Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

Cross Asset Strategy

<p>In this insight, we provide a comprehensive list of 24 stocks in Korea that provided <strong>differentiated dividends</strong> to its shareholders in 2020. These 24 stocks on average have been big alpha generators this year and they are up on average 32.4% YTD, outperforming KOSPI and KOSDAQ that are up 9.2% and 4.6%, respectively YTD. The average dividend yields of these 24 stocks are 2.3%.</p><div class="content-highlight">
<p>All in all, the differentiated dividend paying stocks have been big alpha generators this year. However, we want to emphasize that the past performance do not predict future results and that these alpha generating returns may not occur again next year for this group of stocks. Among the 24 stocks below, we would focus on the top 5-10 market caps for a potential basket related strategy including the differentiated dividend paying stocks in Korea.</p>
<p>The top five market cap stocks in this list include the following:</p>
<ul>
<li>Kumho Petrochem</li>
<li>Doosan</li>
<li>Zinus</li>
<li>Seah Besteel</li>
<li>Orion Holdings</li>
</ul>
</div>

In this insight, we provide a comprehensive list of 24 stocks in Korea that provided differentiated dividends to its shareholders in 2020. These 24 stocks on average have been big alpha generators this year and they are up on average 32.4% YTD, outperforming KOSPI and KOSDAQ that are up 9.2% and 4.6%, respectively YTD. The average dividend yields of these 24 stocks are 2.3%.
All in all, the differentiated dividend paying stocks have been big alpha generators this year. However, we want to emphasize that the past performance do not predict future results and that these alpha generating returns may not occur again next year for this group of stocks. Among the 24 stocks below, we would focus on the top 5-10 market caps for a potential basket related strategy including the differentiated dividend paying stocks in Korea.
The top five market cap stocks in this list include the following:

Kumho Petrochem
Doosan
Zinus
Seah Besteel
Orion Holdings



Alpha Generation from Differentiated Dividend Paying Stocks in Korea

<p>The Korea Exchange announced its KOSDAQ150 and KRX300 indices rebalances today. There were 17 new additions and 17 deletions for KOSDAQ150. </p><p>Most of the stocks that were expected to be included in KOSDAQ 150 were officially included in the rebalance. However there were a few surprises. For example <a href="https://www.smartkarma.com/entities/nanos-co-ltd" target="_blank" data-smartkarma-citation="entities:16796:1" rel="noopener">Nanos Co Ltd (151910 KS),</a>which was one of the stocks that was expected to be included in KOSDAQ150, did not get included in this indext this time. On the other hand, the following stocks including <a href="https://www.smartkarma.com/entities/sang-a-frontec-co-ltd" target="_blank" data-smartkarma-citation="entities:20692:1" rel="noopener">Sang A Frontec (089980 KS)</a>, Novarex (194700 KS(, CIS (222080 KS), MedPacto (215980 KS), <a href="https://www.smartkarma.com/entities/koreacenter-com-co-ltd" target="_blank" data-smartkarma-citation="entities:28329:1" rel="noopener">Koreacenter.com Co Ltd (290510 KS)</a>, and Soulbrain (357780 KS) which were not on the top of the lists of getting selected into the KOSDAQ150 index by the locals, were formally selected be part of the new KOSDAQ150 inclusions.  </p><p>The Korea Exchange also made changes to the KRX300 index. Although the KRX300 index is not currently as important as KOSPI200 and KOSDAQ150 indices, it is increasingly gaining in importance among the local institutional investors. The KRX300 had 33 new additions and 35 deletions. </p>

The Korea Exchange announced its KOSDAQ150 and KRX300 indices rebalances today. There were 17 new additions and 17 deletions for KOSDAQ150. Most of the stocks that were expected to be included in KOSDAQ 150 were officially included in the rebalance. However there were a few surprises. For example Nanos Co Ltd (151910 KS),which was one of the stocks that was expected to be included in KOSDAQ150, did not get included in this indext this time. On the other hand, the following stocks including Sang A Frontec (089980 KS), Novarex (194700 KS(, CIS (222080 KS), MedPacto (215980 KS), Koreacenter.com Co Ltd (290510 KS), and Soulbrain (357780 KS) which were not on the top of the lists of getting selected into the KOSDAQ150 index by the locals, were formally selected be part of the new KOSDAQ150 inclusions.  The Korea Exchange also made changes to the KRX300 index. Although the KRX300 index is not currently as important as KOSPI200 and KOSDAQ150 indices, it is increasingly gaining in importance among the local institutional investors. The KRX300 had 33 new additions and 35 deletions. 

