Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

Event-Driven

<div class="content-highlight">
<p><strong>Sum of the value of SK Square and SK Telecom post split</strong> - Using our base case valuations of SK Square and SK Telecom post split, the combined market caps of these two companies would be 30.2 trillion won, which is 38% higher than the current market cap of 21.9 trillion won.</p>
<ul>
<li>Our base case valuation of SK Square (post split) is 48% higher than the initial  value of SK Square.</li>
<li>Our base case valuation of SK Telecom (post split) is 31% higher than the initial value of SK Telecom. </li>
</ul>
</div><p>Our base case valuation of <strong>SK Square</strong> is an implied market cap of 12.8 trillion won, which would be 48% higher than the initial market cap of 8.6 trillion won for SK Square (using current market cap of 21.9 trillion won for SK Telecom and split ratio of (0.607:0.393). Our base case valuation of SK Square uses a 40% holdco discount rate. The biggest component of the NAV include SK Square's stake in SK Hynix (13.7 trillion won), ADT Caps (2.5 trillion won), and 11st (2.2 trillion won).</p><p>Our base case valuation of<strong> SK Telecom (post split)</strong> is implied market cap of 17.5 trillion won, which would be 31% higher than the initial market cap (adjusted for split ratio) of 13.3 trillion won for the company. We have used EV/EBITDA ratio of 5x using our estimated EBITDA of 4.5 trillion won for the company in 2022.</p>


Sum of the value of SK Square and SK Telecom post split - Using our base case valuations of SK Square and SK Telecom post split, the combined market caps of these two companies would be 30.2 trillion won, which is 38% higher than the current market cap of 21.9 trillion won.

Our base case valuation of SK Square (post split) is 48% higher than the initial  value of SK Square.
Our base case valuation of SK Telecom (post split) is 31% higher than the initial value of SK Telecom. 

Our base case valuation of SK Square is an implied market cap of 12.8 trillion won, which would be 48% higher than the initial market cap of 8.6 trillion won for SK Square (using current market cap of 21.9 trillion won for SK Telecom and split ratio of (0.607:0.393). Our base case valuation of SK Square uses a 40% holdco discount rate. The biggest component of the NAV include SK Square's stake in SK Hynix (13.7 trillion won), ADT Caps (2.5 trillion won), and 11st (2.2 trillion won).Our base case valuation of SK Telecom (post split) is implied market cap of 17.5 trillion won, which would be 31% higher than the initial market cap (adjusted for split ratio) of 13.3 trillion won for the company. We have used EV/EBITDA ratio of 5x using our estimated EBITDA of 4.5 trillion won for the company in 2022.

SK Square & SK Telecom - Valuation Analysis Post Split

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.

