Korea / Special Sits, Pairs, Index Rebalancing, Clepsydra Capital

Sanghyun Park

Korea / Special Sits, Pairs, Index Rebalancing

Clepsydra Capital

Investigate special situations, pairs, and index rebalancing trades in Korea.

Index Rebalance

<ul>
<li>March 5 price action overshot passive impact. Theme-trade momentum, one-way institutional flows, and ETF rebalancing (~10% turnover) juiced the move—Hanwha Ocean -5.41%, Samsung Heavy +5.34%, HD KSOE +6.58%.</li>
<li>June’s rebalance gets spicier—another ETF, ARIRANG K-Defense ETF (449450 KS), also runs the same 20% reversion on June 13, doubling the flow impact and setting up amplified price action.</li>
<li>Key 20% reversion hits: Hanwha Ocean (SOL Shipbuilding) &amp; Hanwha Aerospace (PLUS K-Defense). ~5%p passive outflows (~0.1x DTV) expected, with Hanwha Ocean facing double impact from both ETFs.</li>
</ul>


March 5 price action overshot passive impact. Theme-trade momentum, one-way institutional flows, and ETF rebalancing (~10% turnover) juiced the move—Hanwha Ocean -5.41%, Samsung Heavy +5.34%, HD KSOE +6.58%.
June’s rebalance gets spicier—another ETF, ARIRANG K-Defense ETF (449450 KS), also runs the same 20% reversion on June 13, doubling the flow impact and setting up amplified price action.
Key 20% reversion hits: Hanwha Ocean (SOL Shipbuilding) &amp; Hanwha Aerospace (PLUS K-Defense). ~5%p passive outflows (~0.1x DTV) expected, with Hanwha Ocean facing double impact from both ETFs.


Hunting for Outsized Moves in Off-The-Radar Korean Sector ETFs: SOL Shipbuilding & PLUS K-Defense

Event-Driven

<ul>
<li>This 20% reversion and 30% cap setup creates solid flow trades. With just 13 holdings, SOL ETF’s weight swings hard—Hanwha Ocean's already pushing 27% post-rebal.</li>
<li>Constituent changes drive the biggest dislocations—still the main setup. "The other 10" names are FICS-screened by market cap (May/Nov cut), making rotations fairly predictable.</li>
<li>With AUM only ramping recently, this ETF is still in price discovery mode. Pre-positioning ahead of flows has juice, making it a prime target for aggressive flow trading.</li>
</ul>


This 20% reversion and 30% cap setup creates solid flow trades. With just 13 holdings, SOL ETF’s weight swings hard—Hanwha Ocean's already pushing 27% post-rebal.
Constituent changes drive the biggest dislocations—still the main setup. "The other 10" names are FICS-screened by market cap (May/Nov cut), making rotations fairly predictable.
With AUM only ramping recently, this ETF is still in price discovery mode. Pre-positioning ahead of flows has juice, making it a prime target for aggressive flow trading.


SOL Shipbuilding Top 3 ETF Throws off Some Serious Flow Trading Plays with Plenty of Juice

<ul>
<li>KEXIM ignoring this premium could be a breach of duty, making Hanwha Ocean a prime short play. With 20% of shares, past cases suggest a 5-10% pullback.</li>
<li>This play’s tougher than HMM’s. Without step-ups, timing the conversion is tricky. Early redemption’s unlikely, so the focus is on when KEXIM pulls the trigger on the conversion.</li>
<li>No hints from KEXIM on the CB conversion yet, so loading up aggressively could be risky. We’ll likely need to wait for a signal from KEXIM before jumping in.</li>
</ul>


KEXIM ignoring this premium could be a breach of duty, making Hanwha Ocean a prime short play. With 20% of shares, past cases suggest a 5-10% pullback.
This play’s tougher than HMM’s. Without step-ups, timing the conversion is tricky. Early redemption’s unlikely, so the focus is on when KEXIM pulls the trigger on the conversion.
No hints from KEXIM on the CB conversion yet, so loading up aggressively could be risky. We’ll likely need to wait for a signal from KEXIM before jumping in.


Flagging the Hanwha Ocean CB Conversion Risk (20% of Shares Out)

Asia Pac IPO & Placement Research, China biotech, Aequitas Research

Ke Yan, CFA, FRM

Asia Pac IPO & Placement Research, China biotech

IPOs and Placements coverage across Asia Pacific

Aequitas Research

We cover all listing across the Asia Pacific along with follow-up placements. As of Dec 2020, our team had covered 539 IPOs with a hit rate of 73.5% and 685 placements with a hit rate of 66.8%.

