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>There are six local sector indexes in total, which have a meaningful level of AUM and will be rebalanced in December.</li>
<li>In KOSPI200 IT, LG Corp and Samsung SDS will face a positive flow, while SDI will have an outflow on December 9. KB Financial will replace POSCO in FnGuide TOP10.</li>
<li>Samsung SDI, Enchem, and Dear U deserve the most attention the next day (the 10th). Besides Dear U, RBW is another likely addition to both K-Metaverse and Metaverse Theme.</li>
</ul>


There are six local sector indexes in total, which have a meaningful level of AUM and will be rebalanced in December.
In KOSPI200 IT, LG Corp and Samsung SDS will face a positive flow, while SDI will have an outflow on December 9. KB Financial will replace POSCO in FnGuide TOP10.
Samsung SDI, Enchem, and Dear U deserve the most attention the next day (the 10th). Besides Dear U, RBW is another likely addition to both K-Metaverse and Metaverse Theme.


Korea Sector Indexes with December Rebalancing: Passive Impact by Date

HD Hyundai Heavy Industries  / Event-Driven

<ul>
<li>The stocks we need to pay attention to are Hyundai Heavy Industries and Myoung Shin Industries.</li>
<li>HHI's 4.54% lockup release should cause short-term volatility in the price. We need to consider a setup that builds up a short position right after the KOSPI 200 effective date.</li>
<li>Myoung Shin Industrial's KOSPI 200 passive flow effect will be less than initially expected. Then, we need to look at the timing of entering the short position after December 10th.</li>
</ul>


The stocks we need to pay attention to are Hyundai Heavy Industries and Myoung Shin Industries.
HHI's 4.54% lockup release should cause short-term volatility in the price. We need to consider a setup that builds up a short position right after the KOSPI 200 effective date.
Myoung Shin Industrial's KOSPI 200 passive flow effect will be less than initially expected. Then, we need to look at the timing of entering the short position after December 10th.


KOSPI Major Lockup Releases: Hyundai Heavy Industries & Myoung Shin Industrial

<ul>
<li>There are <strong>a total of four ETFs containing Korea's local metaverse stocks</strong>, all listed together on October 13 this year.</li>
<li>Although <strong>many constituent stocks overlap, there is a significant difference in index weight</strong>. It is because there is a difference in the keyword relevance scoring methodology of each index.</li>
<li>So, rather than predicting the exclusion of existing constituents, <strong>having a trading setup on recent IPO stocks with metaverse keywords exposed in media and securities filings</strong> increases the winning percentage.</li>
</ul>


There are a total of four ETFs containing Korea's local metaverse stocks, all listed together on October 13 this year.
Although many constituent stocks overlap, there is a significant difference in index weight. It is because there is a difference in the keyword relevance scoring methodology of each index.
So, rather than predicting the exclusion of existing constituents, having a trading setup on recent IPO stocks with metaverse keywords exposed in media and securities filings increases the winning percentage.


Four Local Metaverse ETFs in Korea: Operation Details & Inclusion Candidates

Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

Equity Capital Markets

<p><a href="https://www.smartkarma.com/entities/dearu-co-ltd" target="_blank" data-smartkarma-citation="entities:34381:1" rel="noopener">DearU (376300 KS)</a> reported outstanding IPO book building results and the IPO price has been finalized at 26,000 won, which was 8.3% higher than the high end of the IPO price range of 24,000 won. The IPO of DearU will start trading on 10 November. DearU's <a href="http://www.ipo38.co.kr/ipo/index.htm?o=v&amp;key=6&amp;no=1717&amp;l=&amp;page=1" target="_blank" rel="noopener">gray market price</a> is trading at around 33,000 won, which is 27% higher than the IPO price of 26,000 won. </p><p>There were 1,763 institutions that participated in this IPO survey and the demand ratio for the IPO shares were 2,001 to 1. At the price of 26,000 won, it will have a market cap of 572 billion won.  The company will raise 86 billion won in this IPO. </p><p><strong>Valuation of DearU - </strong>Our base case valuation of DearU is implied market cap of 746 billion won or 33,907 won per share, which is 30% higher than the high end of the IPO price of 26,000 won. Given the solid upside, we have a POSITIVE view of the DearU IPO. Our base case valuation is based on a P/E of 33.9x our estimated profit of 22 billion won in 2022. The valuation multiple of 33.9x is based on a 10% premium to the average P/E valuation multiple of the peers in 2022.</p>

