Korea / Special Situations, Clepsydra Capital

Sanghyun Park

Korea / Special Situations

Korea / Special Sits, Pairs, Index Rebalancing

Clepsydra Capital

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

Event-Driven

<ul>
<li>The prior base case was a late October 3Q earnings buyback announcement, followed by a 2~2.5% SO repurchase over six months, but that view is starting to lose traction.</li>
<li>Hynix may avoid it due to cash burn risks amid memory pivot concerns, meaning the expected buyback announcement may not happen.</li>
<li>Hynix may use ADR arb flows to support local shares, with KRW 1.46 million to KRW 1.50 million viewed as the trigger zone at around 2.0x forward PBR.</li>
</ul>


The prior base case was a late October 3Q earnings buyback announcement, followed by a 2~2.5% SO repurchase over six months, but that view is starting to lose traction.
Hynix may avoid it due to cash burn risks amid memory pivot concerns, meaning the expected buyback announcement may not happen.
Hynix may use ADR arb flows to support local shares, with KRW 1.46 million to KRW 1.50 million viewed as the trigger zone at around 2.0x forward PBR.


Hynix ADR Conversion Pool Opening: The Only Realistic Path Forward

Equity Long-Short

Mo Aziz

Equity Bottom-Up

<ul>
<li>The stock is driven by its ETFs, not earnings: realised vol ~1.4x hotter since the 27 May 2x-ETF launch, retail down ~70%, regulators tightening from 5 August.</li>
<li>We sit below consensus at ~KRW58tn Q2 operating profit vs ~KRW64tn street. A print the market calls a "miss" lands on our model and leaves Fair Value intact.</li>
<li>Reiterate BULLISH, Long SK Hynix. Top-quartile ROE at a median multiple, Nvidia's HBM4 lock de-risks demand, and 29 July results should resolve the ETF-driven drawdown upward.</li>
</ul>


The stock is driven by its ETFs, not earnings: realised vol ~1.4x hotter since the 27 May 2x-ETF launch, retail down ~70%, regulators tightening from 5 August.
We sit below consensus at ~KRW58tn Q2 operating profit vs ~KRW64tn street. A print the market calls a "miss" lands on our model and leaves Fair Value intact.
Reiterate BULLISH, Long SK Hynix. Top-quartile ROE at a median multiple, Nvidia's HBM4 lock de-risks demand, and 29 July results should resolve the ETF-driven drawdown upward.


SK HYNIX (000660KS, SKHY US): 29 July - Mark It, Circle It, Put in on Your Fridge

Pan-Asia Tactical Market Calls (Quant-Driven), MRM Research

Nico Rosti

Pan-Asia Tactical Market Calls (Quant-Driven)

MRM Research

Quantitative Research

Equity Derivatives

<ul>
<li>
<a href="https://www.smartkarma.com/entities/sk-hynix-inc" target="_blank" data-smartkarma-citation="entities:16955:1" rel="noopener">SK Hynix (000660 KS)</a> has lost 41% of its value since its peak 1 month ago, a pretty dramatic correction.</li>
<li>No need to state the obvious, 5 weeks down, the stock is ultra-oversold, it should rebound soon but the real question is:how far can the rebound rally go?
</li>
<li>According to our model the upcoming rebound rally is going to be a small rally. Usually this type of rebound pattern can see much lower prices after the 'bounce'.</li>
</ul>



SK Hynix (000660 KS) has lost 41% of its value since its peak 1 month ago, a pretty dramatic correction.
No need to state the obvious, 5 weeks down, the stock is ultra-oversold, it should rebound soon but the real question is:how far can the rebound rally go?

According to our model the upcoming rebound rally is going to be a small rally. Usually this type of rebound pattern can see much lower prices after the 'bounce'.


SK Hynix Tactical Outlook: Imminent Small Rally, And Then?

Derivatives and Quantitative Strategist

Gaudenz Schneider

<ul>
<li>KRX-Listed 2x Long ETFs on SK hynix saw AUM retreat from June highs, but investor interest remains substantial with net flows negative on only four out of 20 trading days.</li>
<li>Regulators are stepping in: Korea will triple minimum deposit requirements for single-stock leveraged ETFs from 31 July, responding to the surge in AUM, heightened volatility and persistent inflows documented here.</li>
<li>The inverse ETF is up 64.2% month-to-date as SK hynix declined, yet experiences outflows. Across the segment, ETF flows and daily rebalancing remain relevant for underlying liquidity.</li>
</ul>


KRX-Listed 2x Long ETFs on SK hynix saw AUM retreat from June highs, but investor interest remains substantial with net flows negative on only four out of 20 trading days.
Regulators are stepping in: Korea will triple minimum deposit requirements for single-stock leveraged ETFs from 31 July, responding to the surge in AUM, heightened volatility and persistent inflows documented here.
The inverse ETF is up 64.2% month-to-date as SK hynix declined, yet experiences outflows. Across the segment, ETF flows and daily rebalancing remain relevant for underlying liquidity.


SK Hynix (000660 KS): Persistent Leveraged ETF Inflows Precede Tighter Rules

<ul>
<li>KSD CEO confirms 2.5%t hard cap on ADR conversion despite 25% SEC headroom. Two way conversion starts July 29, but scaling the cap is fully Hynix call.</li>
<li>Hynix not pushing 2.5% cap hike, instead engaging FSC on ADR registration including third-party conversions. Market confused as past exemptions existed, raising questions on intent and signaling possible hidden agenda.</li>
<li>Market suspects Hynix may limit ADR pool expansion to capture premium, using FSC registration talks as cover. Base case is gradual pool opening with controlled conversion flow.</li>
</ul>


KSD CEO confirms 2.5%t hard cap on ADR conversion despite 25% SEC headroom. Two way conversion starts July 29, but scaling the cap is fully Hynix call.
Hynix not pushing 2.5% cap hike, instead engaging FSC on ADR registration including third-party conversions. Market confused as past exemptions existed, raising questions on intent and signaling possible hidden agenda.
Market suspects Hynix may limit ADR pool expansion to capture premium, using FSC registration talks as cover. Base case is gradual pool opening with controlled conversion flow.


KSD Confirms Hynix ADR 2.5% Hard Cap, Only Hynix Can Expand It. Outlook on the Actual Playbook

South Korea

SK Hynix Inc. provides products and services for the electronic components industry. The Company manufactures semiconductors, such as dynamic random access memory (DRAM), NAND flash memory, and static random access memory (SRAM) chips.

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SK Hynix (000660 KS)

Hynix ADR Conversion Pool Opening: The Only Realistic Path Forward

This post examines the key scenario that could lead to Hynix opening the ADR conversion pool and the potential implications for the stock and ADR...

Sanghyun Park