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

Below are the lockup releases scheduled for May among the KOSPI-listed stocks. We have four names from KOSPI 200, immediate short-selling targets after May 3. 










KOSPI
Ticker
Release date
Shares released
% of SO
KOSPI 200


Metalabs Co Ltd
090370
5/10
112,655
0.18%
-


Industrial Bank of Korea
024110
5/11
29,379,034
3.98%
72


Kyochon F&amp;B Co Ltd
339770
5/12
18,519,961
74.13%
-


Daiyang Metal Co Ltd
009190
5/12
7,326,007
24.78%
-


BK Tops Co Ltd
030790
5/15
4,671,077
35.58%
-


Industrial Bank of Korea
024110
5/18
57,523,357
7.79%
72


A Plus Asset Advisor Co Ltd
244920
5/20
6,170,440
27.29%
-


KH Feelux Co Ltd
033180
5/21
3,383,459
2.61%
-


Jooyon Tech Co Ltd
044380
5/21
1,236,093
2.26%
-


Koramco Energy Plus REIT Co Ltd
357120
5/30
48,300,000
69.38%
-


Boryung Pharmaceutical Co., Ltd
003850
6/1
3,420,000
6.56%
176


IGIS Residence REIT Co Ltd
350520
6/3
2,640,000
12.82%
-


Myoung Shin Industrial Co Ltd
009900
6/8
23,844,210
58.47%
-


Metalabs Co Ltd
090370
6/11
234,208
0.37%
-


JR Global REIT
348950
6/16
68,600,000
41.43%
-


MERITZ SECURITIES CO LTD
008560
6/17
58,651,026
8.68%
97


Metalabs Co Ltd
090370
6/18
286,902
0.45%
-


Kyobo Securities Co., Ltd.
030610
7/9
28,653,296
44.32%
-


Kukbo Co Ltd
001140
7/9
7,299,270
13.59%
-


Industrial Bank of Korea
024110
7/10
12,412,204
1.68%
72


Ascendio Co Ltd
012170
7/15
378,036
0.61%
-


Thelma Therapeutics Co Ltd
015540
7/30
1,100,528
8.18%
-


SoluM Co Ltd
248070
8/2
3,037,304
6.19%
-


Prestige Biopharma Ltd
950210
8/5
13,446,250
22.37%
-


CJ CGV Co Ltd
079160
8/8
2,054,510
5.85%
167

Source: KRX &amp; KSD



KOSPI Lockup Releases - Boryung Pharm, CJ CGV, Meritz Securities, & IBK

Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

Cross Asset Strategy

<div class="content-highlight">
<p>On 9 April, the <a href="https://www.reuters.com/article/southkorea-nps/update-1-s-koreas-pension-fund-adjusts-rules-to-raise-domestic-equity-allocation-idUSL1N2M20EN" target="_blank" rel="noopener">NPS</a> announced that it will change rules to increase the allocation of Korean stocks, which would be the first time in a decade. This adjustment could be implemented starting next week. This change comes after a lot of pressure by the retail investors.</p>
<p>NPS increased the strategic asset allocation (SAA) limit for domestic equities from the current 2% to 3%, increasing the percentage of Korean stocks it can hold from the current band of 14.8% -18.8% (+/- 2% with 16.8% as base) to 13.8% -19.8% (+/- 3% with 16.8% as base). NPS's target of the domestic equity allocation is 16.8% (of total fund amount). <strong>As a result of this change, the sale of domestic stocks by the NPS is expected to slow down.</strong></p>
</div>


On 9 April, the NPS announced that it will change rules to increase the allocation of Korean stocks, which would be the first time in a decade. This adjustment could be implemented starting next week. This change comes after a lot of pressure by the retail investors.
NPS increased the strategic asset allocation (SAA) limit for domestic equities from the current 2% to 3%, increasing the percentage of Korean stocks it can hold from the current band of 14.8% -18.8% (+/- 2% with 16.8% as base) to 13.8% -19.8% (+/- 3% with 16.8% as base). NPS's target of the domestic equity allocation is 16.8% (of total fund amount). As a result of this change, the sale of domestic stocks by the NPS is expected to slow down.


<div class="content-highlight"><p><strong>It has been reported in the past few days that <a href="http://www.koreaninvestors.com/?p=12175" target="_blank" rel="noopener">NPS</a> is likely to put a greater emphasis on ESG (environmental, social, &amp; governance) based investing for Korean stocks and bonds starting 2021. </strong>NPS has currently given a mandate to a company to help NPS to apply ESG based investment system. The ESG evaluations are expected to aid NPS to actively exercise shareholder rights and also to carry out negative screening of stocks.</p></div><h3>Implications of NPS Incorporating More ESG Criteria on Domestic Investments (Bonds &amp; Stocks)</h3><ul>
<li>Negative Impact on VICE industries </li>
<li>Positive Impact on Renewable Energy Industries</li>
<li>Negative Impact on Coal &amp; Oil Industries</li>
<li>Greater Representation of Women in Senior Management Team/BOD</li>
</ul>

It has been reported in the past few days that NPS is likely to put a greater emphasis on ESG (environmental, social, &amp; governance) based investing for Korean stocks and bonds starting 2021. NPS has currently given a mandate to a company to help NPS to apply ESG based investment system. The ESG evaluations are expected to aid NPS to actively exercise shareholder rights and also to carry out negative screening of stocks.Implications of NPS Incorporating More ESG Criteria on Domestic Investments (Bonds &amp; Stocks)
Negative Impact on VICE industries 
Positive Impact on Renewable Energy Industries
Negative Impact on Coal &amp; Oil Industries
Greater Representation of Women in Senior Management Team/BOD


