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>Youlchon Chemical's CFD balance accounts for 3.54% of SO, with approximately 2x leverage trading. It is one of the few in the top CFD balance list that can be short-sold.</li>
<li>Our primary concern should lie with the upcoming December rebalancing of the KOSPI 200 index. Youlchon Chemical finds itself perilously close to the borderline within the Materials sector.</li>
<li>When proactive flow trading targeting KOSPI 200 is set to influence prices early October, we must remain vigilant regarding the potential trades aimed at exploiting a CFD balance squeeze.</li>
</ul>


Youlchon Chemical's CFD balance accounts for 3.54% of SO, with approximately 2x leverage trading. It is one of the few in the top CFD balance list that can be short-sold.
Our primary concern should lie with the upcoming December rebalancing of the KOSPI 200 index. Youlchon Chemical finds itself perilously close to the borderline within the Materials sector.
When proactive flow trading targeting KOSPI 200 is set to influence prices early October, we must remain vigilant regarding the potential trades aimed at exploiting a CFD balance squeeze.


A Fresh Short-Selling Target in Korea: Youlchon Chemical

Daejoo Electronic Materials / Event-Driven

<ul>
<li>The possibility of experiencing a CFD margin call is a genuine and persistent concern. Even a small trigger causes selling pressure to intensify and results in a rapid downward trend.</li>
<li>The counter that the local market is closely monitoring is JPM. The selling pressure from the JPM counter since May 8th has exhibited an abnormal pattern. </li>
<li>Eight names are screened. They are KOSPI 200/KOSDAQ 150 constituents with JPM's net selling volume to SO being 0.2% or higher, and a margin-equity ratio of 3% or higher.</li>
</ul>


The possibility of experiencing a CFD margin call is a genuine and persistent concern. Even a small trigger causes selling pressure to intensify and results in a rapid downward trend.
The counter that the local market is closely monitoring is JPM. The selling pressure from the JPM counter since May 8th has exhibited an abnormal pattern. 
Eight names are screened. They are KOSPI 200/KOSDAQ 150 constituents with JPM's net selling volume to SO being 0.2% or higher, and a margin-equity ratio of 3% or higher.


The Core of CFD Margin Call Risk May Lie in the JPM Counter, Not SG: Potentially Infected Names

Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

<ul>
<li>In this insight, we discuss two stocks in Korea, Dong Yang P&amp;F and Shindaeyang Paper, whose share prices declined sharply on 12 May.</li>
<li>It appears that the main culprit behind their collapse in share price appears to be unwinding of the excessive leverage (especially CFD derivatives trading).</li>
<li>Post the sharp decline in their share price for DYPNF and Shindeyang Paper on 12 May, further downside is likely on these stocks in the coming weeks.</li>
</ul>


In this insight, we discuss two stocks in Korea, Dong Yang P&amp;F and Shindaeyang Paper, whose share prices declined sharply on 12 May.
It appears that the main culprit behind their collapse in share price appears to be unwinding of the excessive leverage (especially CFD derivatives trading).
Post the sharp decline in their share price for DYPNF and Shindeyang Paper on 12 May, further downside is likely on these stocks in the coming weeks.


A Crash in 2 More Korean Stocks Related to CFD Derivatives: Margin Calls Again

Equity Capital Markets

<ul>
<li>Our base case valuation of Tailim Paper is target price of 19,692 won, which is at the low end of the IPO price range. We would pass on this IPO. </li>
<li>Our target price of 19,692 won is based on 5.8x EV/EBITDA using 2021 EBITDA. The EV/EBITDA multiple of 5.8x is at a 40% premium to the comps' average. </li>
<li>Tailim Paper has higher sales growth rate, operating margins, and ROE than its peers. However, it has a weaker balance sheet than its peers. </li>
</ul>


Our base case valuation of Tailim Paper is target price of 19,692 won, which is at the low end of the IPO price range. We would pass on this IPO. 
Our target price of 19,692 won is based on 5.8x EV/EBITDA using 2021 EBITDA. The EV/EBITDA multiple of 5.8x is at a 40% premium to the comps' average. 
Tailim Paper has higher sales growth rate, operating margins, and ROE than its peers. However, it has a weaker balance sheet than its peers. 


South Korea

Shindaeyang Paper Co., Ltd. manufactures corrugated cardboard paper, craft liner paper, and test liner paper.  The Company provides its products to the domestic and overseas corrugated board box manufacturers.

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Shindaeyang Paper (016590 KS)

A Fresh Short-Selling Target in Korea: Youlchon Chemical

This post discovers and discusss how Youlchon Chemical, with a high CFD balance and a high likelihood of being excluded from KOSPI 200, could...

Sanghyun Park

The Core of CFD Margin Call Risk May Lie in the JPM Counter, Not SG: Potentially Infected Names

This core of CFD margin call risk may lie in the JPM counter, not SG. This post presents eight names that are targetable for short-selling.

Sanghyun Park

Tailim Paper IPO Valuation Analysis

Our base case valuation of Tailim Paper is target price of 19,692 won. We would pass on this IPO. Tailim Paper is the market leader of domestic...

Douglas Kim

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