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>After losing nearly 60% of its value from its peak at the end of June, <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> appears may have started resuming its uptrend.</li>
<li>In our <a href="https://www.smartkarma.com/insights/is-sk-hynix-000660-ks-about-to-restart-its-rally-tactical-outlook" target="_blank" rel="noopener">latest insight</a> we made a tactical call for a possible restart of the rally, target at 1.7-1.9M (the stock peaked at 1,792,000 on August 18, then pulled back).</li>
<li>This insight leverages our model to present support price zones where to buy SK Hynix's current pullback, to enter a tactical, asymmetric risk LONG trade to ride the trend long-term.
</li>
</ul>


After losing nearly 60% of its value from its peak at the end of June, SK Hynix (000660 KS) appears may have started resuming its uptrend.
In our latest insight we made a tactical call for a possible restart of the rally, target at 1.7-1.9M (the stock peaked at 1,792,000 on August 18, then pulled back).
This insight leverages our model to present support price zones where to buy SK Hynix's current pullback, to enter a tactical, asymmetric risk LONG trade to ride the trend long-term.



SK Hynix (000660 KS) Uptrend Resuming (Tactical Entry, Long-Term)

Equity Long-Short

Mo Aziz

Equity Bottom-Up

<ul>
<li>
 What he said. At the 27 Aug Indiana groundbreaking, CEO Kwak Noh-jung said the memory shortage runs through end-2030 with no downturn signal visible. He was serious on this. </li>
<li>
 What it is worth. If right, FY2027E OP is ~KRW 295tn vs our KRW 250tn base, and FY2026-30 after-tax earnings exceeds its current MCAP. </li>
<li>
 What to do. BULLISH, FV KRW 3,500,000 unchanged — it needs him right on 2027 only as the market is treating the stock as if earnings have peaked already. </li>
</ul>



 What he said. At the 27 Aug Indiana groundbreaking, CEO Kwak Noh-jung said the memory shortage runs through end-2030 with no downturn signal visible. He was serious on this. 

 What it is worth. If right, FY2027E OP is ~KRW 295tn vs our KRW 250tn base, and FY2026-30 after-tax earnings exceeds its current MCAP. 

 What to do. BULLISH, FV KRW 3,500,000 unchanged — it needs him right on 2027 only as the market is treating the stock as if earnings have peaked already. 


SK Hynix: CEO Sees Shortage Through 2030. Big Profits Continues, Yet Still Trades at ~6x PE

Chief Executive Officer, Emmer Capital Partners Limited

Manishi Raychaudhuri

Chief Executive Officer

Emmer Capital Partners Limited

Emmer Capital Partners is an Asia Pacific focused financial advisory firm engaging in strategic financial asset allocation advice, bespoke thematic research and advising early-stage companies and connecting them to investors. Emmer Capital provides macro-economic and multi-asset investment strategy inputs to institutions, family offices, private wealth managers, private equity, and corporate boards directly and through independent research platforms. Emmer Capital also advises a wide range of startup companies on fund raising and business strategy. Emmer Capital's active engagement with the print and electronic media reaches a broad spectrum of investors across the globe.

Cross Asset Strategy

<ul>
<li>In a world of surging interest rates, highly leveraged markets, sectors and stocks are more vulnerable than unleveraged ones. The former set will have skyrocketing capital costs dampening their profitability.</li>
<li>China (86% net debt-equity in 2025), Thailand (105%) and Philippines (118%) are the most leveraged Asian markets. The least leveraged are Taiwan (54%), India (65%), Indonesia (66%) and Korea (68%).</li>
<li>Thai telecom, Philippines transportation, Philippines energy, Korean distribution services, Philippines telecom, Indonesian transportation are the most-leveraged market-sectors. Singapore health technology, Indonesian commercial services, Taiwan energy, Indonesian industrials are the least-leveraged.</li>
</ul>


In a world of surging interest rates, highly leveraged markets, sectors and stocks are more vulnerable than unleveraged ones. The former set will have skyrocketing capital costs dampening their profitability.
China (86% net debt-equity in 2025), Thailand (105%) and Philippines (118%) are the most leveraged Asian markets. The least leveraged are Taiwan (54%), India (65%), Indonesia (66%) and Korea (68%).
Thai telecom, Philippines transportation, Philippines energy, Korean distribution services, Philippines telecom, Indonesian transportation are the most-leveraged market-sectors. Singapore health technology, Indonesian commercial services, Taiwan energy, Indonesian industrials are the least-leveraged.


