Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

Event-Driven

<ul>
<li>In this insight, we discuss a list of 60 stocks in Korea where NPS recently added or reduced 1% or more stake (27 adds and 33 reduce). </li>
<li>Among the stocks NPS increased its stake, many of them are clear beneficiaries of the end of zero COVID policies in China including Hotel Shilla, Amorepacific Corp, and GKL. </li>
<li>Among the top market cap stocks where the NPS decreased its stake by 1% or more, they include Lg Innotek, Hyundai E&amp;C, Hyundai Mipo, and Posco International. </li>
</ul>


In this insight, we discuss a list of 60 stocks in Korea where NPS recently added or reduced 1% or more stake (27 adds and 33 reduce). 
Among the stocks NPS increased its stake, many of them are clear beneficiaries of the end of zero COVID policies in China including Hotel Shilla, Amorepacific Corp, and GKL. 
Among the top market cap stocks where the NPS decreased its stake by 1% or more, they include Lg Innotek, Hyundai E&amp;C, Hyundai Mipo, and Posco International. 


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

Hyundai Home Shopping Network / Index Rebalance

Hyundai Home Shopping Network (057050 KS)

<ul>
<li>A third of the way through the review period, we see one potential change. There are four stocks that are close to inclusion zone and could lead to more changes.</li>
<li>Currently, Miwon Specialty Chemical Co (268280 KS) is an add while <a href="https://www.smartkarma.com/entities/hyundai-home-shopping-network-corp" target="_blank" data-smartkarma-citation="entities:2357:1" rel="noopener">Hyundai Home Shopping Network (057050 KS)</a> is a delete.</li>
<li>
<a href="https://www.smartkarma.com/entities/samyang-foods-co-ltd" target="_blank" data-smartkarma-citation="entities:9100:1" rel="noopener">Samyang Foods (003230 KS)</a>, <a href="https://www.smartkarma.com/entities/lotte-confectionery-co-ltd-1feb0155-08b6-44eb-bdbd-8d67cf757dac" target="_blank" data-smartkarma-citation="entities:25993:1" rel="noopener">Lotte Confectionery (280360 KS)</a>, <a href="https://www.smartkarma.com/entities/unid-co-ltd" target="_blank" data-smartkarma-citation="entities:11197:1" rel="noopener">Unid Co Ltd (014830 KS)</a> and <a href="https://www.smartkarma.com/entities/miwon-commercial-co-ltd" target="_blank" data-smartkarma-citation="entities:13416:1" rel="noopener">Miwon Commercial (002840 KS)</a> are close adds currently.</li>
</ul>


A third of the way through the review period, we see one potential change. There are four stocks that are close to inclusion zone and could lead to more changes.
Currently, Miwon Specialty Chemical Co (268280 KS) is an add while Hyundai Home Shopping Network (057050 KS) is a delete.

Samyang Foods (003230 KS), Lotte Confectionery (280360 KS), Unid Co Ltd (014830 KS) and Miwon Commercial (002840 KS) are close adds currently.


