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>KRX announced KOSDAQ Global rebalancing. Annually in June, effective date follows June options expiry. Passive flow trading on Thursday, the 13th. 49 companies designated, with nine excluded and eleven added.</li>
<li>Predicting passive capital movement is challenging, but attention must be given to price impacts because reshuffle predictability is low, lacking preemptive trading setups.</li>
<li>We must anticipate the SSF reshuffle in August, likely including new KOSDAQ Global constituents. KRX plans to list SSFs for all remaining constituents, potentially advancing setup timing for price increases.</li>
</ul>


KRX announced KOSDAQ Global rebalancing. Annually in June, effective date follows June options expiry. Passive flow trading on Thursday, the 13th. 49 companies designated, with nine excluded and eleven added.
Predicting passive capital movement is challenging, but attention must be given to price impacts because reshuffle predictability is low, lacking preemptive trading setups.
We must anticipate the SSF reshuffle in August, likely including new KOSDAQ Global constituents. KRX plans to list SSFs for all remaining constituents, potentially advancing setup timing for price increases.


KOSDAQ Global Rebalancing This Week: Trading Considerations

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 Mar 15th which has an aggregated short interest worth USD7.5bn.</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, Posco Dx, Kum Yang, Samsung Biologic, Samsung SDI, Kia, Hyundai Motor.</li>
</ul>


We analyzed the changes in short interest of KRX Stocks as of Mar 15th which has an aggregated short interest worth USD7.5bn.
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, Posco Dx, Kum Yang, Samsung Biologic, Samsung SDI, Kia, Hyundai Motor.


KRX Short Interest Weekly (Mar 15th): Sk Hynix, Posco Dx, Kum Yang, Samsung Biologic, Samsung SDI

APAC IPOs & Placements, Aequitas Research

Ethan Aw

APAC IPOs & Placements

Equity Capital Markets

EcoPro Materials / Equity Capital Markets

<ul>
<li>
<a href="https://www.smartkarma.com/entities/ecopro-materials" target="_blank" data-smartkarma-citation="entities:36806:1" rel="noopener">EcoPro Materials (ECO123 KS)</a> is looking to raise up to US$500m in its Korean IPO.</li>
<li>Ecopro Materials (EPM) manufactures and sells high-nickel precursors, one of the key materials for high-nickel cathode materials for secondary (rechargeable) batteries.</li>
<li>In our previous note, we covered the company’s performance. In this note, we will undertake a  peer comparison.</li>
</ul>



EcoPro Materials (ECO123 KS) is looking to raise up to US$500m in its Korean IPO.
Ecopro Materials (EPM) manufactures and sells high-nickel precursors, one of the key materials for high-nickel cathode materials for secondary (rechargeable) batteries.
In our previous note, we covered the company’s performance. In this note, we will undertake a  peer comparison.


Ecopro Materials IPO - Peer Comparison - Doesn't Particularly Stand Out

<ul>
<li>Yesterday and today, there have been observed cases in Korea that are suspected to be caused by a sudden drop in stock prices due to CFD liquidation trading.</li>
<li>Yesterday it was Celltrion with its two siblings, and today it is Posco DX. I have found candidates that may have similar stock price movements.</li>
<li>These candidates experienced a notable increase in their stock prices from late March to mid-April, and they have a relatively high margin transaction ratio.</li>
</ul>


Yesterday and today, there have been observed cases in Korea that are suspected to be caused by a sudden drop in stock prices due to CFD liquidation trading.
Yesterday it was Celltrion with its two siblings, and today it is Posco DX. I have found candidates that may have similar stock price movements.
These candidates experienced a notable increase in their stock prices from late March to mid-April, and they have a relatively high margin transaction ratio.


CFD Liquidation in Korea: Posco DX, Celltrion Siblings, and Potential Next Targets

<ul>
<li>Lutronic Corp and Jeisys Medical have considerably lower DTV in comparison to their float shares. It is highly probable that they have artificially increased their float shares.</li>
<li>Coincidentally, these two stocks are the ones that have experienced the most dramatic increase in borrow balance after the result announcement.</li>
<li>These two stocks are being targeted for short-selling from a post-event perspective because the market believes they will exhibit abnormal passive (price) impact due to their inflated float shares.</li>
</ul>


Lutronic Corp and Jeisys Medical have considerably lower DTV in comparison to their float shares. It is highly probable that they have artificially increased their float shares.
Coincidentally, these two stocks are the ones that have experienced the most dramatic increase in borrow balance after the result announcement.
These two stocks are being targeted for short-selling from a post-event perspective because the market believes they will exhibit abnormal passive (price) impact due to their inflated float shares.


Two of KS200/KQ150 Additions Are Prime-Targeted for Shorting Due to Their Inflated Float Shares

South Korea

Sam Kang M&T Co., Ltd. manufactures special steel pipes used for petroleum refining and ocean floor exploration.  Sam Kang also produces steel blocks for ship building, and cranes that is used in industry area.

SeAH Steel Holdings Corporation manufactures and sells steel pipes. The Company produces and sells spiral, stainless, titanium tubes, and other products. SeAH Steel Holdings markets its products throughout Korea.