NPS - Greater Emphasis of ESG Based Investing for Korean Stocks & Bonds Starting 2021

Equity Capital Markets

<p><a href="https://www.smartkarma.com/entities/jin-air-co-ltd" target="_blank" data-smartkarma-citation="entities:26028:1" rel="noopener">Jin Air Co. Ltd (272450 KS), </a>one of the leading low-cost carriers in Korea, <a href="http://news.kbs.co.kr/news/view.do?ncd=4510299&amp;ref=A" target="_blank" rel="noopener">announced</a> after the market close that it will conduct a rights offering worth 109.2 billion won, which represents 36% of its market cap. The rights offering involves 15 million shares at 7,280 won per share, which would be at a 27% discount to the current price of 9,980 won. Post this rights offering, Jin Air's shares outstanding will increase from 30 million shares to 45 million shares. </p><p>A big question mark for the company is how much the Korean government is willing to bail out the entire airline industry in Korea. While the government has been willing to bailout Korean Air and Asiana Airlines, it remains uncertain how willing the government is in trying to bail out the entire LCC sector. In this respect, this remains a key concern for Jin Air. </p><div class="content-highlight"><p><strong>All in all, we believe this rights offering of 109 billion won by Jin Air is likely to raise additional concerns about the company's financials and this is likely to lead to further underperformance of Jin Air's share compared to the market. </strong></p></div>

Jin Air Co. Ltd (272450 KS), one of the leading low-cost carriers in Korea, announced after the market close that it will conduct a rights offering worth 109.2 billion won, which represents 36% of its market cap. The rights offering involves 15 million shares at 7,280 won per share, which would be at a 27% discount to the current price of 9,980 won. Post this rights offering, Jin Air's shares outstanding will increase from 30 million shares to 45 million shares. A big question mark for the company is how much the Korean government is willing to bail out the entire airline industry in Korea. While the government has been willing to bailout Korean Air and Asiana Airlines, it remains uncertain how willing the government is in trying to bail out the entire LCC sector. In this respect, this remains a key concern for Jin Air. All in all, we believe this rights offering of 109 billion won by Jin Air is likely to raise additional concerns about the company's financials and this is likely to lead to further underperformance of Jin Air's share compared to the market. 

Jin Air Announces Rights Offering Worth 36% of Its Market Cap

<p>It is no surprise here. CJ CGV is one of the most harshly damaged businesses by COVID-19. So, it finally gives up and says it needs help. This rights offering is substantial for the size of its market cap. It aims to raise about ₩250bil with a 40% shareholding dilution. It is half of its current market value. Again, it is a standby offering backed by the banker (NH), so there is no cancellation risk.</p><p>June 12 is for the preliminary pricing, followed by June 16 as the ex-rights date. Subscription rights will be trading on July 3~9. Then, we have the final pricing on July 15. The subscription will be on July 20. Finally, new shares will get listed on August 7.</p><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/132/617/original/1.png?1589154010" class="editor-image img-responsive" data-smartkarma-image-id="132617"></figure><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/132/618/original/2.png?1589154017" class="editor-image img-responsive" data-smartkarma-image-id="132618"></figure><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/132/619/original/3.png?1589154026" class="editor-image img-responsive" data-smartkarma-image-id="132619"></figure>

It is no surprise here. CJ CGV is one of the most harshly damaged businesses by COVID-19. So, it finally gives up and says it needs help. This rights offering is substantial for the size of its market cap. It aims to raise about ₩250bil with a 40% shareholding dilution. It is half of its current market value. Again, it is a standby offering backed by the banker (NH), so there is no cancellation risk.June 12 is for the preliminary pricing, followed by June 16 as the ex-rights date. Subscription rights will be trading on July 3~9. Then, we have the final pricing on July 15. The subscription will be on July 20. Finally, new shares will get listed on August 7.

CJ CGV Rights Offer: Well Anticipated, but Worth Playing It

South Korea

CJ CGV Co., Ltd. develops and operates multi-screen movie theaters in South Korea.  The Company's theater complex also conducts stores and restaurants in theaters, and offers advertisement through screens.

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CJ CGV Co Ltd (079160 KS)

KOSPI Lockup Releases - Boryung Pharm, CJ CGV, Meritz Securities, & IBK

This post looks into the upcoming lockup releases among the KOSPI-listed stocks and examines those included in the KOSPI 200 for short-selling...

Sanghyun Park

NPS Raises Domestic Equity Allocations

NPS increased the strategic asset allocation (SAA) limit for domestic equities from the current 2% to 3%. As a result of this change, the sale of...

Douglas Kim

NPS - Greater Emphasis of ESG Based Investing for Korean Stocks & Bonds Starting 2021

It has been reported in the past few days that NPS is likely to put a greater emphasis on ESG (environmental, social, & governance) based...

Douglas Kim

Jin Air Announces Rights Offering Worth 36% of Its Market Cap

Jin Air Co. Ltd (272450 KS), one of the leading low-cost carriers in Korea, announced after the market close that it will conduct a rights offering...

Douglas Kim

CJ CGV Rights Offer: Well Anticipated, but Worth Playing It

It is no surprise here. CJ CGV is one of the most harshly damaged businesses by COVID-19. So, it finally gives up and says it needs help. This...

Sanghyun Park

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