Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

Douglas Research Advisory

Cross Asset Strategy

<ul>
<li>KOSPI and KOSDAQ are up 10.2% and 14%, respectively YTD, outperforming S&amp;P 500 is up 2.2% in the same period.  so far. </li>
<li>One of the big drivers of higher share prices of Korean stock market this year has been the strong net buying by the NPS.</li>
<li>Some of the major stocks that have been net purchased by the NPS so far this year include Samsung Electronics, SK Hynix, LG Energy Solution, Hyundai E&amp;C, and Samsung Biologics.</li>
</ul>


KOSPI and KOSDAQ are up 10.2% and 14%, respectively YTD, outperforming S&amp;P 500 is up 2.2% in the same period.  so far. 
One of the big drivers of higher share prices of Korean stock market this year has been the strong net buying by the NPS.
Some of the major stocks that have been net purchased by the NPS so far this year include Samsung Electronics, SK Hynix, LG Energy Solution, Hyundai E&amp;C, and Samsung Biologics.


What Is NPS Buying and Selling in the Korean Stock Market in 2025 So Far?

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>Based on prices and turnover from 22 January, there could be one deletion from the index in January. Plus there will be capping and float changes.</li>
<li>There are four stocks that meet the inclusion criteria, but all are non-pure play companies, and the index is already at the limit of 15 non-pure play companies.</li>
<li>Estimated one-way turnover is 6.8% resulting in a round-trip trade of US$506m. There are many stocks with multiple days of ADV to trade.</li>
</ul>


Based on prices and turnover from 22 January, there could be one deletion from the index in January. Plus there will be capping and float changes.
There are four stocks that meet the inclusion criteria, but all are non-pure play companies, and the index is already at the limit of 15 non-pure play companies.
Estimated one-way turnover is 6.8% resulting in a round-trip trade of US$506m. There are many stocks with multiple days of ADV to trade.


Solactive Global Uranium & Nuclear Components Index Rebalance Preview: Potential Changes Next Week

Equity Bottom-Up

Hyundai Engineering & Construction / Equity Bottom-Up

<ul>
<li>Although it is UNCERTAIN when the wars in Ukraine and the Middle East will end, if these wars indeed come to an end, this could POSITIVELY IMPACT Korean construction sector.</li>
<li>The end of the wars in Ukraine and the Middle East is likely to NEGATIVELY IMPACT the Korean military/defense sector. </li>
<li>The major Korean construction companies have low valuation multiples. On the other hand, the major Korean military/defense companies have high valuation multiples.</li>
</ul>


Although it is UNCERTAIN when the wars in Ukraine and the Middle East will end, if these wars indeed come to an end, this could POSITIVELY IMPACT Korean construction sector.
The end of the wars in Ukraine and the Middle East is likely to NEGATIVELY IMPACT the Korean military/defense sector. 
The major Korean construction companies have low valuation multiples. On the other hand, the major Korean military/defense companies have high valuation multiples.


Trump Trade: Korean Construction Vs Military Stocks Amid Potential End of War in Ukraine?

Event-Driven

<ul>
<li>There are a few stocks in Korea that have outperformed/ underperformed their peers and could be added to or deleted from global passive portfolios next month.</li>
<li>There could be buying in <a href="https://www.smartkarma.com/entities/hyundai-rotem-company" target="_blank" data-smartkarma-citation="entities:1554:1" rel="noopener">Hyundai Rotem</a>, while there could be selling in <a href="https://www.smartkarma.com/entities/kt-corp" target="_blank" data-smartkarma-citation="entities:1112:1" rel="noopener">KT Corp</a>, <a href="https://www.smartkarma.com/entities/celltrion-pharm-inc" target="_blank" data-smartkarma-citation="entities:992:1" rel="noopener">Celltrion Pharm</a>, <a href="https://www.smartkarma.com/entities/kum-yang-co-ltd" target="_blank" data-smartkarma-citation="entities:10364:1" rel="noopener">Kum Yang</a>, <a href="https://www.smartkarma.com/entities/hyundai-engineering-construction" target="_blank" data-smartkarma-citation="entities:4292:1" rel="noopener">Hyundai Engineering &amp; Construction</a>, <a href="https://www.smartkarma.com/entities/hyundai-steel-company" target="_blank" data-smartkarma-citation="entities:963:1" rel="noopener">Hyundai Steel</a>, <a href="https://www.smartkarma.com/entities/cosmoam-t-co-ltd" target="_blank" data-smartkarma-citation="entities:10360:1" rel="noopener">CosmoAM&amp;T</a> and <a href="https://www.smartkarma.com/entities/l-f-co-ltd" target="_blank" data-smartkarma-citation="entities:14300:1" rel="noopener">L&amp;F</a>.</li>
<li>Based on our estimate of passive assets, trackers will need to trade between US$57m to US$230m of the stocks. Impact will vary between 3x-14.5x of ADV to trade.</li>
</ul>


