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

The KRX defines the free float of a stock as the proportion of outstanding shares that is deemed available for purchase in the stock market.The KRX includes the following types of shares in free float for all its indices:<ul>
<li>Stakes held by the major shareholder and the special affiliated persons</li>
<li>Stakes held by the government agencies, excluding the Korea NPS</li>
<li>Treasury shares</li>
<li>Stakes hed by the ESOP</li>
<li>Stakes under a lock-up agreement by court order</li>
</ul>A free float change cycle is every 6 months. That is, the KRX reflects free float changes in the bi-annual rebalancing.But if a change is less than ±5%pt, there will be no change. The KRX will continue to apply the previous free float rates.<div class="content-highlight">The KRX may reflect a free-float change before a bi-annual rebalancing if a change is substantially large. The KRX considers the following factors: company size, rebalancing size and subsequent market impact, and index tracking convenience.</div><hr><h2>Likely names with a ±5%pt free float change</h2>This rebalancing will likely feature a total of 9 constituents having a ±5%pt free float change: 6 names with a 5%pt or greater change and 3 names with a -5%pt or harsher change.Doosan Fuel Cell tops the list with +18.74%pt, followed by CS Wind with +15.56%pt and HYBE with +14.66%pt. On the other hand, DL Holdings will likely lose -30.69%pt in its free-float rate. SK Discovery and Korean Air are also expected to suffer a reduction, -9.50%pt and -8.50%pt, respectively.<table class="table table-striped">
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<tr>
<td data-sheets-value='{"1":2,"2":"Name"}'>Name</td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"Ticker"}'>Ticker</td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"Previous free float rate"}'>Current free float rate (est.)</td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"Current free float rate"}'>New free float rate (est.)</td>
<td data-sheets-value='{"1":2,"2":"Free float change"}'>Free float change</td>
<td style="text-align: left;" data-sheets-value='{"1":2,"2":"Note"}'>Note</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Korean Air Lines Co Ltd"}' data-sheets-formula='=googlefinance(R[0]C[1], "name")'>Korean Air Lines Co Ltd</td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"003490"}' data-sheets-formula='=if(len(R[0]C[7])=2, "0000"&amp;R[0]C[7], if(len(R[0]C[7])=3, "000"&amp;R[0]C[7], if(LEN(R[0]C[7])=4, "00"&amp;R[0]C[7], if(len(R[0]C[7])=5, "0"&amp;R[0]C[7], if(len(R[0]C[7])=6, R[0]C[7], 0)))))'>003490</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0.6079702177328681}' data-sheets-formula='=indirect("KODEX 200!G"&amp;R[0]C[7])'>60.80%</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0.5229999999999999}' data-sheets-formula="=61.04%-(R[0]C[8]-R[0]C[7])">52.30%</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":-0.08497021773286817}' data-sheets-numberformat='{"1":3,"2":"0.00%p"}' data-sheets-formula="=R[0]C[-1]-R[0]C[-2]">-8.50%p</td>
<td style="text-align: left;" data-sheets-value='{"1":2,"2":"New issue"}'>New issue</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"SK Biopharmaceuticals Co Ltd"}' data-sheets-formula='=googlefinance(R[0]C[1], "name")'>SK Biopharmaceuticals Co Ltd</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":326030}' data-sheets-formula='=if(len(R[0]C[7])=2, "0000"&amp;R[0]C[7], if(len(R[0]C[7])=3, "000"&amp;R[0]C[7], if(LEN(R[0]C[7])=4, "00"&amp;R[0]C[7], if(len(R[0]C[7])=5, "0"&amp;R[0]C[7], if(len(R[0]C[7])=6, R[0]C[7], 0)))))'>326030</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0.22696431504105483}' data-sheets-formula='=indirect("KODEX 200!G"&amp;R[0]C[7])'>22.70%</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0.34}'>34.00%</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0.1130356849589452}' data-sheets-numberformat='{"1":3,"2":"0.00%p"}' data-sheets-formula="=R[0]C[-1]-R[0]C[-2]">11.30%p</td>
<td style="text-align: left;" data-sheets-value='{"1":2,"2":"The major shareholder selldown"}'>The major shareholder selldown</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Industrial Bank of Korea"}' data-sheets-formula='=googlefinance(R[0]C[1], "name")'>Industrial Bank of Korea</td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"024110"}' data-sheets-formula='=if(len(R[0]C[7])=2, "0000"&amp;R[0]C[7], if(len(R[0]C[7])=3, "000"&amp;R[0]C[7], if(LEN(R[0]C[7])=4, "00"&amp;R[0]C[7], if(len(R[0]C[7])=5, "0"&amp;R[0]C[7], if(len(R[0]C[7])=6, R[0]C[7], 0)))))'>024110</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0.28784600849134395}' data-sheets-formula='=indirect("KODEX 200!G"&amp;R[0]C[7])'>28.78%</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0.3614}'>36.14%</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0.07355399150865605}' data-sheets-numberformat='{"1":3,"2":"0.00%p"}' data-sheets-formula="=R[0]C[-1]-R[0]C[-2]">7.36%p</td>
