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.

Equity Capital Markets

LG Energy Solution / Equity Capital Markets

<ul>
<li>
 This IPO led to unusually high interest from local active funds. This is evidenced by the order volume</li>
<li>
 Nevertheless, many local institutions must have felt burdened with LG Energy's valuation, so they wanted to avoid setting the offering price above the upper end.</li>
<li>
As for the relatively poor lockup result, the issuer's refusal to incentivize lockup to set the float rate to around 10% may also have played a part.</li>
</ul>



 This IPO led to unusually high interest from local active funds. This is evidenced by the order volume

 Nevertheless, many local institutions must have felt burdened with LG Energy's valuation, so they wanted to avoid setting the offering price above the upper end.

As for the relatively poor lockup result, the issuer's refusal to incentivize lockup to set the float rate to around 10% may also have played a part.


Index Rebalance

<ul>
<li>These indices use the GICS for classification. Bio and Internet are very straightforward. But qualitative judgment may be involved in Battery and Game.
</li>
<li>The passive impact of SoulBrain is estimated to be the largest, and LG Chem wouldn't be negligible either.</li>
<li>If AfreecaTV and Douzon Bizon are swapped, they will experience an impact of +2.0x ADTV and -5.0x ADTV. So they will shine the most if the swap takes place.</li>
</ul>


These indices use the GICS for classification. Bio and Internet are very straightforward. But qualitative judgment may be involved in Battery and Game.

The passive impact of SoulBrain is estimated to be the largest, and LG Chem wouldn't be negligible either.
If AfreecaTV and Douzon Bizon are swapped, they will experience an impact of +2.0x ADTV and -5.0x ADTV. So they will shine the most if the swap takes place.


KRX K-New Deal Index Rebalancing: Detailed Methodology & Changes Preview

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

Brian Freitas

Pan-Asia Index Rebalances/ Events/ Delta One

<ul>
<li>The review period for the March rebalance ends on 31 January, the announcement of the changes will be end February/beginning March, implementation will be at the close on 10 March.</li>
<li>
<a href="https://www.smartkarma.com/entities/lg-energy-solution" target="_blank" data-smartkarma-citation="entities:33464:1" rel="noopener">LG Energy Solution (LGENERGY KS)</a> will be included in the Battery index, and there will be other changes to the Bio, Internet, Game and BBIG indices.</li>
<li>The largest selling is expected to be on <a href="https://www.smartkarma.com/entities/douzone-bizon-co-ltd" target="_blank" data-smartkarma-citation="entities:20161:1" rel="noopener">Douzone Bizon (012510 KS)</a> due to a potential downweight in the Internet index and a deletion from the BBIG index.</li>
</ul>


The review period for the March rebalance ends on 31 January, the announcement of the changes will be end February/beginning March, implementation will be at the close on 10 March.

LG Energy Solution (LGENERGY KS) will be included in the Battery index, and there will be other changes to the Bio, Internet, Game and BBIG indices.
The largest selling is expected to be on Douzone Bizon (012510 KS) due to a potential downweight in the Internet index and a deletion from the BBIG index.


KRX BBIG Index Rebalance Preview (March): LG Energy Should Be Added; Plus Other Changes

<ul>
<li>The two largest battery-themed ETFs in Korea, TIGER (305540) and KODEX (305720), have confirmed the Fast Entry rules for IPO stocks AND spin-off companies due to equity carve-out (ECO).</li>
<li>The official application date for these rule changes is January 26th for KODEX and January 28th for TIGER. LG Energy will be subject to the new Fast Entry rules.</li>
<li>For LG Energy, 0.32% of SO will flow through KODEX, and TIGER will be 0.2%. LG Chem will experience a combined passive outflow of 1.8x ADTV for one day.</li>
</ul>


The two largest battery-themed ETFs in Korea, TIGER (305540) and KODEX (305720), have confirmed the Fast Entry rules for IPO stocks AND spin-off companies due to equity carve-out (ECO).
The official application date for these rule changes is January 26th for KODEX and January 28th for TIGER. LG Energy will be subject to the new Fast Entry rules.
For LG Energy, 0.32% of SO will flow through KODEX, and TIGER will be 0.2%. LG Chem will experience a combined passive outflow of 1.8x ADTV for one day.


Local Battery ETFs Fast Entry Rule Changes: Official Regulatory Filings

Japan/Asia Long-Short, LightStream Research

Mio Kato

Japan/Asia Long-Short

Long-Short Analysis on Japan, Asia and the World

LightStream Research

LightStream conducts quantitatively rigorous and data-driven analysis with a focus on Japan and Asia.

We consistently cover the Tech, Consumer and Industrial sectors, and provide ECM and Events coverage more broadly.

We supplement traditional qualitative insights from company relationships with a robust quantitative foundation that examines as much historical data as is available.
We further refine the accuracy of our insights and calls through the use of alternative data to flesh out current trends, and through a valuation framework that emphasises non-superficial peer group selection and a proper attempt to understand the metrics and changes that have driven security valuations in the past.

Event-Driven

<ul>
<li>Our enthusiasm for the LG Energy Solutions IPO has been rather muted given a plethora of red flags and demanding valuations. </li>
<li>However, given market enthusiasm for the name, the underperformance of parent LG Chem created an opportunity. </li>
<li>A 16% move in four days has corrected most of the discrepancy though and it is time to leave in our view.</li>
</ul>


Our enthusiasm for the LG Energy Solutions IPO has been rather muted given a plethora of red flags and demanding valuations. 
However, given market enthusiasm for the name, the underperformance of parent LG Chem created an opportunity. 
A 16% move in four days has corrected most of the discrepancy though and it is time to leave in our view.


LG Chem – Holdco Discount Narrowed Like a Charm… Time to Exit

South Korea

LG Chem Ltd. is a chemical manufacturer. The Company's products include petrochemicals, plastic resins, and engineering plastics. LG Chem also produces industrial and electronic materials.

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LG Chem (051915 KS)

LG Energy Bookbuilding: Detailed Results

This post details the bookbuilding results of LG Energy IPO and discusses noteworthy aspects shown by local institutions.

Sanghyun Park

KRX K-New Deal Index Rebalancing: Detailed Methodology & Changes Preview

This post details the full methodology of the KRX K-New Deal Index Rebalancing and previews likely changes in the upcoming rebalancing.

Sanghyun Park

KRX BBIG Index Rebalance Preview (March): LG Energy Should Be Added; Plus Other Changes

LG Energy should be added to the Secondary Battery and BBIG indices. There are changes to the Bio, Internet and Game indices too. Douzone Bizon...

Brian Freitas

Local Battery ETFs Fast Entry Rule Changes: Official Regulatory Filings

The two largest battery-themed ETFs in Korea, TIGER (305540) and KODEX (305720), have confirmed the Fast Entry rules for IPO stocks AND spin-off...

Sanghyun Park

LG Chem – Holdco Discount Narrowed Like a Charm… Time to Exit

Market enthusiasm for the LG Energy IPO and the underperformance of parent LG Chem created an opportunity. A 16% move in four days has corrected...

Mio Kato

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