Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

Douglas Research Advisory

Equity Bottom-Up

Hyundai Engineering & Construction / Equity Bottom-Up

Hyundai Engineering & Construction (000720 KS)

<ul>
<li>In this insight, we provide the details of the 10 most recent companies in KOSPI 200 that have announced their Corporate Value Up plans (April and March 2025).</li>
<li>These 10 companies in KOSPI 200 that have announced their Corporate Value Up plans are down on average 1.3% versus KOSPI which is down 2% in the same period.</li>
<li>Three companies that have outperformed KOSPI (since their Corporate Value Up report announcement) include Hanmi Semiconductor, Hyundai Engineering &amp; Construction, and Samyang Foods. </li>
</ul>


In this insight, we provide the details of the 10 most recent companies in KOSPI 200 that have announced their Corporate Value Up plans (April and March 2025).
These 10 companies in KOSPI 200 that have announced their Corporate Value Up plans are down on average 1.3% versus KOSPI which is down 2% in the same period.
Three companies that have outperformed KOSPI (since their Corporate Value Up report announcement) include Hanmi Semiconductor, Hyundai Engineering &amp; Construction, and Samyang Foods. 


Korea Value Up (3 Winners and 7 Losers Among KOSPI 200 Companies) In March and April 2025

<ul>
<li>In this insight, we discuss a pair trade between LG Chem Ltd (051910 KS) (common) and LG Chem (051915 KS) (preferred). </li>
<li>The price ratio (LG Chem common/preferred) is now at 2.16x, which is more than 2 STD (standard deviations). Our trading strategy involves revert to the mean. </li>
<li>One of the key reasons why LG Chem (preferred)'s share price has fared much worse YTD than LG Chem (common) is due to much larger selling by the foreign investors. </li>
</ul>


In this insight, we discuss a pair trade between LG Chem Ltd (051910 KS) (common) and LG Chem (051915 KS) (preferred). 
The price ratio (LG Chem common/preferred) is now at 2.16x, which is more than 2 STD (standard deviations). Our trading strategy involves revert to the mean. 
One of the key reasons why LG Chem (preferred)'s share price has fared much worse YTD than LG Chem (common) is due to much larger selling by the foreign investors. 


A Pair Trade Between LG Chem (Common) And LG Chem (Preferred)

Global Healthcare Analyst

Tina Banerjee

<ul>
<li>
<a href="https://www.smartkarma.com/entities/hanmi-pharm-co-ltd" target="_blank" data-smartkarma-citation="entities:12476:1" rel="noopener">Hanmi Pharm (128940 KS)</a> targets revenue CAGR of at least 15% during 2025–2027 (2021–24: 7.5%) to achieve revenue of KRW2.3T in 2027 and KRW5T by 2033.</li>
<li>Hanmi expects to achieve operating profit of KRW380B in 2027, with operating margin of 16.5% (2024:14.4%). Operating profit is expected to reach KRW1T in 2033, with operating margin of 20.0%.  </li>
<li>R&amp;D pipeline should play a major role in achieving the targets. The company plans to gradually increase the R&amp;D spending to 15%+ of revenue.</li>
</ul>



Hanmi Pharm (128940 KS) targets revenue CAGR of at least 15% during 2025–2027 (2021–24: 7.5%) to achieve revenue of KRW2.3T in 2027 and KRW5T by 2033.
Hanmi expects to achieve operating profit of KRW380B in 2027, with operating margin of 16.5% (2024:14.4%). Operating profit is expected to reach KRW1T in 2033, with operating margin of 20.0%.  
R&amp;D pipeline should play a major role in achieving the targets. The company plans to gradually increase the R&amp;D spending to 15%+ of revenue.


Hanmi Pharm (128940 KS): Corporate Value Enhancement Plan Targets W5 Trillion Revenue by 2033

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

Event-Driven

<ul>
<li>There are 11 stocks (maybe 12) in Korea that could be deleted from a global index in February and that will result in large selling from passive trackers.</li>
<li>With announcement in a week and implementation in just over 3 weeks, there is positioning in a lot of the names.</li>
<li>With short selling still banned, positioning will not be as high as the passive selling and the stocks could still drop over the next few weeks.</li>
</ul>


There are 11 stocks (maybe 12) in Korea that could be deleted from a global index in February and that will result in large selling from passive trackers.
With announcement in a week and implementation in just over 3 weeks, there is positioning in a lot of the names.
With short selling still banned, positioning will not be as high as the passive selling and the stocks could still drop over the next few weeks.


Korea: 11 Potential Index Deletions in February

<ul>
<li>There are quite a few stocks in Korea that have underperformed their peers and could be deleted from global passive portfolios in February.</li>
<li>There are still 3 weeks left for the stocks to redeem themselves and avoid relegation from the K League, so watch out for big price moves.</li>
<li>Based on our estimate of passive assets, trackers will need to trade between US$45m to US$114m of the stocks. Impact will vary between 2.6x-30x of ADV to trade.</li>
</ul>


There are quite a few stocks in Korea that have underperformed their peers and could be deleted from global passive portfolios in February.
There are still 3 weeks left for the stocks to redeem themselves and avoid relegation from the K League, so watch out for big price moves.
Based on our estimate of passive assets, trackers will need to trade between US$45m to US$114m of the stocks. Impact will vary between 2.6x-30x of ADV to trade.


Korea: Potential Relegations from K League 1

South Korea

Hanmi Pharm. Company Ltd. produces pharmaceutical products, including antibiotics, vitamins, and intestinal tonics.  The Company also provides beverages and processes soft capsules for other pharmaceutical firms.

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Hanmi Pharm (128940 KS)

Korea Value Up (3 Winners and 7 Losers Among KOSPI 200 Companies) In March and April 2025

In this insight, we provide the details of the 10 most recent companies in KOSPI 200 that have announced their Corporate Value Up plans (April and...

Douglas Kim

A Pair Trade Between LG Chem (Common) And LG Chem (Preferred)

In this insight, we discuss a pair trade between LG Chem (051910 KS) (common) and LG Chem (051915 KS) (preferred). We recommend going long on LG...

Douglas Kim