<p>KOSPI 200 December rebalancing's review period is May 1 to October 31.</p><h2>Adds</h2><p>Below is the list of the likely additions based on the average daily market cap from May 1 to yesterday. All of them have a pretty decent shot at joining KOSPI 200 at this point.</p><table class="table table-striped">
<colgroup>
<col width="100">
<col width="100">
<col width="100">
<col width="100">
<col width="100">
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<tbody>
<tr>
<td data-sheets-value='{"1":2,"2":"KOSPI 200 adds - screening"}'>KOSPI 200 adds - screening</td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"Ticker"}'>Ticker</td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"Cumulative average daily market cap"}'>Cumulative average daily market cap</td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"Average daily market cap ranking"}'>Average daily market cap ranking</td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"Cumulative average daily trading value"}'>Cumulative average daily trading value</td>
</tr>
<tr>
<td></td>
<td style="text-align: right;"></td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"&gt; 15th percentile"}'>&gt; 15th percentile</td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"&lt; 90.00%"}'>&lt; 90.00%</td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"&gt; 15th percentile"}'><div><div>&gt; 15th percentile</div></div></td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"PI Advanced Materials Co Ltd"}'><strong>PI Advanced Materials</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":178920}'>178920</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0.19436336904045193}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}'><strong>19.44%</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0.8148148148148148}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}'><strong>81.48%</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0.8313253012048193}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}'>83.13%</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Myoung Shin Industrial Co Ltd"}'><strong>Myoung Shin Industrial</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"009900"}'>009900</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0.18064633216832338}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}'><strong>18.06%</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0.6388888888888888}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}'><strong>63.89%</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0.9681528662420382}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}'>96.82%</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"SL Corp"}'><strong>SL Corp</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"005850"}'>005850</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0.16233071177081637}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}'><strong>16.23%</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0.7222222222222222}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}'><strong>72.22%</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0.6751592356687899}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}'>67.52%</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Meritz Financial Group Inc"}'><strong>Meritz Financial Group</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":138040}'>138040</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0.18331189030260275}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}'><strong>18.33%</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0.8947368421052632}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}'><strong>89.47%</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0.6268656716417911}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}'>62.69%</td>
</tr>
<tr><td colspan="5" rowspan="1" data-sheets-value='{"1":2,"2":"Source: KRX &amp; FnGuide"}'>Source: KRX &amp; FnGuide</td></tr>
</tbody>
</table><div class="content-highlight"><p>F&amp;F (383220), Iljin Hysolus (271940), and SD Biosensor (137310) are also meeting the inclusion screening requirements. But they do not meet the minimum listing period of 6 months, so they will not be included in the index for this rebalancing. At their current market caps, they will likely join KOSPI 200 in the June rebalancing next year.</p></div><p>Below are the passive inflow estimates for each likely addition. Meritz Financial Group and SL Corp are expected to experience significant passive inflow at 1.91x and 1.69x compared to ADTV, respectively.</p><table class="table table-striped">
<colgroup>
<col width="100">
<col width="100">
<col width="100">
<col width="100">
<col width="100">
</colgroup>
<tbody>
<tr>
<td data-sheets-value='{"1":2,"2":"KOSPI 200 adds - passive inflow"}'>KOSPI 200 adds - passive inflow</td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"Ticker"}'>Ticker</td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"Estimated passive inflow"}'>Estimated passive inflow</td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"Shares in"}'>Shares-in</td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"Days to buy"}'>Days to buy (est. passive inflow / ADTV)</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"PI Advanced Materials Co Ltd"}'><strong>PI Advanced Materials</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":178920}'>178920</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":10.825840665461046}' data-sheets-numberformat='{"1":2,"2":"₩#,##0.0B"}'>₩10.8B</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":214798.42590200488}' data-sheets-numberformat='{"1":2,"2":"#,##0","3":1}'>214,798</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0.9039685638683741}' data-sheets-numberformat='{"1":2,"2":"#,##0.00x","3":1}'><strong>0.90x</strong></td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Myoung Shin Industrial Co Ltd"}'><strong>Myoung Shin Industrial</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"009900"}'>009900</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":10.991761963498126}' data-sheets-numberformat='{"1":2,"2":"₩#,##0.0B"}'>₩11.0B</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":427695.0180349466}' data-sheets-numberformat='{"1":2,"2":"#,##0","3":1}'>427,695</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0.30905100286068315}' data-sheets-numberformat='{"1":2,"2":"#,##0.00x","3":1}'><strong>0.31x</strong></td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"SL Corp"}'><strong>SL Corp</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"005850"}'>005850</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":6.550051172140481}' data-sheets-numberformat='{"1":2,"2":"₩#,##0.0B"}'>₩6.6B</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":254370.91930642645}' data-sheets-numberformat='{"1":2,"2":"#,##0","3":1}'>254,371</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":1.6851889200919719}' data-sheets-numberformat='{"1":2,"2":"#,##0.00x","3":1}'><strong>1.69x</strong></td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Meritz Financial Group Inc"}'><strong>Meritz Financial Group</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":138040}'>138040</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":15.155515711760314}' data-sheets-numberformat='{"1":2,"2":"₩#,##0.0B"}'>₩15.2B</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":470668.18980622094}' data-sheets-numberformat='{"1":2,"2":"#,##0","3":1}'>470,668</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":1.905338234034025}' data-sheets-numberformat='{"1":2,"2":"#,##0.00x","3":1}'><strong>1.91x</strong></td>
</tr>
<tr><td colspan="5" rowspan="1" data-sheets-value='{"1":2,"2":"Source: KRX &amp; FnGuide"}'>Source: KRX &amp; FnGuide</td></tr>
</tbody>
</table><h2>Deletes</h2><p>Below is the list of the likely deletions based on the average daily market cap from May 1 to yesterday. Of these five candidates, the first three have a higher chance of leaving the index. Then, one of the last two (Lotte Himart or LX Hausys) will likely join the rest to leave the index.</p><table class="table table-striped">
