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>
<strong>The rebalancing cycle of the KODEX Secondary Battery ETF was changed from semi-annual to quarterly.</strong> Also, the rebalancing trading takes place for three trading days instead of one trading day.</li>
<li>
<strong>This passive impact will be different from the previous rebalancing.</strong> LG Energy and SK Innovation will likely experience a significant passive outflow. Then, most small-cap constituents will receive an inflow. </li>
<li>
<strong>Among the top weighting stocks, Samsung SDI and SKIET deserve attention</strong>. Sangsin Energy, E&amp;D, and TSI will face exclusion, while C&amp;I, Sang-A Frontec, and Enchem will likely join the ETF.</li>
</ul>



The rebalancing cycle of the KODEX Secondary Battery ETF was changed from semi-annual to quarterly. Also, the rebalancing trading takes place for three trading days instead of one trading day.

This passive impact will be different from the previous rebalancing. LG Energy and SK Innovation will likely experience a significant passive outflow. Then, most small-cap constituents will receive an inflow. 

Among the top weighting stocks, Samsung SDI and SKIET deserve attention. Sangsin Energy, E&amp;D, and TSI will face exclusion, while C&amp;I, Sang-A Frontec, and Enchem will likely join the ETF.


KODEX Battery ETF Rebalancing Cycle Changed to Quarterly: Preview for March Rebalancing

Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

Equity Capital Markets

<div class="content-highlight">
<p>Iljin Hysolus reduced its IPO price range. The company announced that it will reduce the IPO price range from 30,300 won to 37,300 won previously to 25,700 won to 34,300 won, respectively. This represents a decline of 8% to 15%.</p>
<p>The IPO deal size has been revised down to US$243 million to US$325 million. The expected market cap after the IPO is from 933 billion won (low) to 1,245 billion won (high). The book building for the institutional investors starts on 19 August 2021. </p>
<p><strong>Our revised base case valuation of Iljin Hysolus is implied market cap of 940 billion won or 25,898 won per share, which represents 1% higher than the low end of the IPO price range of 25,700 won. Given the lack of upside, we continue to maintain a NEGATIVE view of this IPO and we would avoid this IPO. </strong></p>
</div><table class="table table-striped">
<colgroup>
<col>
<col>
</colgroup>
<tbody>
<tr>
<td style="width: 240pt;">Deal Specifics of the Iljin Hysolus IPO (Revised):</td>
<td style="width: 238pt;"> </td>
</tr>
<tr>
<td style="width: 240pt;">Lead underwriters of the IPO: </td>
<td style="width: 238pt;">Mirae Asset Securities, Samsung Securities</td>
</tr>
<tr>
<td style="width: 240pt;">Expected IPO price per share: </td>
<td style="width: 238pt;">25,700 won (low)/34,300 won (high)</td>
</tr>
<tr>
<td style="width: 240pt;">Number of Shares for IPO:</td>
<td style="width: 238pt;">10.89m shares (7.26m new shares and 3.63m old shares)</td>
</tr>
<tr>
<td style="width: 240pt;">IPO base deal size: </td>
<td style="width: 238pt;">US$243 mn (low);  US$325 mn (high)</td>
</tr>
<tr>
<td style="width: 240pt;">Expected common shares outstanding, fully diluted (post-IPO):  </td>
<td style="width: 238pt;">36.31m shares</td>
</tr>
<tr>
<td style="width: 240pt;">Expected market cap after IPO:</td>
<td style="width: 238pt;">933 billion won (low)/1,245 billion won (high)</td>
</tr>
<tr>
<td style="width: 240pt;">Book open: </td>
<td style="text-align: left; width: 238pt;">19-Aug-21</td>
</tr>
<tr>
<td style="width: 240pt;">Book closed:</td>
<td style="text-align: left; width: 238pt;">20-Aug-21</td>
</tr>
<tr>
<td style="width: 240pt;">Listing date: </td>
<td style="text-align: left; width: 238pt;">TBD</td>
</tr>
<tr>
<td style="width: 240pt;">Source: Company data</td>
<td style="width: 238pt;"> </td>
</tr>
</tbody>
</table>


Iljin Hysolus reduced its IPO price range. The company announced that it will reduce the IPO price range from 30,300 won to 37,300 won previously to 25,700 won to 34,300 won, respectively. This represents a decline of 8% to 15%.
The IPO deal size has been revised down to US$243 million to US$325 million. The expected market cap after the IPO is from 933 billion won (low) to 1,245 billion won (high). The book building for the institutional investors starts on 19 August 2021. 
Our revised base case valuation of Iljin Hysolus is implied market cap of 940 billion won or 25,898 won per share, which represents 1% higher than the low end of the IPO price range of 25,700 won. Given the lack of upside, we continue to maintain a NEGATIVE view of this IPO and we would avoid this IPO. 







