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>The local street hears KRX has bumped it up to 14.68%. With the 1% rounding applied, it becomes 15%.</li>
<li>It is extremely rare for a Fast Entry to come in with a float market cap of +₩10T. So, we will see significant weight adjustments for the other constituents.</li>
<li>As we move towards the implementation date, we can consider basket-shorting those high-impact names for LG Energy's long hedge.</li>
</ul>


The local street hears KRX has bumped it up to 14.68%. With the 1% rounding applied, it becomes 15%.
It is extremely rare for a Fast Entry to come in with a float market cap of +₩10T. So, we will see significant weight adjustments for the other constituents.
As we move towards the implementation date, we can consider basket-shorting those high-impact names for LG Energy's long hedge.


LG Energy's KOSPI 200 Float Is 15%: Weight Adjustment Trading for Other Constituents

Taiwan Tech Focused Senior Analyst

Patrick Liao

Equity Bottom-Up

ASM Pacific Technology / Equity Bottom-Up

<ul>
<li>The 4Q21 revenue is HK$6.2bn (US$796.3mn), a 43.9% increase YoY. GM 41.3% is a 1,051bps increase YoY. </li>
<li>Some memory market customers, like Samsung and Hynix, are adopting ASMP's mainstream wire bond and advanced packaging tools for high volume manufacturing requirements. </li>
<li>Full year 2021 dividend per share of HK$3.90, a 44.4% YoY increase.</li>
</ul>


The 4Q21 revenue is HK$6.2bn (US$796.3mn), a 43.9% increase YoY. GM 41.3% is a 1,051bps increase YoY. 
Some memory market customers, like Samsung and Hynix, are adopting ASMP's mainstream wire bond and advanced packaging tools for high volume manufacturing requirements. 
Full year 2021 dividend per share of HK$3.90, a 44.4% YoY increase.


ASMP (522.HK): 4Q21 Results/ 1Q22 Outlook- It’s a Record Q1 at the Mid-Point of Guidance.

Pan-Asia Index Rebalances/ Events/ Delta One, Periscope Analytics

Brian Freitas

Pan-Asia Index Rebalances/ Events/ Delta One

<ul>
<li>KRX has announced the Fast Entry inclusion of <a href="https://www.smartkarma.com/entities/lg-energy-solution" target="_blank" data-smartkarma-citation="entities:33464:1" rel="noopener">LG Energy Solution (373220 KS)</a> in the KOSPI200 Index at the close on 10 March. <a href="https://www.smartkarma.com/entities/dongwon-f-b-co-ltd" target="_blank" data-smartkarma-citation="entities:3274:1" rel="noopener">Dongwon F&amp;B (049770 KS)</a> will be deleted.</li>
<li>
<a href="https://www.smartkarma.com/entities/lg-energy-solution" target="_blank" data-smartkarma-citation="entities:33464:1" rel="noopener">LG Energy Solution (373220 KS)</a>'s inclusion in the KRX Secondary Battery Index and the BBIG Index should be announced in the next few days. That will add to passive buying.</li>
<li>Local institutions have been buyers on <a href="https://www.smartkarma.com/entities/lg-energy-solution" target="_blank" data-smartkarma-citation="entities:33464:1" rel="noopener">LG Energy Solution (373220 KS)</a> since listing while retail and foreign investors have been sellers. There is a biggish lock up expiry coming up.</li>
</ul>


KRX has announced the Fast Entry inclusion of LG Energy Solution (373220 KS) in the KOSPI200 Index at the close on 10 March. Dongwon F&amp;B (049770 KS) will be deleted.

LG Energy Solution (373220 KS)'s inclusion in the KRX Secondary Battery Index and the BBIG Index should be announced in the next few days. That will add to passive buying.
Local institutions have been buyers on LG Energy Solution (373220 KS) since listing while retail and foreign investors have been sellers. There is a biggish lock up expiry coming up.


