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>Square's reclass probability next Friday still low, with consolidation accounting for Hynix as key gating item. Current portfolio depth insufficient, so timing remains pushed out despite long term semiconductor pivot.</li>
<li>Fadu likely MKF500 inclusion with ~KRW 700bn passive inflows. Profitability flip reduces exclusion risk, making eligibility case increasingly strong despite residual legal and watchlist overhang.</li>
<li>Street fully aware of MKF500 preview timing, driving front running and flow impact. Square reclass looks stretched, while Fadu inclusion is the cleaner high conviction setup.</li>
</ul>


Square's reclass probability next Friday still low, with consolidation accounting for Hynix as key gating item. Current portfolio depth insufficient, so timing remains pushed out despite long term semiconductor pivot.
Fadu likely MKF500 inclusion with ~KRW 700bn passive inflows. Profitability flip reduces exclusion risk, making eligibility case increasingly strong despite residual legal and watchlist overhang.
Street fully aware of MKF500 preview timing, driving front running and flow impact. Square reclass looks stretched, while Fadu inclusion is the cleaner high conviction setup.


Pre Trading Setup into FnGuide MKF500 Rebalance on the 22nd, Fadu and SK Square in Focus

Index Rebalance

<ul>
<li>Fadu was excluded from KRX and FnGuide base universes, but with Q1 net income turnaround, FnGuide inclusion in MKF500 for June has meaningfully higher probability.</li>
<li>TIGER Top 10 Semis is key, Fadu is just below cutoff vs HPSP. Jusung likely enters October, both set up meaningful passive inflows.</li>
<li>June flows KOSDAQ 150 and KODEX AI Semi, with ~5.3% SO, then ~7.5% in October, totaling ~13% SO, a rare and impactful passive setup.</li>
</ul>


Fadu was excluded from KRX and FnGuide base universes, but with Q1 net income turnaround, FnGuide inclusion in MKF500 for June has meaningfully higher probability.
TIGER Top 10 Semis is key, Fadu is just below cutoff vs HPSP. Jusung likely enters October, both set up meaningful passive inflows.
June flows KOSDAQ 150 and KODEX AI Semi, with ~5.3% SO, then ~7.5% in October, totaling ~13% SO, a rare and impactful passive setup.


What Fadu’s Q1 Return to Profit, Disclosed Today, Means for Its Passive Flow Dynamics

<ul>
<li>KRX indicates inclusion of Fadu in June KOSDAQ 150 review, with prior overhang cleared and no financial or administrative risk this cycle.</li>
<li>FnGuide says MKF500 inclusion depends on earnings as the key driver while legal overhang is fading and 1Q print is critical.</li>
<li>KOSDAQ 150 inclusion looks priced in, MKF500 depends on 1Q profit, and local flows already front running passive story.</li>
</ul>


KRX indicates inclusion of Fadu in June KOSDAQ 150 review, with prior overhang cleared and no financial or administrative risk this cycle.
FnGuide says MKF500 inclusion depends on earnings as the key driver while legal overhang is fading and 1Q print is critical.
KOSDAQ 150 inclusion looks priced in, MKF500 depends on 1Q profit, and local flows already front running passive story.


Sharing Feedback Received from KRX and FnGuide on Fadu’s Passive Inclusion Story

<ul>
<li>KRX signals: even if Fadu’s management is found guilty, the stock won’t enter a listing eligibility review, since the trial concerns criminal issues, not listing-triggering financial red flags.</li>
<li>KRX finally cleared Fadu’s listing review after the indictment; with no financial red flags, June KOSDAQ 150 inclusion looks likely, and blocking it now is hard to justify.</li>
<li>Fadu’s KOSDAQ 150 inclusion could trigger massive passive inflows, roughly KRW 220B or 7% of its SO, at around 1.1–1.2% index weight.</li>
</ul>


KRX signals: even if Fadu’s management is found guilty, the stock won’t enter a listing eligibility review, since the trial concerns criminal issues, not listing-triggering financial red flags.
KRX finally cleared Fadu’s listing review after the indictment; with no financial red flags, June KOSDAQ 150 inclusion looks likely, and blocking it now is hard to justify.
Fadu’s KOSDAQ 150 inclusion could trigger massive passive inflows, roughly KRW 220B or 7% of its SO, at around 1.1–1.2% index weight.


Clarifying the KRX’s Handling of the Fadu Situation

Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

Douglas Research Advisory

Cross Asset Strategy

<ul>
<li>In this analysis, we provide a back testing analysis of the end of mandatory lock-up periods monthly data in Korea in the past six months.</li>
<li>All in all, this end of mandatory lock-up period monthly data continues to provide some alpha generating results.</li>
<li>In the past six months, they have tended to work better in periods when KOSPI declines rather than in periods when KOSPI rises. </li>
</ul>


In this analysis, we provide a back testing analysis of the end of mandatory lock-up periods monthly data in Korea in the past six months.
All in all, this end of mandatory lock-up period monthly data continues to provide some alpha generating results.
In the past six months, they have tended to work better in periods when KOSPI declines rather than in periods when KOSPI rises. 


Back Testing the End of Mandatory Lock-Up Periods Monthly Data in Korea

South Korea

Fadu Inc. oprates electronic component manufacturing businesses. The Company produces controller components, integrated circuits, and other products. Fadu conducts businesses in South Korea.

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Fadu (440110 KS)

Pre Trading Setup into FnGuide MKF500 Rebalance on the 22nd, Fadu and SK Square in Focus

This post looks into the pre trading setup into FnGuide MKF500 rebalance on the 22nd of this month, with Fadu and SK Square in focus

Sanghyun Park

What Fadu’s Q1 Return to Profit, Disclosed Today, Means for Its Passive Flow Dynamics

This post looks into what Fadu’s Q1 return to profit means for its passive flow dynamics and positioning setup over the remainder of the year

Sanghyun Park

Clarifying the KRX’s Handling of the Fadu Situation

This post clarifies the KRX’s handling of the Fadu situation, breaking down how the exchange has managed listing eligibility, trading halts, and...

Sanghyun Park

Back Testing the End of Mandatory Lock-Up Periods Monthly Data in Korea

In this analysis, we provide a back testing analysis of the end of mandatory lock-up periods monthly data in Korea in the past six months....

Douglas Kim

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52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

Pre Trading Setup into FnGuide MKF500 Rebalance on the 22nd, Fadu and SK Square in Focus

This post looks into the pre trading setup into FnGuide MKF500 rebalance on the 22nd of this month, with Fadu and SK Square in focus

Sanghyun Park

What Fadu’s Q1 Return to Profit, Disclosed Today, Means for Its Passive Flow Dynamics

This post looks into what Fadu’s Q1 return to profit means for its passive flow dynamics and positioning setup over the remainder of the year

Sanghyun Park

Sharing Feedback Received from KRX and FnGuide on Fadu’s Passive Inclusion Story

This post shares the feedback received today from KRX and FnGuide regarding the passive inclusion outlook for Fadu in this review cycle.

Sanghyun Park

Clarifying the KRX’s Handling of the Fadu Situation

This post clarifies the KRX’s handling of the Fadu situation, breaking down how the exchange has managed listing eligibility, trading halts, and...

Sanghyun Park

Back Testing the End of Mandatory Lock-Up Periods Monthly Data in Korea

In this analysis, we provide a back testing analysis of the end of mandatory lock-up periods monthly data in Korea in the past six months....

Douglas Kim