Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

Event-Driven

<ul>
<li>Sampyo Cement which is currently included in KOSDAQ150 is likely to be removed from this index in the coming months as the company wants to move to KOSPI.</li>
<li>If Sampyo Cement is excluded from KOSDAQ150, we estimate there could be about 9 billion won worth of passive funds which could exit the stock. ADTV is 1.6 billion won.</li>
<li>Therefore, we believe Sampyo Cement's shares could face further weakness in the next several months. It will hold an EGM to vote on the move to KOSPI on 4 July.</li>
</ul>


Sampyo Cement which is currently included in KOSDAQ150 is likely to be removed from this index in the coming months as the company wants to move to KOSPI.
If Sampyo Cement is excluded from KOSDAQ150, we estimate there could be about 9 billion won worth of passive funds which could exit the stock. ADTV is 1.6 billion won.
Therefore, we believe Sampyo Cement's shares could face further weakness in the next several months. It will hold an EGM to vote on the move to KOSPI on 4 July.


Sampyo Cement: Likely Exit from KOSDAQ150 & Move to KOSPI

Equity Bottom-Up

HDC Hyundai Development Co-Engineering & Construction / Equity Bottom-Up

HDC Hyundai Development Co-Engineering & Construction

<ul>
<li>On 28 January, the government (Ministry of Land, Infrastructure and Transport) announced that it has recommended the heaviest punishment of the cancellation of the construction license for HDC Hyundai Development.</li>
<li>Seoul city government said it will make a decision on the fate of HDC Hyundai Development within six months.</li>
<li>Rather than a complete, permanent cancellation of the company's business license, a more likely scenario is about 6 to 12 months of temporary business operation suspension, in our view. </li>
</ul>


On 28 January, the government (Ministry of Land, Infrastructure and Transport) announced that it has recommended the heaviest punishment of the cancellation of the construction license for HDC Hyundai Development.
Seoul city government said it will make a decision on the fate of HDC Hyundai Development within six months.
Rather than a complete, permanent cancellation of the company's business license, a more likely scenario is about 6 to 12 months of temporary business operation suspension, in our view. 


HDC Hyundai Development: Permanent Business License Cancellation or Temporary Business Suspension?

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.

<ul>
<li>We can consider three types of dividend stocks, targeting the March 31 dividend base date: 1. 1Q fiscal year-ending dividends, 2. Interim (quarterly) dividends, 3. REITs regular dividends</li>
<li>The ex-dividend price corrections of fiscal year-ending dividend stocks have been pretty tight recently. In addition, the futures basis has not reached a desirable level either.</li>
<li>So, either outright dividend trading or dividend arb play does not have much trade opening. So, I'd consider setting up a long/short basket trading, by focusing on high DTV ones.</li>
</ul>


We can consider three types of dividend stocks, targeting the March 31 dividend base date: 1. 1Q fiscal year-ending dividends, 2. Interim (quarterly) dividends, 3. REITs regular dividends
The ex-dividend price corrections of fiscal year-ending dividend stocks have been pretty tight recently. In addition, the futures basis has not reached a desirable level either.
So, either outright dividend trading or dividend arb play does not have much trade opening. So, I'd consider setting up a long/short basket trading, by focusing on high DTV ones.


KOSPI/KOSDAQ End-March Dividends: 1Q Fiscal Year-Ending, Interim(Quarterly), & REITs

<ul>
<li>There are 71 interim dividend stocks on KOSPI and KOSDAQ. Of these, 9 stocks pay quarterly dividends: 7 KOSPI and 2 KOSDAQ.</li>
<li>All except POSCO and Shinhan Financial employ an equal quarterly split. As expected, SKT offers the highest quarterly dividend yield. At the last closing price, it is 1.55%.</li>
<li>Since the absolute yield level is tight, it may not be appropriate to consider a dividend arb play, except for SKT. Nevertheless, it may act as short-term price momentum.</li>
</ul>


There are 71 interim dividend stocks on KOSPI and KOSDAQ. Of these, 9 stocks pay quarterly dividends: 7 KOSPI and 2 KOSDAQ.
All except POSCO and Shinhan Financial employ an equal quarterly split. As expected, SKT offers the highest quarterly dividend yield. At the last closing price, it is 1.55%.
Since the absolute yield level is tight, it may not be appropriate to consider a dividend arb play, except for SKT. Nevertheless, it may act as short-term price momentum.


