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>WCP has the largest gap between the exercise and current prices (-16%). And its retail allocation is also the largest (5.44% of SO). In addition, it is subject to short-selling.</li>
<li>The deadline is January 2nd. A large-scale option exercise will be unavoidable if the share price does not exceed ₩54,000 by that date.</li>
<li>It is very likely that WCP's share price will experience strong downward pressure for a week after January 2nd. We need to consider a position setup that actively utilizes this.</li>
</ul>


WCP has the largest gap between the exercise and current prices (-16%). And its retail allocation is also the largest (5.44% of SO). In addition, it is subject to short-selling.
The deadline is January 2nd. A large-scale option exercise will be unavoidable if the share price does not exceed ₩54,000 by that date.
It is very likely that WCP's share price will experience strong downward pressure for a week after January 2nd. We need to consider a position setup that actively utilizes this.


Recent IPOs Carrying Putback Option in Korea: Market's Attention Is on WCP

Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

<ul>
<li>We discuss end of the mandatory lock-up periods for 58 stocks in Korea in December 2022, among which 9 are in KOSPI and 49 are in KOSDAQ.</li>
<li>These 58 stocks on average could be subject to further selling pressures in December and could underperform relative to the market. </li>
<li>Among these 58 stocks, the top 5 market cap stocks include HYBE, Kakao Games, WCP, Sillajen, and Duksan Neolux. </li>
</ul>


We discuss end of the mandatory lock-up periods for 58 stocks in Korea in December 2022, among which 9 are in KOSPI and 49 are in KOSDAQ.
These 58 stocks on average could be subject to further selling pressures in December and could underperform relative to the market. 
Among these 58 stocks, the top 5 market cap stocks include HYBE, Kakao Games, WCP, Sillajen, and Duksan Neolux. 


End of Mandatory Lock-Up Periods for 58 Companies in Korea in December 2022

Pan-Asia Index Rebalances/ Events/ Delta One, Periscope Analytics

Brian Freitas

Pan-Asia Index Rebalances/ Events/ Delta One

Periscope Analytics

Periscope Analytics focuses on event-driven trades across Asia Pacific and provides comprehensive, timely and systematic coverage of index changes to major Asia Pacific indices in a structured manner.

The analysis includes forecasted inclusions and exclusions to all major Asian indices that have significant amount of tracking assets, including estimates of passive buy/sell flow on the stocks. The service also provides commentary and impact of market consultations, ground rule changes, and other events (IPOs, spin-offs, M&A) that could lead to index changes and passive flow.

Periscope Analytics works with multi-strategy hedge funds, proprietary trading firms, stat arb trading groups and long-only investors that invest and trade in the Asia Pacific region with the data being used to trade index rebalances, avoid pre-positioning and passive flow, and to time entry into and exit from stocks.

Event-Driven Trades Across Asia Pacific

<ul>
<li>There are 11 inclusions and 11 exclusions for the <a href="https://www.smartkarma.com/entities/kosdaq-150-index" target="_blank" data-smartkarma-citation="entities:31077:1" rel="noopener">KOSDAQ 150 Index (KOSDQ150 INDEX)</a> at the December rebalance to be implemented at the close on 8 December.</li>
<li>We had forecast most of the changes (10 adds and 9 deletes), so there are a few surprises. The inclusion of <a href="https://www.smartkarma.com/entities/sillajen-inc" target="_blank" data-smartkarma-citation="entities:22838:1" rel="noopener">SillaJen Inc (215600 KS)</a> is the biggest one.</li>
<li>The adds to the index become short sell eligible from the open of trading on 9 December while the deletions will not be short sell eligible from the same time.</li>
</ul>


There are 11 inclusions and 11 exclusions for the KOSDAQ 150 Index (KOSDQ150 INDEX) at the December rebalance to be implemented at the close on 8 December.
We had forecast most of the changes (10 adds and 9 deletes), so there are a few surprises. The inclusion of SillaJen Inc (215600 KS) is the biggest one.
The adds to the index become short sell eligible from the open of trading on 9 December while the deletions will not be short sell eligible from the same time.


