Category

South Korea

Feb 19
0

Daily Brief South Korea: Korea Stock Exchange KOSPI 200 and more

By | Daily Briefs, South Korea

In today’s briefing:

  • What We’ve Gathered Thus Far Regarding KOREA PREMIUM INDEX: Schedule, Methodology, & NPS

What We’ve Gathered Thus Far Regarding KOREA PREMIUM INDEX: Schedule, Methodology, & NPS

By Sanghyun Park

  • The Feb 26th announcement introduces the Corporate Value Up Program and unveils the Korea Premium Index direction. Methodology finalization expected by mid-March; ETFs launch by mid-May.
  • Similar to JPX Prime 150, KRX aims to target enhancing equity spread and PBR trends (+1.0x) while also integrating dividend growth rate. KOSDAQ stocks may be omitted.
  • NPS’s role is vital for the Korea Premium Index, yet aligning its passive strategy with this index faces challenges. Ongoing discussions aim to adjust regulations for this index investment.

💡 Before it’s here, it’s on Smartkarma

Sign Up for Free

The Smartkarma Preview Pass is your entry to the Independent Investment Research Network

  • ✓ Unlimited Research Summaries
  • ✓ Personalised Alerts
  • ✓ Custom Watchlists
  • ✓ Company Data and News
  • ✓ Events & Webinars
Sign Up for Free


Feb 17
0

Daily Brief South Korea: Korea Stock Exchange Kospi Index and more

By | Daily Briefs, South Korea

In today’s briefing:

  • Emerging Korean Investment Theme: Potential Corporate Defense Mechanisms for Share Cancellations

Emerging Korean Investment Theme: Potential Corporate Defense Mechanisms for Share Cancellations

By Sanghyun Park

  • Local sources confirm government’s focus on strengthening stock market for April election. Market expects aggressive policies for share cancellations, including corporate defense mechanisms.
  • Chosun Ilbo, a government-friendly and influential media outlet,  advocates for corporate defense mechanisms to boost share cancellations, shaping a political atmosphere.
  • This theme is likely to emerge in Korea’s market. We must consider political dynamics and screen companies with high treasury shares for potential stock boosts.

💡 Before it’s here, it’s on Smartkarma

Sign Up for Free

The Smartkarma Preview Pass is your entry to the Independent Investment Research Network

  • ✓ Unlimited Research Summaries
  • ✓ Personalised Alerts
  • ✓ Custom Watchlists
  • ✓ Company Data and News
  • ✓ Events & Webinars
Sign Up for Free


Feb 16
0

Daily Brief South Korea: Hyundai Motor India , ISC Co Ltd and more

By | Daily Briefs, South Korea

In today’s briefing:

  • Initial Thoughts on Hyundai Motor India IPO
  • Sector ETF Rebalancing with Remarkable Price Impact History: ISC In, Wonik IPS Out

Initial Thoughts on Hyundai Motor India IPO

By Douglas Kim

  • Hyundai Motor India has been taking initial steps for an IPO. We believe this IPO could be completed sometime in 4Q 2024. 
  • Hyundai Motor India Limited (HMIL) IPO offering size is estimated to be at least US$3 billion, which would be one of the largest in India and the world this year.
  • If HMIL is valued at US$25 billion and HMC sells a 15% stake, its remaining 85% stake would be worth US$21 billion, representing 55% of HMC’s market cap. 

Sector ETF Rebalancing with Remarkable Price Impact History: ISC In, Wonik IPS Out

By Sanghyun Park

  • Will there be changes in April’s rebalancing? With two weeks left, two names are likely. Wonik IPS may be replaced by ISC Co Ltd, given a ₩150B market cap difference.
  • In the previous rebalancing, constituent changes had a notable price impact. Despite a passive flow impact of +1.0x ADTV, HPSP and EO Technics saw about a 15% 3-day return.
  • Wonik IPS is estimated to receive -4.0x ADTV, while ISC is expected to receive +1.0x ADTV. This is also quite similar to the previous rebalancing.

