Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

Event-Driven

<ul>
<li>Our base case valuation LG Energy Solution is implied market cap of 75 trillion won or target price of 319,089 won, representing 25% below current share price.</li>
<li>Currently, LGES is trading at a premium valuation multiple on a EV/EBITDA (2023E) versus CATL. We believe LGES should trade at a discount to CATL in the next 6-12 months. </li>
<li>LGES's 6 months lock-up ends on 27 July and there are 4.3% of outstanding shares that can be sold which is likely to put negative pressure on share price.</li>
</ul>


Our base case valuation LG Energy Solution is implied market cap of 75 trillion won or target price of 319,089 won, representing 25% below current share price.
Currently, LGES is trading at a premium valuation multiple on a EV/EBITDA (2023E) versus CATL. We believe LGES should trade at a discount to CATL in the next 6-12 months. 
LGES's 6 months lock-up ends on 27 July and there are 4.3% of outstanding shares that can be sold which is likely to put negative pressure on share price.


LG Energy Solution: End of 6 Months Lock-Up Period & Valuation Sensitivity Analysis

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

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>The KRX officially announced the float rate changes of the KOSPI 200 constituents at this June rebalancing: 11 increases and 5 decreases.</li>
<li>Kakao Bank has the most significant change of 43%p, followed by Krafton and Woori Financial. NH Investment and HD Infracore will suffer a drop of 9%p.</li>
<li>As for passive flow x ADTV, Kakao Bank leads the pack at 2.95x, followed by Kakao Pay (1.15x). NH Investment and Korea Gas will face a noticeable outflow.</li>
</ul>


The KRX officially announced the float rate changes of the KOSPI 200 constituents at this June rebalancing: 11 increases and 5 decreases.
Kakao Bank has the most significant change of 43%p, followed by Krafton and Woori Financial. NH Investment and HD Infracore will suffer a drop of 9%p.
As for passive flow x ADTV, Kakao Bank leads the pack at 2.95x, followed by Kakao Pay (1.15x). NH Investment and Korea Gas will face a noticeable outflow.


KOSPI 200 Official Announcement: Float Rate Changes (11 Up & 5 Down)

<ul>
<li>The KOSPI 200 June Review will have a total of 13 float rate changes: 11 increases and 2 reductions.</li>
<li>
<a href="https://www.smartkarma.com/entities/kakaobank-corp" target="_blank" data-smartkarma-citation="entities:33501:1" rel="noopener">Kakao Bank (323410)</a> will experience the biggest change, followed by <a href="https://www.smartkarma.com/entities/hmm-co-ltd" target="_blank" data-smartkarma-citation="entities:13494:1" rel="noopener">HMM (011200)</a> and <a href="https://www.smartkarma.com/entities/krafton-inc" target="_blank" data-smartkarma-citation="entities:28956:1" rel="noopener"> Krafton Inc (259960)</a>. The float rate of <a href="https://www.smartkarma.com/entities/hdc-hyundai-development-co-engineering-construction" target="_blank" data-smartkarma-citation="entities:27397:1" rel="noopener">HDC Hyundai Development (294870)</a> and <a href="https://www.smartkarma.com/entities/doosan-infracore-co-ltd" target="_blank" data-smartkarma-citation="entities:3982:1" rel="noopener">Doosan Infracore (042670)</a> will decrease.</li>
<li>
Kakao Bank and <a href="https://www.smartkarma.com/entities/kakao-pay-corp" target="_blank" data-smartkarma-citation="entities:29675:1" rel="noopener">Kakao Pay (377300)</a> have the most significant passive impact. And <a href="https://www.smartkarma.com/entities/lg-corp" target="_blank" data-smartkarma-citation="entities:6653:1" rel="noopener">LG Corp (003550)</a>, <a href="https://www.smartkarma.com/entities/woori-financial-group-inc" target="_blank" data-smartkarma-citation="entities:27995:1" rel="noopener">Woori Financial Group (316140)</a>, and <a href="https://www.smartkarma.com/entities/krafton-inc" target="_blank" data-smartkarma-citation="entities:28956:1" rel="noopener"> Krafton Inc (259960)</a> are also worth noting.</li>
</ul>


The KOSPI 200 June Review will have a total of 13 float rate changes: 11 increases and 2 reductions.

Kakao Bank (323410) will experience the biggest change, followed by HMM (011200) and  Krafton Inc (259960). The float rate of HDC Hyundai Development (294870) and Doosan Infracore (042670) will decrease.

Kakao Bank and Kakao Pay (377300) have the most significant passive impact. And LG Corp (003550), Woori Financial Group (316140), and  Krafton Inc (259960) are also worth noting.


KOSPI 200 Constituents with a Float Rate Change: 11 Increases & 2 Reductions

Japan/Asia Long-Short, LightStream Research

Mio Kato

Japan/Asia Long-Short

Long-Short Analysis on Japan, Asia and the World

LightStream Research

LightStream conducts quantitatively rigorous and data-driven analysis with a focus on Japan and Asia.

We consistently cover the Tech, Consumer and Industrial sectors, and provide ECM and Events coverage more broadly.

We supplement traditional qualitative insights from company relationships with a robust quantitative foundation that examines as much historical data as is available.
We further refine the accuracy of our insights and calls through the use of alternative data to flesh out current trends, and through a valuation framework that emphasises non-superficial peer group selection and a proper attempt to understand the metrics and changes that have driven security valuations in the past.

Equity Bottom-Up

<ul>
<li>Valorant’s Masters 1 Tournament concluded today in Iceland with North America’s Optic Gaming defeating Brazil’s Loud, leaving Japan’s Zeta Division in third place. </li>
<li>These are three key regions for viewership and Japan’s surprising performance bodes well for the esports scene in the country. </li>
<li>Gameplay for Valorant Mobile has also leaked and early indications are that Krafton could be cannibalised here.</li>
</ul>


Valorant’s Masters 1 Tournament concluded today in Iceland with North America’s Optic Gaming defeating Brazil’s Loud, leaving Japan’s Zeta Division in third place. 
These are three key regions for viewership and Japan’s surprising performance bodes well for the esports scene in the country. 
Gameplay for Valorant Mobile has also leaked and early indications are that Krafton could be cannibalised here.


Valorant Is Good For Japanese Esports and Bad for Krafton

South Korea

Krafton, Inc. operates as a game development company. The Company develops console games, mobile games, computer games, and other related products. Krafton markets its products throughout South Korea.

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Krafton (259960 KS)

LG Energy Solution: End of 6 Months Lock-Up Period & Valuation Sensitivity Analysis

Our base case valuation LG Energy Solution is implied market cap of 75 trillion won or target price of 319,089 won, representing 25% below current...

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

KOSPI 200 Official Announcement: Float Rate Changes (11 Up & 5 Down)

This post details the official results of the KOSPI 200 float rate changes in the upcoming June rebalancing, which will be effective next Friday.

Sanghyun Park

KOSPI 200 Constituents with a Float Rate Change: 11 Increases & 2 Reductions

This post summarizes all the KOSPI 200 constituents, which will likely change their respective float rate in the June Review.

Sanghyun Park

Valorant Is Good For Japanese Esports and Bad for Krafton

Regional parity and strong performance by a Japanese team in Valorant could kick start Japan's esports drive while Valorant Mobile looks like a...

Mio Kato

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