Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

Douglas Research Advisory

Equity Bottom-Up

<ul>
<li>According to our NAV valuation analysis, it suggests NAV per share of 25,624 won for DN Automotive which is 35% higher than current price.</li>
<li>We assumed DN Automotive's estimated post IPO stake of DN Solutions (72.2% stake) would be worth about 4 trillion won. </li>
<li>We used a very large holdco discount rate of 70%. DN Automotive is not a pure holdco company but a quasi holding company.</li>
</ul>


According to our NAV valuation analysis, it suggests NAV per share of 25,624 won for DN Automotive which is 35% higher than current price.
We assumed DN Automotive's estimated post IPO stake of DN Solutions (72.2% stake) would be worth about 4 trillion won. 
We used a very large holdco discount rate of 70%. DN Automotive is not a pure holdco company but a quasi holding company.


Equity Capital Markets

<ul>
<li>DN Solutions is planning to complete its IPO in Korea in 2025. The expected value of DN Solutions is estimated to be about 5 trillion won to 6 trillion won.</li>
<li>DN Solutions' revenue and operating profit increased at CAGR of 19.9% and 62.2%, respectively from 2020 to 2023.</li>
<li>Currently, the largest shareholder of DN Solutions is GMT Holdings which has a 90.32% stake. DN Automotive (007340 KS) owns a 100% stake in GMT Holdings.</li>
</ul>


DN Solutions is planning to complete its IPO in Korea in 2025. The expected value of DN Solutions is estimated to be about 5 trillion won to 6 trillion won.
DN Solutions' revenue and operating profit increased at CAGR of 19.9% and 62.2%, respectively from 2020 to 2023.
Currently, the largest shareholder of DN Solutions is GMT Holdings which has a 90.32% stake. DN Automotive (007340 KS) owns a 100% stake in GMT Holdings.


Asia Pac IPO & Placement Research, China biotech, Aequitas Research

Ke Yan, CFA, FRM

Asia Pac IPO & Placement Research, China biotech

IPOs and Placements coverage across Asia Pacific

Aequitas Research

We cover all listing across the Asia Pacific along with follow-up placements. As of Dec 2020, our team had covered 539 IPOs with a hit rate of 73.5% and 685 placements with a hit rate of 66.8%.

We combine fundamental bottom-up views with our proprietary quantitative framework to provide a holistic coverage across new listings and placements. Our coverage includes pre-IPO notes before the deal is launched, follow-up analysis once the deal is live and post-listing trading analysis as well.

Quantitative Analysis

<ul>
<li>We analyzed the changes in short interest of KRX stocks as of Oct 17th. The aggregated short interest was USD11.9bn.</li>
<li>We tabulate league tables for top short by value and short as multiple of ADT, as well as weekly increases &amp; decreases in short value, short as multiple of ADT.</li>
<li>We highlight short interest changes in KorZinc, Samsung Electronics, ECOPRO, SK Hynix, ECOPROBM.</li>
</ul>


We analyzed the changes in short interest of KRX stocks as of Oct 17th. The aggregated short interest was USD11.9bn.
We tabulate league tables for top short by value and short as multiple of ADT, as well as weekly increases &amp; decreases in short value, short as multiple of ADT.
We highlight short interest changes in KorZinc, Samsung Electronics, ECOPRO, SK Hynix, ECOPROBM.


KRX Short Interest Weekly (Oct 17th): KorZinc, Samsung Electronics, ECOPRO, SK Hynix, ECOPROBM

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

Brian Freitas

Pan-Asia Index Rebalances/ Events/ Delta One

Periscope Analytics

Periscope Analytics focuses on event-driven trades across Asia Pacific and provides comprehensive, timely and systematic coverage of index changes to major Asia Pacific indices in a structured manner.

The analysis includes forecasted inclusions and exclusions to all major Asian indices that have significant amount of tracking assets, including estimates of passive buy/sell flow on the stocks. The service also provides commentary and impact of market consultations, ground rule changes, and other events (IPOs, spin-offs, M&A) that could lead to index changes and passive flow.

Periscope Analytics works with multi-strategy hedge funds, proprietary trading firms, stat arb trading groups and long-only investors that invest and trade in the Asia Pacific region with the data being used to trade index rebalances, avoid pre-positioning and passive flow, and to time entry into and exit from stocks.

