Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

Equity Capital Markets

<p>Maeil Business Daily <a href="https://finance.naver.com/news/news_read.naver?article_id=0004867946&amp;office_id=009&amp;mode=LSS3D&amp;type=0&amp;section_id=101&amp;section_id2=258&amp;section_id3=402&amp;date=20211021&amp;page=1" target="_blank" rel="noopener">reported</a> after the market close today that <a href="https://www.smartkarma.com/entities/kakao-pay-corp" target="_blank" data-smartkarma-citation="entities:29675:1" rel="noopener">Kakao Pay (377300 KS)</a> has successfully completed its IPO book building with the IPO price of 90,000 won, which was at the high end of the IPO price range. As of 2PM, it was estimated that the competition rate for the IPO shares was about 1,400 to 1. It is estimated that the final competition rate could be closer to about 2,000 to 1.</p><p>More than 70% of the subscription shares included lock-up periods, which is quite high. There is a good chance that Kakao Pay could be the last major IPO with market cap of more than 10 trillion won and many institutional investors subscribed to this IPO. The successful IPO of Kakao Bank also likely to have played an important role in the strong IPO demand of Kakao Pay as well.</p><p><strong>Valuation - </strong>Our one year base case valuation of Kakao Pay is implied market cap of 11.1 trillion won or 81,829 won per share, which is based on EV/S of 10x using our estimated sales of 919 billion won in 2022. However, given the excellent book building results, we believe that there is a strong likelihood of a short term pop on the share price after the IPO. Our sensitivity analysis suggests a high end price of 103,366 won and we believe that it is likely to reach/surpass this high end level in the first few hours of trading. </p><p>In the first few days of trading Kakao Pay IPO, it may not be as bullish as Kakao Bank's IPO in the first two weeks of trading. However, there is a good probability that Kakao Pay's stock price will likely exceed our high end valuation levels (103,366 won). Nonetheless, over a longer period of time (1 year), we believe that the share price of Kakao Pay will likely come down closer to our base case (81,829 won) as investors become more concerned about the heightened competitive pressures and the company's growth rate starts to decline. </p>

Maeil Business Daily reported after the market close today that Kakao Pay (377300 KS) has successfully completed its IPO book building with the IPO price of 90,000 won, which was at the high end of the IPO price range. As of 2PM, it was estimated that the competition rate for the IPO shares was about 1,400 to 1. It is estimated that the final competition rate could be closer to about 2,000 to 1.More than 70% of the subscription shares included lock-up periods, which is quite high. There is a good chance that Kakao Pay could be the last major IPO with market cap of more than 10 trillion won and many institutional investors subscribed to this IPO. The successful IPO of Kakao Bank also likely to have played an important role in the strong IPO demand of Kakao Pay as well.Valuation - Our one year base case valuation of Kakao Pay is implied market cap of 11.1 trillion won or 81,829 won per share, which is based on EV/S of 10x using our estimated sales of 919 billion won in 2022. However, given the excellent book building results, we believe that there is a strong likelihood of a short term pop on the share price after the IPO. Our sensitivity analysis suggests a high end price of 103,366 won and we believe that it is likely to reach/surpass this high end level in the first few hours of trading. In the first few days of trading Kakao Pay IPO, it may not be as bullish as Kakao Bank's IPO in the first two weeks of trading. However, there is a good probability that Kakao Pay's stock price will likely exceed our high end valuation levels (103,366 won). Nonetheless, over a longer period of time (1 year), we believe that the share price of Kakao Pay will likely come down closer to our base case (81,829 won) as investors become more concerned about the heightened competitive pressures and the company's growth rate starts to decline. 

