Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

<ul>
<li>It was reported today in numerous local media that there will be an inclusion of 'shareholder value improvement' management evaluation criteria for listed government enterprises.</li>
<li>Some of these listed government enterprises rallied strongly today (KEPCO - up 10%; KOGAS - up 12.7%; Korea District Heating - Up 30%). </li>
<li>The detailed evaluation criteria for management evaluation of government enterprises will include the appropriateness of dividend levels, protection of minority shareholders, and compliance with best practices for ESG improvement.</li>
</ul>


It was reported today in numerous local media that there will be an inclusion of 'shareholder value improvement' management evaluation criteria for listed government enterprises.
Some of these listed government enterprises rallied strongly today (KEPCO - up 10%; KOGAS - up 12.7%; Korea District Heating - Up 30%). 
The detailed evaluation criteria for management evaluation of government enterprises will include the appropriateness of dividend levels, protection of minority shareholders, and compliance with best practices for ESG improvement.


Inclusion of 'Shareholder Value Improvement' Mgmt Evaluation Reforms for Listed Govt Enterprises

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>Given Korea's blanket ban on short-selling, we should concentrate on the likelihood of these ADRs being significantly discounted compared to their underlying shares.</li>
<li>It should persist for an extended period, highlighting the importance of continuously monitoring ADR spreads over the next 2-3 months to seize the opportune entry timing.</li>
<li>Since all these carry single-stock futures, a flexible setup targeting this spread can be designed, ideally incorporating currency hedges.</li>
</ul>


Given Korea's blanket ban on short-selling, we should concentrate on the likelihood of these ADRs being significantly discounted compared to their underlying shares.
It should persist for an extended period, highlighting the importance of continuously monitoring ADR spreads over the next 2-3 months to seize the opportune entry timing.
Since all these carry single-stock futures, a flexible setup targeting this spread can be designed, ideally incorporating currency hedges.


Trading Opportunities Targeting Potential ADR Discount Increases from Korea's Short-Selling Ban

ESG Intelligence RA, Who's Good

Yujin Oh

ESG Intelligence RA

ASIA’S FIRST AI-DRIVEN ESG INSIGHT PROVIDER

Who's Good

Using AI technologies and public data, Who’s Good provides objective and up-to-date corporate ESG insights on Asian companies.

WHY WHO'S GOOD

* Time-sensitive: Time is the essence in finance. Artificial Intelligence (AI) can process vast amount of information in a short span of time. Our powerful algorithm offers real-time in-depth corporate ESG analysis with out compromising its quality.
* Objective: We turned to public big data and news big data as source to base our analysis on and to preserve impartiality. We leverage 350 public big data sources and 93 news data sources in Korea to uncover insights.
* Insightful: Who’s Good ESG analysis coverage extends to all listed and non-listed companies in Korea. This allows us to provide a comprehensive insight into the Korean market.
* Global approach to ESG: Our ESG research framework is built on international standards and principles including UN Global Compact, ISO 26000, ICGN and CFA Guidelines on Corporate Governance to meet the global standards.

HDC Hyundai Development Co-Engineering & Construction / ESG

HDC Hyundai Development Co-Engineering & Construction

<ul>
<li>The result of analyzing 23,940 news articles on 2,722 Korean listed companies released between 1 January and 31 December 2022, reveal that 565 companies (20.7%) had ESG risks.</li>
<li>Companies with ESG risks has decreased compared to 2021, which is the first time a decrease trend has been recorded since Who's Good began conducting ESG analysis in 2015.</li>
<li>Social risk ranked as the highest risk among ESG (Environment, Social, Governance) with the highest ranking ESG issue being 'Supply Chain Management'.</li>
</ul>


The result of analyzing 23,940 news articles on 2,722 Korean listed companies released between 1 January and 31 December 2022, reveal that 565 companies (20.7%) had ESG risks.
Companies with ESG risks has decreased compared to 2021, which is the first time a decrease trend has been recorded since Who's Good began conducting ESG analysis in 2015.
Social risk ranked as the highest risk among ESG (Environment, Social, Governance) with the highest ranking ESG issue being 'Supply Chain Management'.


South Korea's Top ESG Risk Trend in 2022: Analysis of News Articles on More than 2,000 Entities

<ul>
<li>Hankyung's report is a clear misunderstanding under the current index methodology. The possibility of Samchully and Daesung Holdings' KOSPI 200 inclusion is NONE.</li>
<li>However, the issue of deteriorating the market representation of the K200 index, which is caused by the top stocks outside the index, is gaining attention in the local financial space.</li>
<li>So, we should prepare for the possibility that KRX will revise the methodology. In this case, an intense preemptive flow for the top names outside the KOSPI 200 can appear.</li>
</ul>


Hankyung's report is a clear misunderstanding under the current index methodology. The possibility of Samchully and Daesung Holdings' KOSPI 200 inclusion is NONE.
However, the issue of deteriorating the market representation of the K200 index, which is caused by the top stocks outside the index, is gaining attention in the local financial space.
So, we should prepare for the possibility that KRX will revise the methodology. In this case, an intense preemptive flow for the top names outside the KOSPI 200 can appear.


Misunderstandings & Truth About Samchully & Daesung Holdings Entering KOSPI 200

<ul>
<li>KT's foreign room has been rising since early September last year. If this trend continues, it will likely approach the inclusion borderline of 15% within a month or two.</li>
<li>This trend is expected to continue for the time being as the tough relationship between the KT CEO and the government seems unlikely to be resolved in the short term.</li>
<li>The February inclusion is pretty tight, but May seems like we could be looking out for it.</li>
</ul>


KT's foreign room has been rising since early September last year. If this trend continues, it will likely approach the inclusion borderline of 15% within a month or two.
This trend is expected to continue for the time being as the tough relationship between the KT CEO and the government seems unlikely to be resolved in the short term.
The February inclusion is pretty tight, but May seems like we could be looking out for it.


Foreign Ownership Limit Stocks in Korea: KT Is Again in the Limelight

South Korea

Korea Electric Power Corporation (KEPCO) generates, transmits, and distributes electricity to South Korea for a variety of uses. The Company also builds and operates hydro-power, thermal-power, and nuclear power units in South Korea.

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Korea Electric Power (KEPCO) (KEP US)

Inclusion of 'Shareholder Value Improvement' Mgmt Evaluation Reforms for Listed Govt Enterprises

It was reported today in numerous local media that there will be an inclusion of 'shareholder value improvement' management evaluation criteria for...

Douglas Kim

Trading Opportunities Targeting Potential ADR Discount Increases from Korea's Short-Selling Ban

This post explores trading opportunities targeting potential ADR discount increases resulting from Korea's blanket ban on short selling.

Sanghyun Park

South Korea's Top ESG Risk Trend in 2022: Analysis of News Articles on More than 2,000 Entities

Presenting insights into various ESG incidents of Korean companies in 2022, and analysis on trending ESG issue of the year. The analysis is based...

Yujin Oh

Misunderstandings & Truth About Samchully & Daesung Holdings Entering KOSPI 200

This post explains why Hankyung's report about Samchully and Daesung Holdings entering K200 is a misunderstanding. Still, it can lead to revising...

Sanghyun Park

Foreign Ownership Limit Stocks in Korea: KT Is Again in the Limelight

This post examines Korea's foreign ownership-restricted stocks and discusses potential momentum trading opportunities for KT.

Sanghyun Park

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