Asia Pac ECM and Index Rebal, Shenton Research

Ke Yan, CFA, FRM

Asia Pac ECM and Index Rebal

Asia Pac IPO & Placement Research, China Biotech

DZT Research

DZT Research is an independent Asia Pacific equity specialist. Our quantitative research covers index rebalancing flows, alongside exchange data analytics accross Asia Pacific. On the equity capital markets side, we focus on Asia Pacific ECM, especially biotech and TMT. Our lead analyst is frequently cited by international media.

Quantitative Analysis

<ul>
<li>We analyzed the changes in short interest of KRX stocks as of Mar 21st which has an aggregated short interest worth USD3.5bn.</li>
<li>We tabulate league table 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 Mobis (012330 KS), Korea Aerospace (047810 KS).</li>
</ul>


We analyzed the changes in short interest of KRX stocks as of Mar 21st which has an aggregated short interest worth USD3.5bn.
We tabulate league table 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 Mobis (012330 KS), Korea Aerospace (047810 KS).


KRX Short Interest Weekly (Mar 21st): Mobis, Korea Aerospace

Global Healthcare Analyst

Tina Banerjee

Equity Bottom-Up

<ul>
<li>
<a href="https://www.smartkarma.com/entities/green-cross-labcell-corp" target="_blank" data-smartkarma-citation="entities:33237:1" rel="noopener">Green Cross LabCell (144510 KS)</a> (now known as GC Cell) the world’s largest cell therapy product producer with its top selling anticancer drug, Immunecell-LC. The drug has label expansion scope.</li>
<li>The company has developed a pipeline of late and early-stage cell therapy candidates for solid tumors. It also has a strong position in global cell therapy CDMO business.</li>
<li>GC Cell’s unrivaled position in the specimen test services in Korea acts as the main cash cow to feed its future growth engine of cell therapy development.</li>
</ul>



Green Cross LabCell (144510 KS) (now known as GC Cell) the world’s largest cell therapy product producer with its top selling anticancer drug, Immunecell-LC. The drug has label expansion scope.
The company has developed a pipeline of late and early-stage cell therapy candidates for solid tumors. It also has a strong position in global cell therapy CDMO business.
GC Cell’s unrivaled position in the specimen test services in Korea acts as the main cash cow to feed its future growth engine of cell therapy development.


GC Cell (144510 KS): Enviable Portfolio of Cell Therapy Funded by Sample Test Service Business

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

<p>The merger between Green Cross Lab Cell (GCLC) and Green Cross Cell has been completed, and new shares will be listed on November 17, which is next Wednesday.</p><section class="figure"><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/240/529/original/Screen+Shot+2021-11-08+at+9.58.23+PM.png?1636426770" class="editor-image img-responsive" data-smartkarma-image-id="240529"></figure></section><div class="content-caption">(Source: KRX KIND)</div><p>Considering the dissent rights exercised, the total number of new shares to be issued was set at 5,244,765 shares.</p><section class="figure"><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/240/530/original/Screen+Shot+2021-11-08+at+10.02.19+PM.png?1636426964" class="editor-image img-responsive" data-smartkarma-image-id="240530"></figure></section><div class="content-caption">(Source: KRX KIND)</div><p>As a result, these 5.24M new shares will get listed on November 17 at a capital increase rate of nearly 50% (and a shareholding dilution of 33%).</p><table class="table table-striped">
<colgroup>
<col width="200">
<col width="200">
</colgroup>
<tbody>
<tr><td colspan="2" data-sheets-value='{"1":2,"2":"Swap overview"}'>Capital increase rate</td></tr>
<tr>
<td data-sheets-value='{"1":2,"2":": Existing shares"}'>Pre-merger shares outstanding</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":10554054}' data-sheets-numberformat='{"1":2,"2":"#,##0","3":1}'>10,554,054</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":": New shares"}'>: New shares</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":5244765}' data-sheets-numberformat='{"1":2,"2":"#,##0","3":1}'>5,244,765</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":": Post-merger shares outstanding"}'>: Post-merger shares outstanding</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":15798819}' data-sheets-numberformat='{"1":2,"2":"#,##0","3":1}' data-sheets-formula="=R[-2]C[0]+R[-1]C[0]">15,798,819</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Capital increase rate"}'><strong>Capital increase rate</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0.49694316515719933}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}' data-sheets-formula="=R[-2]C[0]/R[-3]C[0]"><strong>49.69%</strong></td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Shareholding dilution"}'><strong>Shareholding dilution</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0.33197196575263}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}' data-sheets-formula="=R[-3]C[0]/R[-2]C[0]"><strong>33.20%</strong></td>
</tr>
<tr><td colspan="2" data-sheets-value='{"1":2,"2":"Source: KRX KIND"}'>Source: KRX KIND</td></tr>
</tbody>
</table>

