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

Sanghyun Park

I investigate special situations, pairs, and index rebalancing trades in Korea.

Korea / Special Sits, Pairs, Index Rebalancing

Kakao Entertainment - Buys US Based Tapas & Radish to Get Ready for an IPO in 2022

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Kakao Corp Placement - Selldown by Founder

Battle Lines Drawn As BABA Builds Out First/Last-Mile Capacity; But Who Will Fund 75+ Bn CNY CapEx?

Clepsydra Capital

Investigate special situations, pairs, and index rebalancing trades in Korea.

Event-Driven

Last week's biggest story would be Kakao, whose loan balance gained 2.25%p, the biggest among the KOSPI stocks.













Top 20 loan balance gainers
Ticker
K200
Short
1W Δ
1W Δ %p
Loan
1W Δ
1W Δ %p


Kakao Corp
035720
9
0.02%
-4.87%
0.00%p
2.89%
351.07%
2.25%p


Daesang Corp
001680
164
0.06%
-23.43%
-0.02%p
3.17%
123.13%
1.75%p


Digital Power Communications Co., Ltd.
026890
#N/A
0.44%
-34.44%
-0.23%p
2.68%
116.50%
1.44%p


Ilyang Pharmaceutical Co., Ltd
007570
134
0.19%
-3.52%
-0.01%p
2.77%
102.55%
1.40%p


LG HAUSYS, LTD.
108670
168
0.14%
-13.50%
-0.02%p
3.29%
58.38%
1.21%p


Hyundai Heavy Industries Holdings Co Ltd
267250
66
0.17%
411.79%
0.14%p
1.38%
444.91%
1.13%p


TS Corp Preference Shares
001795
#N/A
0.00%
#DIV/0!
0.00%p
1.09%
3959.91%
1.06%p


Binggrae Co Ltd
005180
182
0.11%
0.00%
0.00%p
2.55%
66.92%
1.02%p


AK Holdings Inc
006840
#N/A
0.03%
0.00%
0.00%p
1.21%
505.78%
1.01%p


SC Engineering Co., Ltd.
023960
#N/A
0.00%
#DIV/0!
0.00%p
1.06%
1569.56%
0.99%p


Samil Pharmaceutical Co., Ltd.
000520
#N/A
0.64%
100.00%
0.32%p
1.89%
103.53%
0.96%p


LG Display Co Ltd
034220
41
1.41%
0.40%
0.01%p
6.17%
17.69%
0.93%p


SK Networks Co Ltd
001740
154
0.01%
-61.97%
-0.02%p
1.58%
120.18%
0.86%p


Samsung Publishing Co Ltd
068290
#N/A
0.06%
-62.71%
-0.10%p
1.45%
146.53%
0.86%p


KISCO Corp.
104700
#N/A
0.13%
0.00%
0.00%p
1.15%
225.41%
0.80%p


HMM Co Ltd
011200
42
0.09%
-2.66%
0.00%p
4.24%
21.95%
0.76%p


Hyundai Marine &amp; Fire Insurance Co., Ltd
001450
92
0.11%
95.47%
0.05%p
2.42%
41.46%
0.71%p


Posco Chemical Co Ltd
003670
57
0.28%
-11.41%
-0.04%p
2.78%
31.68%
0.67%p


KCTech Co Ltd
281820
#N/A
0.00%
#DIV/0!
0.00%p
1.89%
52.41%
0.65%p


POONGSAN CORPORATION
103140
158
0.05%
-13.97%
-0.01%p
2.19%
40.96%
0.64%p

Source: KRX &amp; KOFIA

Potential shorting seems to be lurking on Kakao's stock split-driven recent bounce. Local retail has fueled the bounce, making it an ideal target of short-selling.Kakao was the second most-bought stock by local retail last week by trading value. 1.03% of the SO and 1.02% of the MC had found new owners among local retail.










Local retail weekly top 10
Ticker
Trading vol
% of SO
Trading value (₩)
% of MC


Samsung Electronics Co Ltd
005930
10,414,800
0.17%
871,760,979,700
0.16%


Kakao Corp
035720
4,573,289
1.03%
547,825,413,400
1.02%


SK Hynix Inc
000660
2,449,023
0.34%
338,060,885,500
0.34%


HYUNDAI MOBIS CO., LTD.
012330
503,443
0.53%
153,238,878,000
0.53%


Lotte Chemical Corp
011170
494,836
1.44%
142,573,014,000
1.44%


Samsung Electronics Co Ltd Preference Shares Non Voting
005935
1,193,020
0.14%
89,537,648,000
0.02%


Samsung Electro-Mechanics Co., Ltd.
009150
330,262
0.44%
62,774,585,500
0.42%


Hybe Co Ltd
352820
246,973
0.69%
60,408,601,500
0.65%


Hotel Shilla Co Ltd
008770
603,222
1.54%
50,732,284,100
1.52%


Celltrion, Inc.
068270
161,278
0.13%
49,662,542,500
0.12%

Source: KRX

The shares continue to outperform the market. 20D Δ sits at 21.49%, pushing up 120D Δ to 71.15%.On the other hand, the street consensus on this year's earnings has been on the decline.It is now down 6.25% from T-3M, resulting in a 32.86% increase in 12M PER, which currently sits at 79.60x, easily a historic high.










Kakao Corp
2021. 4. 19
T-1M
T-3M
T-6M
T-1Y


Sales
5,579.1
5,533.0
5,364.2
4,923.7
4,392.2


OP
779.8
776.4
763.2
681.4
535.5


NP to controlling stake
577.3
584.3
615.8
546.3
399.4


EPS (₩)
1,301
6,587
6,958
6,190
4,593


PER (x)
91.50
75.60
61.40
57.80
37.50


12M PER (x)
79.60
68.24
59.91
60.34
45.84


TP (₩)
122,157
112,575
99,008
86,917
43,267

Source: FnGuide







Kakao Corp

Ticker
035720


MC (₩B)
53,700.9


DTV (₩B)
357.9


Close
₩121,000


52WH
-8.68%


- Date
4/15/21


52WL
259.05%


- Date
4/21/20


20D SMA
16.09%


20D EMA
13.48%


120D SMA
40.22%


20D Δ
21.49%


120D Δ
71.15%


180D Δ
90.25%


RSI (14)
80.59


%K
67.61


%D
65.66

Source: KRX

We are now two weeks away from the short-selling resumption.Loan balance can be a leading indicator. Kakao's loan balance, 2.89% of the SO, may not seem at an alarming level.But given the valuation resistance and local retail-heavy buying pattern, Kakao will likely draw a lot of attention as one of the first short-selling targets in early May if last week's upward trend repeats. 

Kakao, Biggest Gain in Loan Balance Among KOSPI on Valuation Concern Ahead of May 3