KOSPI/KOSDAQ Quarterly Dividend Stocks: DPS & Yield Estimations

Technical Analyst, Vermilion Research

Joe Jasper

Technical Analyst

Technical and Quantitative Research

Vermilion Research

Vermilion’s objective is to deliver timely, actionable, and unique technical research to professional investors through the application of our various technical indicators.

Our research strategists seek to highlight securities which we believe are at major inflection points, based on our various technical and quantitative indicators, and offer asymmetric risk/return profiles. Our unique research methodology, centered on relative strength, enables our strategists to deliver superior investment recommendations.

Our process begins by organizing the universe of actively traded stocks into discrete sectors, then into industry groups. We then apply our technical and quantitative tools to identify developing price trends. Once attractive trends are identified within a selected sector or group, we screen for individual stocks which we believe offer the best risk/reward profile. We provide a historical perspective that often reveals, through our long-term charts, how price patterns often repeat themselves over time.

Technical Analysis

Taiwan Semiconductor (TSMC) / Technical Analysis

<p>Emerging market equities have been one of the worst areas to invest in 2021, but we see early signs of positive change. With the US dollar failing to break above resistance at $93.50 and the MSCI EM ETF (EEM-US) displaying a false breakdown at $52, we believe now is an opportune time to add exposure to emerging market equities. To be clear, we are not getting overly bullish on EM; we have favored developed int’l (EAFE) over EM since May, and we are now shifting back to a neutral stance between the two. We see reason to believe the tide is shifting in EM’s favor. Below we highlight attractive and actionable themes within EM.</p>

Emerging market equities have been one of the worst areas to invest in 2021, but we see early signs of positive change. With the US dollar failing to break above resistance at $93.50 and the MSCI EM ETF (EEM-US) displaying a false breakdown at $52, we believe now is an opportune time to add exposure to emerging market equities. To be clear, we are not getting overly bullish on EM; we have favored developed int’l (EAFE) over EM since May, and we are now shifting back to a neutral stance between the two. We see reason to believe the tide is shifting in EM’s favor. Below we highlight attractive and actionable themes within EM.

Shifting Exposure To Emerging Markets; Buying TSMC/Taiwan Semi, ICICI Bank, Many Others

South Korea

Hanil Cement co.,Ltd. operates as a cement manufacturing company. The Company produces and sells cement, special cement, ready mixed concrete products, high solidity admixture, and other products. Hanil Cement markets its products throughout Korea.

Hanil Holdings Co.,Ltd. manufactures cement products. The Company produces and sells cement, ready-mixed concrete, ready-mixed dry mortar, and other related products. Hanil Holdings also provides information technology services and construction services.

Asia Cement Co., Ltd. manufactures cement and aggregate products.  The Company produces and sells cement, ready-mix concrete, and dry mortar. Asia Cement offers its products to construction industry in Korea.

SAMPYO Cement Co., Ltd. manufactures and distributes cement products. The Company produces slag cement, low heat cement, and other related products. SAMPYO Cement markets its products worldwide.

Eugene Corp. manufactures and markets ready mixed concrete and asphalt concrete. The Company handles pavement works and constructs commercial and residential buildings.

Dong Won Co., Ltd. owns and operates coal mines in South Korea.  The Company's products include hard coal for industrial and household uses.  Dong Won also develops overseas oil and gas fields, especially in South America.

Hanil Hyundai Cement Co.,Ltd manufactures and distributes cement products. The Company produces portland cement, slag cement, and other related products. Hanil Hyundai Cement also operates traveler accommodation businesses.

Sungshin Cement Co., Ltd. manufactures cement, ready-mixed concrete, clinker, and dry ready-mixed cement mortar.  The Company provides its products mainly to domestic market.