Deal Specifics of the Iljin Hysolus IPO (Revised):
 


Lead underwriters of the IPO: 
Mirae Asset Securities, Samsung Securities


Expected IPO price per share: 
25,700 won (low)/34,300 won (high)


Number of Shares for IPO:
10.89m shares (7.26m new shares and 3.63m old shares)


IPO base deal size: 
US$243 mn (low);  US$325 mn (high)


Expected common shares outstanding, fully diluted (post-IPO):  
36.31m shares


Expected market cap after IPO:
933 billion won (low)/1,245 billion won (high)


Book open: 
19-Aug-21


Book closed:
20-Aug-21


Listing date: 
TBD


Source: Company data
 




<p>Our base case valuation of Iljin Hysolus is implied market cap of 817.6 billion won or 22,517 won per share. This represents 26% lower than the low end of the IPO price range of 30,300 won. Given the lower target price versus the IPO price range, we would AVOID this deal. </p><div><p>Established in 2012, Iljin Hysolus is a hydrogen mobility-related parts company that provides hydrogen fuel tanks and modules based on hydrogen storage technology. The company supplied hydrogen fuel tanks for the first time in the industry to the Tucson hydrogen electric vehicle, which Hyundai Motors successfully commercialized in 2014. Since then, it has been supplying hydrogen fuel tanks to hydrogen fuel cell vehicles (FCEV) 'Nexo' and hydrogen buses. </p></div>

Our base case valuation of Iljin Hysolus is implied market cap of 817.6 billion won or 22,517 won per share. This represents 26% lower than the low end of the IPO price range of 30,300 won. Given the lower target price versus the IPO price range, we would AVOID this deal. Established in 2012, Iljin Hysolus is a hydrogen mobility-related parts company that provides hydrogen fuel tanks and modules based on hydrogen storage technology. The company supplied hydrogen fuel tanks for the first time in the industry to the Tucson hydrogen electric vehicle, which Hyundai Motors successfully commercialized in 2014. Since then, it has been supplying hydrogen fuel tanks to hydrogen fuel cell vehicles (FCEV) 'Nexo' and hydrogen buses. 

Cross Asset Strategy

<p>The Korea Exchange announced its KOSDAQ150 and KRX300 indices rebalances today. There were 17 new additions and 17 deletions for KOSDAQ150. </p><p>Most of the stocks that were expected to be included in KOSDAQ 150 were officially included in the rebalance. However there were a few surprises. For example <a href="https://www.smartkarma.com/entities/nanos-co-ltd" target="_blank" data-smartkarma-citation="entities:16796:1" rel="noopener">Nanos Co Ltd (151910 KS),</a>which was one of the stocks that was expected to be included in KOSDAQ150, did not get included in this indext this time. On the other hand, the following stocks including <a href="https://www.smartkarma.com/entities/sang-a-frontec-co-ltd" target="_blank" data-smartkarma-citation="entities:20692:1" rel="noopener">Sang A Frontec (089980 KS)</a>, Novarex (194700 KS(, CIS (222080 KS), MedPacto (215980 KS), <a href="https://www.smartkarma.com/entities/koreacenter-com-co-ltd" target="_blank" data-smartkarma-citation="entities:28329:1" rel="noopener">Koreacenter.com Co Ltd (290510 KS)</a>, and Soulbrain (357780 KS) which were not on the top of the lists of getting selected into the KOSDAQ150 index by the locals, were formally selected be part of the new KOSDAQ150 inclusions.  </p><p>The Korea Exchange also made changes to the KRX300 index. Although the KRX300 index is not currently as important as KOSPI200 and KOSDAQ150 indices, it is increasingly gaining in importance among the local institutional investors. The KRX300 had 33 new additions and 35 deletions. </p>

The Korea Exchange announced its KOSDAQ150 and KRX300 indices rebalances today. There were 17 new additions and 17 deletions for KOSDAQ150. Most of the stocks that were expected to be included in KOSDAQ 150 were officially included in the rebalance. However there were a few surprises. For example Nanos Co Ltd (151910 KS),which was one of the stocks that was expected to be included in KOSDAQ150, did not get included in this indext this time. On the other hand, the following stocks including Sang A Frontec (089980 KS), Novarex (194700 KS(, CIS (222080 KS), MedPacto (215980 KS), Koreacenter.com Co Ltd (290510 KS), and Soulbrain (357780 KS) which were not on the top of the lists of getting selected into the KOSDAQ150 index by the locals, were formally selected be part of the new KOSDAQ150 inclusions.  The Korea Exchange also made changes to the KRX300 index. Although the KRX300 index is not currently as important as KOSPI200 and KOSDAQ150 indices, it is increasingly gaining in importance among the local institutional investors. The KRX300 had 33 new additions and 35 deletions. 