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

<p>Below is the lockup release schedule and volume of noteworthy KOSPI stocks from this week to the end of next month.</p><div class="content-highlight"><p><strong>This time around, there are quite a few stocks with significant volume releases among the top stocks by market cap. These are the large-cap stocks (a market cap of ₩10T or higher) that deserve our special attention:</strong></p></div><ul>
<li><a href="https://www.smartkarma.com/entities/shinhan-financial-group-ltd" target="_blank" data-smartkarma-citation="entities:6978:1" rel="noopener">Shinhan Financial (055550 KS)</a></li>
<li><a href="https://www.smartkarma.com/entities/kakaobank-corp" target="_blank" data-smartkarma-citation="entities:33501:1" rel="noopener">KakaoBank (323410 KS)</a></li>
<li>
<a href="https://www.smartkarma.com/entities/krafton-inc" target="_blank" data-smartkarma-citation="entities:28956:1" rel="noopener"> Krafton Inc (259960 KS)</a> </li>
<li>
<a href="https://www.smartkarma.com/entities/sk-ie-technology" target="_blank" data-smartkarma-citation="entities:29207:1" rel="noopener">SK IE Technology (361610 KS)</a> </li>
</ul><table class="table table-striped">
<colgroup>
<col width="200">
<col width="100">
<col width="100">
<col width="100">
<col width="100">
</colgroup>
<tbody>
<tr>
<td data-sheets-value='{"1":2,"2":"Major lockup releases"}'>Major lockup releases</td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"Ticker"}'>Ticker</td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"Release date"}'>Release date</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":"Market cap"}'>Market cap</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"SK Rent A Car"}'>SK Rent A Car</td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"068400"}' data-sheets-formula='="068400"'>068400</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":44488}' data-sheets-numberformat='{"1":5,"2":"yyyy\". \"mm\". \"dd","3":1}'>2021. 10. 19</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0.24362472994029502}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}' data-sheets-formula='=R[0]C[2]/googlefinance(R[0]C[-2], "shares")'>24.36%</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0.572158664}' data-sheets-numberformat='{"1":2,"2":"₩#,##0.00T","3":1}' data-sheets-formula='=googlefinance(R[0]C[-3], "price")*googlefinance(R[0]C[-3], "shares")/1000000000000'>₩0.57T</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Shinhan Financial Group"}'><strong>Shinhan Financial Group</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"055550"}' data-sheets-formula='="055550"'><strong>055550</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":44489}' data-sheets-numberformat='{"1":5,"2":"yyyy\". \"mm\". \"dd","3":1}'><strong>2021. 10. 20</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0.07574532284632983}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}' data-sheets-formula='=R[0]C[2]/googlefinance(R[0]C[-2], "shares")'><strong>7.57%</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":20.147382606}' data-sheets-numberformat='{"1":2,"2":"₩#,##0.00T","3":1}' data-sheets-formula='=googlefinance(R[0]C[-3], "price")*googlefinance(R[0]C[-3], "shares")/1000000000000'><strong>₩20.15T</strong></td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Kakao Bank"}'><strong>Kakao Bank</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":323410}'><strong>323410</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":44506}' data-sheets-numberformat='{"1":5,"2":"yyyy\". \"mm\". \"dd","3":1}'><strong>2021. 11. 08</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0.03207744137580803}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}' data-sheets-formula='=R[0]C[2]/googlefinance(R[0]C[-2], "shares")'><strong>4.27%</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":28.5535242437}' data-sheets-numberformat='{"1":2,"2":"₩#,##0.00T","3":1}' data-sheets-formula='=googlefinance(R[0]C[-3], "price")*googlefinance(R[0]C[-3], "shares")/1000000000000'><strong>₩28.55T</strong></td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Lotte Chilsung Beverage"}'>Lotte Chilsung Beverage</td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"005300"}' data-sheets-formula='="005300"'>005300</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":44509}' data-sheets-numberformat='{"1":5,"2":"yyyy\". \"mm\". \"dd","3":1}'>2021. 11. 09</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0.1056161495283269}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}' data-sheets-formula='=R[0]C[2]/googlefinance(R[0]C[-2], "shares")'>10.56%</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":1.456784788}' data-sheets-numberformat='{"1":2,"2":"₩#,##0.00T","3":1}' data-sheets-formula='=googlefinance(R[0]C[-3], "price")*googlefinance(R[0]C[-3], "shares")/1000000000000'>₩1.46T</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Krafton"}'><strong>Krafton</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":259960}'><strong>259960</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":44510}' data-sheets-numberformat='{"1":5,"2":"yyyy\". \"mm\". \"dd","3":1}'><strong>2021. 11. 10</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0.05515669660006972}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}' data-sheets-formula='=R[0]C[2]/googlefinance(R[0]C[-2], "shares")'><strong>8.27%</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":23.1295577625}' data-sheets-numberformat='{"1":2,"2":"₩#,##0.00T","3":1}' data-sheets-formula='=googlefinance(R[0]C[-3], "price")*googlefinance(R[0]C[-3], "shares")/1000000000000'><strong>₩23.13T</strong></td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"SK IE Technology"}'><strong>SK IE Technology</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":361610}'><strong>361610</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":44511}' data-sheets-numberformat='{"1":5,"2":"yyyy\". \"mm\". \"dd","3":1}'><strong>2021. 11. 11</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0.7000236417521647}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}' data-sheets-formula='=R[0]C[2]/googlefinance(R[0]C[-2], "shares")'><strong>70.00%</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":13.796084052}' data-sheets-numberformat='{"1":2,"2":"₩#,##0.00T","3":1}' data-sheets-formula='=googlefinance(R[0]C[-3], "price")*googlefinance(R[0]C[-3], "shares")/1000000000000'><strong>₩13.80T</strong></td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Kyung Dong Navien"}'>Kyung Dong Navien</td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"009450"}' data-sheets-formula='="009450"'>009450</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":44517}' data-sheets-numberformat='{"1":5,"2":"yyyy\". \"mm\". \"dd","3":1}'>2021. 11. 17</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0.06394834737624341}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}' data-sheets-formula='=R[0]C[2]/googlefinance(R[0]C[-2], "shares")'>6.39%</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0.889749342}' data-sheets-numberformat='{"1":2,"2":"₩#,##0.00T","3":1}' data-sheets-formula='=googlefinance(R[0]C[-3], "price")*googlefinance(R[0]C[-3], "shares")/1000000000000'>₩0.89T</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Hanjin Transportation"}'>Hanjin Transportation</td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"002320"}' data-sheets-formula='="002320"'>002320</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":44519}' data-sheets-numberformat='{"1":5,"2":"yyyy\". \"mm\". \"dd","3":1}'>2021. 11. 19</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0.03947114552221931}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}' data-sheets-formula='=R[0]C[2]/googlefinance(R[0]C[-2], "shares")'>3.95%</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0.5291460312}' data-sheets-numberformat='{"1":2,"2":"₩#,##0.00T","3":1}' data-sheets-formula='=googlefinance(R[0]C[-3], "price")*googlefinance(R[0]C[-3], "shares")/1000000000000'>₩0.53T</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Meritz Fire &amp; Marine Insurance Co Ltd"}'>Meritz Fire &amp; Marine Insurance</td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"000060"}' data-sheets-formula='="000060"'>000060</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":44527}' data-sheets-numberformat='{"1":5,"2":"yyyy\". \"mm\". \"dd","3":1}'>2021. 11. 27</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0.05761658031088083}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}' data-sheets-formula='=R[0]C[2]/googlefinance(R[0]C[-2], "shares")'>5.76%</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":3.50415625}' data-sheets-numberformat='{"1":2,"2":"₩#,##0.00T","3":1}' data-sheets-formula='=googlefinance(R[0]C[-3], "price")*googlefinance(R[0]C[-3], "shares")/1000000000000'>₩3.50T</td>
</tr>
<tr>
<td data-sheets-value="{&quot;1&quot;:2,&quot;2&quot;:&quot;T'way Air Co Ltd&quot;}">T'way Air</td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"091810"}' data-sheets-formula='="091810"'>091810</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":44528}' data-sheets-numberformat='{"1":5,"2":"yyyy\". \"mm\". \"dd","3":1}'>2021. 11. 28</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0.016133377130316148}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}' data-sheets-formula='=R[0]C[2]/googlefinance(R[0]C[-2], "shares")'>1.61%</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0.44021781321}' data-sheets-numberformat='{"1":2,"2":"₩#,##0.00T","3":1}' data-sheets-formula='=googlefinance(R[0]C[-3], "price")*googlefinance(R[0]C[-3], "shares")/1000000000000'>₩0.44T</td>
</tr>
<tr><td colspan="5" rowspan="1" data-sheets-value='{"1":2,"2":"Source: KRX"}'>Source: KRX</td></tr>
</tbody>
</table>