<td style="text-align: left;" data-sheets-value='{"1":2,"2":"New issue"}'>New issue</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Doosan Fuel Cell Co Ltd"}' data-sheets-formula='=googlefinance(R[0]C[1], "name")'>Doosan Fuel Cell Co Ltd</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":336260}' data-sheets-formula='=if(len(R[0]C[7])=2, "0000"&amp;R[0]C[7], if(len(R[0]C[7])=3, "000"&amp;R[0]C[7], if(LEN(R[0]C[7])=4, "00"&amp;R[0]C[7], if(len(R[0]C[7])=5, "0"&amp;R[0]C[7], if(len(R[0]C[7])=6, R[0]C[7], 0)))))'>336260</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0.4198990285604666}' data-sheets-formula='=indirect("KODEX 200!G"&amp;R[0]C[7])'>41.99%</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0.6073}'>60.73%</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0.18740097143953333}' data-sheets-numberformat='{"1":3,"2":"0.00%p"}' data-sheets-formula="=R[0]C[-1]-R[0]C[-2]">18.74%p</td>
<td style="text-align: left;" data-sheets-value='{"1":2,"2":"New issue &amp; the major shareholder selldown"}'>New issue &amp; the major shareholder selldown</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Cs Wind Corp"}' data-sheets-formula='=googlefinance(R[0]C[1], "name")'>Cs Wind Corp</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":112610}' data-sheets-formula='=if(len(R[0]C[7])=2, "0000"&amp;R[0]C[7], if(len(R[0]C[7])=3, "000"&amp;R[0]C[7], if(LEN(R[0]C[7])=4, "00"&amp;R[0]C[7], if(len(R[0]C[7])=5, "0"&amp;R[0]C[7], if(len(R[0]C[7])=6, R[0]C[7], 0)))))'>112610</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0.40763635199851167}' data-sheets-formula='=indirect("KODEX 200!G"&amp;R[0]C[7])'>40.76%</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0.5632}'>56.32%</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0.15556364800148836}' data-sheets-numberformat='{"1":3,"2":"0.00%p"}' data-sheets-formula="=R[0]C[-1]-R[0]C[-2]">15.56%p</td>
<td style="text-align: left;" data-sheets-value='{"1":2,"2":"New issue"}'>New issue</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Hyundai Rotem Co"}' data-sheets-formula='=googlefinance(R[0]C[1], "name")'>Hyundai Rotem Co</td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"064350"}' data-sheets-formula='=if(len(R[0]C[7])=2, "0000"&amp;R[0]C[7], if(len(R[0]C[7])=3, "000"&amp;R[0]C[7], if(LEN(R[0]C[7])=4, "00"&amp;R[0]C[7], if(len(R[0]C[7])=5, "0"&amp;R[0]C[7], if(len(R[0]C[7])=6, R[0]C[7], 0)))))'>064350</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0.5505147484042126}' data-sheets-formula='=indirect("KODEX 200!G"&amp;R[0]C[7])'>55.05%</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0.6589}'>65.89%</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0.10838525159578749}' data-sheets-numberformat='{"1":3,"2":"0.00%p"}' data-sheets-formula="=R[0]C[-1]-R[0]C[-2]">10.84%p</td>
<td style="text-align: left;" data-sheets-value='{"1":2,"2":"CB conversion"}'>CB conversion</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"DL Holdings Co Ltd"}' data-sheets-formula='=googlefinance(R[0]C[1], "name")'>DL Holdings Co Ltd</td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"000210"}' data-sheets-formula='=if(len(R[0]C[7])=2, "0000"&amp;R[0]C[7], if(len(R[0]C[7])=3, "000"&amp;R[0]C[7], if(LEN(R[0]C[7])=4, "00"&amp;R[0]C[7], if(len(R[0]C[7])=5, "0"&amp;R[0]C[7], if(len(R[0]C[7])=6, R[0]C[7], 0)))))'>000210</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0.8713222556320805}' data-sheets-formula='=indirect("KODEX 200!G"&amp;R[0]C[7])'>87.13%</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0.5643999999999999}' data-sheets-formula="=76.88%-(R[0]C[8]-R[0]C[7])">56.44%</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":-0.30692225563208064}' data-sheets-numberformat='{"1":3,"2":"0.00%p"}' data-sheets-formula="=R[0]C[-1]-R[0]C[-2]">-30.69%p</td>
<td style="text-align: left;" data-sheets-value='{"1":2,"2":"Tender offer"}'>Tender offer</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"SK Discovery Co Ltd"}' data-sheets-formula='=googlefinance(R[0]C[1], "name")'>SK Discovery Co Ltd</td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"006120"}' data-sheets-formula='=if(len(R[0]C[7])=2, "0000"&amp;R[0]C[7], if(len(R[0]C[7])=3, "000"&amp;R[0]C[7], if(LEN(R[0]C[7])=4, "00"&amp;R[0]C[7], if(len(R[0]C[7])=5, "0"&amp;R[0]C[7], if(len(R[0]C[7])=6, R[0]C[7], 0)))))'>006120</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0.6193005803932952}' data-sheets-formula='=indirect("KODEX 200!G"&amp;R[0]C[7])'>61.93%</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0.5243}'>52.43%</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":-0.09500058039329518}' data-sheets-numberformat='{"1":3,"2":"0.00%p"}' data-sheets-formula="=R[0]C[-1]-R[0]C[-2]">-9.50%p</td>
<td style="text-align: left;" data-sheets-value='{"1":2,"2":"The major shareholder buying"}'>The major shareholder buying</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Hybe Co Ltd"}' data-sheets-formula='=googlefinance(R[0]C[1], "name")'>HYBE Co Ltd</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":352820}' data-sheets-formula='=if(len(R[0]C[7])=2, "0000"&amp;R[0]C[7], if(len(R[0]C[7])=3, "000"&amp;R[0]C[7], if(LEN(R[0]C[7])=4, "00"&amp;R[0]C[7], if(len(R[0]C[7])=5, "0"&amp;R[0]C[7], if(len(R[0]C[7])=6, R[0]C[7], 0)))))'>352820</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0.2683143580142878}' data-sheets-formula='=indirect("KODEX 200!G"&amp;R[0]C[7])'>26.83%</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0.4149}'>41.49%</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0.14658564198571217}' data-sheets-numberformat='{"1":3,"2":"0.00%p"}' data-sheets-formula="=R[0]C[-1]-R[0]C[-2]">14.66%p</td>
<td style="text-align: left;" data-sheets-value='{"1":2,"2":"Lockup release"}'>Lockup release</td>
</tr>
<tr><td colspan="6" data-sheets-value='{"1":2,"2":"Source: KRX"}'>Source: KRX</td></tr>
</tbody>
</table>

