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

Strong earnings stocks can protect investors against inflation risk.So, I examined the first-quarter operating profits of all the KOSPI stocks and by how far they beat the local street consensus (compiled by FnGuide).For this, I used the following filters:
1Q21 operating profit beat the local market consensus by 10% or higher.
1Q21 operating profit exceeded ₩50B.
1Q21 operating profit increased year over year.
A total of 59 KOSPI stocks satisfy these filters, as shown below, which potentially serve as an inflation-hedged stock for a basket trade.









Name
Ticker
1Q21 operating profit
1Q21 consensus operating profit
Earnings surprise as a % of consensus


KB Financial Group Inc
105560
₩1,747.2B
₩1,450.5B
20.46%


Shinhan Financial Group Co., Ltd.
055550
₩1,682.4B
₩1,477.7B
13.85%


POSCO
005490
₩1,552.4B
₩1,286.8B
20.64%


LG Electronics Inc.
066570
₩1,516.6B
₩1,202.6B
26.11%


LG Chem Ltd
051910
₩1,408.1B
₩1,009.6B
39.47%


Samsung Life Insurance co., Ltd
032830
₩1,334.4B
₩858.8B
55.38%


Hana Financial Group Inc
086790
₩1,075.8B
₩967.3B
11.21%


LG Corp
003550
₩1,000.9B
₩704.0B
42.17%


Woori Financial Group Inc
316140
₩933.3B
₩803.4B
16.17%


Hanwha Corp
000880
₩848.5B
₩365.7B
131.99%


Industrial Bank of Korea
024110
₩780.3B
₩636.7B
22.56%


GS Holdings Corp
078930
₩706.4B
₩483.3B
46.17%


S Oil Corp
010950
₩629.2B
₩340.9B
84.60%


Lotte Chemical Corp
011170
₩623.8B
₩494.7B
26.10%


Kumho Petro Chemical Co Ltd
011780
₩612.5B
₩445.3B
37.56%


Hyundai Heavy Industries Holdings Co Ltd
267250
₩534.3B
₩300.7B
77.69%


SK Innovation Co Ltd
096770
₩502.5B
₩378.2B
32.87%


KT Corp
030200
₩444.2B
₩386.9B
14.80%


Samsung Securities Co Ltd
016360
₩399.4B
₩338.8B
17.87%


SK Telecom Co Ltd
017670
₩388.8B
₩345.8B
12.44%


CJ Cheiljedang Corp
097950
₩385.1B
₩327.5B
17.58%


NH Investment &amp; Securities Co Ltd
005940
₩374.4B
₩300.0B
24.82%


Hyundai Steel Co
004020
₩303.9B
₩174.8B
73.88%


Samsung C&amp;T Corp
028260
₩302.6B
₩231.6B
30.67%


Doosan Infracore Co Ltd
042670
₩295.4B
₩242.0B
22.04%


MERITZ SECURITIES CO LTD
008560
₩284.7B
₩221.0B
28.80%


LG Uplus Corp
032640
₩275.6B
₩237.5B
16.05%


Hanwha Solutions Corp
009830
₩254.6B
₩229.1B
11.12%


Hyosung TNC Corp
298020
₩246.8B
₩185.5B
33.05%


Daewoo Engineering &amp; Construction Co Ltd
047040
₩229.4B
₩150.1B
52.79%


Samsung SDS Co Ltd
018260
₩217.1B
₩194.7B
11.50%


Hyundai Engineering &amp; Construction Co.
000720
₩200.9B
₩171.3B
17.30%


DL E&amp;C Ord Shs
375500
₩199.8B
₩154.5B
29.29%


Amorepacific Group
002790
₩197.7B
₩146.3B
35.10%


Hankook Tire &amp; Technology Co Ltd
161390
₩186.0B
₩166.4B
11.82%


Samsung Card Co Ltd
029780
₩185.3B
₩149.9B
23.60%


DGB Financial Group Co Ltd
139130
₩178.4B
₩159.9B
11.58%


JB Financial Group Co Ltd
175330
₩177.8B
₩151.6B
17.35%


Amorepacific Corp
090430
₩176.2B
₩146.6B
20.20%


Doosan Bobcat Inc
241560
₩171.3B
₩120.3B
42.42%


Coway Co Ltd
021240
₩170.7B
₩150.0B
13.82%


Shinsegae Inc
004170
₩123.6B
₩89.2B
38.53%


E-Mart Inc
139480
₩123.2B
₩111.7B
10.30%


LG International Corp
001120
₩113.3B
₩69.7B
62.60%


Samsung Engineering Co Ltd
028050
₩107.3B
₩92.8B
15.62%


Hyosung Corp
004800
₩100.6B
₩70.0B
43.76%


Hyosung Advanced Materials Corp
298050
₩83.4B
₩62.6B
33.17%


Hyundai Construction Equipment Co Ltd
267270
₩79.7B
₩52.2B
52.83%


KCC Corp
002380
₩77.4B
₩53.0B
45.94%


SK Biopharmaceuticals Co Ltd
326030
₩75.9B
₩56.3B
34.87%


Mando Corp
204320
₩71.9B
₩63.4B
13.29%


F&amp;F Co., Ltd
007700
₩70.0B
₩33.7B
107.99%


Kolon Industries Inc
120110
₩69.1B
₩55.1B
25.40%


Dongwon Industries Co., Ltd
006040
₩68.1B
₩59.3B
14.91%


Hanwha Aerospace Co Ltd
012450
₩65.9B
₩34.4B
91.40%


Hyundai Department Store Co Ltd
069960
₩65.0B
₩57.9B
12.28%


POONGSAN CORPORATION
103140
₩62.4B
₩44.8B
39.35%


Hyosung Chemical Corp
298000
₩61.1B
₩48.9B
24.92%


KEPCO Plant Service &amp; Engineering Co Ltd
051600
₩56.4B
₩30.2B
86.94%

Source: KRX &amp; FnGuide



Earnings Surprise KOSPI Stocks Potentially Hedging Against Inflation for Basket & Pairs Trades

The second batch of the lockup releases hit the market today on Monday.3,118,610 shares represent 4.08% of the SO and 24.71% of the offering allocation, bringing up the float total from 12.11% to 16.19%.This would be the first real overhang test on the price. <table class="table table-striped">
<colgroup>
<col width="100">
<col width="100">
<col width="100">
<col width="100">
<col width="100">
<col width="100">
</colgroup>
<tbody>
<tr>
