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 key to this rebalancing is the inclusion of WCP, which satisfies the requirements of minimum listing period and secondary battery sales amount.</li>
<li>As a hedge for the LONG WCP position, we can use Soulbrain and Solus Advanced, whose passive outflow is relatively high among those of a similar size to WCP.</li>
<li>Among large caps, we should pay attention to L&amp;F, Posco Chemical, and Iljin Materials. However, we should be cautious about approaching them as an active trading target.</li>
</ul>


The key to this rebalancing is the inclusion of WCP, which satisfies the requirements of minimum listing period and secondary battery sales amount.
As a hedge for the LONG WCP position, we can use Soulbrain and Solus Advanced, whose passive outflow is relatively high among those of a similar size to WCP.
Among large caps, we should pay attention to L&amp;F, Posco Chemical, and Iljin Materials. However, we should be cautious about approaching them as an active trading target.


TIGER (WISE) Secondary Battery ETF Rebalancing in January: Names to Watch

<ul>
<li>To MID migrants: <a href="https://www.smartkarma.com/entities/amorepacific-group" target="_blank" data-smartkarma-citation="entities:12179:1" rel="noopener">Amorepacific Group (002790 KS)</a>, <a href="https://www.smartkarma.com/entities/e-mart-inc" target="_blank" data-smartkarma-citation="entities:6993:1" rel="noopener">E Mart (139480 KS)</a>, <a href="https://www.smartkarma.com/entities/iljin-materials-co-ltd" target="_blank" data-smartkarma-citation="entities:7709:1" rel="noopener">Iljin Materials (020150 KS)</a>, <a href="https://www.smartkarma.com/entities/hanjin-kal-corp" target="_blank" data-smartkarma-citation="entities:19086:1" rel="noopener">Hanjin KAL (180640 KS)</a>, <a href="https://www.smartkarma.com/entities/oci-co-ltd" target="_blank" data-smartkarma-citation="entities:1904:1" rel="noopener">OCI (010060 KS)</a>, <a href="https://www.smartkarma.com/entities/lx-semicon-co-ltd" target="_blank" data-smartkarma-citation="entities:20670:1" rel="noopener">LX Semicon (108320 KS)</a>, and <a href="https://www.smartkarma.com/entities/socar-inc" target="_blank" data-smartkarma-citation="entities:29693:1" rel="noopener">SOCAR (403550 KS)</a>
</li>
<li>To LARGE migrants: <a href="https://www.smartkarma.com/entities/hyundai-rotem-company" target="_blank" data-smartkarma-citation="entities:1554:1" rel="noopener">Hyundai Rotem (064350 KS)</a>, <a href="https://www.smartkarma.com/entities/hotel-shilla-co-ltd" target="_blank" data-smartkarma-citation="entities:107:1" rel="noopener">Hotel Shilla (008770 KS)</a>, <a href="https://www.smartkarma.com/entities/gs-retail-co-ltd" target="_blank" data-smartkarma-citation="entities:3867:1" rel="noopener">GS Retail (007070 KS)</a>, <a href="https://www.smartkarma.com/entities/cs-wind-corp" target="_blank" data-smartkarma-citation="entities:4883:1" rel="noopener">CS Wind (112610 KS)</a>, and <a href="https://www.smartkarma.com/entities/posco-international-corporation" target="_blank" data-smartkarma-citation="entities:5954:1" rel="noopener">Posco International (047050 KS)</a> </li>
<li>This time, the degree of predictability is high as the MC gap widened from an early point. So, we should consider building our position in phases from early next month.</li>
</ul>


To MID migrants: Amorepacific Group (002790 KS), E Mart (139480 KS), Iljin Materials (020150 KS), Hanjin KAL (180640 KS), OCI (010060 KS), LX Semicon (108320 KS), and SOCAR (403550 KS)

To LARGE migrants: Hyundai Rotem (064350 KS), Hotel Shilla (008770 KS), GS Retail (007070 KS), CS Wind (112610 KS), and Posco International (047050 KS) 
This time, the degree of predictability is high as the MC gap widened from an early point. So, we should consider building our position in phases from early next month.