The merger between Green Cross Lab Cell (GCLC) and Green Cross Cell has been completed, and new shares will be listed on November 17, which is next Wednesday.(Source: KRX KIND)Considering the dissent rights exercised, the total number of new shares to be issued was set at 5,244,765 shares.(Source: KRX KIND)As a result, these 5.24M new shares will get listed on November 17 at a capital increase rate of nearly 50% (and a shareholding dilution of 33%).





Capital increase rate

Pre-merger shares outstanding
10,554,054


: New shares
5,244,765


: Post-merger shares outstanding
15,798,819


Capital increase rate
49.69%


Shareholding dilution
33.20%

Source: KRX KIND



Green Cross Lab Cell: Short-Selling Entry Timing Ahead of New Shares Listing on Nov 17

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

Brian Freitas

Pan-Asia Index Rebalances/ Events/ Delta One

Index Rebalance

<div><p>The Korea Exchange (KRX) will announce the results of the December 2021 review of the <a href="https://www.smartkarma.com/entities/kosdaq-150-index" target="_blank" data-smartkarma-citation="entities:31077:1" rel="noopener">KOSDAQ 150 Index (KOSDQ150 INDEX)</a> in November. The constituent changes will be effective after the close of trading on 9 December.</p></div><div>
<p>With the review period complete, we see 15 potential inclusions and exclusions for the index at the December rebalance.</p>
<p>The potential inclusions are <a href="https://www.smartkarma.com/entities/bioneer-corp" target="_blank" data-smartkarma-citation="entities:11487:1" rel="noopener">Bioneer Corp (064550 KS)</a>, <a href="https://www.smartkarma.com/entities/bnc-korea-co-ltd" target="_blank" data-smartkarma-citation="entities:34785:1" rel="noopener">BNC Korea (256840 KS)</a>, <a href="https://www.smartkarma.com/entities/cellid-co-ltd" target="_blank" data-smartkarma-citation="entities:34892:1" rel="noopener">Cellid (299660 KS)</a>, <a href="https://www.smartkarma.com/entities/nanos-co-ltd" target="_blank" data-smartkarma-citation="entities:16796:1" rel="noopener">Nanos Co Ltd (151910 KS)</a>, <a href="https://www.smartkarma.com/entities/aptabio-therapeutics-inc" target="_blank" data-smartkarma-citation="entities:34894:1" rel="noopener">AptaBio Therapeutics (293780 KS)</a>, <a href="https://www.smartkarma.com/entities/access-bio-inc-kdr" target="_blank" data-smartkarma-citation="entities:5729:1" rel="noopener">Access Bio Inc (950130 KS)</a>, <a href="https://www.smartkarma.com/entities/wonik-qnc-corp" target="_blank" data-smartkarma-citation="entities:6828:1" rel="noopener">Wonik QnC Corp (074600 KS)</a>, <a href="https://www.smartkarma.com/entities/komico-ltd" target="_blank" data-smartkarma-citation="entities:24033:1" rel="noopener">KoMiCo Ltd. (183300 KS)</a>, <a href="https://www.smartkarma.com/entities/tk-chemical-corp" target="_blank" data-smartkarma-citation="entities:13428:1" rel="noopener">TK Chemical (104480 KS)</a>, <a href="https://www.smartkarma.com/entities/kona-i-co-ltd" target="_blank" data-smartkarma-citation="entities:19695:1" rel="noopener">Kona I Co Ltd (052400 KS)</a>, <a href="https://www.smartkarma.com/entities/coocon-corp" target="_blank" data-smartkarma-citation="entities:32234:1" rel="noopener">Coocon Corp (294570 KS)</a>, <a href="https://www.smartkarma.com/entities/interpark-holdings-corp" target="_blank" data-smartkarma-citation="entities:12073:1" rel="noopener">Interpark Holdings (035080 KS)</a>, <a href="https://www.smartkarma.com/entities/dk-d-i-co-ltd" target="_blank" data-smartkarma-citation="entities:9948:1" rel="noopener">Dk D&amp;I Co Ltd (033310 KS)</a>, <a href="https://www.smartkarma.com/entities/saraminhr-co-ltd" target="_blank" data-smartkarma-citation="entities:8494:1" rel="noopener">SaraminHR (143240 KS)</a> and <a href="https://www.smartkarma.com/entities/intellian-technologies-inc" target="_blank" data-smartkarma-citation="entities:34895:1" rel="noopener">Intellian Technologies (189300 KS)</a>.</p>