KOSDAQ150 Index Rebalance: 11 Changes with a Couple of Surprises

<ul>
<li>For KOSDAQ 150, SillaJen and WCP made it to the index. As for deletions, Intron Biotechnology, Ebest I&amp;S, and Devsisters are additional names to leave the index through regular review.</li>
<li>Lotte Confectionery and Samyang Holdings do not have sizeable DTV. And they were fully expected. Nevertheless, the passive impact is so significant that the LONG/SHORT approach still seems valid.</li>
<li>We should focus on KOSDAQ 150 inclusions whose return has been high due to the inflow to secure a borrow pool for short-selling on top of the preemptive rebalancing flow.</li>
</ul>


For KOSDAQ 150, SillaJen and WCP made it to the index. As for deletions, Intron Biotechnology, Ebest I&amp;S, and Devsisters are additional names to leave the index through regular review.
Lotte Confectionery and Samyang Holdings do not have sizeable DTV. And they were fully expected. Nevertheless, the passive impact is so significant that the LONG/SHORT approach still seems valid.
We should focus on KOSDAQ 150 inclusions whose return has been high due to the inflow to secure a borrow pool for short-selling on top of the preemptive rebalancing flow.


KOSPI 200 & KOSDAQ 150 Constituent Changes: Several Surprises

<ul>
<li>Korea Exchange announced the KOSPI 200, KOSDAQ 150, and KRX 300 rebalance changes today. Lotte Confectionery will be added and Samyang Holdings will be deleted from the KOSPI 200 index.</li>
<li>The rebalances of these Korean indices are regularly updated twice a year. The changes to these indices will be effective starting 9 December. </li>
<li>The potential exclusion candidates for KOSPI 200 in 2023 include K Car, Handsome, HS Enterprise, Zinus, and Hyundai Home Shopping. </li>
</ul>


Korea Exchange announced the KOSPI 200, KOSDAQ 150, and KRX 300 rebalance changes today. Lotte Confectionery will be added and Samyang Holdings will be deleted from the KOSPI 200 index.
The rebalances of these Korean indices are regularly updated twice a year. The changes to these indices will be effective starting 9 December. 
The potential exclusion candidates for KOSPI 200 in 2023 include K Car, Handsome, HS Enterprise, Zinus, and Hyundai Home Shopping. 


KOSPI 200 & KOSDAQ 150 Rebalance Changes + KOSPI 200 & KOSDAQ 150 Exclusion Candidates in 2023

South Korea

BH Co., Ltd. manufactures and distributes various flexible printed circuits boards (FPCB), such as multi-layer and build-up FPCBs mainly for mobile phones and rigid FPCBs for aerospace sphere.

SFA Engineering Corp. manufactures factory automation and logistics systems. The Company's products include manufacturing system used for producing a picture tube.  SFA Engineering also produces stacker cranes, sorter, conveyor, and loader system for automated distribution center.

Synopex Inc. manufactures and markets wireless device components.  The Company's products include key printed circuit board assemblies (PBA) and liquid crystal display (LCD) modules.  Synopex also produces filters for water purifiers and steel packaging products.

TSE Co., Ltd. manufactures and markets various LED testing equipments and semiconductor testing equipments, such as Interface Boards and Probe Cards.

UTI Inc of Korea operates as an electronics components production company. The Company develops and markets camera windows, fingerprint cover glasses, smart phone cover glasses, and other products. UTI of Korea markets its products throughout Korea.

Dreamtech Co., Ltd. manufactures and distributes phone parts. The Company develops and sells smart phone fingerprint modules, smart phone side modules, and other related products. Dreamtech also produces automotive light emitting diode, sensors, home appliance essential modules, and other products.

Samwha Capacitor Co., Ltd. manufactures various types of capacitors used in high voltage transformers in residential houses and commercial buildings. The Company's products include film capacitors, ceramic capacitors, and chip capacitors.

PARTRON Co., Ltd. manufactures various parts that are used in mobile phones such as filters, duplexer, crystal oscillators, chip dielectric antenna, and isolators.  The Company also produces camera modules that is used in mobile phone cameras.