The KRX defines the free float of a stock as the proportion of outstanding shares that is deemed available for purchase in the stock market.The KRX includes the following types of shares in free float for all its indices:
Stakes held by the major shareholder and the special affiliated persons
Stakes held by the government agencies, excluding the Korea NPS
Treasury shares
Stakes hed by the ESOP
Stakes under a lock-up agreement by court order
A free float change cycle is every 6 months. That is, the KRX reflects free float changes in the bi-annual rebalancing.But if a change is less than ±5%pt, there will be no change. The KRX will continue to apply the previous free float rates.The KRX may reflect a free-float change before a bi-annual rebalancing if a change is substantially large. The KRX considers the following factors: company size, rebalancing size and subsequent market impact, and index tracking convenience.Likely names with a ±5%pt free float changeThis rebalancing will likely feature a total of 9 constituents having a ±5%pt free float change: 6 names with a 5%pt or greater change and 3 names with a -5%pt or harsher change.Doosan Fuel Cell tops the list with +18.74%pt, followed by CS Wind with +15.56%pt and HYBE with +14.66%pt. On the other hand, DL Holdings will likely lose -30.69%pt in its free-float rate. SK Discovery and Korean Air are also expected to suffer a reduction, -9.50%pt and -8.50%pt, respectively.










Name
Ticker
Current free float rate (est.)
New free float rate (est.)
Free float change
Note


Korean Air Lines Co Ltd
003490
60.80%
52.30%
-8.50%p
New issue


SK Biopharmaceuticals Co Ltd
326030
22.70%
34.00%
11.30%p
The major shareholder selldown


Industrial Bank of Korea
024110
28.78%
36.14%
7.36%p
New issue


Doosan Fuel Cell Co Ltd
336260
41.99%
60.73%
18.74%p
New issue &amp; the major shareholder selldown


