is established through reorganization.  The Company provides network solutions and system integration services.  IT Holdings also engages in development, implementation, and maintenance of application software besides selling computer and computer peripheral equipment.

Euronet Worldwide, Inc. provides electronic financial transaction solutions. The Company offers financial payment middleware, financial network gateways, outsourcing, and consulting services to financial institutions and mobile operators.  Euronet has processing centers located in the United States, Europe, and Asia.

The Western Union Company offers global money transfer services. The Company offers consumer to consumer money transfer and bill paying services, and sells money orders.

Travelsky Technology Limited provides information technology solutions for China's air travel and tourism industries.  The Company provides electronic travel distribution systems, or ETD, in China, develops airport passenger processing and air cargo systems, owns and operates real-time network for China's civil aviation industry, and operates Internet-based travel platform.

Perficient, Inc. is an information technology consulting firm. The Firm designs and delivers business-driven information technology solutions, such as business analysis, portal, content management, business integration/SOA, commerce. business intelligence and customer relation management (CRM). Perficient serves clients from a network of domestic and global locations.

Indra Sistemas, S.A. offers information technology products and services.  The Company offers systems integration and outsourcing services, installs railway management and ticketing systems, installs road traffic toll and signaling systems, constructs satellite communications systems, manufactures radar air defense systems, and installs insurance management systems.

Posco DX Company Ltd. provides information and technology services. The Company provides computer systems design, computer and server merchant wholesale, computer and office machine repair and maintenance services. Posco DX also offers eic engineering, smart factory, wireless networking equipment, steel manufacturing, and digital video recorder manufacturing services.

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

Posco DX (022100 KS)

An Update of the Potential KOSPI200 Rebalance Candidates in June 2024

We provide an update of the potential KOSPI200 rebalance candidates in June 2024. We identified seven potential inclusion candidates and 10...

Douglas Kim

Index Rebalance & ETF Flow Recap: STAR50/100, FXI, NIFTY/NEXT50, S&P500, KOSPI, Goodman, Ecopro BM

This recap highlights Insights covering Asian index rebalances (announcements/ forecasts/ IPO Fast Entry/ M&A driven changes). We also highlight...

Brian Freitas

Ecopro BM (247540 KS): Index Impact of KOSDAQ to KOSPI Transfer

Ecopro BM's Board has approved the KOSDAQ delisting and KOSPI listing. The shareholder meeting is on 26 March and KRX approval could come mid-May...

Brian Freitas

KOSPI Size Indices - Potential Migrations as Focus Is on Price to Book

We see 35 migrations and 7 new inclusions for the KOSPI Size indices. Stocks migrating higher have outperformed stocks migrating lower. Some stocks...

Brian Freitas

Hyosung Corp (004800 KS): Spin-Off & KOSPI200 Index Implications

Hyosung Corp is spinning-off part of its businesses to a new entity. The surviving entity will maintain its KS200 membership while the new entity...

Brian Freitas

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)