Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

Event-Driven

<ul>
<li>On 18 February, the KRX announced that the deletion of Osstem Implant (048260 KS) and the inclusion of Caregen Co Ltd (214370 KS) in KOSDAQ150.</li>
<li>The South Korean Presidential election will be held on 9 March and the KRX is not likely to make sensitive decisions such as the delisting of Osstem Implant in March.</li>
<li>We continue to like the pair trade (long KOSPI200 and short KOSDAQ150) which has worked out well in the past month and we expect continued gains on this trade.</li>
</ul>


On 18 February, the KRX announced that the deletion of Osstem Implant (048260 KS) and the inclusion of Caregen Co Ltd (214370 KS) in KOSDAQ150.
The South Korean Presidential election will be held on 9 March and the KRX is not likely to make sensitive decisions such as the delisting of Osstem Implant in March.
We continue to like the pair trade (long KOSPI200 and short KOSDAQ150) which has worked out well in the past month and we expect continued gains on this trade.


KOSDAQ150: Details of Osstem Implant Exclusion & Caregen Inclusion and Case Study of SillaJen

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

Brian Freitas

Pan-Asia Index Rebalances/ Events/ Delta One

Index Rebalance

<ul>
<li>Hang Seng announced the results of the March rebalance post market close Friday. Two adds for the HSI, one set of changes for HSCEI, three sets for HSTECH.</li>
<li>An ad hoc rebalance was announced for the KOSDAQ150 following Osstem being designated an 'Administrative Issue'. In IPO world, we have LIC in India and SBI Sumishin NetBank coming up.</li>
<li>Friday was the review cutoff date for the March rebalance of the ASX200 Index. The ATO has provided Aventus with the tax ruling and that creates a timing issue.</li>
</ul>


Hang Seng announced the results of the March rebalance post market close Friday. Two adds for the HSI, one set of changes for HSCEI, three sets for HSTECH.
An ad hoc rebalance was announced for the KOSDAQ150 following Osstem being designated an 'Administrative Issue'. In IPO world, we have LIC in India and SBI Sumishin NetBank coming up.
Friday was the review cutoff date for the March rebalance of the ASX200 Index. The ATO has provided Aventus with the tax ruling and that creates a timing issue.


Index Rebalance & ETF Flow Recap: HSI, HSCEI, HSTECH, HSCI, S&P/ASX, SET50, LIC, SBI Sumishin, Crown

<ul>
<li>
<a href="https://www.smartkarma.com/entities/osstem-implant-co-ltd" target="_blank" data-smartkarma-citation="entities:1450:1" rel="noopener">Osstem Implant (048260 KS)</a> has been suspended from trading this year following embezzlement that has nearly wiped out its equity capital.</li>
<li>The stock was named an Administrative Issue on Friday and will be deleted from the <a href="https://www.smartkarma.com/entities/kosdaq-150-index" target="_blank" data-smartkarma-citation="entities:31077:1" rel="noopener">KOSDAQ 150 Index (KOSDQ150 INDEX)</a>. <a href="https://www.smartkarma.com/entities/caregen-co-ltd" target="_blank" data-smartkarma-citation="entities:27337:1" rel="noopener">Caregen Co Ltd (214370 KS)</a> is the replacement.</li>
<li>Passive funds will need to sell around KRW 60bn of <a href="https://www.smartkarma.com/entities/osstem-implant-co-ltd" target="_blank" data-smartkarma-citation="entities:1450:1" rel="noopener">Osstem Implant (048260 KS)</a> if they can, and buy KRW 7bn of <a href="https://www.smartkarma.com/entities/caregen-co-ltd" target="_blank" data-smartkarma-citation="entities:27337:1" rel="noopener">Caregen Co Ltd (214370 KS)</a>. </li>
</ul>



Osstem Implant (048260 KS) has been suspended from trading this year following embezzlement that has nearly wiped out its equity capital.
The stock was named an Administrative Issue on Friday and will be deleted from the KOSDAQ 150 Index (KOSDQ150 INDEX). Caregen Co Ltd (214370 KS) is the replacement.
Passive funds will need to sell around KRW 60bn of Osstem Implant (048260 KS) if they can, and buy KRW 7bn of Caregen Co Ltd (214370 KS). 


