Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

Douglas Research Advisory

Event-Driven

<ul>
<li>In this insight, we discuss the alpha generation through companies that announced share buybacks in the Korean stock market in September and October 2024.</li>
<li>On average, the share buyback announcements by 25 companies represented 1.9% of their outstanding shares.</li>
<li>Major companies that have announced share buybacks in Korea in the past two months include Celltrion, Kangwon Land, and Naver. </li>
</ul>


In this insight, we discuss the alpha generation through companies that announced share buybacks in the Korean stock market in September and October 2024.
On average, the share buyback announcements by 25 companies represented 1.9% of their outstanding shares.
Major companies that have announced share buybacks in Korea in the past two months include Celltrion, Kangwon Land, and Naver. 


Alpha Generation Through Share Buybacks in Korea: Bi-Monthly (September and October 2024)

Equity Bottom-Up

<ul>
<li>Kangwon Land has received approval to expand its total casino area from 14,512 square metres previously to 20,260 square metres (up 40%). </li>
<li>The betting limits in the foreign players only zone will increase significantly from 300,000 won (about US$225) to 300 million won (about US$225,000). This represents a 1000x increase.</li>
<li>We would argue that there is a high probability of Kangwon Land benefiting not just from higher sales and profits but also from higher valuation multiples. </li>
</ul>


Kangwon Land has received approval to expand its total casino area from 14,512 square metres previously to 20,260 square metres (up 40%). 
The betting limits in the foreign players only zone will increase significantly from 300,000 won (about US$225) to 300 million won (about US$225,000). This represents a 1000x increase.
We would argue that there is a high probability of Kangwon Land benefiting not just from higher sales and profits but also from higher valuation multiples. 


Kangwon Land: Regulatory Improvements to Result in Higher Earnings and Valuation Multiples Expansion

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.

<ul>
<li>For this September reshuffle, fewer factors affected price impact, so outlier chances were low. Biggest price moves typically occur 30 days before the effective date, especially during LARGE↔MID transitions.</li>
<li>Early positioning for this reshuffle paid off. Past trends suggest price action fades before the effective date, so consider exiting positions by tomorrow or early next week.</li>
<li>Small→Mid migrants historically show weak price impacts, with no clear correlation observed in this September reshuffle either. I'm avoiding those plays targeting the effective date for now.</li>
</ul>


For this September reshuffle, fewer factors affected price impact, so outlier chances were low. Biggest price moves typically occur 30 days before the effective date, especially during LARGE↔MID transitions.
Early positioning for this reshuffle paid off. Past trends suggest price action fades before the effective date, so consider exiting positions by tomorrow or early next week.
Small→Mid migrants historically show weak price impacts, with no clear correlation observed in this September reshuffle either. I'm avoiding those plays targeting the effective date for now.


KOSPI Size Index Reshuffle Results Out Late Today: Early Positioning Delivered Big Gains

Index Rebalance

<ul>
<li>The September KOSPI Size Index rebalancing could bring back the typical price impacts seen over the past decade, unlike the March rebalancing.</li>
<li>The previous rebalancing had anomalies due to newly listed stocks in LARGE and a stronger downward trend in LARGE-to-MID transitions, disrupting the expected price impact.</li>
<li>For September's rebalancing, fewer distortions are expected compared to March. The NPS Mid to Small Cap fund, a key influence, shows no significant changes in benchmark or AUM.</li>
</ul>


The September KOSPI Size Index rebalancing could bring back the typical price impacts seen over the past decade, unlike the March rebalancing.
The previous rebalancing had anomalies due to newly listed stocks in LARGE and a stronger downward trend in LARGE-to-MID transitions, disrupting the expected price impact.
For September's rebalancing, fewer distortions are expected compared to March. The NPS Mid to Small Cap fund, a key influence, shows no significant changes in benchmark or AUM.


Examining the September Reshuffle of the KOSPI Size Index Series

<ul>
<li>On 4 November, the Chinese government suddenly announced it will waive visa requirements for South Korean citizens entering China. </li>
<li>This is likely to have a major positive impact on major travel/airline stocks including Hana Tour Service, Korean Air Lines,  Very Good Leisure, Yellow Balloon Tour, and Modetour Network.</li>
<li>A no-visa policy by China for South Korean citizens could also imply a reciprocal policy by the South Korean government. </li>
</ul>


On 4 November, the Chinese government suddenly announced it will waive visa requirements for South Korean citizens entering China. 
This is likely to have a major positive impact on major travel/airline stocks including Hana Tour Service, Korean Air Lines,  Very Good Leisure, Yellow Balloon Tour, and Modetour Network.
A no-visa policy by China for South Korean citizens could also imply a reciprocal policy by the South Korean government. 


Chinese Government Announces a No-Visa Policy for South Korean Citizens Entering China

South Korea

Kangwon Land Inc. is a casino and hotel services provider located in the Kangwon province area of South Korea.  The Company develops abandoned mines and builds gaming and entertainment facilities.  Kangwon Land operates a number of game tables and slot machines for domestic and international customers under its gaming licenses.

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Kangwon Land (035250 KS)

Kangwon Land: Regulatory Improvements to Result in Higher Earnings and Valuation Multiples Expansion

Kangwon Land has received approval to expand its total casino area and sharply increase betting limits for foreigners by 1000x.

Douglas Kim

KOSPI Size Index Reshuffle Results Out Late Today: Early Positioning Delivered Big Gains

This post details the official results of the September KOSPI Size Index reshuffle, released late today, and analyzes the significant gains...

Sanghyun Park

Examining the September Reshuffle of the KOSPI Size Index Series

This post examines the potential for flow trading setups targeting the September rebalancing of the KOSPI Size Index Series.

Sanghyun Park

Chinese Government Announces a No-Visa Policy for South Korean Citizens Entering China

The Chinese government suddenly announced it will waive visa requirements for South Korean citizens entering China. This is likely to have a major...

Douglas Kim

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

Alpha Generation Through Share Buybacks in Korea: Bi-Monthly (September and October 2024)

In this insight, we discuss the alpha generation through companies that announced share buybacks in the Korean stock market in September and...

Douglas Kim

Kangwon Land: Regulatory Improvements to Result in Higher Earnings and Valuation Multiples Expansion

Kangwon Land has received approval to expand its total casino area and sharply increase betting limits for foreigners by 1000x.

Douglas Kim

KOSPI Size Index Reshuffle Results Out Late Today: Early Positioning Delivered Big Gains

This post details the official results of the September KOSPI Size Index reshuffle, released late today, and analyzes the significant gains...

Sanghyun Park

Examining the September Reshuffle of the KOSPI Size Index Series

This post examines the potential for flow trading setups targeting the September rebalancing of the KOSPI Size Index Series.

Sanghyun Park

Chinese Government Announces a No-Visa Policy for South Korean Citizens Entering China

The Chinese government suddenly announced it will waive visa requirements for South Korean citizens entering China. This is likely to have a major...

Douglas Kim