<td data-sheets-value='{"1":2,"2":"SK BioS float"}'>SK BioS lockup expirations</td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"Qty"}'>Qty</td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"% of SO"}'>% of SO</td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"% of allocation"}'>% of allocation</td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"Accu"}'>Accu</td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"Date"}'>Date</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"1 year"}'>1 year</td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"-"}'>-</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0.0587}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}'>5.87%</td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"-"}'>-</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":1}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}'>100.00%</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":44639}' data-sheets-numberformat='{"1":5,"2":"yyyy-mm-dd","3":1}'>2022-03-19</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"6 months"}'>6 months</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":3948100}' data-sheets-numberformat='{"1":2,"2":"#,##0","3":1}'>3,948,100</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0.7359}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}'>73.59%</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0.3128}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}'>31.28%</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0.9413}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}'>94.13%</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":44458}' data-sheets-numberformat='{"1":5,"2":"yyyy-mm-dd","3":1}'>2021-09-19</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"3 months"}'>3 months</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":3331000}' data-sheets-numberformat='{"1":2,"2":"#,##0","3":1}'>3,331,000</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0.0435}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}'>4.35%</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0.2639}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}'>26.39%</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0.2054}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}'>20.54%</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":44366}' data-sheets-numberformat='{"1":5,"2":"yyyy-mm-dd","3":1}'>2021-06-19</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"1 month"}'>1 month</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":3118610}' data-sheets-numberformat='{"1":2,"2":"#,##0","3":1}'>3,118,610</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0.0408}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}'>4.08%</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0.2471}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}'>24.71%</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0.1619}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}'>16.19%</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":44305}' data-sheets-numberformat='{"1":5,"2":"yyyy-mm-dd","3":1}'>2021-04-19</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"15 days"}'>15 days</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":364380}' data-sheets-numberformat='{"1":2,"2":"#,##0","3":1}'>364,380</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0.0048}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}'>0.48%</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0.0289}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}'>2.89%</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0.1211}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}'>12.11%</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":44288}' data-sheets-numberformat='{"1":5,"2":"yyyy-mm-dd","3":1}'>2021-04-02</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Immediate"}'>Immediate</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":8897510}' data-sheets-numberformat='{"1":2,"2":"#,##0","3":1}'>8,897,510</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0.1163}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}'>11.63%</td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"-"}'>-</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0.1163}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}'>11.63%</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":44273}' data-sheets-numberformat='{"1":5,"2":"yyyy-mm-dd","3":1}'>2021-03-18</td>
</tr>
<tr><td colspan="6" rowspan="1" data-sheets-value='{"1":2,"2":"Source: KRX &amp; DART"}'>Source: KRX &amp; DART</td></tr>
</tbody>
</table>