💡 Before it’s here, it’s on Smartkarma

Sign Up for Free

The Smartkarma Preview Pass is your entry to the Independent Investment Research Network

  • ✓ Unlimited Research Summaries
  • ✓ Personalised Alerts
  • ✓ Custom Watchlists
  • ✓ Company Data and News
  • ✓ Events & Webinars
Sign Up for Free


Feb 15
0

Daily Brief South Korea: KB Financial and more

By | Daily Briefs, South Korea

In today’s briefing:

  • KB Financial Placement – Momentum Has Been Strong and the Last Clean-Up Sale Has Done Well
  • Carlyle Group Selling More than 320 Billion Won Worth of KB Financial in a Block Deal Sale

KB Financial Placement – Momentum Has Been Strong and the Last Clean-Up Sale Has Done Well

By Clarence Chu

  • The Carlyle Group / (CG US) via Kingsman Investment, is looking to raise US$244m from selling its entire stake in KB Financial (105560 KS).
  • Carlyle has been invested in the firm since mid-2020, where it then expressed that it would hold on to its stake for at least three and a half years. 
  • The deal would be a small one to digest at just 3.8 days of KB Financial’s three month ADV, representing 1.2% of its current mcap.

Carlyle Group Selling More than 320 Billion Won Worth of KB Financial in a Block Deal Sale

By Douglas Kim

  • After the market close on 14 February, KB Financial announced that The Carlyle Group is trying to sell a 1.2% stake in the company through a block deal sale. 
  • The expected block deal price range is 64,608 won to 65,954 won per share, representing a 2 to 4% discount to the closing price of 67,300 won on 14 February. 
  • We would pass on this block deal sale. Despite excellent gains so far YTD, there is looming risk of many investors that may bail out of KB Financial post ex-dividend.

💡 Before it’s here, it’s on Smartkarma

Sign Up for Free

The Smartkarma Preview Pass is your entry to the Independent Investment Research Network

  • ✓ Unlimited Research Summaries
  • ✓ Personalised Alerts
  • ✓ Custom Watchlists
  • ✓ Company Data and News
  • ✓ Events & Webinars
Sign Up for Free


Feb 14
0

Daily Brief South Korea: APR, Douzone Bizon and more

By | Daily Briefs, South Korea

In today’s briefing:

  • APR IPO Book-Building Results Analysis
  • Douzone Bizon: A Strong Turnaround Story in the Korean Software Industry

APR IPO Book-Building Results Analysis

By Douglas Kim

  • APR reported a very strong IPO book-building results. APR IPO price has been determined at 250,000 won, which is 25% higher than the high end of the IPO price range.
  • A total of 1,969 institutional investors participated in this IPO book-building. The demand ratio was 663 to 1. APR IPO will start trading on 26 February. 
  • Our base case valuation of APR is target price of 370,809 won per share which represents a 48% upside from the IPO price of 250,000 won. 

Douzone Bizon: A Strong Turnaround Story in the Korean Software Industry

By Douglas Kim

  • Douzone Bizon’s results turned around strongly in 2023. It had sales of 353.6 billion won (up 16.2% YoY) and operating profit of 68.4 billion won (up 50.4% YoY) in 2023.
  • The company plans to release software platforms with artificial intelligence capable functions in 1Q 2024. 
  • The sharp increase in the share price and market cap of Douzone Bizon raises the probability of the company being included in the KOSPI 200 rebalance in 2024.

💡 Before it’s here, it’s on Smartkarma

Sign Up for Free

The Smartkarma Preview Pass is your entry to the Independent Investment Research Network

  • ✓ Unlimited Research Summaries
  • ✓ Personalised Alerts
  • ✓ Custom Watchlists
  • ✓ Company Data and News
  • ✓ Events & Webinars
Sign Up for Free


Feb 13
0

Daily Brief South Korea: Samsung C&T and more

By | Daily Briefs, South Korea

In today’s briefing:

  • Korea: Surging Share Cancellations in 2024

Korea: Surging Share Cancellations in 2024

By Douglas Kim

  • We discuss the surging share cancellations in Korea in 2024. As of 8 February 2024, Korean companies have announced 3.3 trillion won worth of shares to be completed this year. 
  • At current blistering pace, it is likely that the share cancellations in Korea could jump at least 100% YoY to jump more than 10 trillion won in 2024. 
  • Some of the leading Korean companies including Samsung C&T and KT&G that have announced share cancellations this year continue to outperform the market on average. 