KOSDAQ150 and KRX300 Indices Rebalances (Overlapping Additions & Deletions)

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

Brian Freitas

Pan-Asia Index Rebalances/ Events/ Delta One

<p>The KRX has announced the list of inclusions and exclusions to the KOSDAQ150 Index today. The rebalance is effective after the close of trading on 10 December.</p><p>There are 17 inclusions and 17 exclusions in the December 2020 review with an estimated one-way turnover of 7.71%.</p><p>The inclusions and exclusions are:</p><table class="table table-striped">
<colgroup><col span="4"></colgroup>
<tbody>
<tr>
<td colspan="2" style="text-align: center; width: 96pt;"><h3>Additions</h3></td>
<td colspan="2" style="text-align: center; width: 96pt;"><h3>Deletions</h3></td>
</tr>
<tr>
<td style="text-align: center;"><strong>Code</strong></td>
<td style="text-align: center;"><strong>Name</strong></td>
<td style="text-align: center;"><strong>Code</strong></td>
<td style="text-align: center;"><strong>Name</strong></td>
</tr>
<tr>
<td>034950.KQ</td>
<td>Korea Ratings Corp</td>
<td>014620.KQ</td>
<td>Sung Kwang Bend Co Ltd</td>
</tr>
<tr>
<td>078600.KQ</td>
<td>Daejoo Electronic Materials Co Ltd</td>
<td>015750.KQ</td>
<td>Sungwoo Hitech Co Ltd</td>
</tr>
<tr>
<td>089980.KQ</td>
<td>Sang-A Frontec Co Ltd</td>
<td>023160.KQ</td>
<td>TK Corp</td>
</tr>
<tr>
<td>092190.KQ</td>
<td>Seoul Viosys Co Ltd</td>
<td>039840.KQ</td>
<td>Dio Corp</td>
</tr>
<tr>
<td>100130.KQ</td>
<td>Dongkuk Structures &amp; Construction Co Ltd</td>
<td>041190.KQ</td>
<td>Woori Technology Investment Co Ltd</td>
</tr>
<tr>
<td>101490.KQ</td>
<td>S&amp;S Tech Corp</td>
<td>041830.KQ</td>
<td>InBody Co Ltd</td>
</tr>
<tr>
<td>131370.KQ</td>
<td>Rsupport Co Ltd</td>
<td>043150.KQ</td>
<td>Value Added Technology Co Ltd</td>
</tr>
<tr>
<td>137400.KQ</td>
<td>People &amp; Technology Inc</td>
<td>047310.KQ</td>
<td>Power Logics</td>
</tr>
<tr>
<td>194700.KQ</td>
<td>Novarex Co Ltd</td>
<td>049950.KQ</td>
<td>MeereCompany Inc</td>
</tr>
<tr>
<td>204270.KQ</td>
<td>JNTC Co Ltd</td>
<td>051500.KQ</td>
<td>CJ Freshway Corp</td>
</tr>
<tr>
<td>222080.KQ</td>
<td>Creative &amp; Innovative System Corp</td>
<td>063570.KQ</td>
<td>Nice Total Cash Management Co Ltd</td>
</tr>
<tr>
<td>235980.KQ</td>
<td>MedPacto Inc</td>
<td>080160.KQ</td>
<td>Modetour Network Inc</td>
</tr>
<tr>
<td>290510.KQ</td>
<td>KoreaCenter Co Ltd</td>
<td>084110.KQ</td>
<td>Huons Global Co Ltd</td>
</tr>
<tr>
<td>290650.KQ</td>
<td>L&amp;C Bio Co Ltd</td>
<td>089600.KQ</td>
<td>Nasmedia Co Ltd</td>
</tr>
<tr>
<td>293490.KQ</td>
<td>Kakao Games Corp</td>
<td>115960.KQ</td>
<td>Yonwoo Co Ltd</td>
</tr>
<tr>
<td>294140.KQ</td>
<td>Lemon Co Ltd</td>
<td>228760.KQ</td>
<td>Genomictree Inc</td>
</tr>
<tr>
<td>357780.KQ</td>
<td>SoulBrain Co Ltd</td>
<td>282880.KQ</td>
<td>CowinTech Co Ltd</td>
</tr>
</tbody>
</table><p>There are 11 trading days to implementation. There are 2 additions that have more than 3 days of ADV to trade while there are 9 deletions that have more than 3 days of ADV to trade. Things could get interesting over the next couple of weeks.</p>