KOSPI Size Index: Early Preview at One Fourth into Screening Period

<ul>
<li>Despite the WATCH list's confusion, LG Energy Solution replaced LG Chem. In addition, Solactive excluded Iljin Materials, evidently due to its float-adjusted market cap size.</li>
<li>There are some somewhat elusive additions. The most prominent example is Japan Steel Works, which replaced LG Chem in the updated WATCH list at the last minute.</li>
<li>There was confusion about LG Chem's deletion until the last minute, so, likely, the market has not sufficiently reflected this rebalancing factor in LG Energy/LG Chem's LONG/SHORT.</li>
</ul>


Despite the WATCH list's confusion, LG Energy Solution replaced LG Chem. In addition, Solactive excluded Iljin Materials, evidently due to its float-adjusted market cap size.
There are some somewhat elusive additions. The most prominent example is Japan Steel Works, which replaced LG Chem in the updated WATCH list at the last minute.
There was confusion about LG Chem's deletion until the last minute, so, likely, the market has not sufficiently reflected this rebalancing factor in LG Energy/LG Chem's LONG/SHORT.


Solactive Lithium Review Results Out: Key Takeaways

Index Rebalance

<ul>
<li>LG Chem's deletion is almost a done deal. The pouch-type pack goes to LG Energy, and the cathode business is not big enough to beat L&amp;F.</li>
<li>Chunbo is an additive field that this index has not included so far. So, Chunbo will be added as a new addition rather than replacing someone else.</li>
<li>SK IE Tech is quite tricky. The key is to see separator and elecfoil as the same field. If so, SK IET is likely to replace Iljin Materials.</li>
</ul>


LG Chem's deletion is almost a done deal. The pouch-type pack goes to LG Energy, and the cathode business is not big enough to beat L&amp;F.
Chunbo is an additive field that this index has not included so far. So, Chunbo will be added as a new addition rather than replacing someone else.
SK IE Tech is quite tricky. The key is to see separator and elecfoil as the same field. If so, SK IET is likely to replace Iljin Materials.


Solactive Lithium Index Rebalancing: Noteworthy Names in Korea Before the Announcement

Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

Equity Capital Markets

<ul>
<li>Our base case valuation of JEIO is target price of 12,752 won per share, which is 15% lower than the low end of the IPO price range.</li>
<li>Given the low target price relative to the IPO price range, we have a Negative view of JEIO IPO.  </li>
<li>We estimate its sales to increase by 29.5% YoY to reach 117.1 billion won and operating profit to improve to 6.1 billion won in 2023 (turned black YoY).</li>
</ul>


Our base case valuation of JEIO is target price of 12,752 won per share, which is 15% lower than the low end of the IPO price range.
Given the low target price relative to the IPO price range, we have a Negative view of JEIO IPO.  
We estimate its sales to increase by 29.5% YoY to reach 117.1 billion won and operating profit to improve to 6.1 billion won in 2023 (turned black YoY).


South Korea

Lotte Energy Materials Corporation manufactures and distributes electric foils. The Company produces printed circuit board and lithium ion secondary batteries elecfoil, electrolytic and epoxy copper foil, electrolytic capacitor aluminum foil, and other related products. Lotte Energy Materials also offers energy and glass and window construction services.

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Lotte Energy Materials (020150 KS)

TIGER (WISE) Secondary Battery ETF Rebalancing in January: Names to Watch

This post projects the rebalanced weights and resulting passive impacts in the upcoming TIGER (WISE) Secondary Battery ETF rebalancing.

Sanghyun Park

KOSPI Size Index: Early Preview at One Fourth into Screening Period

This post screens migrant candidates of the KOSPI Size Index Series, scheduled for rebalancing in March, as we are one-fourth into the screening...

Sanghyun Park

Solactive Lithium Review Results Out: Key Takeaways

This post details the review results of the Solactive Global Lithium Index and discusses key takeaways for trading setups.

Sanghyun Park

Solactive Lithium Index Rebalancing: Noteworthy Names in Korea Before the Announcement

This post discusses the notable Korean stocks in the upcoming rebalancing of the Solactive Lithium Index (Global X ETF: LIT).

Sanghyun Park

JEIO IPO Valuation Analysis

Our base case valuation of JEIO is target price of 12,752 won per share, which is 15% lower than the low end of the IPO price range.

Douglas Kim

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