KOSDAQ150 Ad Hoc Index Rebalance: Osstem Implant OUT; Caregen IN

<p>The KRX has announced the list of inclusions and exclusions to the <a href="https://www.smartkarma.com/entities/kosdaq-150-index" target="_blank" data-smartkarma-citation="entities:31077:1" rel="noopener">KOSDAQ 150 Index (KOSDQ150 INDEX)</a> today. The rebalance is effective after the close of trading on 10 June.</p><p>There are 16 inclusions into and exclusions from the index at the June review with an estimated one-way turnover of 7.04%.</p><table class="table table-striped">
<colgroup>
<col>
<col>
<col>
<col>
</colgroup>
<tbody>
<tr>
<td colspan="2" style="text-align: center; width: 233pt;"><h3>Inclusions</h3></td>
<td colspan="2" style="text-align: center; width: 242pt;"><h3>Exclusions</h3></td>
</tr>
<tr>
<td><strong>Code</strong></td>
<td><strong>Name</strong></td>
<td><strong>Code</strong></td>
<td><strong>Name</strong></td>
</tr>
<tr>
<td>015750.KQ</td>
<td>Sungwoo Hitech Co Ltd</td>
<td>018290.KQ</td>
<td>VT GMP Co Ltd</td>
</tr>
<tr>
<td>018000.KQ</td>
<td>Unison Co Ltd</td>
<td>034950.KQ</td>
<td>Korea Ratings Corp</td>
</tr>
<tr>
<td>027360.KQ</td>
<td>AJu IB Investment Co Ltd</td>
<td>035810.KQ</td>
<td>Easy Holdings Co Ltd</td>
</tr>
<tr>
<td>036810.KQ</td>
<td>Fine Semitech Corp</td>
<td>052020.KQ</td>
<td>STCube Inc</td>
</tr>
<tr>
<td>041190.KQ</td>
<td>Woori Technology Investment Co Ltd</td>
<td>052260.KQ</td>
<td>Hyundai BioLand Co Ltd</td>
</tr>
<tr>
<td>053030.KQ</td>
<td>Binex Co Ltd</td>
<td>060570.KQ</td>
<td>Dream Us Co</td>
</tr>
<tr>
<td>082270.KQ</td>
<td>GemVax &amp; KAEL Co Ltd</td>
<td>065660.KQ</td>
<td>Anterogen Co Ltd</td>
</tr>
<tr>
<td>100090.KQ</td>
<td>Samkang M&amp;T Co Ltd</td>
<td>082920.KQ</td>
<td>Vitzrocell Co Ltd</td>
</tr>
<tr>
<td>131290.KQ</td>
<td>TSE Co Ltd</td>
<td>092730.KQ</td>
<td>NeoPharm Co Ltd</td>
</tr>
<tr>
<td>131970.KQ</td>
<td>Tesna Inc</td>
<td>143240.KQ</td>
<td>Saramin HR Co Ltd</td>
</tr>
<tr>
<td>140860.KQ</td>
<td>Park Systems Corp</td>
<td>194700.KQ</td>
<td>Novarex Co Ltd</td>
</tr>
<tr>
<td>166090.KQ</td>
<td>Hana Materials Inc</td>
<td>214370.KQ</td>
<td>Caregen Co Ltd</td>
</tr>
<tr>
<td>175250.KQ</td>
<td>Icure Pharmaceutical Inc</td>
<td>215000.KQ</td>
<td>Golfzon Co Ltd</td>
</tr>
<tr>
<td>194480.KQ</td>
<td>Devsisters Corp</td>
<td>237880.KQ</td>
<td>Clio Cosmetics Co Ltd</td>
</tr>
<tr>
<td>222800.KQ</td>
<td>Simmtech Co Ltd</td>
<td>239610.KQ</td>
<td>HL Science Co Ltd</td>
</tr>
<tr>
<td>323990.KQ</td>
<td>Vaxcell Bio Therapeutics</td>
<td>243840.KQ</td>
<td>Shin Heung Energy &amp; Electronics Co Ltd</td>
</tr>
</tbody>
</table><p>There are 12 trading days to implementation of the changes and there are a lot of additions and deletions that have over 2 days of ADV to trade. There will be a lot of action in the next few days on the names with higher ADV to trade.</p><p>With short selling limited to the constituents of the <a href="https://www.smartkarma.com/entities/kosdaq-150-index" target="_blank" data-smartkarma-citation="entities:31077:1" rel="noopener">KOSDAQ 150 Index (KOSDQ150 INDEX)</a>, shorting the inclusions will be tough while selling/shorting the deletions is a lot easier since they are current index constituents. The inclusions could outperform the deletions till a couple of days before implementation date, while there could be a high risk/reward reverse trade if the outperformance is significant.</p>

The KRX has announced the list of inclusions and exclusions to the KOSDAQ 150 Index (KOSDQ150 INDEX) today. The rebalance is effective after the close of trading on 10 June.There are 16 inclusions into and exclusions from the index at the June review with an estimated one-way turnover of 7.04%.