The second batch of the lockup releases hit the market today on Monday.3,118,610 shares represent 4.08% of the SO and 24.71% of the offering allocation, bringing up the float total from 12.11% to 16.19%.This would be the first real overhang test on the price. 










SK BioS lockup expirations
Qty
% of SO
% of allocation
Accu
Date


1 year
-
5.87%
-
100.00%
2022-03-19


6 months
3,948,100
73.59%
31.28%
94.13%
2021-09-19


3 months
3,331,000
4.35%
26.39%
20.54%
2021-06-19


1 month
3,118,610
4.08%
24.71%
16.19%
2021-04-19


15 days
364,380
0.48%
2.89%
12.11%
2021-04-02


Immediate
8,897,510
11.63%
-
11.63%
2021-03-18

Source: KRX &amp; DART



SK BioS Lockup Release Today: FO Drop Can Signal a Tight Supply for Passive Mirroring K200

Below is the KRX notice on April 9 concerning SK Bioscience's entry into the KRX indices.SK BIOSCIENCE (302440) will be added to the corresponding indices since it satisfies the criteria for the fast-entry rule.KRX 100
Addition: SK BIOSCIENCE (302440)
Deletion: MedyTox (086900)
Effective Date: 11th June 2021※ The KRX is now reviewing the entry into the other indices, including KOSPI 200 and KRX 300. So follow up the further notice in May.The link is here.Why not announcing now for KOSPI 200 fast entry?The nearest month KOSPI 200 futures contract that is the first to arrive after the 15 trading sessions falls on the same day as the 1H regular rebalancing.So, for SK Bioscience, the announcement will be made at the end of May with the other biannual changes.





KOSPI 200 FY2021 1H schedule

Announcement
2021-05-31


Effective
2021-06-11

Source: KRX

Entry is a done deal.The 15D daily average MC sits at ₩10.1T.





SK Bioscience in the first 15 trading sessions (₩B)

2021-04-07
₩114,500


2021-04-06
₩115,500


2021-04-05
₩118,000


2021-04-02
₩117,500


2021-04-01
₩119,000


2021-03-31
₩120,500


2021-03-30
₩126,500


2021-03-29
₩123,500


2021-03-26
₩132,000


2021-03-25
₩136,000


2021-03-24
₩136,500


2021-03-23
₩140,500


2021-03-22
₩144,000


2021-03-19
₩166,500


2021-03-18
₩169,000


- Average daily MC
10,095.5

Source: KRX

Below are the KOSPI top 50 names by the Mar 18~Apr 7 average daily MC. SK Bioscience comes in at the 32nd between Lotte Chemical and Korean Air. 