Below is the lockup release schedule and volume of noteworthy KOSPI stocks from this week to the end of next month.This time around, there are quite a few stocks with significant volume releases among the top stocks by market cap. These are the large-cap stocks (a market cap of ₩10T or higher) that deserve our special attention:
Shinhan Financial (055550 KS)
KakaoBank (323410 KS)

 Krafton Inc (259960 KS) 

SK IE Technology (361610 KS) 










Major lockup releases
Ticker
Release date
% of SO
Market cap


SK Rent A Car
068400
2021. 10. 19
24.36%
₩0.57T


Shinhan Financial Group
055550
2021. 10. 20
7.57%
₩20.15T


Kakao Bank
323410
2021. 11. 08
4.27%
₩28.55T


Lotte Chilsung Beverage
005300
2021. 11. 09
10.56%
₩1.46T


Krafton
259960
2021. 11. 10
8.27%
₩23.13T


SK IE Technology
361610
2021. 11. 11
70.00%
₩13.80T


Kyung Dong Navien
009450
2021. 11. 17
6.39%
₩0.89T


Hanjin Transportation
002320
2021. 11. 19
3.95%
₩0.53T


Meritz Fire &amp; Marine Insurance
000060
2021. 11. 27
5.76%
₩3.50T


T'way Air
091810
2021. 11. 28
1.61%
₩0.44T

Source: KRX



KOSPI Major Lockup Releases: Kakao Bank, Krafton, SKIET, & Shinhan Financial

HD Hyundai Heavy Industries  / Event-Driven

<div class="content-highlight"><p>Hyundai Heavy Industries (HHI) announced its book building results and the IPO has been determined at 60,000 won, which was at the high end of the IPO price range. The demand ratio among the institutional investors was very strong at 1,836 to 1. There were 1,633 institutional investors that participated in the IPO survey of which 1,285 were domestic investors and 348 were overseas investors. </p></div><table class="table table-striped">
<colgroup>
<col>
<col span="4">
</colgroup>
<tbody>
<tr>
<td colspan="4" style="width: 470pt;"><div><strong>Institutional Investors Demand Breakdown of Hyundai Heavy Industries IPO Bookbuilding Results</strong></div></td>
<td style="width: 106pt;"><strong> </strong></td>
</tr>
<tr>
<td style="text-align: left;"><strong>Domestic Investors</strong></td>
<td style="text-align: center;"><strong> </strong></td>
<td style="text-align: center;"><strong> </strong></td>
<td style="text-align: center;"><strong> </strong></td>
<td style="text-align: center; width: 106pt;"><strong> </strong></td>
</tr>
<tr>
<td><strong> </strong></td>
<td style="text-align: center;"><strong>Asset mgmt companies</strong></td>
<td style="text-align: center;"><strong>Brokerages</strong></td>
<td style="text-align: center;"><strong>Pension funds/insurance/banks</strong></td>
<td style="text-align: center; width: 106pt;"><strong>Others</strong></td>
</tr>
<tr>
<td>No. of companies</td>
<td style="text-align: center; width: 106pt;">587</td>
<td style="text-align: center; width: 106pt;">40</td>
<td style="text-align: center; width: 106pt;">276</td>
<td style="text-align: center; width: 106pt;">382</td>
</tr>
<tr>
<td><strong>Demand</strong></td>
<td style="text-align: center; width: 106pt;"><strong>692 to 1</strong></td>
<td style="text-align: center; width: 106pt;"><strong>46.7 to 1</strong></td>
<td style="text-align: center; width: 106pt;"><strong>318.1 to 1</strong></td>
<td style="text-align: center; width: 106pt;"><strong>492.3 to 1</strong></td>
</tr>
<tr>
<td> </td>
<td style="text-align: center;"> </td>
<td style="text-align: center;"> </td>
<td style="text-align: center;"> </td>
<td style="text-align: center; width: 106pt;"> </td>
</tr>
<tr>
<td><strong> Overseas Investors</strong></td>
<td style="text-align: center;"><strong> </strong></td>
<td style="text-align: center;"><strong> </strong></td>
<td style="text-align: center;"> </td>
<td style="text-align: center; width: 106pt;"> </td>
</tr>
<tr>
<td><strong> </strong></td>
<td style="text-align: center;"><strong>(A)*</strong></td>
<td style="text-align: center;"><strong>(B)**</strong></td>
<td style="text-align: center;"> </td>
<td style="text-align: center; width: 106pt;"> </td>
</tr>
<tr>
<td>No. of companies</td>
<td style="text-align: center; width: 106pt;">132</td>
<td style="text-align: center; width: 106pt;">216</td>
<td style="text-align: center;"> </td>
<td style="text-align: center; width: 106pt;"> </td>
</tr>
<tr>
<td><strong>Demand</strong></td>
<td style="text-align: center; width: 106pt;"><strong>71.3 to 1</strong></td>
<td style="text-align: center; width: 106pt;"><strong>215.4 to 1</strong></td>
<td style="text-align: center;"> </td>
<td style="text-align: center; width: 106pt;"> </td>
</tr>
<tr>
<td> </td>
<td style="text-align: center;"> </td>
<td style="text-align: center;"> </td>
<td style="text-align: center;"> </td>
<td style="text-align: center; width: 106pt;"> </td>
</tr>
<tr>
<td><strong>Total (No. of companies)</strong></td>
<td style="text-align: center; width: 106pt;"><strong>1,633</strong></td>
<td style="text-align: center;"> </td>
<td style="text-align: center;"> </td>
<td style="text-align: center; width: 106pt;"> </td>
</tr>
<tr>
<td><strong>Total Demand</strong></td>
<td style="text-align: center; width: 106pt;"><strong>1,835.9 to 1</strong></td>
<td style="text-align: center;"> </td>
<td style="text-align: center;"> </td>
<td style="text-align: center; width: 106pt;"> </td>
</tr>
<tr><td colspan="5" style="width: 576pt;">Note: (A)* refers to overseas investment mgmt companies that have records of trading with the brokers involved in this deal.</td></tr>
<tr><td colspan="5" style="width: 576pt;">(B)** refers to overseas investment mgmt companies that do not have records of trading with the brokers involved in this deal.</td></tr>
<tr>
<td colspan="2">Source: Company data</td>
<td> </td>
<td> </td>
<td style="width: 106pt;"></td>
</tr>
</tbody>
</table><p>Unlike major IPOs this year such as <a href="https://www.smartkarma.com/entities/kakaobank-corp" target="_blank" data-smartkarma-citation="entities:33501:1" rel="noopener">KakaoBank (323410 KS)</a>, <a href="https://www.smartkarma.com/entities/sk-bioscience-co-ltd" target="_blank" data-smartkarma-citation="entities:31484:1" rel="noopener">SK Bioscience (302440 KS)</a>, and <a href="https://www.smartkarma.com/entities/sk-ie-technology" target="_blank" data-smartkarma-citation="entities:29207:1" rel="noopener">SK IE Technology (361610 KS) </a>which had numerous hallmarks of blockbuster positive outcomes post IPO, Hyundai Heavy Industries is a mixed bag, in our view. Despite surging new orders in 1H 2021, it remains to be seen if this is sustainable. There also remain a lot of question marks about the company's profitability as well as higher steel raw material costs, higher interest rates, and the M&amp;A of Daewoo Shipbuilding which may be blocked by regulators in EU/Japan.</p><p>Even the book building results imply a mixed bag. The high ratios of lock up period and high demand ratio are certainly very positive. Also, it has a low free float and solid employees subscription for the IPO shares. However, why did the institutional investors not indicate higher prices for the IPO (above 60,000 won)?</p>

