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>I sorted out those on KOSPI 200 with a weekly short-selling volume exceeding 10% of last week's total trade volume and a 30-day ADTV of +₩5B.</li>
<li>I further screened those having an increase in the weekly loan balance. As a result, I filtered 23 KOSPI 200 constituents meeting these conditions.</li>
<li>Among the filtered ones, those whose stock price did not drop last week are screened, meaning that the market's expectations for further share price declines are high for these names.</li>
</ul>


I sorted out those on KOSPI 200 with a weekly short-selling volume exceeding 10% of last week's total trade volume and a 30-day ADTV of +₩5B.
I further screened those having an increase in the weekly loan balance. As a result, I filtered 23 KOSPI 200 constituents meeting these conditions.
Among the filtered ones, those whose stock price did not drop last week are screened, meaning that the market's expectations for further share price declines are high for these names.


Short Interest Flow Checkup on KOSPI 200 Constituents

Insurance & Central Asia-focused Analyst, KT Capital Group

Alec Tseung

Insurance & Central Asia-focused Analyst

Private Capital Markets

Kyobo Life Insurance Co Ltd / Private Capital Markets

<ul>
<li>News and rumors about a potential IPO of <a href="https://www.smartkarma.com/entities/kyobo-life-insurance-co-ltd" target="_blank" data-smartkarma-citation="entities:33146:1" rel="noopener">Kyobo Life Insurance Co Ltd (KYLINZ KS)</a> resurfaced given the strong performance of the equity market in Korea.</li>
<li>Korean life insurance's sector outlook remains uncertain given the country's prolonged low interest rate environment and the upcoming regulatory and accounting standard changes.</li>
<li> Kyobo Life's current shareholding structure is dominated by private equity and other institutional investors which are actively looking to exit.</li>
<li>Its implied value per share based on peers' trading multiples is unlikely to generate a decent recent for these institutional investors.</li>
<li>Kyobo Life's IPO plan remains very challenging.</li>
</ul>


News and rumors about a potential IPO of Kyobo Life Insurance Co Ltd (KYLINZ KS) resurfaced given the strong performance of the equity market in Korea.
Korean life insurance's sector outlook remains uncertain given the country's prolonged low interest rate environment and the upcoming regulatory and accounting standard changes.
 Kyobo Life's current shareholding structure is dominated by private equity and other institutional investors which are actively looking to exit.
Its implied value per share based on peers' trading multiples is unlikely to generate a decent recent for these institutional investors.
Kyobo Life's IPO plan remains very challenging.


Kyobo Life: Challenging Sector Outlook with Most Existing Shareholders Hoping to Get Out

Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

<p>Our NAV analysis of <a href="https://www.smartkarma.com/entities/hanwha-corporation" target="_blank" data-smartkarma-citation="entities:10619:1" rel="noopener">Hanwha Corporation (000880 KS)</a> suggests NAV of 3,845 billion won (51,298 won per share). This represents a 62% upside from the current price of 31,600 won. The biggest component of the company's value is its investments in other Hanwha Group related companies. Hanwha Corp's 37% stake in Hanwha Solution is worth 3.3 trillion won, which represents 60% of the value of the company (pre-holdco discount).</p><p>With the resumption of the partial short selling of Korean stocks on May 3rd, more hedge funds and other active investors will likely to employ pair trade strategies involving holdcos and opcos in Korea. The pair between Hanwha Corp and Hanwha Solution is the one which have shown one of widest gaps in share price performance in the past year. In our view, there is a good chance that this price gap narrows between Hanwha Corp and Hanwha Solution in the coming months.</p>

Our NAV analysis of Hanwha Corporation (000880 KS) suggests NAV of 3,845 billion won (51,298 won per share). This represents a 62% upside from the current price of 31,600 won. The biggest component of the company's value is its investments in other Hanwha Group related companies. Hanwha Corp's 37% stake in Hanwha Solution is worth 3.3 trillion won, which represents 60% of the value of the company (pre-holdco discount).With the resumption of the partial short selling of Korean stocks on May 3rd, more hedge funds and other active investors will likely to employ pair trade strategies involving holdcos and opcos in Korea. The pair between Hanwha Corp and Hanwha Solution is the one which have shown one of widest gaps in share price performance in the past year. In our view, there is a good chance that this price gap narrows between Hanwha Corp and Hanwha Solution in the coming months.