There are a few stocks in Korea that have outperformed/ underperformed their peers and could be added to or deleted from global passive portfolios next month.
There could be buying in Hyundai Rotem, while there could be selling in KT Corp, Celltrion Pharm, Kum Yang, Hyundai Engineering &amp; Construction, Hyundai Steel, CosmoAM&amp;T and L&amp;F.
Based on our estimate of passive assets, trackers will need to trade between US$57m to US$230m of the stocks. Impact will vary between 3x-14.5x of ADV to trade.


Korea: Stocks with Potential Passive Flows in November

Head of Research, IPOs & Placements, Aequitas Research

Sumeet Singh

Head of Research, IPOs & Placements

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.

Equity Capital Markets

Hyundai Motor India  / Equity Capital Markets

<ul>
<li>
<a href="https://www.smartkarma.com/entities/hyundai-motor-co-3267897e-5e6b-47f2-9804-92aa22202d2b" target="_blank" data-smartkarma-citation="entities:26933:1" rel="noopener">Hyundai Motor (005387 KS)</a> is looking to raise around US$3.3bn via listing its India unit, <a href="https://www.smartkarma.com/entities/hyundai-motor-india-ltd" target="_blank" data-smartkarma-citation="entities:40900:1" rel="noopener">Hyundai Motor India</a>. HMI is a wholly owned subsidiary of the Hyundai Motor Group.</li>
<li>HMI primarily manufactures and sells four-wheeler passenger vehicles and parts. Currently its vehicle portfolio includes 13 passenger vehicle models across sedans, hatchbacks, SUVs and battery EVs.</li>
<li>In our previous notes, we looked at the company’s past performance. In this note, we will talk about its RHP updates and valuations.</li>
</ul>



Hyundai Motor (005387 KS) is looking to raise around US$3.3bn via listing its India unit, Hyundai Motor India. HMI is a wholly owned subsidiary of the Hyundai Motor Group.
HMI primarily manufactures and sells four-wheeler passenger vehicles and parts. Currently its vehicle portfolio includes 13 passenger vehicle models across sedans, hatchbacks, SUVs and battery EVs.
In our previous notes, we looked at the company’s past performance. In this note, we will talk about its RHP updates and valuations.


Hyundai Motor India IPO - RHP Updates, Valuation Getting Tricky

South Korea

Hyundai Engineering & Construction Co., Ltd., a general construction company, provides civil engineering, architectural, industrial, and electrical engineering services.  The Company constructs roadways, dams, bridges, ports, industrial plants, apartment complexes, and cultural facilities.

Hyundai Engineering & Construction (000720 KS)

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Hyundai Engineering & Construction (000720 KS)

What Is NPS Buying and Selling in the Korean Stock Market in 2025 So Far?

One of the big drivers of higher share prices of Korean stock market this year has been the strong net buying by the NPS. Pension funds in Korea...

Douglas Kim

Solactive Global Uranium & Nuclear Components Index Rebalance Preview: Potential Changes Next Week

There could be 1 delete in Jan. There are unlikely to be any adds; one name is close. Estimated 1-way turnover is 6.8% resulting in a round-trip...

Brian Freitas

Trump Trade: Korean Construction Vs Military Stocks Amid Potential End of War in Ukraine?

Although it is UNCERTAIN when the wars in Ukraine and the Middle East will end, if these wars indeed come to an end, this could POSITIVELY IMPACT...

Douglas Kim

Korea: Stocks with Potential Passive Flows in November

There could be 1 add and up to 7 deletes from global passive portfolios in Nov. Trackers will need to trade between US$57m to US$230m of the...

Brian Freitas

Hyundai Motor India IPO - RHP Updates, Valuation Getting Tricky

Hyundai Motor (005387 KS) is looking to raise around US$3.3bn via listing its India unit, Hyundai Motor India. In this note, we talk about the RHP...

Sumeet Singh

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