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.

Index Rebalance

<ul>
<li>Korea's battery sector got wrecked, crushing POSCO and Samsung SDI's caps. Shakeup incoming: Hanwha Aerospace locks in, and Samsung Biologics is also a strong contender.</li>
<li>Low pre-positioning leads to highly correlated moves on rebalance day; last June, KB and Shinhan got in while LG Chem and Energy got cut with similar impact, netting ~3% yield.</li>
<li>Given the track record, it makes sense to trim the holding window on rebalance day and deploy a long-short strategy.</li>
</ul>


Korea's battery sector got wrecked, crushing POSCO and Samsung SDI's caps. Shakeup incoming: Hanwha Aerospace locks in, and Samsung Biologics is also a strong contender.
Low pre-positioning leads to highly correlated moves on rebalance day; last June, KB and Shinhan got in while LG Chem and Energy got cut with similar impact, netting ~3% yield.
Given the track record, it makes sense to trim the holding window on rebalance day and deploy a long-short strategy.


4 Key Movers in TIGER Top 10 in June Reshuffle

Global Healthcare Analyst

Tina Banerjee

Equity Bottom-Up

<ul>
<li>
<a href="https://www.smartkarma.com/entities/samsung-biologics-co-ltd" target="_blank" data-smartkarma-citation="entities:22932:1" rel="noopener">Samsung Biologics (207940 KS)</a> reported 2024 revenue of KRW4.55T, up 23% YoY, ahead of guidance of 15–20%. Growth was driven by increased contribution from Plant 4 and milestone payment.</li>
<li>Ramp-Up at Plant 4 is expected to drive further revenue growth, while Plant 5, scheduled to begin operations in April 2025, will expand total production capacity to 784,000 liters. </li>
<li>Samsung Biologics is well positioned to be resilient to the industry challenges. The company has guided for 20–25% YoY revenue growth to KRW5456–5684B in 2025.</li>
</ul>



Samsung Biologics (207940 KS) reported 2024 revenue of KRW4.55T, up 23% YoY, ahead of guidance of 15–20%. Growth was driven by increased contribution from Plant 4 and milestone payment.
Ramp-Up at Plant 4 is expected to drive further revenue growth, while Plant 5, scheduled to begin operations in April 2025, will expand total production capacity to 784,000 liters. 
Samsung Biologics is well positioned to be resilient to the industry challenges. The company has guided for 20–25% YoY revenue growth to KRW5456–5684B in 2025.


Samsung Biologics (207940 KS): Record High Revenue in 2024; Accelerated Growth Expected in 2025

<ul>
<li>In 3Q24, <a href="https://www.smartkarma.com/entities/samsung-biologics-co-ltd" target="_blank" data-smartkarma-citation="entities:22932:1" rel="noopener">Samsung Biologics (207940 KS)</a> reported 15% YoY revenue growth to KRW1,187B, driven by the contribution of Plant 4, the full utilization of Plants 1–3, and biosimilar products.</li>
<li>The company has raised 2024 annual revenue growth guidance to 15–20% YoY from 10–15% earlier, driven by successful ramp-up of Plant 4 and favorable Fx movement.</li>
<li>The company has signed record-breaking CMO contract with an Asian pharmaceutical company, thereby bringing the company’s total new contract value for the year to more than $3.3B.</li>
</ul>


In 3Q24, Samsung Biologics (207940 KS) reported 15% YoY revenue growth to KRW1,187B, driven by the contribution of Plant 4, the full utilization of Plants 1–3, and biosimilar products.
The company has raised 2024 annual revenue growth guidance to 15–20% YoY from 10–15% earlier, driven by successful ramp-up of Plant 4 and favorable Fx movement.
The company has signed record-breaking CMO contract with an Asian pharmaceutical company, thereby bringing the company’s total new contract value for the year to more than $3.3B.


Samsung Biologics (207940 KS): 3Q Result Beat Expectation; Guidance Raise Amid Increasing Order Book

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

Korea Stock Exchange KOSPI 200 / Event-Driven

<ul>
<li>Since short selling was banned in November 2023, short interest has plunged in Korea as shorts were covered. Markets have not done much over the last 16 months though. </li>
<li>Foreign investor holdings have dropped from 32.05% in July to 28.57%. The top 25 stocks bought by foreign investors outperformed the top 25 stocks sold by 128% in 16 months.</li>
<li>There will be trade opportunities across indices, pref/ords, index migrations and deletions, potential market upgrades and overvalued stocks being sold.</li>
</ul>


Since short selling was banned in November 2023, short interest has plunged in Korea as shorts were covered. Markets have not done much over the last 16 months though. 
Foreign investor holdings have dropped from 32.05% in July to 28.57%. The top 25 stocks bought by foreign investors outperformed the top 25 stocks sold by 128% in 16 months.
There will be trade opportunities across indices, pref/ords, index migrations and deletions, potential market upgrades and overvalued stocks being sold.


Korea: Short Selling Is Back in March; Trade Ideas

<ul>
<li>Samsung C&amp;T’s holding company ratio is closing in on 50%, driven by the Biologics rally, which has Samsung on high alert for a forced conversion.</li>
<li>Watch Samsung's moves to avoid forced holding company status. The old Biologics-for-Electronics swap isn’t viable, so they’ll likely sell Biologics shares to lower the ratio.</li>
<li>Samsung C&amp;T might sell Biologics shares at a ₩80T market cap. They've boosted construction to manage assets and the holding ratio, but beyond ₩80T, risks increase.</li>
</ul>


Samsung C&amp;T’s holding company ratio is closing in on 50%, driven by the Biologics rally, which has Samsung on high alert for a forced conversion.
Watch Samsung's moves to avoid forced holding company status. The old Biologics-for-Electronics swap isn’t viable, so they’ll likely sell Biologics shares to lower the ratio.
Samsung C&amp;T might sell Biologics shares at a ₩80T market cap. They've boosted construction to manage assets and the holding ratio, but beyond ₩80T, risks increase.


Trading Plays on Samsung C&T’s Holding Company Shift and Biologics Share Sell-Off

South Korea

Samsung Biologics Co.,Ltd. manufactures bio-healthcare products. The Company develops, refines, and distributes biopharmaceutical products.

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Samsung Biologics (207940 KS)

4 Key Movers in TIGER Top 10 in June Reshuffle

This post breaks down June’s key passive event in the Korean market: the TIGER Top 10 rebalancing, with four heavy hitters in play.

Sanghyun Park