💡 Before it’s here, it’s on Smartkarma

Sign Up for Free

The Smartkarma Preview Pass is your entry to the Independent Investment Research Network

  • ✓ Unlimited Research Summaries
  • ✓ Personalised Alerts
  • ✓ Custom Watchlists
  • ✓ Company Data and News
  • ✓ Events & Webinars
Sign Up for Free


Feb 12
0

Daily Brief South Korea: Hyundai Motor and more

By | Daily Briefs, South Korea

In today’s briefing:

  • Exploring Prioritized Buyback/Cancellation of Samsung Electronics & Hyundai Motor Prefs

Exploring Prioritized Buyback/Cancellation of Samsung Electronics & Hyundai Motor Prefs

By Sanghyun Park

  • Samsung Elec & Hyundai Motor’s high proportion of preferred stocks leads to their unusually high cost of capital, making themselves prime targets for the govt’s Corporate Value Up policy.
  • Policy likely focuses on aggressive share buybacks, especially preferred stock repurchase, to improve PBR. Pension funds may invest heavily in ETFs, offsetting dilution effects.
  • Hyundai Motor may pursue more aggressive shareholder returns due to the India listing, possibly prioritizing preferred share repurchases as it introduces risks of value transfer controversies within Korea.

💡 Before it’s here, it’s on Smartkarma

Sign Up for Free

The Smartkarma Preview Pass is your entry to the Independent Investment Research Network

  • ✓ Unlimited Research Summaries
  • ✓ Personalised Alerts
  • ✓ Custom Watchlists
  • ✓ Company Data and News
  • ✓ Events & Webinars
Sign Up for Free


Feb 09
0

Daily Brief South Korea: Woori Financial Group , Korea Stock Exchange KOSPI 200, Kakao Games and more

By | Daily Briefs, South Korea

In today’s briefing:

  • Investigating Potential Block Deals Involving Korea’s Financial Holding Companies
  • Quiddity Leaderboard KOSPI 200 Jun 24: L&F (066970) Likely To Miss Out on Fast Entry in March
  • Kakao Games: Put Options on CB Likely to Drive Lower Share Price

Investigating Potential Block Deals Involving Korea’s Financial Holding Companies

By Sanghyun Park

  • Stake sales by Affinity and Bearing PE are attractive due to the absence of special partnerships with Shinhan Financial Group, indicating favorable exit potential at current stock prices.
  • KB Financial draws attention due to Carlyle’s ₩240B EB investment in 2020. Carlyle can now convert to shares at ₩48,000/share, yielding 37.08%.
  • Woori Financial is intriguing. IMM PE and Eugene PE hold stakes, investing ₩450B and ₩386B respectively. Their yields are 32.55% and 10.45% respectively. No constraints on divestment.

Quiddity Leaderboard KOSPI 200 Jun 24: L&F (066970) Likely To Miss Out on Fast Entry in March

By Travis Lundy

  • KOSPI 200 is a Korean blue-chip index that tracks the 200 largest and most-liquid names listed in the KOSPI section of the Korea Exchange (KRX).
  • In this insight, we take a look at the names leading the race to become ADDs and DELs during the upcoming semiannual review in June 2024.
  • There could be up to four changes in the KOSPI 200 index in the run up to the June 2024 index rebal event including an intra-review fast entry change.

Kakao Games: Put Options on CB Likely to Drive Lower Share Price

By Douglas Kim

  • One of the biggest risks facing Kakao Games is nearly 500 billion won that it may need to pay to investors that exercise their put options on CB.
  • The full exercise of the put options on CBs (500 billion won) could represent nearly 24% of Kakao Games’ market cap at current prices. 
  • The worst case for Kakao Games would be for the company to pay nearly 500 billion won at once by the end of March. 

💡 Before it’s here, it’s on Smartkarma

Sign Up for Free

The Smartkarma Preview Pass is your entry to the Independent Investment Research Network

  • ✓ Unlimited Research Summaries
  • ✓ Personalised Alerts
  • ✓ Custom Watchlists
  • ✓ Company Data and News
  • ✓ Events & Webinars
Sign Up for Free


Feb 08
0

Daily Brief South Korea: Korea Stock Exchange KOSPI 200, Aekyung Chemical , Korea Stock Exchange Kospi Index, KT&G Corporation and more

By | Daily Briefs, South Korea

In today’s briefing:

  • An Optimal Way to Sourcing and Screening Data for Low PBR Theme Stocks in Korea
  • Quiddity Primer for KOSPI 200 Index Rebal Events (2024)
  • KOSPI200 Index Adhoc Rebalance: Potential Replacements for SsangyongC&E
  • Rule Changes to Swap Ratio Calculations for Merger Swaps in Korea
  • A First Major Class Action Lawsuit Against KT&G’s Directors by FCP + KT&G’s Results Analysis in 2023
  • EQD | KOSPI 200 Rally: WEEKLY Resistance Levels