Cs Wind Corp
112610
40.76%
56.32%
15.56%p
New issue


Hyundai Rotem Co
064350
55.05%
65.89%
10.84%p
CB conversion


DL Holdings Co Ltd
000210
87.13%
56.44%
-30.69%p
Tender offer


SK Discovery Co Ltd
006120
61.93%
52.43%
-9.50%p
The major shareholder buying


HYBE Co Ltd
352820
26.83%
41.49%
14.66%p
Lockup release

Source: KRX



KOSPI 200 Rebalancing: Constituents with a ±5%pt Free Float Change

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

Brian Freitas

Pan-Asia Index Rebalances/ Events/ Delta One

EDP - Energias de Portugal SA / Event-Driven

The changes to the S&amp;P Global Clean Energy Index have been announced. There are 52 additions to the index to take the number of index constituents up to 82. The changes are effective after the close of trading on 16 April.The 52 additions and capping changes will result in a one-way turnover of close to 55% and will require the ETFs tracking the index to trade US$12bn to rebalance their portfolios.The largest buying impact in terms of ADV to trade will be on <a href="https://www.smartkarma.com/entities/edp-energias-de-portugal-sa" target="_blank" data-smartkarma-citation="entities:21362:1" rel="noopener">Edp - Energias De Portugal Sa (EDP PL)</a>, <a href="https://www.smartkarma.com/entities/sse-plc" target="_blank" data-smartkarma-citation="entities:22163:1" rel="noopener">SSE PLC (SSE LN)</a>, <a href="https://www.smartkarma.com/entities/northland-power-inc" target="_blank" data-smartkarma-citation="entities:25480:1" rel="noopener">Northland Power (NPI CN)</a>, <a href="https://www.smartkarma.com/entities/enel-americas-sa-c3a67f8a-ad13-45ff-a676-cbc513b8c458" target="_blank" data-smartkarma-citation="entities:25965:1" rel="noopener">Enel Americas SA (ENIA US)</a>, <a href="https://www.smartkarma.com/entities/drax-group-plc" target="_blank" data-smartkarma-citation="entities:21911:1" rel="noopener">Drax Group PLC (DRX LN)</a>, <a href="https://www.smartkarma.com/entities/meyer-burger-technology-ag" target="_blank" data-smartkarma-citation="entities:25013:1" rel="noopener">Meyer Burger Technology Ag (MBTN SW)</a> and <a href="https://www.smartkarma.com/entities/centrais-eletricas-br-sp-adr" target="_blank" data-smartkarma-citation="entities:28638:1" rel="noopener">Centrais Eletricas Br-Sp Adr (EBR US)</a>.The largest selling impact will be on <a href="https://www.smartkarma.com/entities/meridian-ener-partly-paid-sh" target="_blank" data-smartkarma-citation="entities:4327:1" rel="noopener">Meridian Energy (MEL NZ)</a>, <a href="https://www.smartkarma.com/entities/contact-energy-ltd" target="_blank" data-smartkarma-citation="entities:13136:1" rel="noopener">Contact Energy (CEN NZ)</a>, <a href="https://www.smartkarma.com/entities/verbund-ag" target="_blank" data-smartkarma-citation="entities:22563:1" rel="noopener">Verbund AG (VER AV)</a>, <a href="https://www.smartkarma.com/entities/innergex-renewable-energy-inc" target="_blank" data-smartkarma-citation="entities:25479:1" rel="noopener">Innergex Renewable Energy (INE CN)</a>, <a href="https://www.smartkarma.com/entities/cia-energetica-de-spon-adr" target="_blank" data-smartkarma-citation="entities:28644:1" rel="noopener">Cia Energetica De-Spon Adr (CIG US)</a>, <a href="https://www.smartkarma.com/entities/boralex-inc" target="_blank" data-smartkarma-citation="entities:25478:1" rel="noopener">Boralex Inc (BLX CN)</a> and <a href="https://www.smartkarma.com/entities/scatec-solar-asa" target="_blank" data-smartkarma-citation="entities:25120:1" rel="noopener">Scatec Solar ASA (SSO NO)</a>.Among the current index constituents, there will be buying on <a href="https://www.smartkarma.com/entities/orsted-a-s" target="_blank" data-smartkarma-citation="entities:24765:1" rel="noopener">Orsted A/S (ORSTED DC)</a> and <a href="https://www.smartkarma.com/entities/vestas-wind-systems-a-s" target="_blank" data-smartkarma-citation="entities:22524:1" rel="noopener">Vestas Wind Systems A/S (VWS DC)</a>.We recommend buying the surprise inclusions and unwinding the positions by implementation date. A lot of the stocks that will have a reduction in index weight have been sold off over the last few months and the active positions will be covered leading up to implementation date - we recommend buying these stocks in the days leading up to implementation date since the stocks could rally once the overhang of passive selling has been removed.

The changes to the S&amp;P Global Clean Energy Index have been announced. There are 52 additions to the index to take the number of index constituents up to 82. The changes are effective after the close of trading on 16 April.The 52 additions and capping changes will result in a one-way turnover of close to 55% and will require the ETFs tracking the index to trade US$12bn to rebalance their portfolios.The largest buying impact in terms of ADV to trade will be on Edp - Energias De Portugal Sa (EDP PL), SSE PLC (SSE LN), Northland Power (NPI CN), Enel Americas SA (ENIA US), Drax Group PLC (DRX LN), Meyer Burger Technology Ag (MBTN SW) and Centrais Eletricas Br-Sp Adr (EBR US).The largest selling impact will be on Meridian Energy (MEL NZ), Contact Energy (CEN NZ), Verbund AG (VER AV), Innergex Renewable Energy (INE CN), Cia Energetica De-Spon Adr (CIG US), Boralex Inc (BLX CN) and Scatec Solar ASA (SSO NO).Among the current index constituents, there will be buying on Orsted A/S (ORSTED DC) and Vestas Wind Systems A/S (VWS DC).We recommend buying the surprise inclusions and unwinding the positions by implementation date. A lot of the stocks that will have a reduction in index weight have been sold off over the last few months and the active positions will be covered leading up to implementation date - we recommend buying these stocks in the days leading up to implementation date since the stocks could rally once the overhang of passive selling has been removed.

