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>Due to the matched order fraud incident in recent days, there has been a significant change in the KOSDAQ top 50 rankings, presenting a great opportunity for Yunsung F&amp;C.</li>
<li>The estimated size of the passive inflow that it is likely to receive is approximately 0.5-0.8x ADTV for ETFs alone, and 1.2-1.5x when expanded to all passive funds.</li>
<li>We should note that the level of market exposure to inclusion possibility has been significantly low. Therefore, we can expect a significant price impact at the time of the announcement.</li>
</ul>


Due to the matched order fraud incident in recent days, there has been a significant change in the KOSDAQ top 50 rankings, presenting a great opportunity for Yunsung F&amp;C.
The estimated size of the passive inflow that it is likely to receive is approximately 0.5-0.8x ADTV for ETFs alone, and 1.2-1.5x when expanded to all passive funds.
We should note that the level of market exposure to inclusion possibility has been significantly low. Therefore, we can expect a significant price impact at the time of the announcement.


One Unnoticed Addition to KOSDAQ 150: Yunsung F&C Through Special Inclusion

Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

<ul>
<li>In this insight, we discuss the potential inclusions and exclusions of the upcoming KOSDAQ 150 rebalance in May 2023.</li>
<li>The next round of KOSDAQ 150 rebalance will be announced in May and it will be effective as of end of May 2023.</li>
<li>Typically, the potential inclusions and exclusions to KOSDAQ 150 make their biggest moves in the one to three months prior to the rebalance announcements.</li>
</ul>


In this insight, we discuss the potential inclusions and exclusions of the upcoming KOSDAQ 150 rebalance in May 2023.
The next round of KOSDAQ 150 rebalance will be announced in May and it will be effective as of end of May 2023.
Typically, the potential inclusions and exclusions to KOSDAQ 150 make their biggest moves in the one to three months prior to the rebalance announcements.


Potential Inclusions & Exclusions in KOSDAQ 150 Rebalance in May 2023

Cross Asset Strategy

<ul>
<li>We discuss end of the mandatory lock-up periods for 52 stocks in Korea in February 2023, among which 3 are in KOSPI and 49 are in KOSDAQ.</li>
<li>These 52 stocks on average could be subject to further selling pressures in Febraury and could underperform relative to the market. </li>
<li>Among these 52 stocks, the top 5 market cap stocks include Rainbow Robotics, SillaJen, SOCAR, Sebitchem, and Yunsung F&amp;C.</li>
</ul>


We discuss end of the mandatory lock-up periods for 52 stocks in Korea in February 2023, among which 3 are in KOSPI and 49 are in KOSDAQ.
These 52 stocks on average could be subject to further selling pressures in Febraury and could underperform relative to the market. 
Among these 52 stocks, the top 5 market cap stocks include Rainbow Robotics, SillaJen, SOCAR, Sebitchem, and Yunsung F&amp;C.


End of Mandatory Lock-Up Periods for 52 Companies in Korea in February 2023

<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

Equity Capital Markets

<ul>
<li>Our base case valuation of Yunsung F&amp;C is target price of 53,360 won per share, which is 0.7% higher than the low end of the IPO price range.</li>
<li>Given the lack of upside, we would avoid this IPO.</li>
<li>Yunsung F&amp;C is one of the leaders in Korea in producing mixers for rechargeable battery materials for customers including LG Energy Solution and SK On. </li>
</ul>


Our base case valuation of Yunsung F&amp;C is target price of 53,360 won per share, which is 0.7% higher than the low end of the IPO price range.
Given the lack of upside, we would avoid this IPO.
Yunsung F&amp;C is one of the leaders in Korea in producing mixers for rechargeable battery materials for customers including LG Energy Solution and SK On. 


South Korea

Yunsung F&C Co., Ltd. wholesales and distributes mixing powder and liquid raw materials secondary battery manufacturing equipment. The Company wholesales and distributes pre mixers, storage containers, metal storage tanks, and other related products. Yunsung F&C also offers biopharmaceutical and food services.

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Yunsung F&C (372170 KS)

One Unnoticed Addition to KOSDAQ 150: Yunsung F&C Through Special Inclusion

This post investigates one hidden inclusion candidate to KOSDAQ 150 in the upcoming June review, which the market has mostly overlooked until...

Sanghyun Park

Potential Inclusions & Exclusions in KOSDAQ 150 Rebalance in May 2023

We discuss the potential inclusions and exclusions of the upcoming KOSDAQ 150 rebalance in May 2023 which will be announced in May and it will be...

Douglas Kim

End of Mandatory Lock-Up Periods for 52 Companies in Korea in February 2023

We discuss end of the mandatory lock-up periods for 52 stocks in Korea in February 2023, among which 3 are in KOSPI and 49 are in KOSDAQ.

Douglas Kim

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

Yunsung F&C Valuation Analysis

Our base case valuation of Yunsung F&C is target price of 53,360 won per share, which is 0.7% higher than the low end of the IPO price range. Given...

Douglas Kim

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