Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

Douglas Research Advisory

Equity Capital Markets

<ul>
<li>In this insight, we discuss whether a Saudi Arabian investment company (SKAEEB) could save Kum Yang (001570 KS) from delisting.</li>
<li>There are several aspects of this deal with SKAEEB that are a bit fishy. </li>
<li>1) A 50% Market Premium is Not Justified; 2) Does SKAEEB have enough money? 3) Control does not change</li>
</ul>


In this insight, we discuss whether a Saudi Arabian investment company (SKAEEB) could save Kum Yang (001570 KS) from delisting.
There are several aspects of this deal with SKAEEB that are a bit fishy. 
1) A 50% Market Premium is Not Justified; 2) Does SKAEEB have enough money? 3) Control does not change


Will A Saudi Arabian Investment Company Save Kum Yang From Delisting?

Event-Driven

<ul>
<li>On 26 March, Korea Exchange provided a list of 38 companies in KOSPI and KOSDAQ that are subject to delisting this year.</li>
<li>These 38 companies have a combined market cap of 3.4 trillion won.</li>
<li>Many of these companies have received 'refusals of opinion' from auditors in the audit report. Some of them also face charges of embezzlement and breach of trust. </li>
</ul>


On 26 March, Korea Exchange provided a list of 38 companies in KOSPI and KOSDAQ that are subject to delisting this year.
These 38 companies have a combined market cap of 3.4 trillion won.
Many of these companies have received 'refusals of opinion' from auditors in the audit report. Some of them also face charges of embezzlement and breach of trust. 


Korea Exchange Highlights 38 Companies That Could Be Delisted in 2025

<ul>
<li>Murphy's law is at progress for Kum Yang (001570 KS).</li>
<li>On 21 March, Kum Yang's external auditor gave a disclaimer of opinion on the on its audit report.</li>
<li>Korea Exchange is becoming more serious about delisting shady companies, especially one that receives inappropriate audit opinions for two consecutive years.</li>
</ul>


Murphy's law is at progress for Kum Yang (001570 KS).
On 21 March, Kum Yang's external auditor gave a disclaimer of opinion on the on its audit report.
Korea Exchange is becoming more serious about delisting shady companies, especially one that receives inappropriate audit opinions for two consecutive years.


Kum Yang: A Potential Delisting? [Murphy's Law in Progress]

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>
<a href="https://www.smartkarma.com/entities/kum-yang-co-ltd" target="_blank" data-smartkarma-citation="entities:10364:1" rel="noopener">Kum Yang (001570 KS)</a>'s designation as an Administrative Issue should result in the deletion of the stock from the <a href="https://www.smartkarma.com/entities/korea-stock-exchange-kospi-200" target="_blank" data-smartkarma-citation="entities:26021:1" rel="noopener">Korea Stock Exchange KOSPI 200 (KOSPI2 INDEX)</a> later this week.</li>
<li>
<a href="https://www.smartkarma.com/entities/taekwang-industrial-co-ltd" target="_blank" data-smartkarma-citation="entities:6291:1" rel="noopener">Taekwang Industrial (003240 KS)</a> could be added to the index as an ad hoc replacement. The stock was in line to be added to the index at the June rebalance.</li>
<li>
<a href="https://www.smartkarma.com/entities/miwon-specialty-chemical-co-ltd" target="_blank" data-smartkarma-citation="entities:44173:1" rel="noopener">Miwon Specialty Chemical (268280 KS)</a> ranked higher than <a href="https://www.smartkarma.com/entities/taekwang-industrial-co-ltd" target="_blank" data-smartkarma-citation="entities:6291:1" rel="noopener">Taekwang Industrial (003240 KS)</a> at the December rebalance but appears to fail the liquidity screen.</li>
</ul>



Kum Yang (001570 KS)'s designation as an Administrative Issue should result in the deletion of the stock from the Korea Stock Exchange KOSPI 200 (KOSPI2 INDEX) later this week.

Taekwang Industrial (003240 KS) could be added to the index as an ad hoc replacement. The stock was in line to be added to the index at the June rebalance.

Miwon Specialty Chemical (268280 KS) ranked higher than Taekwang Industrial (003240 KS) at the December rebalance but appears to fail the liquidity screen.


KOSPI200 Index Adhoc Rebalance: Kumyang (001570 KS)'s Designation Opens Up an Index Spot

<ul>
<li>On 4 March, Korea Exchange announced that it will designate Kum Yang (001570 KS) as an administration stock, resulting in a deletion from KOSPI 200 index.</li>
<li>These increased penalty points and fine are mainly from the company inflating the expected performance of a Mongolian mine which the company had plans to acquire shares.</li>
<li>We continue to remain negative on Kum Yang. As a result of designation as an administration stock and deletion from KOSPI 200, investors will likely push down this stock further.</li>
</ul>


On 4 March, Korea Exchange announced that it will designate Kum Yang (001570 KS) as an administration stock, resulting in a deletion from KOSPI 200 index.
These increased penalty points and fine are mainly from the company inflating the expected performance of a Mongolian mine which the company had plans to acquire shares.
We continue to remain negative on Kum Yang. As a result of designation as an administration stock and deletion from KOSPI 200, investors will likely push down this stock further.


Kum Yang Gets Designated as an Administration Stock and To Be Deleted from KOSPI 200 Index

South Korea

Kum Yang Co., Ltd. specializes in manufacturing blowing agents to foam rubber products and polymers.  The Company also produces other basic fine chemicals, such as sulphur products.

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Kum Yang (001570 KS)

Will A Saudi Arabian Investment Company Save Kum Yang From Delisting?

In this insight, we discuss whether a Saudi Arabian investment company (SKAEEB) could save Kum Yang (001570 KS) from delisting.

Douglas Kim

Korea Exchange Highlights 38 Companies That Could Be Delisted in 2025

On 26 March, Korea Exchange provided a list of 38 companies in KOSPI and KOSDAQ that are subject to delisting this year. These 38 companies have a...

Douglas Kim

Kum Yang: A Potential Delisting? [Murphy's Law in Progress]

On 21 March, Kum Yang's external auditor gave a disclaimer of opinion on the on its audit report. There is a serious probability of Kum Yang...

Douglas Kim

KOSPI200 Index Adhoc Rebalance: Kumyang (001570 KS)'s Designation Opens Up an Index Spot

Kumyang has been designated as an Administrative Issue and should be deleted from the KOSPI200 later this week. That opens the door for Taekwang...

Brian Freitas

Kum Yang Gets Designated as an Administration Stock and To Be Deleted from KOSPI 200 Index

On 4 March, Korea Exchange announced that it will designate Kum Yang (001570 KS) as an administration stock, resulting in a deletion from KOSPI 200...

Douglas Kim

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