Global Clean Energy Index: 52 Adds, 55% Index Turnover, US$12bn to Trade

Earlier today, S&amp;P Dow Jones announced that all the proposals of the latest market consultation would be implemented at the close of trading on 16 April to reduce constituent concentration, ease liquidity limitations, and improve index replication further than would have been achieved from the result of the prior market consultation.We expect there will be 37 additions to the index taking the number of index constituents up to 67. This number will increase over the next few rebalances as the target is to get up to at least 100 constituent stocks.With index weight dependent on free float market cap and turnover, plus capping of index weight dependent on exposure scores, this is going to be a large rebalance. We expect a one-way turnover of 48.1% with our expected changes.Stocks that could see passive buying (sorted in terms of days of ADV) are <a href="https://www.smartkarma.com/entities/drax-group-plc" target="_blank" data-smartkarma-citation="entities:21911:1" rel="noopener">Drax Group PLC (DRX LN)</a>, <a href="https://www.smartkarma.com/entities/enel-americas-sa-c3a67f8a-ad13-45ff-a676-cbc513b8c458" target="_blank" data-smartkarma-citation="entities:25965:1" rel="noopener">Enel Americas Sa (ENIA US)</a>, <a href="https://www.smartkarma.com/entities/fortum-oyj" target="_blank" data-smartkarma-citation="entities:21762:1" rel="noopener">Fortum OYJ (FUM1V FH)</a>, <a href="https://www.smartkarma.com/entities/erg-spa" target="_blank" data-smartkarma-citation="entities:21186:1" rel="noopener">ERG SpA (ERG IM)</a>, <a href="https://www.smartkarma.com/entities/terna-rete-elettrica-nazionale" target="_blank" data-smartkarma-citation="entities:21232:1" rel="noopener">Terna Rete Elettrica Nazionale (TRN IM)</a>, <a href="https://www.smartkarma.com/entities/china-longyuan-power-group-corp-ltd" target="_blank" data-smartkarma-citation="entities:14215:1" rel="noopener">China Longyuan Power Group Corp (916 HK)</a>, <a href="https://www.smartkarma.com/entities/nordex-se" target="_blank" data-smartkarma-citation="entities:21682:1" rel="noopener">Nordex SE (NDX1 GR)</a>, <a href="https://www.smartkarma.com/entities/acciona-sa" target="_blank" data-smartkarma-citation="entities:21248:1" rel="noopener">Acciona SA (ANA SM)</a>, <a href="https://www.smartkarma.com/entities/avista-corp" target="_blank" data-smartkarma-citation="entities:17178:1" rel="noopener">Avista Corp (AVA US)</a> and <a href="https://www.smartkarma.com/entities/idacorp-inc" target="_blank" data-smartkarma-citation="entities:15190:1" rel="noopener">Idacorp Inc (IDA US)</a>.Stocks that could see passive selling (sorted in terms of days of ADV) are <a href="https://www.smartkarma.com/entities/meridian-ener-partly-paid-sh" target="_blank" data-smartkarma-citation="entities:4327:1" rel="noopener">Meridian Energy (MEL NZ)</a>, <a href="https://www.smartkarma.com/entities/contact-energy-ltd" target="_blank" data-smartkarma-citation="entities:13136:1" rel="noopener">Contact Energy (CEN NZ)</a>, <a href="https://www.smartkarma.com/entities/verbund-ag" target="_blank" data-smartkarma-citation="entities:22563:1" rel="noopener">Verbund AG (VER AV)</a>, <a href="https://www.smartkarma.com/entities/edp-renovaveis-sa" target="_blank" data-smartkarma-citation="entities:21363:1" rel="noopener">EDP Renovaveis SA (EDPR PL)</a>, <a href="https://www.smartkarma.com/entities/scatec-solar-asa" target="_blank" data-smartkarma-citation="entities:25120:1" rel="noopener">Scatec Solar ASA (SSO NO)</a>, <a href="https://www.smartkarma.com/entities/innergex-renewable-energy-inc" target="_blank" data-smartkarma-citation="entities:25479:1" rel="noopener">Innergex Renewable Energy (INE CN)</a>, <a href="https://www.smartkarma.com/entities/boralex-inc" target="_blank" data-smartkarma-citation="entities:25478:1" rel="noopener">Boralex Inc (BLX CN)</a> and <a href="https://www.smartkarma.com/entities/siemens-gamesa-renewable-energy-s-a" target="_blank" data-smartkarma-citation="entities:21270:1" rel="noopener">Siemens Gamesa Renewable Energy, S.A. (SGRE SM)</a>.Among existing constituents, there will be passive inflows on <a href="https://www.smartkarma.com/entities/orsted-a-s" target="_blank" data-smartkarma-citation="entities:24765:1" rel="noopener">Orsted A/S (ORSTED DC)</a>, <a href="https://www.smartkarma.com/entities/vestas-wind-systems-a-s" target="_blank" data-smartkarma-citation="entities:22524:1" rel="noopener">Vestas Wind Systems A/S (VWS DC)</a>, <a href="https://www.smartkarma.com/entities/solaredge-technologies-inc" target="_blank" data-smartkarma-citation="entities:27981:1" rel="noopener">SolarEdge Technologies Inc (SEDG US)</a>, <a href="https://www.smartkarma.com/entities/sunrun-inc" target="_blank" data-smartkarma-citation="entities:19726:1" rel="noopener">Sunrun Inc (RUN US)</a> and <a href="https://www.smartkarma.com/entities/enphase-energy-inc" target="_blank" data-smartkarma-citation="entities:8872:1" rel="noopener">Enphase Energy (ENPH US)</a>.