DearU (376300 KS) reported outstanding IPO book building results and the IPO price has been finalized at 26,000 won, which was 8.3% higher than the high end of the IPO price range of 24,000 won. The IPO of DearU will start trading on 10 November. DearU's gray market price is trading at around 33,000 won, which is 27% higher than the IPO price of 26,000 won. There were 1,763 institutions that participated in this IPO survey and the demand ratio for the IPO shares were 2,001 to 1. At the price of 26,000 won, it will have a market cap of 572 billion won.  The company will raise 86 billion won in this IPO. Valuation of DearU - Our base case valuation of DearU is implied market cap of 746 billion won or 33,907 won per share, which is 30% higher than the high end of the IPO price of 26,000 won. Given the solid upside, we have a POSITIVE view of the DearU IPO. Our base case valuation is based on a P/E of 33.9x our estimated profit of 22 billion won in 2022. The valuation multiple of 33.9x is based on a 10% premium to the average P/E valuation multiple of the peers in 2022.

<p>KRX officially announced today that it would not apply the volatility interruption on the first day of listing for newly listed stocks from <strong>October 18th</strong>.</p><p><strong>Both dynamic VI and static VI do not apply on the listing date.</strong> However, in the case of a transfer listing from the KOSDAQ to the KOSPI or a transfer listing from the KOSPI to the KOSDAQ, the current VI continues to apply. However, it won't apply for a transfer from KONEX to KOSDAQ.</p><section class="figure"><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/232/793/original/1.png?1632975345" class="editor-image img-responsive" data-smartkarma-image-id="232793"></figure></section><div class="content-caption">(Source: KRX)</div><div class="content-highlight"><p>Attached below is the full version of the press release by the KRX.</p></div><p>KRX cited as the reason for this rule change that, although it is a natural phenomenon that price fluctuations accompany the process of finding a fair price on the listing date, the VI was excessively triggered in the recent listings, which undermines transaction continuity.</p><p>In particular, there has been frequent VI activation immediately after the opening, where many investors participated, caused many problems by stopping trading and delaying the discovery of a fair price. Therefore, through this measure, KRX expects to improve the process of finding a fair price for newly listed stocks by increasing transaction continuity on the listing date.</p>

KRX officially announced today that it would not apply the volatility interruption on the first day of listing for newly listed stocks from October 18th.Both dynamic VI and static VI do not apply on the listing date. However, in the case of a transfer listing from the KOSDAQ to the KOSPI or a transfer listing from the KOSPI to the KOSDAQ, the current VI continues to apply. However, it won't apply for a transfer from KONEX to KOSDAQ.(Source: KRX)Attached below is the full version of the press release by the KRX.KRX cited as the reason for this rule change that, although it is a natural phenomenon that price fluctuations accompany the process of finding a fair price on the listing date, the VI was excessively triggered in the recent listings, which undermines transaction continuity.In particular, there has been frequent VI activation immediately after the opening, where many investors participated, caused many problems by stopping trading and delaying the discovery of a fair price. Therefore, through this measure, KRX expects to improve the process of finding a fair price for newly listed stocks by increasing transaction continuity on the listing date.

No VI (Volatility Interruption) Applies to Korean IPO Stocks on the Listing Date After October 18

South Korea

Dear U Co Ltd develops and produces application software. The Company provides mobile karaoke services, artist-only fan community platform and other services. Dear U offers services worldwide.

Price Gauge
52-week Range	0.00 - 0.00
Market Cap (USDm)	0.00
P/E	0.00
Dividend (Yield)	0.00

DearU (376300 KS)

Korea Sector Indexes with December Rebalancing: Passive Impact by Date

There are six local sector indexes in total, which have a meaningful level of AUM and will be rebalanced in December. This post tracks the passive...

Sanghyun Park

KOSPI Major Lockup Releases: Hyundai Heavy Industries & Myoung Shin Industrial

This post looks at the significant lockup releases on KOSPI for this month: Hyundai Heavy Industries and Myoung Shin Industrial.

Sanghyun Park

Four Local Metaverse ETFs in Korea: Operation Details & Inclusion Candidates

This post examines Korea's four local ETFs containing the local metaverse stocks. It looks at the operation details and discusses trading...

Sanghyun Park

DearU IPO Bookbuilding Results Analysis

DearU (376300 KS) reported outstanding IPO book building results and the IPO price has been finalized at 26,000 won. The demand ratio for the IPO...

Douglas Kim

No VI (Volatility Interruption) Applies to Korean IPO Stocks on the Listing Date After October 18

The KRX made it official that no VI (volatility interruption) applies to IPO stocks on the listing date after October 18. This post details the...

Sanghyun Park

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)