<p>The potential deletions are <a href="https://www.smartkarma.com/entities/lemon-co-ltd" target="_blank" data-smartkarma-citation="entities:28841:1" rel="noopener">Lemon Co Ltd (294140 KQ)</a>, <a href="https://www.smartkarma.com/entities/g-treebnt-co-ltd" target="_blank" data-smartkarma-citation="entities:1933:1" rel="noopener">G Treebnt (115450 KS)</a>, <a href="https://www.smartkarma.com/entities/spigen-korea-co-ltd" target="_blank" data-smartkarma-citation="entities:9852:1" rel="noopener">Spigen Korea (192440 KS)</a>, <a href="https://www.smartkarma.com/entities/wisol-co-ltd" target="_blank" data-smartkarma-citation="entities:14463:1" rel="noopener">Wisol Co Ltd (122990 KS)</a>, <a href="https://www.smartkarma.com/entities/dongkuk-structures-constru" target="_blank" data-smartkarma-citation="entities:20412:1" rel="noopener">Dongkuk Structures &amp; Constru (100130 KS)</a>, <a href="https://www.smartkarma.com/entities/ubiquoss-inc" target="_blank" data-smartkarma-citation="entities:14341:1" rel="noopener">Ubiquoss Holding (078070 KS)</a>, <a href="https://www.smartkarma.com/entities/icure-pharm-inc" target="_blank" data-smartkarma-citation="entities:27142:1" rel="noopener">Icure Pharm Inc (175250 KS)</a>, <a href="https://www.smartkarma.com/entities/winix-inc" target="_blank" data-smartkarma-citation="entities:19972:1" rel="noopener">Winix Inc (044340 KS)</a>, <a href="https://www.smartkarma.com/entities/telcon-inc" target="_blank" data-smartkarma-citation="entities:15231:1" rel="noopener">Telcon Inc (200230 KS)</a>, <a href="https://www.smartkarma.com/entities/danawa-co-ltd" target="_blank" data-smartkarma-citation="entities:7191:1" rel="noopener">Danawa Co Ltd (119860 KS)</a>, <a href="https://www.smartkarma.com/entities/advanced-process-systems-corporation" target="_blank" data-smartkarma-citation="entities:24087:1" rel="noopener">Advanced Process Systems (265520 KS)</a>, <a href="https://www.smartkarma.com/entities/toptec-co-ltd" target="_blank" data-smartkarma-citation="entities:7332:1" rel="noopener">Toptec Co Ltd (108230 KS)</a>, <a href="https://www.smartkarma.com/entities/optoelectronics-solutions-co" target="_blank" data-smartkarma-citation="entities:2098:1" rel="noopener">Optoelectronics Solutions Co (138080 KS)</a>, <a href="https://www.smartkarma.com/entities/daea-ti-co-ltd" target="_blank" data-smartkarma-citation="entities:1473:1" rel="noopener">Daea Ti Co Ltd (045390 KS)</a> and <a href="https://www.smartkarma.com/entities/unison-co-ltd-south-korea" target="_blank" data-smartkarma-citation="entities:18617:1" rel="noopener">Unison Co Ltd (018000 KS)</a>.</p>
<p><a href="https://www.smartkarma.com/entities/huons-co-ltd" target="_blank" data-smartkarma-citation="entities:16275:1" rel="noopener">Huons Co Ltd (084110 KS)</a> is a very close add and the corresponding deletion is <a href="https://www.smartkarma.com/entities/koentec-co-ltd" target="_blank" data-smartkarma-citation="entities:4049:1" rel="noopener">Koentec Co Ltd (029960 KS)</a>.</p>
<p>One-way turnover is estimated at 6.95% and the impact on the expected deletions is a lot higher than the impact on the expected inclusions.</p>
<p>The potential inclusions outperformed the potential deletions in August before returns flatlined in September and then dropped in October. There could be outperformance from now to the announcement of the changes.</p>
</div>