<colgroup>
<col width="100">
<col width="100">
<col width="100">
<col width="100">
<col width="100">
</colgroup>
<tbody>
<tr>
<td data-sheets-value='{"1":2,"2":"KOSPI 200 deletes - screening"}'>KOSPI 200 deletes - screening</td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"Ticker"}'>Ticker</td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"Cumulative average daily market cap"}'>Cumulative average daily market cap</td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"Average daily market cap ranking"}'>Average daily market cap ranking</td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"Cumulative average daily trading value"}'>Cumulative average daily trading value</td>
</tr>
<tr>
<td></td>
<td style="text-align: right;"></td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"&gt; 15th percentile"}'>&lt; 15th percentile</td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"&gt; 110.00%"}'>&gt; 110.00%</td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"&gt; 15th percentile"}'><div><div>&gt; 15th percentile</div></div></td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Samyang Foods Co Ltd"}'><strong>Samyang Foods</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"003230"}'>003230</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0.09118900815365227}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}'><strong>9.12%</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":1.2173913043478262}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}'><strong>121.74%</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0.5416666666666667}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}'>54.17%</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Ilyang Pharmaceutical Co., Ltd"}'><strong>Ilyang Pharmaceutical</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"007570"}'>007570</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0.05931317465504915}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}'><strong>5.93%</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":1.4444444444444444}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}'><strong>144.44%</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0.5614035087719298}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}'>56.14%</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"LX Holdings Corp"}'><strong>LX Holdings</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":383800}'>383800</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0.09812342876337998}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}'><strong>9.81%</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":1.2}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}'><strong>120.00%</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0.5176470588235293}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}'>51.76%</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"LOTTE Himart Co Ltd"}'><strong>LOTTE Himart</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"071840"}'>071840</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0.09733771137498692}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}'><strong>9.73%</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":1.1388888888888888}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}'><strong>113.89%</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0.5605095541401274}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}'>56.05%</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"LX Hausys Ltd"}'><strong>LX Hausys</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":108670}'>108670</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0.10423769792069448}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}'><strong>10.42%</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":1.16}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}'><strong>116.00%</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0.6705882352941177}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}'>67.06%</td>
</tr>
<tr><td colspan="5" rowspan="1" data-sheets-value='{"1":2,"2":"Source: KRX &amp; FnGuide"}'>Source: KRX &amp; FnGuide</td></tr>
</tbody>
</table><p>Below are the passive outflow estimates for each likely deletion. Samyang Foods and Lotte Himart will likely suffer the harshest passive outflow at 2.40x and 2.12x compared to ADTV, respectively.</p><table class="table table-striped">
<colgroup>
<col width="100">
<col width="100">
<col width="100">
<col width="100">
<col width="100">
</colgroup>
<tbody>
<tr>
<td data-sheets-value='{"1":2,"2":"KOSPI 200 deletes - passive outflow"}'>KOSPI 200 deletes - passive outflow</td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"Ticker"}'>Ticker</td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"Estimated passive outflow"}'>Estimated passive outflow</td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"Shares-out"}'>Shares-out</td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"Days to cover"}'>Days to cover (est. passive outflow / ADTV)</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Samyang Foods Co Ltd"}'><strong>Samyang Foods</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"003230"}'>003230</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":4}' data-sheets-numberformat='{"1":2,"2":"₩#,##0.0B"}'>₩4.0B</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":46948.35680751174}' data-sheets-numberformat='{"1":2,"2":"#,##0","3":1}'>46,948</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":2.3955941922623576}' data-sheets-numberformat='{"1":2,"2":"#,##0.00x","3":1}'><strong>2.40x</strong></td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Ilyang Pharmaceutical Co., Ltd"}'><strong>Ilyang Pharmaceutical</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"007570"}'>007570</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":5.999999999999999}' data-sheets-numberformat='{"1":2,"2":"₩#,##0.0B"}'>₩6.0B</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":207972.27036395145}' data-sheets-numberformat='{"1":2,"2":"#,##0","3":1}'>207,972</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":1.1713189148648702}' data-sheets-numberformat='{"1":2,"2":"#,##0.00x","3":1}'><strong>1.17x</strong></td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"LX Holdings Corp"}'><strong>LX Holdings</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":383800}'>383800</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":5.999999999999999}' data-sheets-numberformat='{"1":2,"2":"₩#,##0.0B"}'>₩6.0B</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":673400.6734006733}' data-sheets-numberformat='{"1":2,"2":"#,##0","3":1}'>673,401</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":1.7705475669560264}' data-sheets-numberformat='{"1":2,"2":"#,##0.00x","3":1}'><strong>1.77x</strong></td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"LOTTE Himart Co Ltd"}'><strong>LOTTE Himart</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"071840"}'>071840</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":4}' data-sheets-numberformat='{"1":2,"2":"₩#,##0.0B"}'>₩4.0B</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":139616.05584642233}' data-sheets-numberformat='{"1":2,"2":"#,##0","3":1}'>139,616</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":2.1244720753282564}' data-sheets-numberformat='{"1":2,"2":"#,##0.00x","3":1}'><strong>2.12x</strong></td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"LX Hausys Ltd"}'><strong>LX Hausys</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":108670}'>108670</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":8}' data-sheets-numberformat='{"1":2,"2":"₩#,##0.0B"}'>₩8.0B</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":108695.65217391304}' data-sheets-numberformat='{"1":2,"2":"#,##0","3":1}'>108,696</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":1.2487943625014968}' data-sheets-numberformat='{"1":2,"2":"#,##0.00x","3":1}'><strong>1.25x</strong></td>
</tr>
<tr><td colspan="5" rowspan="1" data-sheets-value='{"1":2,"2":"Source: KRX &amp; FnGuide"}'>Source: KRX &amp; FnGuide</td></tr>
</tbody>
</table>