The KRX has announced the list of inclusions and exclusions to the KOSDAQ150 Index today. The rebalance is effective after the close of trading on 10 December.There are 17 inclusions and 17 exclusions in the December 2020 review with an estimated one-way turnover of 7.71%.The inclusions and exclusions are:



Additions
Deletions


Code
Name
Code
Name


034950.KQ
Korea Ratings Corp
014620.KQ
Sung Kwang Bend Co Ltd


078600.KQ
Daejoo Electronic Materials Co Ltd
015750.KQ
Sungwoo Hitech Co Ltd


089980.KQ
Sang-A Frontec Co Ltd
023160.KQ
TK Corp


092190.KQ
Seoul Viosys Co Ltd
039840.KQ
Dio Corp


100130.KQ
Dongkuk Structures &amp; Construction Co Ltd
041190.KQ
Woori Technology Investment Co Ltd


101490.KQ
S&amp;S Tech Corp
041830.KQ
InBody Co Ltd


131370.KQ
Rsupport Co Ltd
043150.KQ
Value Added Technology Co Ltd


137400.KQ
People &amp; Technology Inc
047310.KQ
Power Logics


194700.KQ
Novarex Co Ltd
049950.KQ
MeereCompany Inc


204270.KQ
JNTC Co Ltd
051500.KQ
CJ Freshway Corp


222080.KQ
Creative &amp; Innovative System Corp
063570.KQ
Nice Total Cash Management Co Ltd


235980.KQ
MedPacto Inc
080160.KQ
Modetour Network Inc


290510.KQ
KoreaCenter Co Ltd
084110.KQ
Huons Global Co Ltd


290650.KQ
L&amp;C Bio Co Ltd
089600.KQ
Nasmedia Co Ltd


293490.KQ
Kakao Games Corp
115960.KQ
Yonwoo Co Ltd


294140.KQ
Lemon Co Ltd
228760.KQ
Genomictree Inc


357780.KQ
SoulBrain Co Ltd
282880.KQ
CowinTech Co Ltd


There are 11 trading days to implementation. There are 2 additions that have more than 3 days of ADV to trade while there are 9 deletions that have more than 3 days of ADV to trade. Things could get interesting over the next couple of weeks.

KOSDAQ150 Index Rebalance: Lots of Changes, Big Turnover, High Impact

South Korea

Sang-A Frontec Co., Ltd. produces various fluoroplastic and functional engineering plastic products for a wide range of industries.

Price Gauge
52-week Range	0.00 - 0.00
Market Cap (USDm)	0.00
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Sang A Frontec (089980 KS)

KODEX Battery ETF Rebalancing Cycle Changed to Quarterly: Preview for March Rebalancing

The rebalancing cycle of the KODEX Secondary Battery ETF was changed from semi-annual to quarterly. This post previews the upcoming rebalancing...

Sanghyun Park

Iljin Hysolus Reduces IPO Price Range

Iljin Hysolus reduced its IPO price range. The company announced that it will reduce the IPO price range to 25,700 won to 34,300 won. We continue...

Douglas Kim

Iljin Hysolus IPO Valuation Analysis

Our base case valuation of Iljin Hysolus is implied market cap of 817.6 billion won or 22,517 won per share. Given the lower target price versus...

Douglas Kim

KOSDAQ150 and KRX300 Indices Rebalances (Overlapping Additions & Deletions)

We highlight the KOSDAQ150 and KRX300 indices rebalances. There are some interesting new names, especially among those that are over lapping in...

Douglas Kim

KOSDAQ150 Index Rebalance: Lots of Changes, Big Turnover, High Impact

There are 17 changes to the KOSDAQ150 index and the turnover is estimated at 7.71%. There are a lot of stocks that have over 3 days of ADV to trade...

Brian Freitas

Price Gauge

52-week Range

Market Cap (USDm)

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