Seah Besteel Corp. manufactures specified steel products such as H-beam, alloy steel, and carbon steel.  The Company also produces train and auto parts.

KG Dongbusteel Co., Ltd. manufactures cold rolled sheets, such as commercial quality cold rolled steel sheets, deep drawing quality cold rolled sheets, and stabilized deep drawing cold rolled sheets.  The Company also offers special cold rolled sheets and plating base metals.

Sam-A Aluminum Co., Ltd. manufactures aluminum foils for cigarette and food packaging, window frames, and related products.  The Company also produces aluminum powder used for painting ships, automobiles, and bridges.

KISWIRE Ltd. manufactures secondary steel products, such as wire ropes and wire strands for electric wire and springs.  The Company markets to the shipbuilding and construction industries, and exports products to overseas markets.  KISWIRE also has a financial subsidiary.

Young Poong Corporation produces and markets non-ferrous metals, such as zinc ingots, sulfate, and cadmium.  The Company also generates income from leasing buildings.

TCC Steel manufactures and sells electrolytic and copper coated tinplates.  The Company supplies its products to the food, beverage, electronic, and automobile industries. TCC Steel also operates plant construction services as well as real estate leasing businesses.

Poongsan Holdings Corporation is an investment holding company.  The company, through its subsidiaries, manufactures non-ferrous metal and defense-related products.

SeAH Holdings Corporation is a holding company.  The Company, through its subsidiaries, fabricates metal products, manufactures automotive parts, distributes natural gas, provides information technology services, and offers inland transportation services.

OSAKA STEEL CO., LTD. is an Osaka based electric furnace steelmaker.  The Company is affiliated with Nippon Steel.  Osaka Steel makes shaped steel, nets, and other processed wire-rod products.

Spartan Resources Limited provides exploration and mining services. The Company explores and develops gold projects in Western Australia. Spartan Resources serves customers worldwide.

Nittetsu Mining Co., Ltd., an affiliate of Nippon Steel Group, mines for limestone mining for the steel industry.  The Company also smelts copper ore into ingots, and produces flame-retardant ceramic papers, mining machinery, and environment-related products.  Nittetsu Mining also operates real estate.

Jayaswal Neco Industries Ltd. manufactures steel and steel products.  The Company produces steel for manufacturers of automobiles, appliances, and other products; produces ferrous and non-ferrous castings for the railroad, automobile, construction, and valve manufacturing industries; and mines coal.

PT Cita Mineral Investindo Tbk is a mineral exploration company. The Company mines for and produces bauxite.

Yieh United Steel Corp. manufactures and markets hot-rolled stainless steel coils and plates, cold-rolled stainless steel coils and plates, as well as stainless steel billets.

OSAKA Titanium technologies Co., Ltd. produces and sells non-ferrous metals such as titanium.  The Company's products include sponge and powdered titanium, titanium ingots, and high-purity titanium as well as non-metal products such as silicon processed materials and polycrystalline silicon utilized in the semiconductor industry.

KYOEI STEEL LTD. manufactures and sells specialty steel products for construction use.  The company's products include deformed steel bar, structural steel bar, flat steel bar, and angle bar.  KYOEI also operates medical and industrial waste management

Lingyuan Iron & Steel Co., Ltd. manufactures and markets iron and steel products including hot-rolled bend steel, screw-thread steel, steel rods, steel pipes, and other related products.

ISMT Ltd manufactures steel required for seamless tubes manufacturing and other critical applications. The Company's products are used in applications in the forging/general engineering industry.

POSCO M-TECH CO.,LTD. manufactures steel strips used for packing.  The Company also produces deoxidizers used in the steel-making process.  Under  a long-term supply contact, the Company distributes a significant portion of  its output to POSCO.

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Posco M-Tech (009520 KS)

KOSDAQ Global Rebalancing This Week: Trading Considerations

This post outlines today's announcement of the KOSDAQ Global Index rebalancing results and explores trading implications.

Sanghyun Park

KRX Short Interest Weekly (Mar 15th): Sk Hynix, Posco Dx, Kum Yang, Samsung Biologic, Samsung SDI

We analyzed KRX short interest report for the past week and highlighted short interest changes in Sk Hynix, Posco Dx, Kum Yang, Samsung Biologic,...

Ke Yan, CFA, FRM

Ecopro Materials IPO - Peer Comparison - Doesn't Particularly Stand Out

EcoPro Materials (ECO123 KS) is looking to raise up to US$500m in its Korean IPO. In our previous note, we covered the company’s performance. In...

Ethan Aw

CFD Liquidation in Korea: Posco DX, Celltrion Siblings, and Potential Next Targets

This post investigates what might have happened to Posco DX today and Celltrion siblings yesterday, which are suspected of being the victim of CFD...

Sanghyun Park

Two of KS200/KQ150 Additions Are Prime-Targeted for Shorting Due to Their Inflated Float Shares

This post investigates which of the KOSPI 200/KOSDAQ 150 additions are being prime-targeted for short-selling after index inclusion due to the...

Sanghyun Park

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