KOSPI 200 December rebalancing's review period is May 1 to October 31.AddsBelow is the list of the likely additions based on the average daily market cap from May 1 to yesterday. All of them have a pretty decent shot at joining KOSPI 200 at this point.









KOSPI 200 adds - screening
Ticker
Cumulative average daily market cap
Average daily market cap ranking
Cumulative average daily trading value




&gt; 15th percentile
&lt; 90.00%
&gt; 15th percentile


PI Advanced Materials
178920
19.44%
81.48%
83.13%


Myoung Shin Industrial
009900
18.06%
63.89%
96.82%


SL Corp
005850
16.23%
72.22%
67.52%


Meritz Financial Group
138040
18.33%
89.47%
62.69%

Source: KRX &amp; FnGuide

F&amp;F (383220), Iljin Hysolus (271940), and SD Biosensor (137310) are also meeting the inclusion screening requirements. But they do not meet the minimum listing period of 6 months, so they will not be included in the index for this rebalancing. At their current market caps, they will likely join KOSPI 200 in the June rebalancing next year.Below are the passive inflow estimates for each likely addition. Meritz Financial Group and SL Corp are expected to experience significant passive inflow at 1.91x and 1.69x compared to ADTV, respectively.









KOSPI 200 adds - passive inflow
Ticker
Estimated passive inflow
Shares-in
Days to buy (est. passive inflow / ADTV)


PI Advanced Materials
178920
₩10.8B
214,798
0.90x


Myoung Shin Industrial
009900
₩11.0B
427,695
0.31x


SL Corp
005850
₩6.6B
254,371
1.69x


Meritz Financial Group
138040
₩15.2B
470,668
1.91x

Source: KRX &amp; FnGuide

DeletesBelow is the list of the likely deletions based on the average daily market cap from May 1 to yesterday. Of these five candidates, the first three have a higher chance of leaving the index. Then, one of the last two (Lotte Himart or LX Hausys) will likely join the rest to leave the index.









