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>This ETF's AUM has decreased by 17% over the past three months to ₩200B. It has 18 constituents, and it is unlikely that there will be any addition/deletion.</li>
<li>The first thing to note is Hana Tour because the increase in the number of shares through an offering will be reflected its the market cap right before the rebalancing.</li>
<li>Among the top stocks by market cap, Asiana Airlines (020560 KS) (+0,.20x ADTV) and Kangwon Land (035250 KS) (-0.21x ADTV) will likely have a significant passive impact.</li>
</ul>


This ETF's AUM has decreased by 17% over the past three months to ₩200B. It has 18 constituents, and it is unlikely that there will be any addition/deletion.
The first thing to note is Hana Tour because the increase in the number of shares through an offering will be reflected its the market cap right before the rebalancing.
Among the top stocks by market cap, Asiana Airlines (020560 KS) (+0,.20x ADTV) and Kangwon Land (035250 KS) (-0.21x ADTV) will likely have a significant passive impact.


TIGER Theme ETF "Tour Leisure" Rebalancing Projections: Hanatour, Asiana, Kangwon Land, & T'way Air

<ul>
<li>Korean Air might have already notified the creditors of its early repayment decision. Asiana will likely follow suit, immediately triggering the creditors to exercise the conversion rights.</li>
<li>So, both Korean Air and Asiana's conversion should be a foregone conclusion. There is only uncertainty about how many conversions we will actually see for Asiana from the KDB.</li>
<li>Instead of preemptive position setup at this point, I would consider starting the position build-up within the 2-3 day window from the repayment filing to CB conversion.</li>
</ul>


Korean Air might have already notified the creditors of its early repayment decision. Asiana will likely follow suit, immediately triggering the creditors to exercise the conversion rights.
So, both Korean Air and Asiana's conversion should be a foregone conclusion. There is only uncertainty about how many conversions we will actually see for Asiana from the KDB.
Instead of preemptive position setup at this point, I would consider starting the position build-up within the 2-3 day window from the repayment filing to CB conversion.


Korean Air & Asiana Airlines: Current Status of CB Conversion Event

IPOs and Catalysts/Events, Global Equity Research Ltd

Arun George

IPOs and Catalysts/Events

Uncompromised, Independent, Conflict-Free Research

Global Equity Research Ltd

Global Equity Research was started in 2017 by a group of experienced research professionals. It was founded on a passionate belief in the importance and the need for uncompromised, independent, conflict-free research. We aim to provide differentiated and actionable primary and bottom up fundamental research.

Alliance Aviation Services / Event-Driven

<ul>
<li>
<a href="https://www.smartkarma.com/entities/alliance-aviation-services-ltd" target="_blank" data-smartkarma-citation="entities:20401:1" rel="noopener">Alliance Aviation Services (AQZ AU)</a> entered a SID with <a href="https://www.smartkarma.com/entities/qantas-airways-ltd" target="_blank" data-smartkarma-citation="entities:677:1" rel="noopener">Qantas Airways (QAN AU)</a>. Shareholders will receive A$4.75 in Qantas shares for each Alliance share, 35.3% premium to 4 May close. </li>
<li>The key risk is approval from the ACCC, which will start a public review. On 5 April, the ACCC closed an investigation into Qantas’ acquisition of its 19.9% Alliance stake. </li>
<li>Alliance Aviation can pay an additional special cash dividend if ACCC approval takes time. The offer is attractive in the context of historical share prices and multiples.</li>
</ul>



Alliance Aviation Services (AQZ AU) entered a SID with Qantas Airways (QAN AU). Shareholders will receive A$4.75 in Qantas shares for each Alliance share, 35.3% premium to 4 May close. 
The key risk is approval from the ACCC, which will start a public review. On 5 April, the ACCC closed an investigation into Qantas’ acquisition of its 19.9% Alliance stake. 
Alliance Aviation can pay an additional special cash dividend if ACCC approval takes time. The offer is attractive in the context of historical share prices and multiples.