Event-Driven Trades Across Asia Pacific

Index Rebalance

HD Hyundai Marine Solution  / Index Rebalance

<ul>
<li>There will be 8 additions and 8 deletions for the <a href="https://www.smartkarma.com/entities/korea-stock-exchange-kospi-200" target="_blank" data-smartkarma-citation="entities:26021:1" rel="noopener">Korea Stock Exchange KOSPI 200 (KOSPI2 INDEX)</a> at the next rebalance to be implemented at the close on 12 June.</li>
<li>The inclusion of <a href="https://www.smartkarma.com/entities/korea-district-heating-corp" target="_blank" data-smartkarma-citation="entities:8806:1" rel="noopener">Korea District Heating (071320 KS)</a> is a surprise and leads to an extra deletion - all the other adds are exactly in line with forecasts.</li>
<li>The list of adds has been stable for the last few months and the stocks have outperformed the deletes and the <a href="https://www.smartkarma.com/entities/korea-stock-exchange-kospi-200" target="_blank" data-smartkarma-citation="entities:26021:1" rel="noopener">KOSPI2 INDEX</a> since the start of the review period.</li>
</ul>


There will be 8 additions and 8 deletions for the Korea Stock Exchange KOSPI 200 (KOSPI2 INDEX) at the next rebalance to be implemented at the close on 12 June.
The inclusion of Korea District Heating (071320 KS) is a surprise and leads to an extra deletion - all the other adds are exactly in line with forecasts.
The list of adds has been stable for the last few months and the stocks have outperformed the deletes and the KOSPI2 INDEX since the start of the review period.


KOSPI200 Index Rebalance: 8 Changes a Side with 2 Surprises

Quantitative Researcher, MRM Research

Nico Rosti

Quantitative Researcher

MRM Research

Quantitative Research

Equity Derivatives

Korea Stock Exchange KOSPI 200 / Equity Derivatives

<ul>
<li>Korea Exchange announced its <a href="https://www.smartkarma.com/entities/korea-stock-exchange-kospi-200" target="_blank" data-smartkarma-citation="entities:26021:1" rel="noopener">KOSPI 200</a> rebalance changes on 27 May, <a href="https://www.smartkarma.com/profiles/sanghyun-park" target="_blank" data-smartkarma-citation="accounts:354" rel="noopener">Sanghyun Park</a> and <a href="https://www.smartkarma.com/profiles/douglas-kim" target="_blank" data-smartkarma-citation="accounts:342" rel="noopener">Douglas Kim</a> wrote extensively about this, here we want to focus purely on the tactical strategy.</li>
<li>The <a href="https://www.smartkarma.com/entities/korea-stock-exchange-kospi-200" target="_blank" data-smartkarma-citation="entities:26021:1" rel="noopener">KOSPI 200 INDEX</a> pulled back last week, then surged on Monday and stagnated on Tuesday, the index <strong>has plenty of room to go higher according to our model.</strong>
</li>
<li>According to our model,<strong> the number of rallies vastly offset the number of pullbacks when this pattern is encountered (=pullbacks are rare), this could be read as a bullish indication.</strong>
</li>
</ul>


Korea Exchange announced its KOSPI 200 rebalance changes on 27 May, Sanghyun Park and Douglas Kim wrote extensively about this, here we want to focus purely on the tactical strategy.
The KOSPI 200 INDEX pulled back last week, then surged on Monday and stagnated on Tuesday, the index has plenty of room to go higher according to our model.

According to our model, the number of rallies vastly offset the number of pullbacks when this pattern is encountered (=pullbacks are rare), this could be read as a bullish indication.



KOSPI 200 Tactical Outlook After Index Rebalancing

South Korea

DN Automotive Corporation manufactures and distributes automobile parts. The Company produces automobile tires, tubes, recycled tires, flaps, automobile vibration proof parts, automobile batteries, and other related products. DN Automotive markets its products worldwide.

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DN Automotive (007340 KS)

DN Automotive NAV Valuation Analysis

According to our NAV valuation analysis, it suggests NAV per share of 25,624 won for DN Automotive which is 35% higher than current price.

Douglas Kim

Initial Thoughts on the DN Solutions IPO

DN Solutions is planning to complete its IPO in Korea in 2025. The expected value of DN Solutions is estimated to be about 5 trillion won to 6...

Douglas Kim

KRX Short Interest Weekly (Oct 17th): KorZinc, Samsung Electronics, ECOPRO, SK Hynix, ECOPROBM

We analyzed KRX short interest report for the past week and highlighted short interest changes in KorZinc, Samsung Electronics, ECOPRO, SK Hynix,...

Ke Yan, CFA, FRM

KOSPI200 Index Rebalance: 8 Changes a Side with 2 Surprises

There are 8 changes with most on expected lines. Cosmo AM&T will also be sold by the IT sector ETF. Shorts have increased in a few stocks since the...

Brian Freitas

KOSPI 200 Tactical Outlook After Index Rebalancing

The fresh KOSPI 200 rebalance changes may affect tactical strategies, this insight examines the index's current outlook using our probabilistic...

Nico Rosti

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