Our NAV Analysis of Hanwha Corp and A Pair Trade with Hanwha Solution

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

Brian Freitas

Pan-Asia Index Rebalances/ Events/ Delta One

Quantitative Analysis

<div><p>The Asia Short Interest weekly looks at moves in market wide short interest and highlights movements in stock specific short interest across Hong Kong, Japan, Korea and Taiwan using the last available data published by the relevant authorities.</p></div><div><p>Hong Kong saw shorts rise on <a href="https://www.smartkarma.com/entities/smoore-international" target="_blank" data-smartkarma-citation="entities:28241:1" rel="noopener">Smoore International (6969 HK)</a>, <a href="https://www.smartkarma.com/entities/tencent-holdings-ltd" target="_blank" data-smartkarma-citation="entities:26:1" rel="noopener">Tencent Holdings (700 HK)</a>, <a href="https://www.smartkarma.com/entities/jd-com-inc" target="_blank" data-smartkarma-citation="entities:29043:1" rel="noopener">JD.com (HK) (9618 HK)</a> and <a href="https://www.smartkarma.com/entities/haidilao-international-holding-ltd" target="_blank" data-smartkarma-citation="entities:27044:1" rel="noopener">Haidilao (6862 HK)</a> while there was short covering on <a href="https://www.smartkarma.com/entities/ping-an-insurance-grp-co-of-china-ltd" target="_blank" data-smartkarma-citation="entities:12880:1" rel="noopener">Ping An Insurance (H) (2318 HK)</a>, <a href="https://www.smartkarma.com/entities/semiconductor-manufacturing-international-corp-smic" target="_blank" data-smartkarma-citation="entities:14231:1" rel="noopener">Semiconductor Manufacturing International Corp (SMIC) (981 HK)</a>, <a href="https://www.smartkarma.com/entities/china-mobile-ltd" target="_blank" data-smartkarma-citation="entities:27:1" rel="noopener">China Mobile (941 HK)</a> and <a href="https://www.smartkarma.com/entities/hsbc-holdings-plc" target="_blank" data-smartkarma-citation="entities:516:1" rel="noopener">HSBC Holdings (5 HK)</a>. Shorts increased on Real Estate, Consumer Discretionary, Consumer Staples and Materials, and decreased on Financials , Information Technology, Health Care and Communication Services.</p></div><div><p>In Japan, stocks that saw the most shorts were <a href="https://www.smartkarma.com/entities/itochu-corp" target="_blank" data-smartkarma-citation="entities:18448:1" rel="noopener">Itochu Corp (8001 JP)</a>, <a href="https://www.smartkarma.com/entities/trend-micro-inc" target="_blank" data-smartkarma-citation="entities:13172:1" rel="noopener">Trend Micro Inc (4704 JP)</a>, <a href="https://www.smartkarma.com/entities/seiko-epson-corp" target="_blank" data-smartkarma-citation="entities:16793:1" rel="noopener">Seiko Epson (6724 JP)</a> and <a href="https://www.smartkarma.com/entities/bank-of-kyoto-ltd" target="_blank" data-smartkarma-citation="entities:5248:1" rel="noopener">Bank Of Kyoto (8369 JP)</a> while shorts decreased on <a href="https://www.smartkarma.com/entities/honda-motor-co-ltd" target="_blank" data-smartkarma-citation="entities:154:1" rel="noopener">Honda Motor (7267 JP)</a>, <a href="https://www.smartkarma.com/entities/ana-holdings-inc" target="_blank" data-smartkarma-citation="entities:5308:1" rel="noopener">Ana Holdings (9202 JP)</a>, <a href="https://www.smartkarma.com/entities/kao-corp" target="_blank" data-smartkarma-citation="entities:12933:1" rel="noopener">Kao Corp (4452 JP)</a> and <a href="https://www.smartkarma.com/entities/kubota-corp" target="_blank" data-smartkarma-citation="entities:12926:1" rel="noopener">Kubota Corp (6326 JP)</a>. Sectorally, shorts increased on Information Technology and Financials, while decreasing on Consumer Discretionary,  Industrials, Consumer Staples and Real Estate.</p></div><div><p>In Korea, there were short positions put on in <a href="https://www.smartkarma.com/entities/samsung-electronics-co-ltd" target="_blank" data-smartkarma-citation="entities:191:1" rel="noopener">Samsung Electronics (005930 KS)</a>, <a href="https://www.smartkarma.com/entities/hyundai-motor-co" target="_blank" data-smartkarma-citation="entities:155:1" rel="noopener">Hyundai Motor Co (005380 KS)</a>, <a href="https://www.smartkarma.com/entities/kakao-corp" target="_blank" data-smartkarma-citation="entities:15002:1" rel="noopener">Kakao Corp (035720 KS)</a> and <a href="https://www.smartkarma.com/entities/lg-display-co-ltd" target="_blank" data-smartkarma-citation="entities:7145:1" rel="noopener">LG Display (034220 KS)</a> while shorts were covered in <a href="https://www.smartkarma.com/entities/s-oil-corp" target="_blank" data-smartkarma-citation="entities:1667:1" rel="noopener">S Oil Corp (010950 KS)</a>, <a href="https://www.smartkarma.com/entities/mirae-asset-daewoo-co-ltd-b50c4d95-1687-46cb-9b58-f79ce0e72670" target="_blank" data-smartkarma-citation="entities:12061:1" rel="noopener">Mirae Asset Daewoo (006800 KS)</a>, <a href="https://www.smartkarma.com/entities/hanwha-life-insurance-co-ltd" target="_blank" data-smartkarma-citation="entities:2163:1" rel="noopener">Hanwha Life Insurance (088350 KS)</a> and <a href="https://www.smartkarma.com/entities/doosan-infracore-co-ltd" target="_blank" data-smartkarma-citation="entities:3982:1" rel="noopener">Doosan Infracore (042670 KS)</a>. </p></div><div><p>Stocks in Taiwan that saw the highest increase in shorts were <a href="https://www.smartkarma.com/entities/pegatron-corp" target="_blank" data-smartkarma-citation="entities:12852:1" rel="noopener">Pegatron Corp (4938 TT)</a>, <a href="https://www.smartkarma.com/entities/foxconn-technology-co-ltd" target="_blank" data-smartkarma-citation="entities:11950:1" rel="noopener">Foxconn Technology (2354 TT)</a>, <a href="https://www.smartkarma.com/entities/yageo-corporation" target="_blank" data-smartkarma-citation="entities:13212:1" rel="noopener">Yageo Corporation (2327 TT)</a> and <a href="https://www.smartkarma.com/entities/unimicron-technology-corp" target="_blank" data-smartkarma-citation="entities:18778:1" rel="noopener">Unimicron Technology (3037 TT)</a> while shorts were covered on <a href="https://www.smartkarma.com/entities/united-microelectronics-corp" target="_blank" data-smartkarma-citation="entities:6450:1" rel="noopener">United Microelectronics Corp (2303 TT)</a>, <a href="https://www.smartkarma.com/entities/taiwan-semiconductor-manufacturing-company" target="_blank" data-smartkarma-citation="entities:11230:1" rel="noopener">TSMC (2330 TT)</a>, <a href="https://www.smartkarma.com/entities/evergreen-marine-corp-ltd" target="_blank" data-smartkarma-citation="entities:15428:1" rel="noopener">Evergreen Marine Corp (2603 TT)</a> and <a href="https://www.smartkarma.com/entities/delta-electronics-inc" target="_blank" data-smartkarma-citation="entities:12688:1" rel="noopener">Delta Electronics (2308 TT)</a>.</p></div>