KOSPI200 Dec Index Rebalance Preview: Stocks Nearing the Inclusion Zone

<div class="content-highlight"><p>In this insight, we provide a first cut at the potential additions and deletions of KOSPI 200 rebalance in November 2021. Although there are about five months left until the next KOSPI 200 rebalance, there are already many investors getting ready for this event. There are also stocks with a combination of improving fundamentals and higher probability of getting included in the KOSPI 200 index rebalance in November that have been big outperformers this year. </p></div><ul>
<li>Among the <strong>additions</strong>, we think some of the top candidates include F&amp;F, Hyundai Autoever, Hansol Chem, <a href="https://www.smartkarma.com/entities/daou-technology-inc" target="_blank" data-smartkarma-citation="entities:4411:1" rel="noopener">Daou Technology (023590 KS), </a><a href="https://www.smartkarma.com/entities/hyundai-construction-equipment-corporation" target="_blank" data-smartkarma-citation="entities:24120:1" rel="noopener">Hyundai Construction Equipment (267270 KS)</a>, <a href="https://www.smartkarma.com/entities/hyosung-chemical-corp" target="_blank" data-smartkarma-citation="entities:27752:1" rel="noopener">Hyosung Chemical Corp (298000 KS)</a>, <a href="https://www.smartkarma.com/entities/seah-besteel-corp" target="_blank" data-smartkarma-citation="entities:11760:1" rel="noopener">Seah Besteel (001430 KS)</a>, <a href="https://www.smartkarma.com/entities/hanmi-semiconductor-co-ltd" target="_blank" data-smartkarma-citation="entities:15587:1" rel="noopener">Hanmi Semiconductor (042700 KS)</a> </li>
<li>Among the <strong>deletions</strong>, we think that some of the top candidates include F&amp;F Holdings, Nexen Tire, H.S. Enterprise, Hyundai Green Food, and LX International. </li>
</ul><div class="content-highlight">
<p>Among the 29 companies we highlighted as the potential additions, six of them had their operating profit increasing by more than 100% YoY in 1Q 2021 which include the following:</p>
<ul>
<li><a href="https://www.smartkarma.com/entities/daou-technology-inc" target="_blank" data-smartkarma-citation="entities:4411:1" rel="noopener">Daou Technology (023590 KS)</a></li>
<li>
<a href="https://www.smartkarma.com/entities/hyundai-construction-equipment-corporation" target="_blank" data-smartkarma-citation="entities:24120:1" rel="noopener">Hyundai Construction Equipment (267270 KS)</a> </li>
<li>
<a href="https://www.smartkarma.com/entities/hyosung-chemical-corp" target="_blank" data-smartkarma-citation="entities:27752:1" rel="noopener">Hyosung Chemical Corp (298000 KS)</a> </li>
<li>KCC Glass (344820 KS)</li>
<li>
<a href="https://www.smartkarma.com/entities/seah-besteel-corp" target="_blank" data-smartkarma-citation="entities:11760:1" rel="noopener">Seah Besteel (001430 KS)</a> </li>
<li>
<a href="https://www.smartkarma.com/entities/hanmi-semiconductor-co-ltd" target="_blank" data-smartkarma-citation="entities:15587:1" rel="noopener">Hanmi Semiconductor (042700 KS)</a> </li>
</ul>
<p>These six stocks have had an outstanding share price performances this year as their share prices are up on average 97.1% YTD. These stocks have both a combination of improving fundamentals as well as the likelihood of getting included in KOSPI 200 index, resulting in many investors bidding up their shares. </p>
</div>

In this insight, we provide a first cut at the potential additions and deletions of KOSPI 200 rebalance in November 2021. Although there are about five months left until the next KOSPI 200 rebalance, there are already many investors getting ready for this event. There are also stocks with a combination of improving fundamentals and higher probability of getting included in the KOSPI 200 index rebalance in November that have been big outperformers this year. 
Among the additions, we think some of the top candidates include F&amp;F, Hyundai Autoever, Hansol Chem, Daou Technology (023590 KS), Hyundai Construction Equipment (267270 KS), Hyosung Chemical Corp (298000 KS), Seah Besteel (001430 KS), Hanmi Semiconductor (042700 KS) 
Among the deletions, we think that some of the top candidates include F&amp;F Holdings, Nexen Tire, H.S. Enterprise, Hyundai Green Food, and LX International. 

Among the 29 companies we highlighted as the potential additions, six of them had their operating profit increasing by more than 100% YoY in 1Q 2021 which include the following:

Daou Technology (023590 KS)

Hyundai Construction Equipment (267270 KS) 

Hyosung Chemical Corp (298000 KS) 
KCC Glass (344820 KS)

Seah Besteel (001430 KS) 

Hanmi Semiconductor (042700 KS) 

These six stocks have had an outstanding share price performances this year as their share prices are up on average 97.1% YTD. These stocks have both a combination of improving fundamentals as well as the likelihood of getting included in KOSPI 200 index, resulting in many investors bidding up their shares. 