Earlier today, S&amp;P Dow Jones announced that all the proposals of the latest market consultation would be implemented at the close of trading on 16 April to reduce constituent concentration, ease liquidity limitations, and improve index replication further than would have been achieved from the result of the prior market consultation.We expect there will be 37 additions to the index taking the number of index constituents up to 67. This number will increase over the next few rebalances as the target is to get up to at least 100 constituent stocks.With index weight dependent on free float market cap and turnover, plus capping of index weight dependent on exposure scores, this is going to be a large rebalance. We expect a one-way turnover of 48.1% with our expected changes.Stocks that could see passive buying (sorted in terms of days of ADV) are Drax Group PLC (DRX LN), Enel Americas Sa (ENIA US), Fortum OYJ (FUM1V FH), ERG SpA (ERG IM), Terna Rete Elettrica Nazionale (TRN IM), China Longyuan Power Group Corp (916 HK), Nordex SE (NDX1 GR), Acciona SA (ANA SM), Avista Corp (AVA US) and Idacorp Inc (IDA US).Stocks that could see passive selling (sorted in terms of days of ADV) are Meridian Energy (MEL NZ), Contact Energy (CEN NZ), Verbund AG (VER AV), EDP Renovaveis SA (EDPR PL), Scatec Solar ASA (SSO NO), Innergex Renewable Energy (INE CN), Boralex Inc (BLX CN) and Siemens Gamesa Renewable Energy, S.A. (SGRE SM).Among existing constituents, there will be passive inflows on Orsted A/S (ORSTED DC), Vestas Wind Systems A/S (VWS DC), SolarEdge Technologies Inc (SEDG US), Sunrun Inc (RUN US) and Enphase Energy (ENPH US). 

Global Clean Energy Index: All Proposals to Be Implemented; 48% One-Way Turnover

The S&amp;P Global Clean Energy Index is designed to measure the performance of 30 companies from around the world that are involved in clean energy-related businesses, comprising a diversified mix of clean energy production and clean energy equipment and technology companies.There are two ETFs that are benchmarked to the index and these ETFs have seen massive inflows over the last year. This has caused liquidity issues in the underlying stocks and has led to S&amp;P having multiple market consultations to reduce constituent concentration, easy liquidity limitations and improve index replication.The changes due to these market consultations will cause large passive flows on the stocks. A few stocks have moved substantially over the last couple of months but there could be more in store for a few of them.Depending on the which proposals are implemented, one-way turnover for the review could be in the range of 30-50% and there are a lot of stocks that will have more than 10 days of ADV to trade.In this Insight we look at the index, the inflows on the ETFs, the various market consultations and the impact on the stocks that constitute the index and those that could be added to the index in the April rebalance.

The S&amp;P Global Clean Energy Index is designed to measure the performance of 30 companies from around the world that are involved in clean energy-related businesses, comprising a diversified mix of clean energy production and clean energy equipment and technology companies.There are two ETFs that are benchmarked to the index and these ETFs have seen massive inflows over the last year. This has caused liquidity issues in the underlying stocks and has led to S&amp;P having multiple market consultations to reduce constituent concentration, easy liquidity limitations and improve index replication.The changes due to these market consultations will cause large passive flows on the stocks. A few stocks have moved substantially over the last couple of months but there could be more in store for a few of them.Depending on the which proposals are implemented, one-way turnover for the review could be in the range of 30-50% and there are a lot of stocks that will have more than 10 days of ADV to trade.In this Insight we look at the index, the inflows on the ETFs, the various market consultations and the impact on the stocks that constitute the index and those that could be added to the index in the April rebalance.

Global Clean Energy Index: MASSIVE Changes Coming Up; 30-50% One-Way Turnover

APAC IPOs & Placements

Zhen Zhou, Toh

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.

Equity Capital Markets

Aequitas Research puts out a weekly update on the deals that have been covered by the team recently along with updates for upcoming IPOs.
To kickstart the new year, we shared Aequitas 2020 IPOs and Placements results. 2020 marked our second full year of operations as an Independent Research Company, and our fifth year covering Equity Capital Markets (ECM). Even though ECM started off on a precarious note, it ended with very strong momentum. 

Aequitas 2020 IPOs and Placements Performance - IPOs in the Limelight but Placements Stole the Show 
Hong Kong ECM kicked off the year on a strong note with Yidu Tech Inc (2158 HK) closing its bookbuild a day earlier than stipulated. The deal was launched on the last day of 2020. Roiserv Lifestyle Services (2146 HK), the property management arm of Risesun Real Estate Devel A (002146 CH), also launched its bookbuild on the same day. 