KOSPI 200 deletes - screening
Ticker
Cumulative average daily market cap
Average daily market cap ranking
Cumulative average daily trading value




&lt; 15th percentile
&gt; 110.00%
&gt; 15th percentile


Samyang Foods
003230
9.12%
121.74%
54.17%


Ilyang Pharmaceutical
007570
5.93%
144.44%
56.14%


LX Holdings
383800
9.81%
120.00%
51.76%


LOTTE Himart
071840
9.73%
113.89%
56.05%


LX Hausys
108670
10.42%
116.00%
67.06%

Source: KRX &amp; FnGuide

Below are the passive outflow estimates for each likely deletion. Samyang Foods and Lotte Himart will likely suffer the harshest passive outflow at 2.40x and 2.12x compared to ADTV, respectively.









KOSPI 200 deletes - passive outflow
Ticker
Estimated passive outflow
Shares-out
Days to cover (est. passive outflow / ADTV)


Samyang Foods
003230
₩4.0B
46,948
2.40x


Ilyang Pharmaceutical
007570
₩6.0B
207,972
1.17x


LX Holdings
383800
₩6.0B
673,401
1.77x


LOTTE Himart
071840
₩4.0B
139,616
2.12x


LX Hausys
108670
₩8.0B
108,696
1.25x

Source: KRX &amp; FnGuide



KOSPI 200 December Rebalancing: 5 Adds/Deletes & Special Considerations

Chart based progressive global trading strategies, Chart Partners

Thomas Schroeder

Chart based progressive global trading strategies

Chart Partners

Chart Partners objective is to discover medium-term cycle turns and profit opportunities before they unfold, within structural trends while preserving capital with clear degrees of risk. We have real return ideas. 

Markets are dynamic and trading systems must reflect this. It is crucial to determine underlying correlations and lead-lag relationships within global markets and the impact on linked instruments. Our weekly Chartonics product gives you short-term trading strategies that can be applied within the medium and longer term macro trends that are mapped out in our strategy updates. 

Our methodology fuses global market variables and isolates drivers in trends. We specialize in FX, index trade in NY and Asia with a focus on Asian stocks. 

Technical Analysis

<p>SK Telecom long has performed well against our short Kospi position. SKT buy call from 285k is now testing secondary breakout resistance that would open the way to new highs. Macro target remains at 373k.</p><p>A Kospi cycle low in October  will reduce the defensive appeal of SKT and see a rally stall near 340k.</p><p>We like buying SKT on a pullback in November with support at 312k.</p>

SK Telecom long has performed well against our short Kospi position. SKT buy call from 285k is now testing secondary breakout resistance that would open the way to new highs. Macro target remains at 373k.A Kospi cycle low in October  will reduce the defensive appeal of SKT and see a rally stall near 340k.We like buying SKT on a pullback in November with support at 312k.