Looking Ahead to the KOSPI 200 Rebalance in November 2021

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.

Equity Bottom-Up

The biggest gainers this morning are:

Hansol Chemical (014680 KS): +8.00%

DL Co Ltd (000210 KS): +7.78%

Kcc Corp (002380 KS): +7.58%

Hanwha Solutions (009830 KS): +7.56%













Gainers
Daily Δ
Losers
Daily Δ
x Open
Value
TV/DTV (x)
Value


Hansol Chemical Co Ltd
8.00%
Dong Suh Companies Inc
-5.67%
Dongwon Systems Corp
10.87%
KCC Corp
3.26


DL Holdings Co Ltd
7.78%
Chong Kun Dang Pharmaceutical Corp
-3.90%
Hansol Chemical Co Ltd
10.00%
Doosan Infracore Co Ltd
2.96


KCC Corp
7.58%
Dongwon Systems Corp
-3.37%
Dong Suh Companies Inc
8.22%
LOTTE Himart Co Ltd
2.94


SKC Co Ltd
7.56%
Oci Co Ltd
-2.65%
KCC Corp
7.82%
Hanwha Solutions Corp
2.57


Hanwha Solutions Corp
7.11%
Lotte Tour Development Co., Ltd.
-2.48%
SKC Co Ltd
7.52%
CJ Logistics Corp
1.68


LOTTE Himart Co Ltd
6.49%
Green Cross Holdings
-2.46%
LOTTE Himart Co Ltd
6.88%
Samsung Heavy Industries Co.,Ltd
1.63


Doosan Infracore Co Ltd
5.24%
Hanssem Co Ltd
-2.30%
Hanwha Solutions Corp
6.76%
LG HAUSYS, LTD.
1.44


Hyundai Steel Co
4.95%
Green Cross Corp
-2.05%
Hyundai Steel Co
6.49%
Dongwon Systems Corp
1.42


SK Holdings Co Ltd
4.30%
Korea Aerospace Industries Ltd
-2.01%
HMM Co Ltd
6.20%
Doubleu Games Co Ltd
1.42


Samsung C&amp;T Corp
4.22%
Cuckoo Holdings Co Ltd
-2.00%
Chong Kun Dang Pharmaceutical Corp
5.71%
Lotte Chilsung Beverage Co Ltd
1.41


Lotte Shopping Co Ltd
4.13%
Cuckoo Homesys Co Ltd
-1.93%
DL Holdings Co Ltd
5.69%
DL Holdings Co Ltd
1.29


Lotte Chilsung Beverage Co Ltd
4.07%
Ilyang Pharmaceutical Co., Ltd
-1.90%
Kolon Industries Inc
5.59%
SKC Co Ltd
1.23


Posco International Corp
4.01%
Boryung Pharmaceutical Co., Ltd
-1.82%
Handsome Corp
5.51%
Hyundai Steel Co
1.13


Shinsegae Inc
3.89%
CJ Cheiljedang Corp
-1.75%
SK Holdings Co Ltd
5.33%
Kolon Industries Inc
1.08


Handsome Corp
3.76%
NCSoft Corp
-1.60%
Doosan Infracore Co Ltd
5.20%
Hansol Chemical Co Ltd
1.01


KB Financial Group Inc
3.73%
Naver Corp
-1.55%
Shinsegae Inc
5.19%
JW Pharmaceutical Corp
0.94


SK Innovation Co Ltd
2.93%
JW Pharmaceutical Corp
-1.50%
Dongkuk Steel Mill Co., Ltd
5.02%
Ssangyong Cement Industry Co Ltd
0.92


LG International Corp
2.83%
DB HiTek Co Ltd
-1.45%
KB Financial Group Inc
4.92%
KEPCO Plant Service &amp; Engineering Co Ltd
0.91


Shinhan Financial Group Co., Ltd.
2.71%
SK Biopharmaceuticals Co Ltd
-1.41%
Posco International Corp
4.71%
Handsome Corp
0.89