Yidu Tech (医渡云) IPO - Expensive but It's Still Justifiable 

Roiserv Lifestyle (荣万家) IPO - Small, Expensive, and Parent Dependent 

There are a few IPOs looking to launch their IPOs soon such as Beijing Kuaishou Technology Co Ltd (1496219D CH),  MicroPort CardioFlow (1844972D HK), and New Horizon Health (NHH HK). There is also another wave of secondary listings. We heard that Baidu (BIDU US), Autohome Inc (Adr) (ATHM US), and Bilibili Inc (BILI US) will likely come to market soon.
Other than IPOs, Hong Kong companies/shareholders were eager to sell to lock in some cash. Shareholders of Wuxi Biologics (2269 HK) was back on the market, ahead of lock-up to sell again whereas Haidilao (6862 HK)'s cofounders, Shi Yonghong and Li Haiyan, sold about 1.4% stake in the company and locked in US$600m in cash on Friday. 


Wuxi Biologics Placement - Well Ahead of Lock-Up, Again 

Haidilao (海底捞) Placement - Founders Back to Sell More 

Akeso (康方生物) Placement - Prepping for Commercialization 

Jinxin Fertility (锦欣生殖) Placement - Only Warburg Selling This Time 

There was also a big block in Korea, sold by the ten shareholders of Doosan Fuel Cell Co Ltd (336260 KS) who had earlier failed to sell their entire shareholding last year. Hence, this was likely an expected selldown.

Doosan Fuel Cell - The Expected Return Of The Remaining Big Block 
In the US, despite the uncertainty surrounding China ADRs as evidenced from the deletion of the three Chinese telcos from MSCI and FTSE, RLX Technology Inc (RLX US) is looking to raise about US$1bn from its IPO. The company was said to be premarketing its IPO.


RLX Technology Pre-IPO - The Positives - Fast Growth, Low Penetration 

RLX Technology Pre-IPO - The Negatives - Limited Track Record, and Missing International Ops 

In Thailand, market will likely see more deals coming their way after Kerry Express Thailand (KEX TB) strong debut towards the end of 2020. We are hearing that PTT Oil and Retail (PTTOR TB) will likely launch its bookbuild early next week.

Kerry Express Thailand IPO Trading - Delivering a Christmas Present 
Accuracy Rate:Our overall accuracy rate is 73.5% for IPOs and 66.9% for Placements (Performance measurement criteria is explained at the end of the note)New IPO filings this week  

Chaoju Eye Care (Hong Kong, ~US$200m)
Linklogic Inc. (Hong Kong, &gt;US$100m)
Toplist (Hong Kong, re-filed)
Below is a snippet of our IPO tool showing upcoming events for the next week. The IPO tool is designed to provide readers with timely information on all IPO related events (Book open/closing, listing, initiation, lock-up expiry, etc) for all the deals that we have worked on. You can access the tool here or through the tools menu.  
News on Upcoming IPOs  

Baidu picks CLSA, Goldman for a Hong Kong secondary listing
Bilibili to raise over $2 billion in Hong Kong listing
Gojek in talks with Tokopedia for $23.7 billion merger
Upcoming IPOs in 2021: LIC, IRFC, Zomato, other public issues on cards
Analysis on Upcoming IPOs

Name
Insight

Hong Kong

ByteDance
ByteDance (字节跳动) IPO: How Jinri Toutiao Paves The Way for a Bigger Empire (Part 1)


ByteDance
ByteDance (字节跳动) Pre-IPO: Why Facebook Should Worry About TikTok 


ByteDance
ByteDance (字节跳动) IPO: Tiktok the No.1 Short Video App for a Good Reason (Part 2)


ByteDance
ByteDance (字节跳动) Pre-IPO: How Has It Done in 1H? 


ByteDance
ByteDance: The Unlisted Company’s Video Apps Leading the Market and Threatening Internet Giants 


ByteDance
ByteDance (字节跳动) Pre-IPO: Why Facebook Should Worry About TikTok 


ByteDance
ByteDance (字节跳动) Pre-IPO - Globally the Most Downloaded App for Jan 2020 Driven by India 


ByteDance
ByteDance (字节跳动) Pre-IPO: Global Ambition Meets Regulatory Challenges 


Dida
Dida Pre-IPO - Making Hay While Big Brother Retreats 


E-Star Comm
E-Star Commercial Management Pre-IPO - Better Disclosure in New Prospectus 


E-Star Comm
E-Star Commercial Management Pre-IPO - Still Largely Reliant on Galaxy, Poor Disclosure Doesn’t Help 


Kilcoy
Kilcoy Global Foods Pre-IPO - Rapid Earnings Growth on the Back of Margin Improvement 


Kilcoy
Kilcoy Global Foods Pre-IPO - A Lot of Things Still Remain Unexplained 


Kuaishou
Kuaishou Technology Pre-IPO - The Positives - Hot Segment, Fast Growth 


Kuaishou
Kuaishou Technology Pre-IPO - The Negatives - Ample Doubts Remain 


Megvii

Megvii (旷视) Pre-IPO - Remarkable Growth (Part 1) 


Megvii

Megvii (旷视) Pre-IPO - A Bet on the Future - Segments, Revenue Drivers and Growth Potential 


Megvii

Megvii (旷视) Pre-IPO - The Real Race Is in Research - Founders' Profile and Talent 