KOSPI200 Index Rebalance (March): LG Energy IN; Dongwon F&B Out

<ul>
<li>There are 71 interim dividend stocks on KOSPI and KOSDAQ. Of these, 9 stocks pay quarterly dividends: 7 KOSPI and 2 KOSDAQ.</li>
<li>All except POSCO and Shinhan Financial employ an equal quarterly split. As expected, SKT offers the highest quarterly dividend yield. At the last closing price, it is 1.55%.</li>
<li>Since the absolute yield level is tight, it may not be appropriate to consider a dividend arb play, except for SKT. Nevertheless, it may act as short-term price momentum.</li>
</ul>


There are 71 interim dividend stocks on KOSPI and KOSDAQ. Of these, 9 stocks pay quarterly dividends: 7 KOSPI and 2 KOSDAQ.
All except POSCO and Shinhan Financial employ an equal quarterly split. As expected, SKT offers the highest quarterly dividend yield. At the last closing price, it is 1.55%.
Since the absolute yield level is tight, it may not be appropriate to consider a dividend arb play, except for SKT. Nevertheless, it may act as short-term price momentum.


KOSPI/KOSDAQ Quarterly Dividend Stocks: DPS & Yield Estimations

United Microelectron Sp Adr / Equity Bottom-Up

<ul>
<li>To our understanding, UMC and Samsung have dealt the 28nm wafer demand and have lifted 28nm wafer price in 2Q22.</li>
<li>We think it’s possible to lift the wafer price again in 2H22 if TSMC decides to further lift wafer price recently.</li>
<li>Entering the 5G era, there could be more demand in several aspects, like data storage, data transmission and processing, smartphone, and PC/NB upgrade and etc.</li>
</ul>


To our understanding, UMC and Samsung have dealt the 28nm wafer demand and have lifted 28nm wafer price in 2Q22.
We think it’s possible to lift the wafer price again in 2H22 if TSMC decides to further lift wafer price recently.
Entering the 5G era, there could be more demand in several aspects, like data storage, data transmission and processing, smartphone, and PC/NB upgrade and etc.


UMC (UMC.US; 2303.TT): Although It Could Be ~1% ASP Changed Only, but the Price Is Lifted in 2Q22.

South Korea

Samsung Electronics Co., Ltd. manufactures a wide range of consumer and industrial electronic equipment and products such as semiconductors, personal computers, peripherals, monitors, televisions, and home appliances including air conditioners and microwave ovens. The Company also produces Internet access network systems and telecommunications equipment including mobile phones.

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Samsung Electronics (SMSN LI)

LG Energy's KOSPI 200 Float Is 15%: Weight Adjustment Trading for Other Constituents

KRX has bumped up LG Energy's float to 15%. As a result, we will see a more substantial passive impact on LG Energy. Also, we should see...

Sanghyun Park

ASMP (522.HK): 4Q21 Results/ 1Q22 Outlook- It’s a Record Q1 at the Mid-Point of Guidance.

The ASMP indicated Q1 2022 to be between US$640 million to US$690 million. It’s a record Q1 at the mid-point of guidance.

Patrick Liao

KOSPI200 Index Rebalance (March): LG Energy IN; Dongwon F&B Out

LG Energy will be added to the KOSPI200 Index at the close on 10 March, while Dongwon F&B will be deleted. There will be a large KOSPI200 basket...

Brian Freitas

KOSPI/KOSDAQ Quarterly Dividend Stocks: DPS & Yield Estimations

This post lists all 71 interim dividend stocks, of which 9 are quarterly dividend stocks. It then estimates DPS and dividend yield of these 9...

Sanghyun Park

UMC (UMC.US; 2303.TT): Although It Could Be ~1% ASP Changed Only, but the Price Is Lifted in 2Q22.

Considering Samsung 28nm demand fraction to UMC’s total revenue, we estimate UMC's price should be lifted for ~1% and GM might increase to be ~41%...

Patrick Liao

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