LG HAUSYS, LTD.
2.57%
Daewoong Pharmaceutical Co., Ltd.
-1.16%
Pan Ocean Co Ltd
4.69%
IS DONGSEO CO., LTD.
0.85

Source: KRX

















Top 20
52WH
52WH Date
MC (₩B)
Daily Δ
x Open
TV/DTV
x 52WL
U Wick
Body
L Wick


Kolon Industries Inc
1.04
3/23/21
1,678.1
1.97%
5.59%
1.08
2.59
-52.94%
41.18%
5.88%


KT Corp
1.02
2/17/21
7,285.0
0.72%
1.62%
0.55
1.45
-11.11%
44.44%
44.44%


Amorepacific Corp
1.02
1/25/21
15,082.3
0.78%
3.15%
0.68
1.73
-37.50%
50.00%
12.50%


Handsome Corp
1.01
3/17/21
1,018.5
3.76%
5.51%
0.89
2.30
-34.09%
65.91%
0.00%


Doosan Bobcat Inc
0.99
3/17/21
3,669.1
1.95%
2.64%
0.43
2.23
-5.26%
63.16%
31.58%


KB Financial Group Inc
0.99
3/11/21
21,996.2
3.73%
4.92%
0.55
1.73
-4.00%
84.00%
12.00%


Cosmax Inc
0.98
10/12/20
1,261.2
2.45%
4.51%
0.46
1.84
-18.18%
63.64%
18.18%


HMM Co Ltd
0.98
3/23/21
9,625.2
-0.17%
6.20%
0.72
11.59
-8.11%
-40.54%
51.35%


KCC Corp
0.97
1/26/21
1,955.0
7.58%
7.82%
3.26
1.86
0.00%
96.88%
3.13%


Seah Besteel Corporation
0.97
3/23/21
615.0
1.48%
3.26%
0.26
2.56
-18.18%
54.55%
27.27%


Lotte Chilsung Beverage Co Ltd
0.97
2/9/21
1,148.8
4.07%
4.03%
1.41
1.54
0.00%
80.00%
20.00%


Kangwon Land, Inc.
0.97
3/18/21
5,658.7
0.57%
1.53%
0.24
1.49
-12.50%
87.50%
0.00%


Shinsegae International Inc
0.96
4/28/20
1,513.7
1.44%
2.90%
0.41
1.58
-16.67%
83.33%
0.00%


Dongkuk Steel Mill Co., Ltd
0.96
3/23/21
1,078.4
2.26%
5.02%
0.30
3.29
-27.27%
63.64%
9.09%


Hotel Shilla Co Ltd
0.96
1/18/21
3,430.3
1.39%
2.21%
0.40
1.33
-10.53%
78.95%
10.53%


MERITZ SECURITIES CO LTD
0.96
3/23/21
2,947.2
0.00%
2.30%
0.49
1.78
-5.00%
20.00%
75.00%


BNK Financial Group Inc
0.96
3/19/21
2,180.5
2.14%
3.37%
0.33
1.66
-9.09%
72.73%
18.18%


Hana Financial Group Inc
0.96
3/19/21
12,294.9
0.00%
3.35%
0.56
1.95
-25.93%
44.44%
29.63%


Hansol Chemical Co Ltd
0.95
2/22/21
2,754.5
8.00%
10.00%
1.01
3.38
-11.11%
80.00%
8.89%


Doosan Infracore Co Ltd
0.95
9/28/20
2,176.5
5.24%
5.20%
2.96
3.50
-10.00%
86.00%
4.00%

Source: KRX



Hanwha S, DL, KCC, & Hansol C Are KOSPI 200 Movers Today: What Happens?