Hyundai Heavy Industries (HHI) announced its book building results and the IPO has been determined at 60,000 won, which was at the high end of the IPO price range. The demand ratio among the institutional investors was very strong at 1,836 to 1. There were 1,633 institutional investors that participated in the IPO survey of which 1,285 were domestic investors and 348 were overseas investors. 






Institutional Investors Demand Breakdown of Hyundai Heavy Industries IPO Bookbuilding Results
 


Domestic Investors
 
 
 
 


 
Asset mgmt companies
Brokerages
Pension funds/insurance/banks
Others


No. of companies
587
40
276
382


Demand
692 to 1
46.7 to 1
318.1 to 1
492.3 to 1


 
 
 
 
 


 Overseas Investors
 
 
 
 


 
(A)*
(B)**
 
 


No. of companies
132
216
 
 


Demand
71.3 to 1
215.4 to 1
 
 


 
 
 
 
 


Total (No. of companies)
1,633
 
 
 


Total Demand
1,835.9 to 1
 
 
 

Note: (A)* refers to overseas investment mgmt companies that have records of trading with the brokers involved in this deal.
(B)** refers to overseas investment mgmt companies that do not have records of trading with the brokers involved in this deal.

Source: Company data
 
 



Unlike major IPOs this year such as KakaoBank (323410 KS), SK Bioscience (302440 KS), and SK IE Technology (361610 KS) which had numerous hallmarks of blockbuster positive outcomes post IPO, Hyundai Heavy Industries is a mixed bag, in our view. Despite surging new orders in 1H 2021, it remains to be seen if this is sustainable. There also remain a lot of question marks about the company's profitability as well as higher steel raw material costs, higher interest rates, and the M&amp;A of Daewoo Shipbuilding which may be blocked by regulators in EU/Japan.Even the book building results imply a mixed bag. The high ratios of lock up period and high demand ratio are certainly very positive. Also, it has a low free float and solid employees subscription for the IPO shares. However, why did the institutional investors not indicate higher prices for the IPO (above 60,000 won)?

Hyundai Heavy Industries - Trading Strategy Post Book Building Results

<p>As shown below, KRX BBIG consists of one mother index and four sub-indices. That is, a total of five individual indices each have their own ETF.</p><table class="table table-striped">
<colgroup>
<col width="100">
<col width="100">
<col width="100">
</colgroup>
<tbody>
<tr>
<td style="width: 248.991px;" data-sheets-value='{"1":2,"2":"Index calculations"}'>Index calculations</td>
<td style="width: 191.989px;" data-sheets-value='{"1":2,"2":"BBIG"}'>BBIG (the mother index)</td>
<td style="width: 305.028px;" data-sheets-value='{"1":2,"2":"Four sub-indices"}'>
<div>Four sub-indices</div>
<div>: Secondary Battery, Bio, Internet, &amp; Game</div>
</td>
</tr>
<tr>
<td style="width: 248.991px;" data-sheets-value='{"1":2,"2":"Number of constituents"}'>Number of constituents</td>
<td style="width: 191.989px;" data-sheets-value='{"1":3,"3":12}' data-sheets-numberformat='{"1":2,"2":"#,##0"}'>12</td>
<td style="width: 305.028px;" data-sheets-value='{"1":3,"3":10}' data-sheets-numberformat='{"1":2,"2":"#,##0"}'>10</td>
</tr>
<tr>
<td colspan="1" rowspan="2" style="width: 248.991px;" data-sheets-value='{"1":2,"2":"Index weight"}'><div>Index weight</div></td>
<td colspan="1" rowspan="2" style="width: 191.989px;" data-sheets-value='{"1":2,"2":"Equal-weighted at 8.33%"}' data-sheets-numberformat='{"1":2,"2":"#,##0"}'><div>Equal-weighted at 8.33%</div></td>
<td colspan="1" rowspan="2" style="width: 305.028px;" data-sheets-value='{"1":2,"2":"Top 3 (by full market cap): Equal-weighted at 25%\nThe remaining 7: float-adjusted market cap-weighted totaling 25%"}' data-sheets-numberformat='{"1":2,"2":"#,##0"}'><div>Top 3 (by full market cap): Equal-weighted at 25%<br>The remaining 7: float-adjusted market-cap-weighted totaling 25%</div></td>
</tr>
<tr></tr>
<tr><td colspan="3" rowspan="1" style="width: 746.008px;" data-sheets-value='{"1":2,"2":"Source: KRX &amp; WISE Index"}' data-sheets-numberformat='{"1":2,"2":"₩#,##0.0B"}'>Source: KRX &amp; WISE Index</td></tr>
</tbody>
</table><p>It is important to note that these indices consist of only 10 to 12 stocks. <strong>In addition, futures of the KRX BBIG mother index and two sub-indices (Secondary Battery and Bio) have been listed and operated since July of this year.</strong></p><section class="figure"><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/227/980/original/Screen+Shot+2021-09-05+at+3.22.23+AM.png?1630829541" class="editor-image img-responsive" data-smartkarma-image-id="227980"></figure></section><div class="content-highlight">
<p><strong>Hence, these indices provide relatively suitable conditions for ETF arbitrage.</strong></p>
<ul>
<li><strong>In other words, we can aim for arbitrage using an ETF/NAV disparity. In particular, in Korea, we get tax-free benefits (no transaction tax) when selling ETFs.</strong></li>
<li><strong>For this reason, if a disparity rises above -0.25% (equivalent to transaction tax rate), we can consider a classic ETF arb setup.</strong></li>
<li><strong>We buy underlying securities and undergo ETF creation and redemption in the primary and then sell ETFs in the secondary market.</strong></li>
</ul>
</div>