The Asia Short Interest weekly looks at moves in market wide short interest and highlights movements in stock specific short interest across Hong Kong, Japan, Korea and Taiwan using the last available data published by the relevant authorities.Hong Kong saw shorts rise on Smoore International (6969 HK), Tencent Holdings (700 HK), JD.com (HK) (9618 HK) and Haidilao (6862 HK) while there was short covering on Ping An Insurance (H) (2318 HK), Semiconductor Manufacturing International Corp (SMIC) (981 HK), China Mobile (941 HK) and HSBC Holdings (5 HK). Shorts increased on Real Estate, Consumer Discretionary, Consumer Staples and Materials, and decreased on Financials , Information Technology, Health Care and Communication Services.In Japan, stocks that saw the most shorts were Itochu Corp (8001 JP), Trend Micro Inc (4704 JP), Seiko Epson (6724 JP) and Bank Of Kyoto (8369 JP) while shorts decreased on Honda Motor (7267 JP), Ana Holdings (9202 JP), Kao Corp (4452 JP) and Kubota Corp (6326 JP). Sectorally, shorts increased on Information Technology and Financials, while decreasing on Consumer Discretionary,  Industrials, Consumer Staples and Real Estate.In Korea, there were short positions put on in Samsung Electronics (005930 KS), Hyundai Motor Co (005380 KS), Kakao Corp (035720 KS) and LG Display (034220 KS) while shorts were covered in S Oil Corp (010950 KS), Mirae Asset Daewoo (006800 KS), Hanwha Life Insurance (088350 KS) and Doosan Infracore (042670 KS). Stocks in Taiwan that saw the highest increase in shorts were Pegatron Corp (4938 TT), Foxconn Technology (2354 TT), Yageo Corporation (2327 TT) and Unimicron Technology (3037 TT) while shorts were covered on United Microelectronics Corp (2303 TT), TSMC (2330 TT), Evergreen Marine Corp (2603 TT) and Delta Electronics (2308 TT).