Korea Petroleum Industrial Co., Ltd. manufactures and markets asphalt used in constructions.  The Company also produces solvents, waterproofing sheets, and synthetic resins for the building contractors and manufacturers of paint, tire, and pharmaceuticals.  In addition, Korea Petroleum Industrial distributes gasoline, kerosene, and other chemicals.

Baek Kwang Mineral Products Co., Ltd. manufactures quicklime, calcium hydroxide, granular calcium oxide, and calcium hydroxide fertilizer.

The Ramco Cements Limited manufactures cement, ready mix concrete and dry mix products.  The Company also exports  cement and owns and operates a private sector wind mill power generating farm.

Gansu Qilianshan Cement Group Co.,Ltd manufactures cement products. The Company produces portland cements, low alkali cements, sulphate resistant cements, cement clinkers, and other products. Gansu Qilianshan Cement Group also produces cement equipment.

China Resources Cement Holdings Limited, through its subsidiaries, produces, distributes and sells cement, clinker and concrete.

Goldsun Building Materials Co., Ltd. manufactures building materials. The Company produces pre-mixed concrete, corrugated asbestos sheets, and concrete products. The Company also operates in the real estate development business.

Taiwan Goldsun Building Materials (2504 TT)

PT Semen Indonesia (Persero) Tbk manufactures cement including portland cement, oil well cement, and mixed cement. Through its subsidiaries, the Company also develops and operates an industrial estate, mines limestone and clay, and packages and distributes cement.

United States Lime & Minerals, Inc. supplies lime and limestone products to the steel, paper, agriculture, environmental protection, and construction industries.  The Company operates plants in Texas and Arkansas.

Vicat S.A. manufactures and sells cements, ready-mix concrete, aggregates and concrete pipes, as well as stucco and mortar for use in building construction internationally.  The Company also produces a variety of papers, medium-to-large capacity paper bags and chemicals and provides freight transportation services.

BBMG Corporation has operation in manufacturing and sales of cement and modern building materials. The Company also operates in property development, property investment and provision of property management services in China.

CSG Holding Co. Ltd.  manufactures raw sheets of high-grade float glass, archite ctural glass, delicacy glass, automotive glass, new-typed electronic components, and structure ceramic materials. The Company also operates in real estate development.

Cementos Argos SA is a cement and concrete producer and marketer, covering  several markets such as Colombia, Caribbean and Central America, and United  States.

Ssangyong Cement Industrial Co., Ltd. produces cement and ready-mixed concrete. The Company also manufactures fine ceramics for industrial uses and ferrite magnets for components used in audio equipment.  In addition, Ssangyong Cement Industrial develops housing, plant engineering, environmental resources, and leisure businesses.

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Ssangyong Cement Industrial (003410 KS)

Sampyo Cement: Likely Exit from KOSDAQ150 & Move to KOSPI

Sampyo Cement which is currently included in KOSDAQ150 is likely to be removed from this index in the coming months as the company wants to move to...

Douglas Kim

HDC Hyundai Development: Permanent Business License Cancellation or Temporary Business Suspension?

On 28 January, the Ministry of Land, Infrastructure and Transport announced that it has recommended the heaviest punishment of the cancellation of...

Douglas Kim

KOSPI/KOSDAQ End-March Dividends: 1Q Fiscal Year-Ending, Interim(Quarterly), & REITs

This post offers the latest update on the expected dividends and dividend yields of the three types of end-1Q dividend stocks.

Sanghyun Park

KOSPI/KOSDAQ Quarterly Dividend Stocks: DPS & Yield Estimations

This post lists all 71 interim dividend stocks, of which 9 are quarterly dividend stocks. It then estimates DPS and dividend yield of these 9...

Sanghyun Park

Shifting Exposure To Emerging Markets; Buying TSMC/Taiwan Semi, ICICI Bank, Many Others

We see early signs of positive change within EM, and we present a strong case as to why we believe now is an opportune time to add exposure.

Vermilion Research

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