The Korea Exchange (KRX) will announce the results of the December 2021 review of the KOSDAQ 150 Index (KOSDQ150 INDEX) in November. The constituent changes will be effective after the close of trading on 9 December.
With the review period complete, we see 15 potential inclusions and exclusions for the index at the December rebalance.
The potential inclusions are Bioneer Corp (064550 KS), BNC Korea (256840 KS), Cellid (299660 KS), Nanos Co Ltd (151910 KS), AptaBio Therapeutics (293780 KS), Access Bio Inc (950130 KS), Wonik QnC Corp (074600 KS), KoMiCo Ltd. (183300 KS), TK Chemical (104480 KS), Kona I Co Ltd (052400 KS), Coocon Corp (294570 KS), Interpark Holdings (035080 KS), Dk D&amp;I Co Ltd (033310 KS), SaraminHR (143240 KS) and Intellian Technologies (189300 KS).
The potential deletions are Lemon Co Ltd (294140 KQ), G Treebnt (115450 KS), Spigen Korea (192440 KS), Wisol Co Ltd (122990 KS), Dongkuk Structures &amp; Constru (100130 KS), Ubiquoss Holding (078070 KS), Icure Pharm Inc (175250 KS), Winix Inc (044340 KS), Telcon Inc (200230 KS), Danawa Co Ltd (119860 KS), Advanced Process Systems (265520 KS), Toptec Co Ltd (108230 KS), Optoelectronics Solutions Co (138080 KS), Daea Ti Co Ltd (045390 KS) and Unison Co Ltd (018000 KS).
Huons Co Ltd (084110 KS) is a very close add and the corresponding deletion is Koentec Co Ltd (029960 KS).
One-way turnover is estimated at 6.95% and the impact on the expected deletions is a lot higher than the impact on the expected inclusions.
The potential inclusions outperformed the potential deletions in August before returns flatlined in September and then dropped in October. There could be outperformance from now to the announcement of the changes.


KOSDAQ150 Index Rebalance Preview: 15 Potential Changes and Large Turnover

<p>On 16 July, <a href="https://www.smartkarma.com/entities/green-cross-labcell-corp" target="_blank" data-smartkarma-citation="entities:33237:1" rel="noopener">Green Cross LabCell (144510 KS)</a> and <a href="https://www.smartkarma.com/entities/green-cross-cell-corp" target="_blank" data-smartkarma-citation="entities:15811:1" rel="noopener">Green Cross Cell (031390 KS)</a> announced that they had entered into a definitive merger agreement to combine in an all stock transaction. For each share of <a href="https://www.smartkarma.com/entities/green-cross-cell-corp" target="_blank" data-smartkarma-citation="entities:15811:1" rel="noopener">Green Cross Cell (031390 KS)</a> held, shareholders would receive 0.4023542 shares of <a href="https://www.smartkarma.com/entities/green-cross-labcell-corp" target="_blank" data-smartkarma-citation="entities:33237:1" rel="noopener">Green Cross LabCell (144510 KS)</a>.</p><p>On 13 September, shareholders approved the merger at the EGM and <a href="https://www.smartkarma.com/entities/green-cross-labcell-corp" target="_blank" data-smartkarma-citation="entities:33237:1" rel="noopener">Green Cross LabCell (144510 KS)</a> is the surviving entity. Both stocks will be suspended from 28 October and <a href="https://www.smartkarma.com/entities/green-cross-labcell-corp" target="_blank" data-smartkarma-citation="entities:33237:1" rel="noopener">Green Cross LabCell (144510 KS)</a> is expected to resume trading on 17 November.</p><p>Both stocks are <a href="https://www.smartkarma.com/entities/kosdaq-150-index" target="_blank" data-smartkarma-citation="entities:31077:1" rel="noopener">KOSDAQ 150 Index (KOSDQ150 INDEX)</a> constituents and the merger will open up a spot in the index.</p><p>Last evening post market close, the KRX announced that <a href="https://www.smartkarma.com/entities/eubiologics-co-ltd" target="_blank" data-smartkarma-citation="entities:23739:1" rel="noopener">Eubiologics (206650 KS)</a> would be added to the index at the close of trading on 27 October. The stock was a high probability inclusion at the December rebalance and will now get index membership next week instead. This will also make the stock short-sell eligible from the open on 28 October.</p><p>Passive funds benchmarked to the <a href="https://www.smartkarma.com/entities/kosdaq-150-index" target="_blank" data-smartkarma-citation="entities:31077:1" rel="noopener">KOSDAQ 150 Index (KOSDQ150 INDEX)</a> will need to buy 1.29m shares (KRW 60.3bn; 1.1 days of ADV) of <a href="https://www.smartkarma.com/entities/eubiologics-co-ltd" target="_blank" data-smartkarma-citation="entities:23739:1" rel="noopener">Eubiologics (206650 KS)</a> at the close on 27 October.</p><p>The impact on the Green Cross stocks will be a lot lower since we expect most trackers to swap their shares in <a href="https://www.smartkarma.com/entities/green-cross-cell-corp" target="_blank" data-smartkarma-citation="entities:15811:1" rel="noopener">Green Cross Cell (031390 KS)</a> for shares in <a href="https://www.smartkarma.com/entities/green-cross-labcell-corp" target="_blank" data-smartkarma-citation="entities:33237:1" rel="noopener">Green Cross LabCell (144510 KS)</a>, unless the price ratio deviates significantly from the merger ratio.</p>