Asia Short Interest: Smoore, JD, SMIC, China Mobile, Itochu, Honda, Ana, Samsung, Pegatron, TSMC

<ul>
<li>
<strong>The combination of the panic selling due to COVID-19 combined with the consolidation of the Korean life insurance industry has resulted in interesting opportunities to invest in <a href="https://www.smartkarma.com/entities/samsung-life-insurance-co-ltd" target="_blank" data-smartkarma-citation="entities:510:1" rel="noopener">Samsung Life Insurance (032830 KS)</a> and <a href="https://www.smartkarma.com/entities/hanwha-life-insurance-co-ltd" target="_blank" data-smartkarma-citation="entities:2163:1" rel="noopener">Hanwha Life Insurance (088350 KS) </a></strong><strong>at deeply depressed prices.</strong>
</li>
<li>Samsung Life Insurance owns an 8.5% stake in Samsung Electronics, which is currently worth 25 trillion won. Samsung Life Insurance's market cap has fallen to 10.1 trillion won so its 8.5% stake in Samsung Electronics is nearly 245% of its entire market cap.</li>
<li>On 10 April, <a href="https://www.smartkarma.com/entities/kb-financial-group-inc" target="_blank" data-smartkarma-citation="entities:718:1" rel="noopener">Kb Financial Group (105560 KS)</a> announced that it will acquire Prudential Life Insurance Korea for<a href="http://www.koreaninvestors.com/?p=8052" target="_blank" rel="noopener"> 2.3 trillion won</a> ($1.9 billion).</li>
<li>Following the sale of Prudential Life Insurance Korea to KB Financial, it has been reported that<a href="http://www.wowtv.co.kr/NewsCenter/News/Read?articleId=A202004130002&amp;t=NN" target="_blank" rel="noopener"> KDB Life Insurance</a> is also likely to be sold soon with a private equity firm called JC Partners, which is expected to purchase a 92.7% stake in KDB Life Insurance for about 200 billion won and afterward conduct an additional rights offering of about 300 billion won.</li>
</ul>



The combination of the panic selling due to COVID-19 combined with the consolidation of the Korean life insurance industry has resulted in interesting opportunities to invest in Samsung Life Insurance (032830 KS) and Hanwha Life Insurance (088350 KS) at deeply depressed prices.

Samsung Life Insurance owns an 8.5% stake in Samsung Electronics, which is currently worth 25 trillion won. Samsung Life Insurance's market cap has fallen to 10.1 trillion won so its 8.5% stake in Samsung Electronics is nearly 245% of its entire market cap.
On 10 April, Kb Financial Group (105560 KS) announced that it will acquire Prudential Life Insurance Korea for 2.3 trillion won ($1.9 billion).
Following the sale of Prudential Life Insurance Korea to KB Financial, it has been reported that KDB Life Insurance is also likely to be sold soon with a private equity firm called JC Partners, which is expected to purchase a 92.7% stake in KDB Life Insurance for about 200 billion won and afterward conduct an additional rights offering of about 300 billion won.


Consolidation of the Korean Life Insurance Industry & Panic Selling Due to COVID-19

South Korea

Hanwha Life Insurance Co., Ltd. offers life insurance services and reinsurance services.  The Company also does insurance against loss business, beverages business, real estate rental, and securities investment business through its subsidiaries.

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Hanwha Life Insurance (088350 KS)

Short Interest Flow Checkup on KOSPI 200 Constituents

This post checks up the short interests of the KOSPI 200 constituents available for short selling and screens out those with a high potential for a...

Sanghyun Park

Kyobo Life: Challenging Sector Outlook with Most Existing Shareholders Hoping to Get Out

Kyobo Life's potential IPO remains difficult given the uncertain sector outlook and conflicting shareholders' interests.

Alec Tseung

Our NAV Analysis of Hanwha Corp and A Pair Trade with Hanwha Solution

In this insight, we provide our NAV Analysis of Hanwha Corp suggest a pair trade involving Hanwha Corp & Hanwha Solutions.

Douglas Kim

Asia Short Interest: Smoore, JD, SMIC, China Mobile, Itochu, Honda, Ana, Samsung, Pegatron, TSMC

The Insight looks at large short interest movements across HK, Japan, Korea and Taiwan stocks and highlights large increases/decreases in shorts to...

Brian Freitas

Consolidation of the Korean Life Insurance Industry & Panic Selling Due to COVID-19

The combination of the panic selling due to COVID-19 combined with the consolidation of the Korean life insurance industry has resulted in...

Douglas Kim

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