KOSPI top 50 by avg daily MC (Mar 18~Apr 7)
Ticker
MC (₩B)
Rank


Samsung Electronics Co Ltd
005930
493,866.8
1


SK Hynix Inc
000660
100,363.2
2


Naver Corp
035420
63,182.1
3


LG Chem Ltd
051910
58,270.1
4


Samsung Biologics Co Ltd
207940
48,546.7
5


Hyundai Motor Co
005380
48,324.6
6


Samsung SDI Co Ltd
006400
44,994.9
7


Kakao Corp
035720
44,168.9
8


Celltrion, Inc.
068270
38,067.6
9


Kia Corp
000270
34,201.4
10


HYUNDAI MOBIS CO., LTD.
012330
27,942.9
11


POSCO
005490
27,321.0
12


LG Electronics Inc.
066570
24,974.5
13


LG Household &amp; Healthcare Ltd
051900
24,205.6
14


Samsung C&amp;T Corp
028260
23,028.6
15


KB Financial Group Inc
105560
21,888.8
16


SK Telecom Co Ltd
017670
21,431.3
17


SK Innovation Co Ltd
096770
20,224.3
18


NCSoft Corp
036570
19,800.1
19


Shinhan Financial Group Co., Ltd.
055550
18,719.6
20


SK Inc
034730
18,545.8
21


Samsung Life Insurance co., Ltd
032830
15,486.7
22


LG Corp
003550
15,467.8
23


Korea Electric Power Corporation
015760
15,134.3
24


Amorepacific Corp
090430
14,713.7
25


Samsung SDS Co Ltd
018260
14,622.3
26


Samsung Electro-Mechanics Co., Ltd.
009150
14,254.0
27


Hana Financial Group Inc
086790
12,467.6
28


KT&amp;G Corp
033780
11,103.9
29


Netmarble Corp
251270
10,766.4
30


Lotte Chemical Corp
011170
10,366.4
31


Korean Air Lines Co Ltd
003490
9,626.9
32


Hanon Systems
018880
9,569.8
33


HMM Co Ltd
011200
9,353.6
34


Posco Chemical Co Ltd
003670
9,280.4
35


S Oil Corp
010950
9,114.8
36


Hanwha Solutions Corp
009830
8,934.8
37


Samsung Fire &amp; Marine Insurance Co Ltd
000810
8,903.8
38


Korea Shipbuilding &amp;Offshore Engn Co Ltd
009540
8,854.5
39


SK Biopharmaceuticals Co Ltd
326030
8,259.9
40


LG Display Co Ltd
034220
8,147.3
41


Korea Zinc Inc
010130
7,665.4
42


Kumho Petro Chemical Co Ltd
011780
7,310.6
43


Woori Financial Group Inc
316140
7,287.7
44


KT Corp
030200
7,182.8
45


Hyundai Glovis Co Ltd
086280
7,140.6
46


Industrial Bank of Korea
024110
6,704.6
47


CJ Cheiljedang Corp
097950
6,277.2
48


Mirae Asset Securities Co Ltd
006800
6,172.1
49


Hyundai Steel Co
004020
6,135.2
50

Source: KRX



SK Bioscience K200 Entry: Potential Trades Reflecting SK Biopharm's Passive Inflow Pattern

Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

Cross Asset Strategy

<div class="content-highlight">
NPS has been continuing to sell big in Korea in 2021. Having covered Korea for more than two decades, I do not remember NPS selling like it has been in the past two months. As of 28 February, NPS net sold KOSPI for 42 consecutive days. It has been reported that NPS sold nearly 13 trillion won ($11.6 billion) of KOSPI since December 2020. The big selling by the NPS has become one of the biggest stories in the Korean stock market in 2021. 
As of the end of 2020, the Korean equities accounted for 21.2% of NPS' total portfolio. <a href="https://finance.naver.com/news/news_read.nhn?article_id=0003341623&amp;office_id=020&amp;mode=LSS2D&amp;type=0&amp;section_id=101&amp;section_id2=258&amp;section_id3=&amp;date=20210302&amp;page=3" target="_blank" rel="noopener">NPS'</a> goal is to reduce this to 16.8% of its total portfolio at the end of 2021. That is a big drop. In this case, NPS could sell an additional 24 trillion won ($21.4 billion) worth of Korean stocks by the end of 2021, which is nearly twice the amount of Korean stocks that it has sold in the past two months. 
</div>