<div class="content-highlight">
<p>In our view, <a href="https://www.smartkarma.com/entities/tokai-carbon-korea-co-ltd" target="_blank" data-smartkarma-citation="entities:18979:1" rel="noopener">Tokai Carbon Korea (064760 KS)</a>'s valuation premium versus its peers appears reasonable but priced to "near-perfection." A key risk for this stock is if there is some hiccup to the NAND Capex and equipment spending by its major customers including Samsung Electronics, LAM Research, and Applied Materials.</p>
<p>TCK is best known for its highest quality SiC components, which accounted for 71.4% and 80.4% of the company's sales in 2019 and 1Q 2020, respectively. The company has a near-monopoly position for its SiC rings that are used in the chemical vapour deposition (CVD) semiconductor equipment.  </p>
<p>TCK currently trades at a significant premium to the comps (domestic) on almost all valuation multiples including P/S, P/E, and EV/EBITDA. The average P/E and EV/EBITDA multiples of the comps are 15.4x and 8.8x, respectively in 2019. In comparison, TCK has higher multiples of 22.7x P/E and 13.7x, respectively in 2019.</p>
<p><em>Although TCK's share price has rebounded nicely since the third week of March (up more than 130% since then), the company's business still remains a <strong>component supplier to the highly volatile NAND semiconductor sector.</strong> As such, a more prudent approach is to wait until the share price comes down to more reasonable levels (we would wait for at least a 15-20% correction from current levels). </em></p>
</div>


In our view, Tokai Carbon Korea (064760 KS)'s valuation premium versus its peers appears reasonable but priced to "near-perfection." A key risk for this stock is if there is some hiccup to the NAND Capex and equipment spending by its major customers including Samsung Electronics, LAM Research, and Applied Materials.
TCK is best known for its highest quality SiC components, which accounted for 71.4% and 80.4% of the company's sales in 2019 and 1Q 2020, respectively. The company has a near-monopoly position for its SiC rings that are used in the chemical vapour deposition (CVD) semiconductor equipment.  
TCK currently trades at a significant premium to the comps (domestic) on almost all valuation multiples including P/S, P/E, and EV/EBITDA. The average P/E and EV/EBITDA multiples of the comps are 15.4x and 8.8x, respectively in 2019. In comparison, TCK has higher multiples of 22.7x P/E and 13.7x, respectively in 2019.
Although TCK's share price has rebounded nicely since the third week of March (up more than 130% since then), the company's business still remains a component supplier to the highly volatile NAND semiconductor sector. As such, a more prudent approach is to wait until the share price comes down to more reasonable levels (we would wait for at least a 15-20% correction from current levels). 


Tokai Carbon Korea (TCK) - Priced for A "Near-Perfection"

South Korea

Hansol Chemical Co., Ltd. manufactures chemical products such as hydrogen peroxide, benzol peroxide, urea resin, polyacrylamide, trimethylolpropane, and latex.  The Company supplies its products to the paper, textile, and food industries.

Price Gauge
52-week Range	0.00 - 0.00
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Hansol Chemical (014680 KS)

What Is NPS Buying & Selling?

In this insight, we discuss a list of 60 stocks in Korea where NPS recently added or reduced 1% or more stake (27 adds and 33 reduce).

Douglas Kim

KOSPI200 Dec Index Rebalance Preview: Stocks Nearing the Inclusion Zone

We currently see one potential change to the KOSPI200 in Dec, though there are 4 more changes possible. There will be a lot to trade on some stocks...

Brian Freitas

Looking Ahead to the KOSPI 200 Rebalance in November 2021

In this insight, we provide a first cut at the potential additions and deletions of KOSPI 200 rebalance in November 2021.

Douglas Kim

Hanwha S, DL, KCC, & Hansol C Are KOSPI 200 Movers Today: What Happens?

This post looks into what may have happened to KOSPI 200 movers today: Hanwha Solutions, DL Corp, KCC, and Hansol Chemical.

Sanghyun Park

Tokai Carbon Korea (TCK) - Priced for A "Near-Perfection"

In our view, Tokai Carbon Korea (064760 KS)'s valuation premium versus its peers appears reasonable but priced to "near-perfection." A key risk...

Douglas Kim

Price Gauge

52-week Range

Market Cap (USDm)

P/E

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