Inclusions
Exclusions


Code
Name
Code
Name


015750.KQ
Sungwoo Hitech Co Ltd
018290.KQ
VT GMP Co Ltd


018000.KQ
Unison Co Ltd
034950.KQ
Korea Ratings Corp


027360.KQ
AJu IB Investment Co Ltd
035810.KQ
Easy Holdings Co Ltd


036810.KQ
Fine Semitech Corp
052020.KQ
STCube Inc


041190.KQ
Woori Technology Investment Co Ltd
052260.KQ
Hyundai BioLand Co Ltd


053030.KQ
Binex Co Ltd
060570.KQ
Dream Us Co


082270.KQ
GemVax &amp; KAEL Co Ltd
065660.KQ
Anterogen Co Ltd


100090.KQ
Samkang M&amp;T Co Ltd
082920.KQ
Vitzrocell Co Ltd


131290.KQ
TSE Co Ltd
092730.KQ
NeoPharm Co Ltd


131970.KQ
Tesna Inc
143240.KQ
Saramin HR Co Ltd


140860.KQ
Park Systems Corp
194700.KQ
Novarex Co Ltd


166090.KQ
Hana Materials Inc
214370.KQ
Caregen Co Ltd


175250.KQ
Icure Pharmaceutical Inc
215000.KQ
Golfzon Co Ltd


194480.KQ
Devsisters Corp
237880.KQ
Clio Cosmetics Co Ltd


222800.KQ
Simmtech Co Ltd
239610.KQ
HL Science Co Ltd


323990.KQ
Vaxcell Bio Therapeutics
243840.KQ
Shin Heung Energy &amp; Electronics Co Ltd


There are 12 trading days to implementation of the changes and there are a lot of additions and deletions that have over 2 days of ADV to trade. There will be a lot of action in the next few days on the names with higher ADV to trade.With short selling limited to the constituents of the KOSDAQ 150 Index (KOSDQ150 INDEX), shorting the inclusions will be tough while selling/shorting the deletions is a lot easier since they are current index constituents. The inclusions could outperform the deletions till a couple of days before implementation date, while there could be a high risk/reward reverse trade if the outperformance is significant.