KOSDAQ150 and KRX300 Indices Rebalances (Overlapping Additions & Deletions)

<p>KRX announced the rebalance to the KOSPI200 index today. There was not much surprise among the new 10 additions, which included stocks such as Samyang Foods, Zinus, and Kiwoom Securities. However, there was some surprises among the deletions including Unid, <a href="https://www.smartkarma.com/entities/dong-a-socio-holdings-co-ltd" target="_blank" data-smartkarma-citation="entities:4271:1" rel="noopener">Dong A Socio Holdings (000640 KS), </a>and <a href="https://www.smartkarma.com/entities/dong-a-st-co-ltd" target="_blank" data-smartkarma-citation="entities:16873:1" rel="noopener">Dong A St (170900 KS)</a>.</p><p>Among the newly included companies, in terms of their fundamental business outlook and reasonable valuations, we think Samyang Foods, Zinus, and Hanwha Systems fit into these categories. We would be cautious on Big Hit Entertainment, CS Wind, and Shinpoong Pharm as we think there could be some sellers on investors that trade on the "sell on news" strategy of being included in KOSPI 200.  </p>

KRX announced the rebalance to the KOSPI200 index today. There was not much surprise among the new 10 additions, which included stocks such as Samyang Foods, Zinus, and Kiwoom Securities. However, there was some surprises among the deletions including Unid, Dong A Socio Holdings (000640 KS), and Dong A St (170900 KS).Among the newly included companies, in terms of their fundamental business outlook and reasonable valuations, we think Samyang Foods, Zinus, and Hanwha Systems fit into these categories. We would be cautious on Big Hit Entertainment, CS Wind, and Shinpoong Pharm as we think there could be some sellers on investors that trade on the "sell on news" strategy of being included in KOSPI 200.  

KOSPI 200 Index Rebalances: No Surprises Among Additions, A Few Surprises Among Deletions

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

Brian Freitas

Pan-Asia Index Rebalances/ Events/ Delta One

Event-Driven

<p>The KRX has announced the list of inclusions and exclusions to the <a href="https://www.smartkarma.com/entities/korea-stock-exchange-kospi-200-index" target="_blank" data-smartkarma-citation="entities:26021:1" rel="noopener">Korea Stock Exchange Kospi 200 Index (KOSPI2 INDEX)</a> today. The rebalance is effective after the close of trading on 10 December.</p><p>There are 10 inclusions and 10 exclusions in the December 2020 review with an estimated one-way turnover of 1.06%.</p><p>The inclusions and exclusions are:</p><table class="table table-striped">
<colgroup><col span="4"></colgroup>
<tbody>
<tr>
<td colspan="2" style="text-align: center; width: 96pt;"><h3>Inclusions</h3></td>
<td colspan="2" style="text-align: center; width: 96pt;"><h3>Exclusions</h3></td>
</tr>
<tr>
<td><strong>Code</strong></td>
<td><strong>Name</strong></td>
<td><strong>Code</strong></td>
<td><strong>Name</strong></td>
</tr>
<tr>
<td>003090.KS</td>
<td>Daewoong Co Ltd</td>
<td>000640.KS</td>
<td>Dong-A Socio Holdings Co Ltd</td>
</tr>
<tr>
<td>003230.KS</td>
<td>Samyang Foods Co Ltd</td>
<td>001430.KS</td>
<td>SeAH Besteel Corp</td>
</tr>
<tr>
<td>008350.KS</td>
<td>Namsun Aluminium Co Ltd</td>
<td>002270.KS</td>
<td>Lotte Foods Co Ltd</td>
</tr>
<tr>
<td>013890.KS</td>
<td>Zinus Inc</td>
<td>014830.KS</td>
<td>Unid Co Ltd</td>
</tr>
<tr>
<td>019170.KS</td>
<td>Shinpoong Pharmaceutical Co Ltd</td>
<td>019680.KS</td>
<td>Daekyo Co Ltd</td>
</tr>
<tr>
<td>039490.KS</td>
<td>KIWOOM Securities Co Ltd</td>
<td>025860.KS</td>
<td>Namhae Chemical Corp</td>
</tr>
<tr>
<td>112610.KS</td>
<td>CS Wind Corp</td>
<td>027410.KS</td>
<td>BGF Co Ltd</td>
</tr>
<tr>
<td>272210.KS</td>
<td>Hanwha Systems Co Ltd</td>
<td>060980.KS</td>
<td>Halla Holdings Corp</td>
</tr>
<tr>
<td>336260.KS</td>
<td>Doosan Fuel Cell Co Ltd</td>
<td>093050.KS</td>
<td>LF Corp</td>
</tr>
<tr>
<td>352820.KS</td>
<td>Big Hit Entertainment Co Ltd</td>
<td>170900.KS</td>
<td>Dong-A ST Co Ltd</td>
</tr>
</tbody>
</table><p>There are 11 trading days to implementation and there are quite a few deletes that have over 3-4 days of ADV to trade. The impact on the inclusions is smaller but there will be a lot of active funds looking to buy the stocks so they don't deviate too much from their benchmark.</p>