Megvii

Megvii (旷视) Pre-IPO - Competitive Landscape and Peer Analysis 


Megvii

Megvii (旷视) Pre-IPO -  Initial Thoughts on Valuation 


Ocumension

Ocumension (欧康维视) Pre-IPO: All Ready for a Great Listing Except a Block Buster 


RemeGen

RemeGen (荣昌生物) Pre-IPO: Thoughts on Valuation of RC18 and RC48 


Toplist

Toplist China Pre-IPO - Overwhelmingly More Negatives than Positives 


Tasly

Tasly Biopharm (天士力生物) IPO: Visible Growth from Approved Drug but Lacks Blockbusters 


WeDoctor

WeDoctor (微医) Pre-IPO -App Walk Through - The Online Medical Directory and More 


WeDoctor

WeDoctor (微医) Pre-IPO - A More Focused Online Medical Svc Provider than Ping An Good Doctor 

India

ASK

ASK Investment Managers Pre-IPO - Riding on a Wave of Wealth 


Anmol Ind
Anmol Industries Pre-IPO Quick Take - No Growth, Generous Payments to Founders


Bharat Hotel
Bharat Hotels Pre-IPO - Catching up with Peers 


Brookfields REIT
Brookfields India Real Estate Trust Pre-IPO - The Positives- Provides Different Geographic Exposure 


Brookfields REIT
Brookfields India Real Estate Trust Pre-IPO- The Negatives- Asset Details Leave Questions Unanswered 


Bajaj En
Bajaj Energy Pre-IPO - Supposed to Deliver Steady Performance if Only Its Sole Client Would Let It 


CMS Info
CMS Info Systems Pre-IPO - When a PE Sells to Another PE... Only One Gets the Timing Right


Crystal Crop
Crystal Crop Protection Pre-IPO - DRHP Raises More Questions than in Answers


ESAF SFB

ESAF Small Finance Bank Pre-IPO - Growing Fast but Remains Highly Dependant on a Related Party 


Flemingo 
Flemingo Travel Retail Pre-IPO - Its a Different Business in Every Country


Emami Cem

Emami Cement Pre-IPO - Still in Ramp Up Phase but Shares Pledge Might Lead to an Early IPO 


IRFC

Indian Railway Finance Pre-IPO - Low Risk, Low Margin Business 


NSE
NSE IPO Preview- Not Only Fast..its Risky and Expensive


NSE
National Stock Exchange Pre-IPO Review - Bigger, Better, Stronger but a Little Too Fast for Some


Mrs. Bector
Mrs. Bectors Food Specialities Pre-IPO Quick Take - Sales for Its Main Segment Have Been Sta


LIC

Life Insurance Corporation of India Pre-IPO - Early Take on India's Largest IPO 


Lodha
Lodha Developers Pre-IPO - Second Time Lucky but Not Really that Much Affordable


Lodha
Lodha Developers IPO: Presence in Affordable Segment Saves Lodha the Blushes in a Sluggish Mkt


Penna Cem

Penna Cement - Aggressive Expansion Plans Even Though Past Performance Has Been Tepid 


PNB Met
PNB Metlife Pre-IPO Quick Take - Doesn't Stack up Well Versus Its Larger Peers


Samhi Hotels

Samhi Hotels Pre-IPO - Assets and Borrowings Are Growing, but Earnings Haven’t Kept Pace 

Malaysia

QSR
QSR Brands Pre-IPO - As Healthy as Fast Food

Thailand

PTTOR

PTT Oil and Retail IPO - F&amp;B Business Is the Profit Driver 

The U.S

CDP

CDP Holdings Pre-IPO Review - Highly Reliant on Best Inc. 


CloudMinds
CloudMinds Inc Early Thoughts - Still Nascent



ECM Weekly (10 January 2021) - RLX Technology, Roiserv, Yidu Tech, and Placements

South Korea

Doosan Fuel Cell Co. Ltd. produces and sells cell products. The Company develops and sells residential used compact fuel cells and other products. Doosan Fuel Cell markets its products worldwide.

Price Gauge
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Doosan Fuel Cell (336260 KS)

KOSPI 200 Rebalancing: Constituents with a ±5%pt Free Float Change

This post looks into KOSPI 200 constituents with a potential ±5%pt free float change in the upcoming rebalancing. It then examines the extent of...

Sanghyun Park

Global Clean Energy Index: 52 Adds, 55% Index Turnover, US$12bn to Trade

There are 52 additions to the S&P Global Clean Energy Index. One-way turnover is nearly 55% and the ETF benchmarked to the index will need to trade...

Brian Freitas

Global Clean Energy Index: All Proposals to Be Implemented; 48% One-Way Turnover

S&P will implement all proposals of the market consultation at the close on 16 April. This will create trading opportunities. One-way turnover is...

Brian Freitas

Global Clean Energy Index: MASSIVE Changes Coming Up; 30-50% One-Way Turnover

The huge inflows into ETFs tracking the S&P Global Clean Energy Index have led to many market consultations and there will be massive flows in/out...

Brian Freitas

ECM Weekly (10 January 2021) - RLX Technology, Roiserv, Yidu Tech, and Placements

Aequitas Research puts out a weekly update on the deals that have been covered by the team recently along with updates for upcoming IPOs.

Zhen Zhou, Toh

Price Gauge

52-week Range

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