KOSDAQ150 Index Rebalance: 16 Changes & Large Turnover

<p>The review period for the <a href="https://www.smartkarma.com/entities/kosdaq-150-index" target="_blank" data-smartkarma-citation="entities:31077:1" rel="noopener">KOSDAQ 150 Index (KOSDQ150 INDEX)</a> June rebalance ends on 30 April. The Korea Exchange (KRX) will announce the results of the June 2021 review of the <a href="https://www.smartkarma.com/entities/kosdaq-150-index" target="_blank" data-smartkarma-citation="entities:31077:1" rel="noopener">KOSDAQ 150 Index (KOSDQ150 INDEX)</a> in May with the changes becoming effective after the close of trading on 10 June.</p><p>We currently see 15 inclusions and 15 exclusions from the index.</p><p>The potential inclusions are Vaxcell Bio Therapeutics (323990 KS), <a href="https://www.smartkarma.com/entities/gemvax-kael-co-ltd" target="_blank" data-smartkarma-citation="entities:17026:1" rel="noopener">Gemvax &amp; Kael (082270 KS)</a>, <a href="https://www.smartkarma.com/entities/binex-co-ltd" target="_blank" data-smartkarma-citation="entities:1949:1" rel="noopener">Binex Co Ltd (053030 KS)</a>, <a href="https://www.smartkarma.com/entities/nanos-co-ltd" target="_blank" data-smartkarma-citation="entities:16796:1" rel="noopener">Nanos Co Ltd (151910 KS)</a>, <a href="https://www.smartkarma.com/entities/tesna-inc" target="_blank" data-smartkarma-citation="entities:8792:1" rel="noopener">Tesna Inc (131970 KS)</a>, <a href="https://www.smartkarma.com/entities/simmtech-co-ltd" target="_blank" data-smartkarma-citation="entities:28871:1" rel="noopener">SIMMTECH Co Ltd (222800 KS)</a>, Park Systems Corp (140860 KS), <a href="https://www.smartkarma.com/entities/sam-kang-m-t-co-ltd" target="_blank" data-smartkarma-citation="entities:7263:1" rel="noopener">Sam Kang M&amp;T (100090 KS)</a>, <a href="https://www.smartkarma.com/entities/hana-materials-inc" target="_blank" data-smartkarma-citation="entities:24088:1" rel="noopener">Hana Materials Inc (166090 KS)</a>, <a href="https://www.smartkarma.com/entities/tse-co-ltd" target="_blank" data-smartkarma-citation="entities:17821:1" rel="noopener">Tse Co Ltd (131290 KS)</a>, <a href="https://www.smartkarma.com/entities/unison-co-ltd-south-korea" target="_blank" data-smartkarma-citation="entities:18617:1" rel="noopener">Unison Co Ltd (018000 KS)</a>, AJu IB Investment (027360 KS), <a href="https://www.smartkarma.com/entities/woori-technology-inv-co-ltd" target="_blank" data-smartkarma-citation="entities:2853:1" rel="noopener">Woori Technology Inv (041190 KS)</a>, <a href="https://www.smartkarma.com/entities/icure-pharm-inc" target="_blank" data-smartkarma-citation="entities:27142:1" rel="noopener">Icure Pharm Inc (175250 KS)</a> and <a href="https://www.smartkarma.com/entities/sungwoo-hitech-co-ltd" target="_blank" data-smartkarma-citation="entities:3963:1" rel="noopener">Sungwoo Hitech (015750 KS)</a>. </p><p>The potential exclusions are <a href="https://www.smartkarma.com/entities/hlscience-co-ltd" target="_blank" data-smartkarma-citation="entities:23629:1" rel="noopener">HLscience Co. (239610 KS)</a>, <a href="https://www.smartkarma.com/entities/easy-bio-inc" target="_blank" data-smartkarma-citation="entities:5778:1" rel="noopener">Easy Bio Inc (035810 KS)</a>, <a href="https://www.smartkarma.com/entities/vt-gmp-co-ltd" target="_blank" data-smartkarma-citation="entities:8056:1" rel="noopener">VT GMP Co Ltd (018290 KS)</a>, <a href="https://www.smartkarma.com/entities/stcube" target="_blank" data-smartkarma-citation="entities:4872:1" rel="noopener">STCube (052020 KS)</a>, <a href="https://www.smartkarma.com/entities/iriver-ltd" target="_blank" data-smartkarma-citation="entities:13005:1" rel="noopener">Iriver Ltd (060570 KS)</a>, <a href="https://www.smartkarma.com/entities/shinheung-sec" target="_blank" data-smartkarma-citation="entities:24426:1" rel="noopener">Shin Heung Energy &amp; Electronics Co (243840 KS)</a>, <a href="https://www.smartkarma.com/entities/saraminhr-co-ltd" target="_blank" data-smartkarma-citation="entities:8494:1" rel="noopener">SaraminHR (143240 KS)</a>, <a href="https://www.smartkarma.com/entities/vitzrocell-co-ltd" target="_blank" data-smartkarma-citation="entities:4885:1" rel="noopener">Vitzrocell (082920 KS)</a>, <a href="https://www.smartkarma.com/entities/sangsangin-co-ltd" target="_blank" data-smartkarma-citation="entities:10494:1" rel="noopener">Sangsangin Co., Ltd. (038540 KS)</a>, <a href="https://www.smartkarma.com/entities/advanced-process-systems-corporation" target="_blank" data-smartkarma-citation="entities:24087:1" rel="noopener">Advanced Process Systems (265520 KS)</a>, <a href="https://www.smartkarma.com/entities/ebest-investment-securitie" target="_blank" data-smartkarma-citation="entities:18895:1" rel="noopener">Ebest Investment &amp; Securitie (078020 KS)</a>, <a href="https://www.smartkarma.com/entities/spigen-korea-co-ltd" target="_blank" data-smartkarma-citation="entities:9852:1" rel="noopener">Spigen Korea (192440 KS)</a>, <a href="https://www.smartkarma.com/entities/daea-ti-co-ltd" target="_blank" data-smartkarma-citation="entities:1473:1" rel="noopener">Daea Ti Co Ltd (045390 KS)</a>, <a href="https://www.smartkarma.com/entities/korea-ratings-corp" target="_blank" data-smartkarma-citation="entities:20020:1" rel="noopener">Korea Ratings (034950 KS)</a> and <a href="https://www.smartkarma.com/entities/caregen-co-ltd" target="_blank" data-smartkarma-citation="entities:27337:1" rel="noopener">Caregen Co Ltd (214370 KS)</a>.</p><p>Limited short selling in Korea resumes on 3 May. The expected deletions could drop ahead of the announcement of the changes since <a href="https://www.smartkarma.com/entities/kosdaq-150-index" target="_blank" data-smartkarma-citation="entities:31077:1" rel="noopener">KOSDAQ 150 Index (KOSDQ150 INDEX)</a> constituents are short sell eligible. The stocks that are included in the index could outperform the deletions, but drop off post their inclusion in the <a href="https://www.smartkarma.com/entities/kosdaq-150-index" target="_blank" data-smartkarma-citation="entities:31077:1" rel="noopener">KOSDAQ 150 Index (KOSDQ150 INDEX)</a>. </p>