Qantas Aims to Fully Acquire Alliance Aviation

Mirae Asset Tiger Tour Leisure ETF / Event-Driven

Mirae Asset Tiger Tour Leisure ETF (228800 KS)

<ul>
<li>Next Thursday, the rebalancing trading of the WISE Secondary Cell Index will occur. The current AUM is ₩0.24T, and the AUM has slightly increased in the last two weeks.</li>
<li>Five names (2 Longs &amp; 3 Shorts) are screened: <strong>Hana Tour Service, Lotte Tour Development, Asiana Airlines, Paradise Co Ltd, &amp; Hanjin KAL Corp</strong>.</li>
<li>All the short targets are available for short-selling. The Long targets have also not seen much volatility recently, so it looks fine to put them all in a Long/Short basket.</li>
</ul>


Next Thursday, the rebalancing trading of the WISE Secondary Cell Index will occur. The current AUM is ₩0.24T, and the AUM has slightly increased in the last two weeks.
Five names (2 Longs &amp; 3 Shorts) are screened: Hana Tour Service, Lotte Tour Development, Asiana Airlines, Paradise Co Ltd, &amp; Hanjin KAL Corp.
All the short targets are available for short-selling. The Long targets have also not seen much volatility recently, so it looks fine to put them all in a Long/Short basket.


WISE Tour Leisure Rebalancing (TIGER ETF): Long/Short Tradable Names

<ul>
<li>The TIGER Tour Leisure ETF shows the fastest AUM growth among the local themed ETFs in Korea. It seems clear that this is due to the reopening expectations.</li>
<li>The absolute size of AUM seems small. But the number of components is only 19, and most of them are small caps. So the actual passive impact is not small.</li>
<li>Another noteworthy aspect is that the rebalancing is pretty straightforward. It primarily relies on the float-adjusted market caps. So, the rebalancing estimation visibility is relatively high.</li>
</ul>


The TIGER Tour Leisure ETF shows the fastest AUM growth among the local themed ETFs in Korea. It seems clear that this is due to the reopening expectations.
The absolute size of AUM seems small. But the number of components is only 19, and most of them are small caps. So the actual passive impact is not small.
Another noteworthy aspect is that the rebalancing is pretty straightforward. It primarily relies on the float-adjusted market caps. So, the rebalancing estimation visibility is relatively high.


TIGER WISE Tour Leisure ETF Rebalancing Preview

South Korea

Asiana Airlines, Inc. provides air cargo and passenger transportation services throughout South Korea and overseas.  The Company also offers airline catering and on-flight duty free shopping services and operates aircraft leasing business.

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Asiana Airlines (020560 KS)

TIGER Theme ETF "Tour Leisure" Rebalancing Projections: Hanatour, Asiana, Kangwon Land, & T'way Air

This post projects the upcoming rebalancing of the TIGER Theme ETF "Tour Leisure": Hanatour, Asiana, Kangwon Land, & T'way Air.

Sanghyun Park

Korean Air & Asiana Airlines: Current Status of CB Conversion Event

This post investigates the current status of Korean Air and Asiana Airlines' CB conversion event by the creditors: the KDB and the Korea EXIM.

Sanghyun Park

Qantas Aims to Fully Acquire Alliance Aviation

Shareholders will receive A$4.75 in Qantas shares for each Alliance share. ACCC approval is the key risk. At the last close, the gross spread to...

Arun George

WISE Tour Leisure Rebalancing (TIGER ETF): Long/Short Tradable Names

This post recommends Long/Short tradable names for the rebalancing trading event of the WISE Tour Leisure Index (TIGER ETF) next Thursday.

Sanghyun Park

TIGER WISE Tour Leisure ETF Rebalancing Preview

TIGER Tour Leisure ETF's passive impact should be of a meaningful level given its AUM size. So, we need to consider a long/short setup as a basket...

Sanghyun Park

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