SKT Long Gaining Traction with New High in Store

<div><div class="content-highlight">
<p><strong>This post is a step-by-step walkthrough of the SK Telecom spinoff relisting. It seems that there is still some confusion about the procedure. So, I am writing this post to clarify the primary confusing aspects that most of us find difficult to understand. </strong></p>
<p>Before jumping in, I would like to remind you that this post doesn't contain any investment recommendations or views.</p>
</div></div><div>
<hr>
<h2>1. Split ratio &amp; per share allocation</h2>
<p>The split ratio was fixed in advance based on the most recent financials before the board resolution. In this case, the BOD date was June 10. So the split ratio calculation used the 1Q21 financials.</p>
<table class="table table-striped">
<colgroup>
<col width="100">
<col width="100">
<col width="100">
</colgroup>
<tbody>
<tr>
<td data-sheets-value='{"1":2,"2":"Financials"}'>Financials</td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"SK Telecom"}'>SK Telecom</td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"SK Square"}'>SK Square</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Total assets"}'>Total assets</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":24940.5}' data-sheets-numberformat='{"1":2,"2":"₩#,##0.0B","3":1}'>₩24,940.5B</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":6926.9}' data-sheets-numberformat='{"1":2,"2":"₩#,##0.0B","3":1}'>₩6,926.9B</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Total liabilities"}'>Total liabilities</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":14499.1}' data-sheets-numberformat='{"1":2,"2":"₩#,##0.0B","3":1}'>₩14,499.1B</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":97.1}' data-sheets-numberformat='{"1":2,"2":"₩#,##0.0B","3":1}'>₩97.1B</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Total equity"}'><strong>Total equity</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":10441.3}' data-sheets-numberformat='{"1":2,"2":"₩#,##0.0B","3":1}'><strong>₩10,441.3B</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":6829.9}' data-sheets-numberformat='{"1":2,"2":"₩#,##0.0B","3":1}'><strong>₩6,829.9B</strong></td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Split ratio"}'>Split ratio</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0.6073625}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}'>60.74%</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0.3926375}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}'>39.26%</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"FY2020 de-consolidated sales"}'>FY2020 de-consolidated sales</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":11746.6}' data-sheets-numberformat='{"1":2,"2":"₩#,##0.0B","3":1}'>₩11,746.6B</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":173.2}' data-sheets-numberformat='{"1":2,"2":"₩#,##0.0B","3":1}'>₩173.2B</td>
</tr>
<tr><td colspan="3" rowspan="1" data-sheets-value='{"1":2,"2":"Source: DART"}'>Source: DART</td></tr>
</tbody>
</table>
<p>The spinoff ratio is basically the net asset of a spun-off entity over the pre-split total net asset, including the treasury shares. This calculation gives us 0.3926375 for SK Square. Subsequently, SK Telecom gets 0.6073625, which is 1 - SK Square.</p>
<table class="table table-striped">
<colgroup>
<col width="100">
<col width="100">
<col width="100">
</colgroup>
<tbody>
<tr><td colspan="3" rowspan="1" data-sheets-value='{"1":2,"2":"Detailed calculation of the split ratio"}'>Detailed calculation of the split ratio</td></tr>
<tr>
<td data-sheets-value='{"1":2,"2":"SK Square equity (net asset)"}'>SK Square equity (net asset)</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":6829.9}' data-sheets-numberformat='{"1":2,"2":"₩#,##0.0B","3":1}' data-sheets-formula="=R[2]C[-3]">₩6,829.9B</td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"A"}'>A</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Pre-split equity (net asset)"}'>Pre-split equity (net asset)</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":17191.290842696}' data-sheets-numberformat='{"1":2,"2":"₩#,##0.0B","3":1}' data-sheets-formula="=R[111]C[-4]">₩17,191.3B</td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"B"}'>B</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Pre-split treasury shares"}'>Pre-split treasury shares</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":203.594907624}' data-sheets-numberformat='{"1":2,"2":"₩#,##0.0B","3":1}'>₩203.6B</td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"C"}'>C</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"The split ratio for SK Square"}'><strong>SK Square: split ratio</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0.3926375}' data-sheets-numberformat='{"1":2,"2":"#,##0.0000000","3":1}'><strong>0.3926375</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"D = A / (B + C)"}'><strong>D = A / (B + C)</strong></td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"The split ratio for SK Telecom"}'><strong>SK Telecom: split ratio</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0.6073625}' data-sheets-numberformat='{"1":2,"2":"#,##0.0000000","3":1}' data-sheets-formula="=1-R[-1]C[0]"><strong>0.6073625</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"1 - D"}'><strong>1 - D</strong></td>
</tr>
<tr><td colspan="3" rowspan="1" data-sheets-value='{"1":2,"2":"Source: DART"}'>Source: DART</td></tr>
</tbody>
</table>
<p>We then apply the split ratio to the pre-split total shares to get the total shares of each company. <strong>We have to be careful here</strong>. Both companies will have undergone a 5-for-1 stock split. So, we have to multiply it by 5. Here are the final results for both companies' post-split total shares.</p>
<table class="table table-striped">
<colgroup>
<col width="100">
<col width="100">
<col width="100">
</colgroup>
<tbody>
<tr>
<td data-sheets-value='{"1":2,"2":"Shares outstanding"}'>Shares outstanding</td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"Shares"}'>Shares</td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"Per-share allocation"}'>Per-share allocation</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Pre-split"}'>Pre-split</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":72060143}' data-sheets-numberformat='{"1":2,"2":"#,##0"}'>72,060,143</td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"-"}' data-sheets-numberformat='{"1":2,"2":"#,##0.0000000","3":1}'>-</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"SK Telecom"}'><strong>SK Telecom</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":43766628.6028375}' data-sheets-numberformat='{"1":2,"2":"#,##0"}' data-sheets-formula="=R[-1]C[0]*R[0]C[1]">43,766,629</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0.6073625}' data-sheets-numberformat='{"1":2,"2":"#,##0.0000000","3":1}' data-sheets-formula="=Financials!R[-9]C[3]">0.6073625</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":" - 5 for 1 stock split"}'><strong>- 5 for 1 stock split</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":218833143}' data-sheets-numberformat='{"1":2,"2":"#,##0"}'><strong>218,833,143</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"-"}' data-sheets-numberformat='{"1":2,"2":"#,##0.0000000","3":1}'><strong><span data-sheets-value='{"1":3,"3":3.0368125}' data-sheets-userformat='{"2":15041,"3":{"1":2,"2":"#,##0.0000000","3":1},"9":2,"10":1,"12":0,"14":{"1":2,"2":0},"15":"Courier New","16":9}' data-sheets-formula="=R[-1]C[0]*5">3.0368125</span></strong></td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"SK Square"}'><strong>SK Square</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":28293514.397162497}' data-sheets-numberformat='{"1":2,"2":"#,##0"}' data-sheets-formula="=R[-3]C[0]*R[0]C[1]">28,293,514</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0.3926375}' data-sheets-numberformat='{"1":2,"2":"#,##0.0000000","3":1}' data-sheets-formula="=Financials!R[-12]C[3]">0.3926375</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":" - 5 for 1 stock split"}'><strong>- 5 for 1 stock split</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":141467571}' data-sheets-numberformat='{"1":2,"2":"#,##0"}'><strong>141,467,571</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"-"}' data-sheets-numberformat='{"1":2,"2":"#,##0.0000000","3":1}'><strong><span data-sheets-value='{"1":3,"3":1.9631874999999999}' data-sheets-userformat='{"2":15041,"3":{"1":2,"2":"#,##0.0000000","3":1},"9":2,"10":1,"12":0,"14":{"1":2,"2":0},"15":"Courier New","16":9}' data-sheets-formula="=R[-1]C[0]*5">1.9631875</span></strong></td>
</tr>
<tr><td colspan="3" rowspan="1" data-sheets-value='{"1":2,"2":"Source: DART"}'>Source: DART</td></tr>
</tbody>
</table>
<div class="content-highlight"><p><strong>In the end, your one share of the pre-split SK Telecom will be converted into 3.0368125 shares of the post-split SK Telecom and 1.9631875 shares of SK Square. </strong></p></div>
</div>