As shown below, KRX BBIG consists of one mother index and four sub-indices. That is, a total of five individual indices each have their own ETF.







Index calculations
BBIG (the mother index)

Four sub-indices
: Secondary Battery, Bio, Internet, &amp; Game



Number of constituents
12
10


Index weight
Equal-weighted at 8.33%
Top 3 (by full market cap): Equal-weighted at 25% The remaining 7: float-adjusted market-cap-weighted totaling 25%


Source: KRX &amp; WISE Index

It is important to note that these indices consist of only 10 to 12 stocks. In addition, futures of the KRX BBIG mother index and two sub-indices (Secondary Battery and Bio) have been listed and operated since July of this year.
Hence, these indices provide relatively suitable conditions for ETF arbitrage.

In other words, we can aim for arbitrage using an ETF/NAV disparity. In particular, in Korea, we get tax-free benefits (no transaction tax) when selling ETFs.
For this reason, if a disparity rises above -0.25% (equivalent to transaction tax rate), we can consider a classic ETF arb setup.
We buy underlying securities and undergo ETF creation and redemption in the primary and then sell ETFs in the secondary market.



ETF Arbitrage Using KRX BBIG New Deal Is on the Rise

<h2>Rebalancing results</h2><p>Below is the official result of the regular rebalancing in September for the KRX BBIG K_New Deal Index.</p><div class="content-highlight"><p><strong>Of course, the big changes are Krafton and SK Bioscience in the main index. And SKIET's inclusion in the Secondary Battery sub-index also deserves special attention.</strong></p></div><table class="table table-striped">
<colgroup>
<col width="100">
<col width="100">
<col width="100">
<col width="100">
<col width="100">
</colgroup>
<tbody>
<tr><td colspan="5" data-sheets-value='{"1":2,"2":"Constituents Change of KRX BBIG K-New Deal Index"}'>Constituents Change of KRX BBIG K-New Deal Index</td></tr>
<tr>
<td rowspan="2" data-sheets-value='{"1":2,"2":"Index"}'><div>Index</div></td>
<td colspan="2" style="text-align: center;" data-sheets-value='{"1":2,"2":"Addition"}'>Addition</td>
<td colspan="2" style="text-align: center;" data-sheets-value='{"1":2,"2":"Deletion"}'>Deletion</td>
</tr>
<tr>
<td style="text-align: left;" data-sheets-value='{"1":2,"2":"Ticker"}'>Ticker</td>
<td style="text-align: left;" data-sheets-value='{"1":2,"2":"Name"}'>Name</td>
<td style="text-align: left;" data-sheets-value='{"1":2,"2":"Ticker"}'>Ticker</td>
<td style="text-align: left;" data-sheets-value='{"1":2,"2":"Name"}'>Name</td>
</tr>
<tr>
<td rowspan="2" data-sheets-value='{"1":2,"2":"KRX BBIG K_New Deal Index"}'><div><strong>KRX BBIG K_New Deal</strong></div></td>
<td style="text-align: left;" data-sheets-value='{"1":2,"2":"302440"}' data-sheets-numberformat='[null,2,"₩#,##0.0B"]' data-sheets-formula='="302440"'><strong>302440</strong></td>
<td style="text-align: left;" data-sheets-value='{"1":2,"2":"SK Bioscience Co Ltd"}' data-sheets-formula='=googlefinance(R[0]C[-1], "name")'><strong>SK Bioscience</strong></td>
<td style="text-align: left;" data-sheets-value='{"1":2,"2":"302440"}' data-sheets-numberformat='[null,2,"₩#,##0.0B"]' data-sheets-formula='="302440"'><strong>302440</strong></td>
<td style="text-align: left;" data-sheets-value='{"1":2,"2":"SK Bioscience Co Ltd"}' data-sheets-formula='=googlefinance(R[0]C[-1], "name")'><div><div><strong>SK Biopharm</strong></div></div></td>
</tr>
<tr>
<td style="text-align: left;" data-sheets-value='{"1":2,"2":"259960"}' data-sheets-formula='="259960"'><strong>259960</strong></td>
<td style="text-align: left;" data-sheets-value='{"1":2,"2":"Krafton Inc"}' data-sheets-formula='=googlefinance(R[0]C[-1], "name")'><strong>Krafton</strong></td>
<td style="text-align: left;" data-sheets-value='{"1":2,"2":"293490"}' data-sheets-formula='="293490"'><strong>293490</strong></td>
<td style="text-align: left;" data-sheets-value='{"1":2,"2":"Kakao Games Corp"}' data-sheets-formula='=googlefinance(R[0]C[-1], "name")'><div><div><strong>Kakao Games</strong></div></div></td>
</tr>
<tr>
<td><div></div></td>
<td colspan="4" style="text-align: left;"><div><div></div></div></td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"KRX Secondary Battery K_New Deal Index"}'><strong>KRX Secondary Battery</strong></td>
<td style="text-align: left;" data-sheets-value='{"1":2,"2":"361610"}' data-sheets-formula='="361610"'><strong>361610</strong></td>
<td style="text-align: left;" data-sheets-value='{"1":2,"2":"SK IE Technology Co Ltd"}' data-sheets-formula='=googlefinance(R[0]C[-1], "name")'><strong>SK IE Technology</strong></td>
<td style="text-align: left;" data-sheets-value='{"1":2,"2":"278280"}' data-sheets-formula='="278280"'><strong>278280</strong></td>
<td style="text-align: left;" data-sheets-value='{"1":2,"2":"Chunbo Co Ltd"}' data-sheets-formula='=googlefinance(R[0]C[-1], "name")'><strong>Chunbo</strong></td>
</tr>
<tr>
<td rowspan="2" data-sheets-value='{"1":2,"2":"KRX Bio K_New Deal Index"}'><div>KRX Bio</div></td>
<td style="text-align: left;" data-sheets-value='{"1":2,"2":"302440"}' data-sheets-numberformat='[null,2,"₩#,##0.0B"]' data-sheets-formula='="302440"'>302440</td>
<td style="text-align: left;" data-sheets-value='{"1":2,"2":"SK Bioscience Co Ltd"}' data-sheets-formula='=googlefinance(R[0]C[-1], "name")'>SK Bioscience</td>
<td style="text-align: left;" data-sheets-value='{"1":2,"2":"019170"}' data-sheets-formula='="019170"'>019170</td>
<td style="text-align: left;" data-sheets-value='{"1":2,"2":"Shinpoong Pharmaceutical Co Ltd"}' data-sheets-formula='=googlefinance(R[0]C[-1], "name")'><div><div>Shinpoong Pharm</div></div></td>
</tr>
<tr>
<td style="text-align: left;" data-sheets-value='{"1":2,"2":"128940"}' data-sheets-formula='="128940"'>128940</td>