We combine fundamental bottom-up views with our proprietary quantitative framework to provide a holistic coverage across new listings and placements. Our coverage includes pre-IPO notes before the deal is launched, follow-up analysis once the deal is live and post-listing trading analysis as well.

Quantitative Analysis

<ul>
<li>We analyzed the changes in foreign holdings of KRX stocks as of Mar 21st which has an aggregated holding worth USD500.4bn.</li>
<li>We estimate that foreign flows to be inflows of USD1,889mln. We tabulate the league table for top changes by value for 1W/4W/1Y and top stocks held by foreign institutions.</li>
<li>We highlight changes of foreign holdings in Samsung Electronics, SK Hynix, Hanwha Aerospace.</li>
</ul>


We analyzed the changes in foreign holdings of KRX stocks as of Mar 21st which has an aggregated holding worth USD500.4bn.
We estimate that foreign flows to be inflows of USD1,889mln. We tabulate the league table for top changes by value for 1W/4W/1Y and top stocks held by foreign institutions.
We highlight changes of foreign holdings in Samsung Electronics, SK Hynix, Hanwha Aerospace.


KRX Foreign Holding Weekly (Mar 21st): Samsung Electronics, SK Hynix, Hanwha Aerospace

Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

Douglas Research Advisory

Equity Bottom-Up

<ul>
<li>In the Korean stock market, one of the biggest positive catalysts of Donald Trump becoming the next United States President has been the shipbuilding sector.</li>
<li>About 20 years, the United States had a dominant naval superiority versus China. That is no longer the case. </li>
<li>There is a likely scenario of the US Navy increasingly outsourcing the construction and after-service of its fleet to Korean companies such as Hanwha Ocean and HD Hyundai Heavy Industries.</li>
</ul>


In the Korean stock market, one of the biggest positive catalysts of Donald Trump becoming the next United States President has been the shipbuilding sector.
About 20 years, the United States had a dominant naval superiority versus China. That is no longer the case. 
There is a likely scenario of the US Navy increasingly outsourcing the construction and after-service of its fleet to Korean companies such as Hanwha Ocean and HD Hyundai Heavy Industries.


Trump Catalyst - Korean Shipbuilding Sector

South Korea

Hanwha Ocean Co., Ltd. operates as a shipbuilding and offshore company. The Company provides floating structure construction, steel wire drying, commercial vessels, specialty vessels, gas carrier, tanker, containership, ro ro, bulk carrier, submarine, warship, auxiliaries, cruise ships, and ferries manufacturing services. Hanwha Ocean also offers onshore plants services.

Price Gauge
52-week Range	0.00 - 0.00
Market Cap (USDm)	0.00
P/E	0.00
Dividend (Yield)	0.00

Hanwha Ocean (042660 KS)

Hunting for Outsized Moves in Off-The-Radar Korean Sector ETFs: SOL Shipbuilding & PLUS K-Defense

This post dives into hunting for outsized moves in off-the-radar Korean sector ETFs: SOL Shipbuilding and PLUS K-Defense.

Sanghyun Park

SOL Shipbuilding Top 3 ETF Throws off Some Serious Flow Trading Plays with Plenty of Juice

The Shipbuilding Top 3 ETF’s ad-hoc rebalance (25% reversion after hitting the 30% cap) is locked in. Hanwha Ocean blew past 30%, so the rebal...

Sanghyun Park

Flagging the Hanwha Ocean CB Conversion Risk (20% of Shares Out)

This post highlights the Hanwha Ocean CB conversion risk, with nearly 20% of the shares outstanding potentially being converted.

Sanghyun Park

KRX Foreign Holding Weekly (Mar 21st): Samsung Electronics, SK Hynix, Hanwha Aerospace

We analyzed KRX foreign holding data for the past week and highlighted foreign holding changes in Samsung Electronics, SK Hynix, Hanwha Aerospace.

Ke Yan, CFA, FRM

Trump Catalyst - Korean Shipbuilding Sector

The Korean shipbuilding sector (especially shipbuilding companies including Hanwha Ocean and HD Hyundai Heavy Industries) is a major beneficiary of...

Douglas Kim

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)