Jahwa Electronics Co., Ltd. manufactures a variety of magnetic electronic components such as purity convergence magnets (PCM), vibration motors, and positive temperature coefficients (PTC).  The Company also produces plastic and rubber magnets used in home appliances and automobiles.  Jahwa Electronics, through its subsidiary, provides venture capital services.

EM-Tech Co,. Ltd specializes in manufacturing micro-speakers, dynamic receivers, two-way and two-magnet mode speakers.  The product is used for speakers in CDMA, GSM and other mobile devices.  The company also produces hearing aid speakers.

Wasion Group Holdings Limited is engaged in the provision of Advanced Metering Infrastructure solutions, Advanced Distribution Operations solutions; and development, manufacturing and sale of smart power, water, heat and gas meters and smart power distribution devices.

Oki Electric Industry Company, Limited, develops, produces, and sells a broad range of communication and information related equipment.  The Company's products include personal computers (PCs), PC peripheral equipment, and electronic devices such as semiconductors and automated teller machines (ATMs). Oki Electric Industry also provides installation and maintenance services.

Chin-Poon Industrial Co., Ltd. manufactures and markets single-sided, double-sided, and multi-layer printed circuit boards (PCBs).

Henan Hanwei Electronics Company Ltd. manufactures domestic gas alarms, portable gas detectors, industrial fixed systems, breath alcohol testers, gas analyzers, and gas sensors.

Guangdong Goworld Co., Ltd. manufactures and markets printed circuit boards, liquid crystal displays (LCDs), and ultrasonic electronic measuring instruments. Guangdong Goworld distributes its products throughout the world.

Wuhan P&S Information Technology Company Limited is engaged in the promotion, sales and application services of IC and other electronic components.  The Company's main products are microcontrollers and microprocessors, clock management components and system management components, etc.

Wuhan P&S Information Technology (300184 CH)

Unitech Printed Circuit Board Corp. manufactures and markets multi-layered and double-sided printed circuit boards.

Digital China Holdings Limited, through its subsidiaries, distributes foreign brand information technology products and provides system integration service in China.  The Company also develops and distributes networking products.

Beijing SDL Technology Company Limited develops, manufactures and sells analytical instruments, environmental monitoring systems, industrial process analysis systems, and provides operational and maintenance services. The Company's main products include analytical instruments, and related ancillary products.

Guangzhou Hi-Target Navigation Tech Company Limited develops, produces and sells high-precision GNSS software and hardware products. The Company's main products envelopes mapping measurement, GIS data collection, geological disaster monitoring, precision construction and machine control, marine exploration, forestry, urban resource management and national defense etc.

W-Scope Chungju Plant Co., Ltd. develops and manufactures battery separator. The Company develops, produces and sales lithium ion secondary battery separator. W-Scope Chungju Plant markets its products worldwide.

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WCP (393890 KS)

Recent IPOs Carrying Putback Option in Korea: Market's Attention Is on WCP

This post investigates the recent IPOs in Korea which carry putback options. In particular, it looks at WCP, which will likely experience a large...

Sanghyun Park

End of Mandatory Lock-Up Periods for 58 Companies in Korea in December 2022

We discuss end of the mandatory lock-up periods for 58 stocks in Korea in December 2022, among which 9 are in KOSPI and 49 are in KOSDAQ.

Douglas Kim

KOSDAQ150 Index Rebalance: 11 Changes with a Couple of Surprises

There are 11 changes at the Dec rebal: mostly in line with forecasts. SillaJen is a surprise add; Devsisters is a surprise delete. Short interest...

Brian Freitas

KOSPI 200 & KOSDAQ 150 Constituent Changes: Several Surprises

This post details the constituent changes of the KOSPI 200 and KOSDAQ 150 and highlights several surprises along with the passive flow estimations.

Sanghyun Park

KOSPI 200 & KOSDAQ 150 Rebalance Changes + KOSPI 200 & KOSDAQ 150 Exclusion Candidates in 2023

Korea Exchange announced the KOSPI 200, KOSDAQ 150, and KRX 300 rebalance changes today. Lotte Confectionery will be added and Samyang Holdings...

Douglas Kim

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52-week Range

Market Cap (USDm)

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