<td style="text-align: left;" data-sheets-value='{"1":2,"2":"HanmiPharm"}' data-sheets-formula='=googlefinance(R[0]C[-1], "name")'>HanmiPharm</td>
<td style="text-align: left;" data-sheets-value='{"1":2,"2":"096530"}' data-sheets-formula='="096530"'>096530</td>
<td style="text-align: left;" data-sheets-value='{"1":2,"2":"Seegene Inc"}' data-sheets-formula='=googlefinance(R[0]C[-1], "name")'>Seegene</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"KRX Internet K_New Deal Index"}'>KRX Internet</td>
<td style="text-align: left;" data-sheets-value='{"1":2,"2":"035600"}' data-sheets-formula='="035600"'>035600</td>
<td style="text-align: left;" data-sheets-value='{"1":2,"2":"KGInicis Co Ltd"}' data-sheets-formula='=googlefinance(R[0]C[-1], "name")'>KGInicis</td>
<td style="text-align: left;" data-sheets-value='{"1":2,"2":"131370"}' data-sheets-formula='="131370"'>131370</td>
<td style="text-align: left;" data-sheets-value='{"1":2,"2":"Rsupport Co Ltd"}' data-sheets-formula='=googlefinance(R[0]C[-1], "name")'><div><div>Rsupport</div></div></td>
</tr>
<tr>
<td rowspan="2" data-sheets-value='{"1":2,"2":"KRX Game K_New Deal Index"}'><div>KRX Game</div></td>
<td style="text-align: left;" data-sheets-value='{"1":2,"2":"259960"}' data-sheets-formula='="259960"'>259960</td>
<td style="text-align: left;" data-sheets-value='{"1":2,"2":"Krafton Inc"}' data-sheets-formula='=googlefinance(R[0]C[-1], "name")'>Krafton</td>
<td style="text-align: left;" data-sheets-value='{"1":2,"2":"112040"}' data-sheets-formula='="112040"'>112040</td>
<td style="text-align: left;" data-sheets-value='{"1":2,"2":"Wemade Co Ltd"}' data-sheets-formula='=googlefinance(R[0]C[-1], "name")'>Wemade</td>
</tr>
<tr>
<td style="text-align: left;" data-sheets-value='{"1":2,"2":"194480"}' data-sheets-formula='="194480"'>194480</td>
<td style="text-align: left;" data-sheets-value='{"1":2,"2":"Devsisters Corp"}' data-sheets-formula='=googlefinance(R[0]C[-1], "name")'>Devsisters</td>
<td style="text-align: left;" data-sheets-value='{"1":2,"2":"217270"}' data-sheets-formula='="217270"'>217270</td>
<td style="text-align: left;" data-sheets-value='{"1":2,"2":"Neptune Co"}' data-sheets-formula='=googlefinance(R[0]C[-1], "name")'>Neptune</td>
</tr>
<tr><td colspan="5" data-sheets-value='{"1":2,"2":"Source: KRX"}'>Source: KRX</td></tr>
</tbody>
</table><p><strong>The effective date is September 10, the same as the KOSPI 200 Fast Entry rebalancing. It means that Krafton will receive passive inflow from both KRX BBIG and KOSPI 200.</strong></p><table class="table table-striped">
<colgroup>
<col width="100">
<col width="100">
</colgroup>
<tbody>
<tr><td colspan="2" rowspan="1" style="width: 746.008px;" data-sheets-value='{"1":2,"2":"Rebalancing schedule"}'>Rebalancing schedule</td></tr>
<tr>
<td style="width: 212.997px;" data-sheets-value='{"1":2,"2":"Rebalancing cycle"}'>Rebalancing cycle</td>
<td style="width: 533.011px;" data-sheets-value='{"1":2,"2":"Semi-annually"}' data-sheets-numberformat='{"1":2,"2":"₩#,##0.0B"}'>Semi-annually</td>
</tr>
<tr>
<td style="width: 212.997px;" data-sheets-value='{"1":2,"2":"Rebalancing month"}'>Rebalancing month</td>
<td style="width: 533.011px;" data-sheets-value='{"1":2,"2":"March and September"}' data-sheets-numberformat='{"1":2,"2":"₩#,##0.0B"}'><div>March and September</div></td>
</tr>
<tr>
<td style="width: 212.997px;" data-sheets-value='{"1":2,"2":"Implementation date"}'>Implementation date</td>
<td style="width: 533.011px;" data-sheets-value='{"1":2,"2":"The trading day following the last trading day for KOSPI 200 futures contracts"}' data-sheets-numberformat='{"1":2,"2":"₩#,##0.0B"}'><div>The trading day following the last trading day for KOSPI 200 futures contracts</div></td>
</tr>
<tr>
<td style="width: 212.997px;" data-sheets-value='{"1":2,"2":"Next implementation date"}'>Next implementation date</td>
<td style="width: 533.011px;" data-sheets-value='{"1":2,"2":"September 10, 2021"}' data-sheets-numberformat='{"1":2,"2":"₩#,##0.0B"}'><div>September 10, 2021</div></td>
</tr>
<tr>
<td style="width: 212.997px;" data-sheets-value='{"1":2,"2":"Rebalancing trading"}'>Rebalancing trading</td>
<td style="width: 533.011px;" data-sheets-value='{"1":2,"2":"At the close on September 9, 2021"}' data-sheets-numberformat='{"1":2,"2":"₩#,##0.0B"}'><div>At the close on September 9, 2021</div></td>
</tr>
<tr>
<td style="width: 212.997px;" data-sheets-value='{"1":2,"2":"Screening base date"}'>Screening base date</td>
<td style="width: 533.011px;" data-sheets-value='{"1":2,"2":"The last trading day of the month preceding the date of regular rebalancing"}' data-sheets-numberformat='{"1":2,"2":"₩#,##0.0B"}'><div>The last trading day of the month preceding the date of regular rebalancing.</div></td>
</tr>
<tr>
<td style="width: 212.997px;" data-sheets-value='{"1":2,"2":"Screening period"}'>Screening period</td>
<td style="width: 533.011px;" data-sheets-value='{"1":2,"2":"The three months preceding the screening base date"}' data-sheets-numberformat='{"1":2,"2":"₩#,##0.0B"}'><div>The three months preceding the screening base date</div></td>
</tr>
<tr><td colspan="2" rowspan="1" style="width: 746.008px;" data-sheets-value='{"1":2,"2":"Source: KRX &amp; WISE Index"}' data-sheets-numberformat='{"1":2,"2":"₩#,##0.0B"}'>Source: KRX &amp; WISE Index</td></tr>
</tbody>
</table><p>Below are the AUMs of the ETFs tracking these indices. Only the main index and the secondary battery sub-index have a meaningful size of AUM. And both indices' AUMs have decreased from the peak in the first half of this year.</p><table class="table table-striped">
<colgroup>
<col width="100">
<col width="100">
<col width="100">
<col width="100">
</colgroup>
<tbody>
<tr>
<td data-sheets-value='{"1":2,"2":"ETFs tracking BBIG indices"}'>ETFs tracking BBIG indices</td>