An Optimal Way to Sourcing and Screening Data for Low PBR Theme Stocks in Korea

By Sanghyun Park

  • We can use KRX to access PER, PBR, and dividend yield. However, except for PER, the data, being based on the most recent information, limits its usefulness for proactive positions.
  • So, we should look into FnGuide, which aggregates and provides exclusive consensus data. This website also requires payment for access.
  • However, FnGuide provides some data for free, including PBR. Therefore, we can make use of this within the scope of its free offerings.

Quiddity Primer for KOSPI 200 Index Rebal Events (2024)

By Travis Lundy

  • KOSPI 200 is a Korean blue-chip index that tracks the 200 largest and most-liquid names listed in the KOSPI section of the Korea Exchange (KRX).
  • KOSPI 200 is also used as the underlying index for various financial products such as ETPs, ELS, index funds, and futures/options.
  • In this insight, we take a brief look at the index selection methodology and the historical price and volume performance of KOSPI 200 index rebalance baskets.

KOSPI200 Index Adhoc Rebalance: Potential Replacements for SsangyongC&E

By Brian Freitas

Rule Changes to Swap Ratio Calculations for Merger Swaps in Korea

By Sanghyun Park

  • The Financial Services Commission plans to delegate merger swap ratio determination to corporate autonomy. Initially, only mergers between non-affiliated companies will be affected, with potential extension to affiliate mergers later.
  • The Financial Services Commission aims to start the legislative process in mid-February and complete the amendment by the third quarter of this year.
  • This change will enhance trading dynamics by decreasing the likelihood of prices aligning with the ratio just before merger announcements due to pre-information leakage.

A First Major Class Action Lawsuit Against KT&G’s Directors by FCP + KT&G’s Results Analysis in 2023

By Douglas Kim

  • One of the biggest news facing KT&G this year as been a class action lawsuit against KT&G’s directors by Flashlight Capital Partners.
  • KT&G announced that it will cancel 3.5 million shares (about 315 billion won) on 16 February, which represent 2.6% of its outstanding shares and 16.7% of treasury shares.
  • One of the major reasons why we remain positive on KT&G is that there is a relatively high probability of the company announcing cigarette price hikes in 2H 2024.

EQD | KOSPI 200 Rally: WEEKLY Resistance Levels

By Nico Rosti

  • The KOSPI 200 INDEX last week displayed and impressive bounce, maybe too impressive, too quick, too fast.
  • A short-selling ban is in place until June 2024 for this market, but that does not mean it cannot pull back: according to our models the KOSPI 200 INDEX is OVERBOUGHT.
  • We expect a pullback next week, unless the index closes this week down, in that case SHORT resistance levels will be reset.

💡 Before it’s here, it’s on Smartkarma

Sign Up for Free

The Smartkarma Preview Pass is your entry to the Independent Investment Research Network

  • ✓ Unlimited Research Summaries
  • ✓ Personalised Alerts
  • ✓ Custom Watchlists
  • ✓ Company Data and News
  • ✓ Events & Webinars
Sign Up for Free


Feb 07
0

Daily Brief South Korea: Samhyun and more

By | Daily Briefs, South Korea

In today’s briefing:

  • Samhyun IPO Valuation Analysis

Samhyun IPO Valuation Analysis

By Douglas Kim

  • Our base case valuation of Samhyun is target price of 28,106 won, which is 25% higher than the mid-point of the IPO price range (22,500 won).
  • Given the moderate upside, we have a Positive view of Samhyun IPO. Our base case valuation is based on P/E of 34.6x net profit of 8.6 billion won in 2023.
  • Samhyun developed one of the world’s first CVVD (Continuously Variable Valve Duration) technology for automobile engines, which improves fuel efficiency by controlling the engine’s valve opening time.

💡 Before it’s here, it’s on Smartkarma

Sign Up for Free

The Smartkarma Preview Pass is your entry to the Independent Investment Research Network

  • ✓ Unlimited Research Summaries
  • ✓ Personalised Alerts
  • ✓ Custom Watchlists
  • ✓ Company Data and News
  • ✓ Events & Webinars
Sign Up for Free