Derivatives and Quantitative Strategist

Gaudenz Schneider

<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> fell 3.8% in August MTD, while its 2x Leveraged Index declined 13.4% and combined KRX-listed ETF AUM fell 28% to KRW 3.8tn.</li>
<li>The seven KRX-listed 2x long ETFs recorded combined net outflows of KRW 763bn, with units outstanding declining in six products and redemptions amplifying negative performance.</li>
<li>Daily flows in the long and inverse ETFs were negatively correlated, causing associated hedge flows to reinforce rather than offset each other, although the larger long products dominate the effect.</li>
</ul>



SK hynix (000660 KS) fell 3.8% in August MTD, while its 2x Leveraged Index declined 13.4% and combined KRX-listed ETF AUM fell 28% to KRW 3.8tn.
The seven KRX-listed 2x long ETFs recorded combined net outflows of KRW 763bn, with units outstanding declining in six products and redemptions amplifying negative performance.
Daily flows in the long and inverse ETFs were negatively correlated, causing associated hedge flows to reinforce rather than offset each other, although the larger long products dominate the effect.


SK Hynix (000660 KS): 2x Leveraged ETF Redemptions Compound 13% August Index Loss

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

Brian Freitas

Pan-Asia Index Rebalances/ Events/ Delta One

Periscope Analytics

Periscope Analytics focuses on event-driven trades across Asia Pacific and provides comprehensive, timely and systematic coverage of index changes to major Asia Pacific indices in a structured manner.

The analysis includes forecasted inclusions and exclusions to all major Asian indices that have significant amount of tracking assets, including estimates of passive buy/sell flow on the stocks. The service also provides commentary and impact of market consultations, ground rule changes, and other events (IPOs, spin-offs, M&A) that could lead to index changes and passive flow.

Periscope Analytics works with multi-strategy hedge funds, proprietary trading firms, stat arb trading groups and long-only investors that invest and trade in the Asia Pacific region with the data being used to trade index rebalances, avoid pre-positioning and passive flow, and to time entry into and exit from stocks.

Event-Driven Trades Across Asia Pacific

Event-Driven

<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> raised US$26.5bn selling 177.9m shares of <a href="https://www.smartkarma.com/entities/sk-hynix-inc-a4e8e2ec-1a75-4752-b58c-eaa0d074d145" target="_blank" data-smartkarma-citation="entities:50283:1" rel="noopener">SK Hynix (SKHY US)</a> at US$149/share. <a href="https://www.smartkarma.com/entities/sk-hynix-inc-a4e8e2ec-1a75-4752-b58c-eaa0d074d145" target="_blank" data-smartkarma-citation="entities:50283:1" rel="noopener">SK Hynix (SKHY US)</a> closed at a 15.5% premium to the local line.</li>
<li>There will be passive buying in the local shares and the ADR line over the next few months. The ADR line could trade at a premium in the near-term.</li>
<li>We expect the ADR to trade between a 30-35% premium in the very short-term and that could drift lower following the limited passive buying in the ADR.</li>
</ul>



SK Hynix (000660 KS) raised US$26.5bn selling 177.9m shares of SK Hynix (SKHY US) at US$149/share. SK Hynix (SKHY US) closed at a 15.5% premium to the local line.
There will be passive buying in the local shares and the ADR line over the next few months. The ADR line could trade at a premium in the near-term.
We expect the ADR to trade between a 30-35% premium in the very short-term and that could drift lower following the limited passive buying in the ADR.


SK Hynix (000660 KS; SKHY US): Updated Index Flows/Timing & Where Could the Premium Settle?

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)