The KRX has announced the list of inclusions and exclusions to the Korea Stock Exchange Kospi 200 Index (KOSPI2 INDEX) today. The rebalance is effective after the close of trading on 10 December.There are 10 inclusions and 10 exclusions in the December 2020 review with an estimated one-way turnover of 1.06%.The inclusions and exclusions are:



Inclusions
Exclusions


Code
Name
Code
Name


003090.KS
Daewoong Co Ltd
000640.KS
Dong-A Socio Holdings Co Ltd


003230.KS
Samyang Foods Co Ltd
001430.KS
SeAH Besteel Corp


008350.KS
Namsun Aluminium Co Ltd
002270.KS
Lotte Foods Co Ltd


013890.KS
Zinus Inc
014830.KS
Unid Co Ltd


019170.KS
Shinpoong Pharmaceutical Co Ltd
019680.KS
Daekyo Co Ltd


039490.KS
KIWOOM Securities Co Ltd
025860.KS
Namhae Chemical Corp


112610.KS
CS Wind Corp
027410.KS
BGF Co Ltd


272210.KS
Hanwha Systems Co Ltd
060980.KS
Halla Holdings Corp


336260.KS
Doosan Fuel Cell Co Ltd
093050.KS
LF Corp


352820.KS
Big Hit Entertainment Co Ltd
170900.KS
Dong-A ST Co Ltd


There are 11 trading days to implementation and there are quite a few deletes that have over 3-4 days of ADV to trade. The impact on the inclusions is smaller but there will be a lot of active funds looking to buy the stocks so they don't deviate too much from their benchmark.

KOSPI200 Index Rebalance: No Surprises Here, but Decent Impact Expected

Korea / Special Sits, Pairs, Index Rebalancing, Clepsydra Capital

Sanghyun Park

Korea / Special Sits, Pairs, Index Rebalancing

<p>We are now four weeks before the KOSPI 200 rebalancing, December 12, Friday.</p><p>That is, we are supposed to be at an optimal point to trade.</p><p>So, I gather trading data (recent passive flow, volatility, price upside, and liquidity) on this rebalancing's additions and deletions.</p>

We are now four weeks before the KOSPI 200 rebalancing, December 12, Friday.That is, we are supposed to be at an optimal point to trade.So, I gather trading data (recent passive flow, volatility, price upside, and liquidity) on this rebalancing's additions and deletions.

KOSPI 200 Rebalancing Trade Data: Recent Passive Flow, Volatility, Upside, & Liquidity

South Korea

Ace Bed Co., Ltd. manufactures and markets bed mattresses, bed frames, and other wooden furniture.  The Company exports some of its products to Indonesia and China.

Paseco Co., Ltd. manufactures and markets household appliances, such as oil stoves, electric heaters, dishwashers, dish dryers, and refrigerators.

Hyundai Livart Co Ltd designs and manufactures furniture.  The Company produces a variety of furniture, such as bed, chair, desk, and closet used in bedroom, living room, and office.

Topfield Co., Ltd. manufactures digital set top boxes.  The Company's products include free to air receivers, personal video recorders, and common interface receivers.  Topfield provides its products mainly to overseas market.

Iriver Ltd. develops, designs, manufactures, and markets audio equipment, such as MP3 players.  The Company's products include CD type, flash memory type, and hard disk type MP3 players.  In addition, Iriver produces and sells accessories for mobile communication devices.

