In today’s briefing:
- Investigating the Size and Timing of Korea’s Local Dividend Arbitrage Traders’ Position Liquidation
- [KE Holdings (BEKE US, BUY, TP US$24) Review]: Investor Friendly & Best-In-Class…Reiterate BUY
Investigating the Size and Timing of Korea’s Local Dividend Arbitrage Traders’ Position Liquidation
- Estimating FINANCIAL INVESTMENT’s dividend arbitrage positions’ exact size and liquidation plans is challenging. Yet, past trading patterns suggest a substantial portion may be liquidated soon, akin to January’s volume (≥₩2T).
- Many local market participants expect a scenario unfolding post-March, aligning with KOSPI companies rescheduling ex-dividend dates. Expect substantial position liquidation by April’s end, likely impacting index negatively, akin to January.
- Position setups should adapt to short-term index corrections, leveraging earnings season for earnings-based spreads using index short hedging.
[KE Holdings (BEKE US, BUY, TP US$24) Review]: Investor Friendly & Best-In-Class…Reiterate BUY
- KE Holdings’ (BEKE) reported C4Q23 revenue 6.2%/7.5% above our est./cons.. Its non-GAAP net income miss our est. by 8.3%, due to bad debt write-off and year-end bonus
- Although recovery in new home market remains muddy, we view Beike’s commitment to deliver 5% yield through dividend and stock buyback as investor friendly.
- We reiterate BUY rating and maintain TP at US$24/ADS .
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