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>Got surprised by KRX adding POSCO Holdings to the Battery Index. Normally predictable rebalancing went off-script with this unexpected move.</li>
<li>POSCO Holdings, not Posco Future M, replaced Ecopro BM. Plus, Alteogen Inc is replacing SK Biopharmaceuticals in the BBIG, driving notable flow.</li>
<li>Consider a day trading long POSCO Holdings and short Ecopro BM. Also, a long-short futures basket could be worth exploring for names with big passive flows.</li>
</ul>


Got surprised by KRX adding POSCO Holdings to the Battery Index. Normally predictable rebalancing went off-script with this unexpected move.
POSCO Holdings, not Posco Future M, replaced Ecopro BM. Plus, Alteogen Inc is replacing SK Biopharmaceuticals in the BBIG, driving notable flow.
Consider a day trading long POSCO Holdings and short Ecopro BM. Also, a long-short futures basket could be worth exploring for names with big passive flows.


Key Flow Trading Opportunities After KRX Suddenly Added POSCO Holdings to the BBIG Battery Mix

<ul>
<li>The KRX BBIG's concentrated weight and top three replacements still attract significant flow trading interest despite a decline in AUM.</li>
<li>In the Battery Sector, Posco Future M will replace Ecopro BM, while in the Bio Sector, Alteogen will replace SK Biopharmaceuticals.</li>
<li>A significant single-day passive flow is expected, especially for SK Biopharm. Additionally, a day trading setup with Posco Future M and Ecopro BM will likely attract substantial interest.</li>
</ul>


The KRX BBIG's concentrated weight and top three replacements still attract significant flow trading interest despite a decline in AUM.
In the Battery Sector, Posco Future M will replace Ecopro BM, while in the Bio Sector, Alteogen will replace SK Biopharmaceuticals.
A significant single-day passive flow is expected, especially for SK Biopharm. Additionally, a day trading setup with Posco Future M and Ecopro BM will likely attract substantial interest.


KRX’s September Major Rebalancing Events: Why We Should Focus on KRX BBIG

Global Healthcare Analyst

Tina Banerjee

Equity Bottom-Up

SK Biopharmaceuticals   / Equity Bottom-Up

<ul>
<li>In 1Q24, <a href="https://www.smartkarma.com/entities/sk-biopharmaceuticals-co-ltd" target="_blank" data-smartkarma-citation="entities:28966:1" rel="noopener">SK Biopharmaceuticals (326030 KS)</a> posted Xcopri U.S. sales of KRW90.9B, up 69% YoY and 17% QoQ. The company remains confident to meet annual sales guidance of KRW390–416B.</li>
<li>1Q24 operating profit reached KRW10B from an operating loss of KRW23B in 1Q23. The company aims to achieve profitability throughout 2024.</li>
<li>The company is seeking a second product to strengthen its U.S. and global business. Xcopri also has potential for indication expansion in near future.</li>
</ul>


In 1Q24, SK Biopharmaceuticals (326030 KS) posted Xcopri U.S. sales of KRW90.9B, up 69% YoY and 17% QoQ. The company remains confident to meet annual sales guidance of KRW390–416B.
1Q24 operating profit reached KRW10B from an operating loss of KRW23B in 1Q23. The company aims to achieve profitability throughout 2024.
The company is seeking a second product to strengthen its U.S. and global business. Xcopri also has potential for indication expansion in near future.


SK Biopharmaceuticals (326030 KS): Resumption of US Sales Growth Raises Hope for Annual Profit

<ul>
<li>In 3Q23, <a href="https://www.smartkarma.com/entities/sk-biopharmaceuticals-co-ltd" target="_blank" data-smartkarma-citation="entities:28966:1" rel="noopener">SK Biopharmaceuticals (326030 KS)</a> reported Xcopri U.S. revenue of KRW75.7 billion, up 60% YoY and 19% QoQ, driven by accelerating new patients being treated with the drug.</li>
<li>In 3Q23, operating loss narrowed sequentially to KRW10.7 billion. However, operating loss widened compared to year-ago period, mainly due to higher operating costs of the company’s U.S. subsidiary.</li>
<li>The company is on track to report a profitable Q4. With continued momentum, Xcopri is expected to hit blockbuster status by generating revenue of $1B in the U.S. in 2029.</li>
</ul>


In 3Q23, SK Biopharmaceuticals (326030 KS) reported Xcopri U.S. revenue of KRW75.7 billion, up 60% YoY and 19% QoQ, driven by accelerating new patients being treated with the drug.
In 3Q23, operating loss narrowed sequentially to KRW10.7 billion. However, operating loss widened compared to year-ago period, mainly due to higher operating costs of the company’s U.S. subsidiary.
The company is on track to report a profitable Q4. With continued momentum, Xcopri is expected to hit blockbuster status by generating revenue of $1B in the U.S. in 2029.


SK Biopharmaceuticals (326030 KS): Xcopri Sales Hit All-Time High in 3Q23; Operating Loss Narrowed

Thematic (Sector/Industry)

<ul>
<li>CSPC Pharmaceutical entered into an exclusive license agreement with AstraZeneca for the global development, manufacture, and commercialization bad cholesterol lowering drug candidate YS2302018.</li>
<li>Ono Pharmaceutical entered into a license agreement with LigaChem Biosciences for LCB97, a pre-clinical stage antibody-drug conjugate (ADC) aimed at being a first-in-class drug in the field of solid tumors.</li>
<li>The U.S. International Trade Commission (ITC) has issued final ruling in favor of Hugel. This should accelerate Hugel’s business expansion in the U.S.</li>
</ul>


CSPC Pharmaceutical entered into an exclusive license agreement with AstraZeneca for the global development, manufacture, and commercialization bad cholesterol lowering drug candidate YS2302018.
Ono Pharmaceutical entered into a license agreement with LigaChem Biosciences for LCB97, a pre-clinical stage antibody-drug conjugate (ADC) aimed at being a first-in-class drug in the field of solid tumors.
The U.S. International Trade Commission (ITC) has issued final ruling in favor of Hugel. This should accelerate Hugel’s business expansion in the U.S.


APAC Healthcare Weekly (Oct 13)- CSPC Pharma, Hugel, Astellas, Ono Pharma, and Hanmi Pharm

South Korea

SK Biopharmaceuticals Co., Ltd. researches and develops new drugs. The Company develops and markets brain disorders treatment drugs, central nervous system disorders treatment drugs, and other products. SK Biopharmaceuticals markets its products worldwide.

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SK Biopharmaceuticals (326030 KS)

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