<td data-sheets-value='{"1":2,"2":"Index"}'>Index</td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"Ticker"}'>Ticker</td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"AUM"}'>AUM</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Mirae Asset TIGER KRX BBIG K-New Deal ETF"}' data-sheets-formula='=googlefinance(R[0]C[2], "name")'>Mirae Asset TIGER KRX BBIG K-New Deal ETF</td>
<td rowspan="4" data-sheets-value='{"1":2,"2":"KRX BBIG K-New Deal Index"}'><div><strong>KRX BBIG K-New Deal Index</strong></div></td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":364960}'>364960</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":441.35}' data-sheets-numberformat='[null,2,"₩#,##0.0B",1]' data-sheets-formula="=R[0]C[1]*R[0]C[2]/1000000000">₩441.4B</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Hana Financial Investment Hana KRX BBIG K-New Deal ETN 3"}' data-sheets-formula='=googlefinance(R[0]C[2], "name")'>Hana Financial Investment Hana KRX BBIG K-New Deal ETN 3</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":700003}'>700003</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":10.31}' data-sheets-numberformat='[null,2,"₩#,##0.0B",1]' data-sheets-formula="=R[0]C[1]*R[0]C[2]/1000000000">₩10.3B</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"TIMEFOLIO TIMEFOLIO BBIG Active ETF"}' data-sheets-formula='=googlefinance(R[0]C[2], "name")'>TIMEFOLIO TIMEFOLIO BBIG Active ETF</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":385710}'>385710</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":27.564}' data-sheets-numberformat='[null,2,"₩#,##0.0B",1]' data-sheets-formula="=R[0]C[1]*R[0]C[2]/1000000000">₩27.6B</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"- Total"}' data-sheets-numberformat='[null,2,"#,##0.00",1]'><strong>- Total</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"-"}'><strong>-</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":479.22400000000005}' data-sheets-numberformat='[null,2,"₩#,##0.0B",1]' data-sheets-formula="=sum(R[-3]C[0]:R[-1]C[0])"><strong>₩479.2B</strong></td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Mirae Asset TIGER KRX Second Battery K-NewDeal ETF"}' data-sheets-formula='=googlefinance(R[0]C[2], "name")'>Mirae Asset TIGER KRX Second Battery K-NewDeal ETF</td>
<td data-sheets-value='{"1":2,"2":"KRX Secondary Battery K-New Deal Index"}' data-sheets-numberformat='[null,2,"#,##0.0"]'><strong>KRX Secondary Battery K-New Deal Index</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":364980}'>364980</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":647.235}' data-sheets-numberformat='[null,2,"₩#,##0.0B",1]' data-sheets-formula="=R[0]C[1]*R[0]C[2]/1000000000"><strong>₩647.2B</strong></td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Mirae Asset TIGER KRX BIO K-New Deal ETF"}' data-sheets-formula='=googlefinance(R[0]C[2], "name")'>Mirae Asset TIGER KRX BIO K-New Deal ETF</td>
<td data-sheets-value='{"1":2,"2":"KRX Bio K-New Deal Index"}' data-sheets-numberformat='[null,2,"#,##0.0"]'><strong>KRX Bio K-New Deal Index</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":364970}'>364970</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":100.53}' data-sheets-numberformat='[null,2,"₩#,##0.0B",1]' data-sheets-formula="=R[0]C[1]*R[0]C[2]/1000000000"><strong>₩100.5B</strong></td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Mirae Asset TIGER KRX Internet K-New Deal ETF"}' data-sheets-formula='=googlefinance(R[0]C[2], "name")'>Mirae Asset TIGER KRX Internet K-New Deal ETF</td>
<td data-sheets-value='{"1":2,"2":"KRX Internet K-New Deal Index"}' data-sheets-numberformat='[null,2,"#,##0.0"]'><strong>KRX Internet K-New Deal Index</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":365000}'>365000</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":64.86725}' data-sheets-numberformat='[null,2,"₩#,##0.0B",1]' data-sheets-formula="=R[0]C[1]*R[0]C[2]/1000000000"><strong>₩64.9B</strong></td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Mirae Asset TIGER KRX Game K-New Deal ETF"}' data-sheets-formula='=googlefinance(R[0]C[2], "name")'>Mirae Asset TIGER KRX Game K-New Deal ETF</td>
<td data-sheets-value='{"1":2,"2":"KRX Game K-New Deal Index"}' data-sheets-numberformat='[null,2,"#,##0.0"]'><strong>KRX Game K-New Deal Index</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":364990}'>364990</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":31.89275}' data-sheets-numberformat='[null,2,"₩#,##0.0B",1]' data-sheets-formula="=R[0]C[1]*R[0]C[2]/1000000000"><strong>₩31.9B</strong></td>
</tr>
<tr><td colspan="4">Source: KRX</td></tr>
</tbody>
</table><hr><h2>Regarding Krafton's inclusion:</h2><p>Krafton was listed after the review cutoff date (July 31). Nonetheless, KRX decided to include it in this rebalancing. Then, did KRX break its own rule? Well, it did not.</p><p><strong>Here is my explanation which I posted previously, concerning this issue.</strong></p><div class="content-highlight">
<p>First of all, this BBIG index does not have a Fast Entry clause. So, KRX was internally debating whether to apply the review cutoff date to newly listed stocks with large market caps. (This was what I heard from KRX directly.) Since this index has few constituents, if newly listed stocks with large market caps are excluded from the index for nearly six months, the resulting disparity between the index and the actual sector may become too large, and KRX is also concerned about this.</p>
<p>Therefore, KRX said that it would decide on Fast Entry of those stocks with large market caps, such as Krafton, Kakao Pay, and LG Energy Solution, at the time of regular rebalancing in consultation with the ETF operators (Mirae Asset). In the end, it turned out that the outcome of the KRX &amp; Mirae Asset discussion on the Fast Entry of Krafton was Go, which wasn't outside the scope of the KRX Index methodology at all.</p>
</div>