The review period for the KOSDAQ 150 Index (KOSDQ150 INDEX) June rebalance ends on 30 April. The Korea Exchange (KRX) will announce the results of the June 2021 review of the KOSDAQ 150 Index (KOSDQ150 INDEX) in May with the changes becoming effective after the close of trading on 10 June.We currently see 15 inclusions and 15 exclusions from the index.The potential inclusions are Vaxcell Bio Therapeutics (323990 KS), Gemvax &amp; Kael (082270 KS), Binex Co Ltd (053030 KS), Nanos Co Ltd (151910 KS), Tesna Inc (131970 KS), SIMMTECH Co Ltd (222800 KS), Park Systems Corp (140860 KS), Sam Kang M&amp;T (100090 KS), Hana Materials Inc (166090 KS), Tse Co Ltd (131290 KS), Unison Co Ltd (018000 KS), AJu IB Investment (027360 KS), Woori Technology Inv (041190 KS), Icure Pharm Inc (175250 KS) and Sungwoo Hitech (015750 KS). The potential exclusions are HLscience Co. (239610 KS), Easy Bio Inc (035810 KS), VT GMP Co Ltd (018290 KS), STCube (052020 KS), Iriver Ltd (060570 KS), Shin Heung Energy &amp; Electronics Co (243840 KS), SaraminHR (143240 KS), Vitzrocell (082920 KS), Sangsangin Co., Ltd. (038540 KS), Advanced Process Systems (265520 KS), Ebest Investment &amp; Securitie (078020 KS), Spigen Korea (192440 KS), Daea Ti Co Ltd (045390 KS), Korea Ratings (034950 KS) and Caregen Co Ltd (214370 KS).Limited short selling in Korea resumes on 3 May. The expected deletions could drop ahead of the announcement of the changes since KOSDAQ 150 Index (KOSDQ150 INDEX) constituents are short sell eligible. The stocks that are included in the index could outperform the deletions, but drop off post their inclusion in the KOSDAQ 150 Index (KOSDQ150 INDEX). 

KOSDAQ150 Index Rebalance Preview: 15 Potential Changes; Big Impact on Deletions

South Korea

Caregen Co., Ltd. manufactures medical equipment based on their research on Growth Factors and purified Biomimetic Peptides.  The Company's products include Dermaheal and Renokin.

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Caregen Co Ltd (214370 KS)

KOSDAQ150: Details of Osstem Implant Exclusion & Caregen Inclusion and Case Study of SillaJen

The South Korean Presidential election will be held on 9 March and the KRX is not likely to make sensitive decisions such as the delisting of...

Douglas Kim

Index Rebalance & ETF Flow Recap: HSI, HSCEI, HSTECH, HSCI, S&P/ASX, SET50, LIC, SBI Sumishin, Crown

This recap highlights Insights covering Asian index rebalances (announcements/ forecasts/ IPO Fast Entry/ M&A driven changes). We also highlight...

Brian Freitas

KOSDAQ150 Ad Hoc Index Rebalance: Osstem Implant OUT; Caregen IN

Osstem Implant will be deleted from the KOSDAQ150 Index at some point over the next 15 trading days and replaced with Caregen. Passive ETFs and...

Brian Freitas

KOSDAQ150 Index Rebalance: 16 Changes & Large Turnover

There are 16 changes to the KOSDAQ150 index resulting in a one-way turnover of 7.04%. The impact on the exclusions is a lot higher than on the...

Brian Freitas

KOSDAQ150 Index Rebalance Preview: 15 Potential Changes; Big Impact on Deletions

We see 15 potential changes to the KOSDAQ150 Index at the June review. With short selling resuming on 3 May, the inclusions could outperform the...

Brian Freitas

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