This post is a step-by-step walkthrough of the SK Telecom spinoff relisting. It seems that there is still some confusion about the procedure. So, I am writing this post to clarify the primary confusing aspects that most of us find difficult to understand. 
Before jumping in, I would like to remind you that this post doesn't contain any investment recommendations or views.


1. Split ratio &amp; per share allocation
The split ratio was fixed in advance based on the most recent financials before the board resolution. In this case, the BOD date was June 10. So the split ratio calculation used the 1Q21 financials.








Financials
SK Telecom
SK Square


Total assets
₩24,940.5B
₩6,926.9B


Total liabilities
₩14,499.1B
₩97.1B


Total equity
₩10,441.3B
₩6,829.9B


Split ratio
60.74%
39.26%


FY2020 de-consolidated sales
₩11,746.6B
₩173.2B

Source: DART


The spinoff ratio is basically the net asset of a spun-off entity over the pre-split total net asset, including the treasury shares. This calculation gives us 0.3926375 for SK Square. Subsequently, SK Telecom gets 0.6073625, which is 1 - SK Square.







Detailed calculation of the split ratio

SK Square equity (net asset)
₩6,829.9B
A


Pre-split equity (net asset)
₩17,191.3B
B


Pre-split treasury shares
₩203.6B
C


SK Square: split ratio
0.3926375
D = A / (B + C)


SK Telecom: split ratio
0.6073625
1 - D

Source: DART


We then apply the split ratio to the pre-split total shares to get the total shares of each company. We have to be careful here. Both companies will have undergone a 5-for-1 stock split. So, we have to multiply it by 5. Here are the final results for both companies' post-split total shares.








