Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

Equity Bottom-Up

<ul>
<li>HYBE announced a major news which was that the BTS group will go on a "temporary break" so that its members could pursue various solo projects.</li>
<li>Rather, we believe the consensus sales and operating profit estimates will decline by 20-40% in 2023 and 2024.</li>
<li>If P/E multiple is lowered to 20x (2024E), this would suggest an implied market cap of 4.8 trillion won or 117,138 won per share, representing a further 39% downside risk. </li>
</ul>


HYBE announced a major news which was that the BTS group will go on a "temporary break" so that its members could pursue various solo projects.
Rather, we believe the consensus sales and operating profit estimates will decline by 20-40% in 2023 and 2024.
If P/E multiple is lowered to 20x (2024E), this would suggest an implied market cap of 4.8 trillion won or 117,138 won per share, representing a further 39% downside risk. 


HYBE: Consensus to Slash Earning Estimates Due to BTS Going on A "Temporary Break" For Solo Projects

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

<ul>
<li>There are 7 adds and 7 deletes for the <a href="https://www.smartkarma.com/entities/korea-stock-exchange-kospi-200-index" target="_blank" data-smartkarma-citation="entities:26021:1" rel="noopener">Korea Stock Exchange Kospi 200 Index (KOSPI2 INDEX)</a> rebalance to be implemented at the close on 9 June.</li>
<li>There are also a bunch of stocks that will have changes applied to their free float. There were announced last week and are much less tracked.</li>
<li>The flows and impact on some of the float change names are significant and pre-positioning and passive flows could move the stocks over the next few days.</li>
</ul>


There are 7 adds and 7 deletes for the Korea Stock Exchange Kospi 200 Index (KOSPI2 INDEX) rebalance to be implemented at the close on 9 June.
There are also a bunch of stocks that will have changes applied to their free float. There were announced last week and are much less tracked.
The flows and impact on some of the float change names are significant and pre-positioning and passive flows could move the stocks over the next few days.


KOSPI200 Index Rebalance: Float Changes, Flows & Trades

<ul>
<li>There were 128k visitors to South Korea in April, up 32% MoM which was the biggest jump in MoM change in visitors to South Korea in the past year.</li>
<li>There were 215k outbound people from South Korea in April 2022, up 48% MoM and up 202% YoY.</li>
<li>Among the 21 major reopening plays in Korea, we prefer certain sectors including casino related plays (GKL, Paradise, and Kangwon Land) as well as F&amp;B related (Hitejinro and CJ Cheiljedang).</li>
</ul>


There were 128k visitors to South Korea in April, up 32% MoM which was the biggest jump in MoM change in visitors to South Korea in the past year.
There were 215k outbound people from South Korea in April 2022, up 48% MoM and up 202% YoY.
Among the 21 major reopening plays in Korea, we prefer certain sectors including casino related plays (GKL, Paradise, and Kangwon Land) as well as F&amp;B related (Hitejinro and CJ Cheiljedang).


Significant MoM Increase in Inbound & Outbound Visitors in Korea in April 2022

Event-Driven

<ul>
<li>We discuss end of the mandatory lock-up periods for 40 stocks in Korea in June 2022, among which 5 are in KOSPI and 35 are in KOSDAQ.</li>
<li>These 40 stocks on average could be subject to further selling pressures in June and could underperform relative to the market. </li>
<li>Among these 40 stocks, <a href="https://www.smartkarma.com/entities/hybe-co-ltd" target="_blank" data-smartkarma-citation="entities:28959:1" rel="noopener">HYBE (352820 KS) and </a><a href="https://www.smartkarma.com/entities/koreacenter-com-co-ltd" target="_blank" data-smartkarma-citation="entities:28329:1" rel="noopener">Koreacenter.com Co Ltd (290510 KS) </a>could face further selling pressures in the coming weeks.</li>
</ul>


We discuss end of the mandatory lock-up periods for 40 stocks in Korea in June 2022, among which 5 are in KOSPI and 35 are in KOSDAQ.
These 40 stocks on average could be subject to further selling pressures in June and could underperform relative to the market. 
Among these 40 stocks, HYBE (352820 KS) and Koreacenter.com Co Ltd (290510 KS) could face further selling pressures in the coming weeks.


End of Mandatory Lock-Up Periods for 40 Companies in Korea in June 2022

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.

<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

South Korea

HYBE Co., Ltd. operates as an entertainment company. The Company provides music production, album distribution, entertainers management, publicity, planning, training, and other services. HYBE also makes television shows.

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HYBE (352820 KS)

HYBE: Consensus to Slash Earning Estimates Due to BTS Going on A "Temporary Break" For Solo Projects

HYBE announced a major news which was that the BTS group will go on a "temporary break" so that its members could pursue various solo projects. We...

Douglas Kim

KOSPI200 Index Rebalance: Float Changes, Flows & Trades

There are significant flows and impact on some stocks that have float changes at the upcoming KOSPI2 rebalance. With over 5 days ADV to buy,...

Brian Freitas

Significant MoM Increase in Inbound & Outbound Visitors in Korea in April 2022

There were 128k visitors to South Korea in April, up 32% MoM. There were 215k outbound people from South Korea in April 2022, up 48% MoM.

Douglas Kim

End of Mandatory Lock-Up Periods for 40 Companies in Korea in June 2022

We discuss end of the mandatory lock-up periods for 40 stocks in Korea in June 2022, among which 5 are in KOSPI and 35 are in KOSDAQ.

Douglas Kim

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

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