NPS has been continuing to sell big in Korea in 2021. Having covered Korea for more than two decades, I do not remember NPS selling like it has been in the past two months. As of 28 February, NPS net sold KOSPI for 42 consecutive days. It has been reported that NPS sold nearly 13 trillion won ($11.6 billion) of KOSPI since December 2020. The big selling by the NPS has become one of the biggest stories in the Korean stock market in 2021. 
As of the end of 2020, the Korean equities accounted for 21.2% of NPS' total portfolio. NPS' goal is to reduce this to 16.8% of its total portfolio at the end of 2021. That is a big drop. In this case, NPS could sell an additional 24 trillion won ($21.4 billion) worth of Korean stocks by the end of 2021, which is nearly twice the amount of Korean stocks that it has sold in the past two months. 


NPS Is Selling Big in Korea - Will This Lead to an Underperformance of KOSPI in 2021?

Equity Capital Markets

SK Biopharmaceuticals   / Equity Capital Markets

<a href="https://www.smartkarma.com/entities/sk-holdings-co-ltd" target="_blank" data-smartkarma-citation="entities:393:1" rel="noopener">SK Holdings (034730 KS)</a> announced after the market close today that it plans to sell a significant amount of <a href="https://www.smartkarma.com/entities/sk-biopharmaceuticals-co-ltd" target="_blank" data-smartkarma-citation="entities:28966:1" rel="noopener">SK Biopharmaceuticals Co Ltd (326030 KS)</a> shares in a block deal (about $1 billion). The block deal price range of SK Biopharm is from 129,800 won to 134,225 won. Overall, we believe this deal is likely to be slightly positive on SK Holdings but negative on SK Biopharm. We believe that investors will be able to buy SK Biopharm shares even at lower prices than than the discounted block deal prices. This big block deal is likely to act as an ongoing OVERHANG on SK Biopharm shares in the coming months.

SK Holdings (034730 KS) announced after the market close today that it plans to sell a significant amount of SK Biopharmaceuticals Co Ltd (326030 KS) shares in a block deal (about $1 billion). The block deal price range of SK Biopharm is from 129,800 won to 134,225 won. Overall, we believe this deal is likely to be slightly positive on SK Holdings but negative on SK Biopharm. We believe that investors will be able to buy SK Biopharm shares even at lower prices than than the discounted block deal prices. This big block deal is likely to act as an ongoing OVERHANG on SK Biopharm shares in the coming months. 

SK Biopharm - A Block Deal Worth $1 Billion Sell Down by SK Holdings (A Big Overhang)

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.

Price Gauge
52-week Range	0.00 - 0.00
Market Cap (USDm)	0.00
P/E	0.00
Dividend (Yield)	0.00

SK Biopharmaceuticals (326030 KS)

Earnings Surprise KOSPI Stocks Potentially Hedging Against Inflation for Basket & Pairs Trades

This post finds the first-quarter earnings surprise stocks in KOSPI that potentially hedge against inflation for basket and pairs trades.

Sanghyun Park

SK BioS Lockup Release Today: FO Drop Can Signal a Tight Supply for Passive Mirroring K200

SK Bioscience's lockup releases hit the market today. A substantial drop in FO can signal a tighter supply for passive funds, increasing the...

Sanghyun Park

SK Bioscience K200 Entry: Potential Trades Reflecting SK Biopharm's Passive Inflow Pattern

This post finds the similarities between SK Biopharm and SK Bioscience concerning the passive money inflow pattern for the KOSPI 200 fast entry.

Sanghyun Park

NPS Is Selling Big in Korea - Will This Lead to an Underperformance of KOSPI in 2021?

As of 28 February, NPS net sold KOSPI for 42 consecutive days. NPS could sell an additional 24 trillion won ($21.4 billion) worth of Korean stocks...

Douglas Kim

SK Biopharm - A Block Deal Worth $1 Billion Sell Down by SK Holdings (A Big Overhang)

SK Holdings plans to sell nearly $1 billion worth of SK Biopharm in a block deal. We believe this will act as a big overhang on SK BIopharm shares.

Douglas Kim

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