Shares outstanding
Shares
Per-share allocation


Pre-split
72,060,143
-


SK Telecom
43,766,629
0.6073625


- 5 for 1 stock split
218,833,143
3.0368125


SK Square
28,293,514
0.3926375


- 5 for 1 stock split
141,467,571
1.9631875

Source: DART


In the end, your one share of the pre-split SK Telecom will be converted into 3.0368125 shares of the post-split SK Telecom and 1.9631875 shares of SK Square. 


SK Telecom Spinoff Relisting Step-By-Step Walkthrough

Equity Bottom-Up

<div class="content-highlight">
<p>In this insight, we provide an updated NAV valuation analysis of <a href="https://www.smartkarma.com/entities/sk-holdings-co-ltd" target="_blank" data-smartkarma-citation="entities:393:1" rel="noopener">SK Inc (034730 KS)</a>. Our updated base case valuation of SK Inc is 381,838 won per share, representing 45.5% higher than current share price.</p>
<p>In the next 12 months, we believe there is likely to be a greater emphasis on three of the unlisted companies of SK Inc including<strong> SK E&amp;S, SK Pharmteco, and SK Siltron</strong> which will increasingly be considered as potential IPO candidates.</p>
</div><ul>
<li>
<strong>SK E&amp;S</strong> is a private company that is 90% owned by <a href="https://www.smartkarma.com/entities/sk-holdings-co-ltd" target="_blank" data-smartkarma-citation="entities:393:1" rel="noopener">SK Inc (034730 KS)</a>. In early September, SK E&amp;S provided a detailed plan to aggressively expand its hydrogen, LNG, and renewable operations by 2025.</li>
<li>
<a href="https://www.ezyeconomy.com/news/articleView.html?idxno=111825" target="_blank" rel="noopener">SK Pharmteco's</a> sales increased form 110 billion won in 2017 to 710 billion won in 2020. As of July 2021, the local media mentioned that the value of SK Pharmteco could be nearly 2 trillion won but this valuation could rise to nearly 10 trillion in two to three years if the company continues to make strong progress in the CMO sector.</li>
<li>
<a href="https://www.businesspost.co.kr/BP?command=article_view&amp;num=251332" target="_blank" rel="noopener"><strong>SK Siltron</strong></a> is another private company owned SK Inc that is seriously being considered for an IPO. In September 2021, the local media mentioned that SK Siltron could be valued at about 4 to 5 trillion won. </li>
</ul>


In this insight, we provide an updated NAV valuation analysis of SK Inc (034730 KS). Our updated base case valuation of SK Inc is 381,838 won per share, representing 45.5% higher than current share price.
In the next 12 months, we believe there is likely to be a greater emphasis on three of the unlisted companies of SK Inc including SK E&amp;S, SK Pharmteco, and SK Siltron which will increasingly be considered as potential IPO candidates.


SK E&amp;S is a private company that is 90% owned by SK Inc (034730 KS). In early September, SK E&amp;S provided a detailed plan to aggressively expand its hydrogen, LNG, and renewable operations by 2025.

SK Pharmteco's sales increased form 110 billion won in 2017 to 710 billion won in 2020. As of July 2021, the local media mentioned that the value of SK Pharmteco could be nearly 2 trillion won but this valuation could rise to nearly 10 trillion in two to three years if the company continues to make strong progress in the CMO sector.

SK Siltron is another private company owned SK Inc that is seriously being considered for an IPO. In September 2021, the local media mentioned that SK Siltron could be valued at about 4 to 5 trillion won. 


SK Inc - SoTP Valuation Analysis and 3 Key Catalysts (SK E&S, SK Pharmteco, & SK Siltron)

South Korea

SK Telecom Co., Ltd. is a Korean mobile and telecommunications operator. The Company provides cellular voice, wireless data, and wireless internet services. SK Telecom also offers fixed line services and platform services.

Price Gauge
52-week Range	0.00 - 0.00
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SK Telecom (017670 KS)

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In this insight, we provide an updated NAV valuation analysis of SK Inc. Our updated base case valuation of SK Inc is 381,838 won per share,...

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