Thinkware Systems Corp. designs, manufactures, and markets navigational devices. The Company' products include portable navigation devices, hand-held navigation, and navigation software.  Thinkware Systems also provides location based services (LBS) through mobile networks which enables users to identify location of other users and obtain live traffic information, etc.

Anam Electronics Co., Ltd. specializes in manufacturing audio and video products, such as wide screen televisions, video cassette recorders, and DVD players.  The Company also produces digital set-top boxes that receive satellite broadcasting programs.

Shinil Industrial Co., Ltd. manufactures electric fans, ovens, rice pots, small refrigerators, pagers, electric heaters, and other household appliances.

Winix Inc. develops, manufactures, and markets heat exchangers, evaporators, condensers, and air conditioner parts.  The Company also produces water heaters, coolers, purifiers, and dehumidifiers.  Winix supplies its products mainly to appliance manufacturers.

Zaigle Co., Ltd. manufactures household cooking appliance.  The Company's products include oven range, frying pan, and grill.

Sern Kou Resources Berhad is an investment holding company. The Company, through its subsidiaries, manufactures wooden and metal furniture and trades kiln-dried rubber wood.

TOA CORPORATION manufactures and sells sound and information & communication equipment.  The Company's products include loudspeakers, microphones, amplifiers, signal processors, digital mixing systems, and conference systems.

Fuji Corporation Ltd. sells single-family houses and condominiums, primarily in Osaka and Wakayama prefectures. The Company offers real estate management plans for building owners and landholders. Additionally, Fuji operates real estate brokerage and leasing businesses.

Guangdong Anjubao Digital Technology Company Limited researches, designs, produces, sells and provide services on building intercom systems, intelligent home systems and burglar alarm systems.

EG Industries Berhad is an investment holding company. Through its subsidiaries, the Company manufactures and sells individual speaker drivers, speaker systems, and parquet flooring. EG Industries also operates as a subcontractor for the manufacture of speaker systems received on consignment basis.

Anhui Deli Household Glass Co Ltd. manufactures glassware products. The Company supplies various products, mainly with machine blown-molded cups, machine press-molded cups, gift cups with  advertisement, kettles, vases, ashtray, sealed jar, glass bowl, candleholder and plates etc.

Action Electronics Co., Ltd. manufactures and markets high resolution color televisions (TVs) , liquid crystal display (LCD) TVs, video compact disks (VCDs), and mini televisions.  The Company markets its products under the ACTION brand  name.  Action Electronics exports its products to Europe, America, and Asia.

Zeng Hsing Industrial Co., Limited manufactures sewing machines and floor care products.

NACCO Industries, Inc. is an operating holding company. The Company's subsidiaries operate in coal mining and marketing, small electric household appliances, commercial products for restaurants, bars and hotels, and specialty retail of kitchenware and gourmet foods.

Flexsteel Industries, Inc. manufactures and sells wooden and upholstered furniture for the retail, contract, and recreational vehicle (RV) furniture markets. The Company's products are sold to furniture dealers, department stores, and RV manufacturers throughout the United States. Flexsteel also sells its products to several national chains that sell on a private label basis.

Zinus Inc. wholesales and distributes household furniture. The Company wholesales and distributes bed frames, sofas, platform beds, mattresses, and other related products. Zinus markets its products worldwide.

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Zinus (013890 KS)

Alpha Generation from Differentiated Dividend Paying Stocks in Korea

We provide a comprehensive list of 24 stocks in Korea that provided differentiated dividends to its shareholders in 2020. These stocks on average...

Douglas Kim

KOSDAQ150 and KRX300 Indices Rebalances (Overlapping Additions & Deletions)

We highlight the KOSDAQ150 and KRX300 indices rebalances. There are some interesting new names, especially among those that are over lapping in...

Douglas Kim

KOSPI 200 Index Rebalances: No Surprises Among Additions, A Few Surprises Among Deletions

KRX anounced its KOSPI200 index rebalance. There were no surprises among the new additions but a few surprises among the deletions.

Douglas Kim

KOSPI200 Index Rebalance: No Surprises Here, but Decent Impact Expected

There are 10 inclusions and exclusions in the KOSPI200 and there is significant impact expected some of the stocks. We feel the inclusions could...

Brian Freitas

KOSPI 200 Rebalancing Trade Data: Recent Passive Flow, Volatility, Upside, & Liquidity

We are now four weeks before the KOSPI 200 rebalancing. This insight has trading data (recent passive flow, volatility, price upside, and...

Sanghyun Park

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