On 16 July, Green Cross LabCell (144510 KS) and Green Cross Cell (031390 KS) announced that they had entered into a definitive merger agreement to combine in an all stock transaction. For each share of Green Cross Cell (031390 KS) held, shareholders would receive 0.4023542 shares of Green Cross LabCell (144510 KS).On 13 September, shareholders approved the merger at the EGM and Green Cross LabCell (144510 KS) is the surviving entity. Both stocks will be suspended from 28 October and Green Cross LabCell (144510 KS) is expected to resume trading on 17 November.Both stocks are KOSDAQ 150 Index (KOSDQ150 INDEX) constituents and the merger will open up a spot in the index.Last evening post market close, the KRX announced that Eubiologics (206650 KS) would be added to the index at the close of trading on 27 October. The stock was a high probability inclusion at the December rebalance and will now get index membership next week instead. This will also make the stock short-sell eligible from the open on 28 October.Passive funds benchmarked to the KOSDAQ 150 Index (KOSDQ150 INDEX) will need to buy 1.29m shares (KRW 60.3bn; 1.1 days of ADV) of Eubiologics (206650 KS) at the close on 27 October.The impact on the Green Cross stocks will be a lot lower since we expect most trackers to swap their shares in Green Cross Cell (031390 KS) for shares in Green Cross LabCell (144510 KS), unless the price ratio deviates significantly from the merger ratio.

KOSDAQ150 Index Rebalance: Green Cross Merger & EuBiologics Addition

South Korea

Green Cross LabCell Corp. is a biotechnology company that researches and develops cell therapy products.  The Company is also engaged in cell banking, clinical laboratory services, clinical trial, and bio-logistics services.

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Green Cross LabCell (144510 KS)

KRX Short Interest Weekly (Mar 21st): Mobis, Korea Aerospace

We analyzed KRX short interest report for the past week and highlighted short interest changes in Mobis, Korea Aerospace.

Ke Yan, CFA, FRM

GC Cell (144510 KS): Enviable Portfolio of Cell Therapy Funded by Sample Test Service Business

GC Cell’s marketed cell therapy product Immuncell-LC is on high growth trajectory. The company has also developed a rich pipeline of both NK and T...

Tina Banerjee

Green Cross Lab Cell: Short-Selling Entry Timing Ahead of New Shares Listing on Nov 17

This post discusses short-selling entry timing for the Green Cross Lab Cell merger event ahead of the listing of new shares on November 17.

Sanghyun Park

KOSDAQ150 Index Rebalance Preview: 15 Potential Changes and Large Turnover

At the end of the review period, we see 15 potential changes for the KOSDAQ150 index. Most of the changes are high probability. The adds could...

Brian Freitas

KOSDAQ150 Index Rebalance: Green Cross Merger & EuBiologics Addition

EuBiologics will be added to the KOSDAQ150 Index at the close on 27 Oct due to the Green Cross merger. We would look to be long EuBio for the next...

Brian Freitas

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