Rebalancing resultsBelow is the official result of the regular rebalancing in September for the KRX BBIG K_New Deal Index.Of course, the big changes are Krafton and SK Bioscience in the main index. And SKIET's inclusion in the Secondary Battery sub-index also deserves special attention.








Constituents Change of KRX BBIG K-New Deal Index

Index
Addition
Deletion


Ticker
Name
Ticker
Name


KRX BBIG K_New Deal
302440
SK Bioscience
302440
SK Biopharm


259960
Krafton
293490
Kakao Games






KRX Secondary Battery
361610
SK IE Technology
278280
Chunbo


KRX Bio
302440
SK Bioscience
019170
Shinpoong Pharm


128940
HanmiPharm
096530
Seegene


KRX Internet
035600
KGInicis
131370
Rsupport


KRX Game
259960
Krafton
112040
Wemade


194480
Devsisters
217270
Neptune

Source: KRX

The effective date is September 10, the same as the KOSPI 200 Fast Entry rebalancing. It means that Krafton will receive passive inflow from both KRX BBIG and KOSPI 200.





Rebalancing schedule

Rebalancing cycle
Semi-annually


Rebalancing month
March and September


Implementation date
The trading day following the last trading day for KOSPI 200 futures contracts


Next implementation date
September 10, 2021


Rebalancing trading
At the close on September 9, 2021


Screening base date
The last trading day of the month preceding the date of regular rebalancing.


Screening period
The three months preceding the screening base date

Source: KRX &amp; WISE Index

Below are the AUMs of the ETFs tracking these indices. Only the main index and the secondary battery sub-index have a meaningful size of AUM. And both indices' AUMs have decreased from the peak in the first half of this year.








ETFs tracking BBIG indices
Index
Ticker
AUM


Mirae Asset TIGER KRX BBIG K-New Deal ETF
KRX BBIG K-New Deal Index
364960
₩441.4B


Hana Financial Investment Hana KRX BBIG K-New Deal ETN 3
700003
₩10.3B


TIMEFOLIO TIMEFOLIO BBIG Active ETF
385710
₩27.6B


- Total
-
₩479.2B


Mirae Asset TIGER KRX Second Battery K-NewDeal ETF
KRX Secondary Battery K-New Deal Index
364980
₩647.2B


Mirae Asset TIGER KRX BIO K-New Deal ETF
KRX Bio K-New Deal Index
364970
₩100.5B


Mirae Asset TIGER KRX Internet K-New Deal ETF
KRX Internet K-New Deal Index
365000
₩64.9B


Mirae Asset TIGER KRX Game K-New Deal ETF
KRX Game K-New Deal Index
364990
₩31.9B

Source: KRX

Regarding Krafton's inclusion:Krafton was listed after the review cutoff date (July 31). Nonetheless, KRX decided to include it in this rebalancing. Then, did KRX break its own rule? Well, it did not.Here is my explanation which I posted previously, concerning this issue.
First of all, this BBIG index does not have a Fast Entry clause. So, KRX was internally debating whether to apply the review cutoff date to newly listed stocks with large market caps. (This was what I heard from KRX directly.) Since this index has few constituents, if newly listed stocks with large market caps are excluded from the index for nearly six months, the resulting disparity between the index and the actual sector may become too large, and KRX is also concerned about this.
Therefore, KRX said that it would decide on Fast Entry of those stocks with large market caps, such as Krafton, Kakao Pay, and LG Energy Solution, at the time of regular rebalancing in consultation with the ETF operators (Mirae Asset). In the end, it turned out that the outcome of the KRX &amp; Mirae Asset discussion on the Fast Entry of Krafton was Go, which wasn't outside the scope of the KRX Index methodology at all.


KRX BBIG Rebalancing Results & Passive Impact Estimations: Watch Douzone Bizon

South Korea

SK IE Technology Co., Ltd operates as a material solution provider. The Company provides information material solutions, electronic materials solutions, and other products. SK IE Technology conducts businesses across worldwide.

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SK IE Technology (361610 KS)

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