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

<p>KOSPI 200 December rebalancing's review period is May 1 to October 31.</p><h2>Adds</h2><p>Below is the list of the likely additions based on the average daily market cap from May 1 to yesterday. All of them have a pretty decent shot at joining KOSPI 200 at this point.</p><table class="table table-striped">
<colgroup>
<col width="100">
<col width="100">
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<col width="100">
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<tbody>
<tr>
<td data-sheets-value='{"1":2,"2":"KOSPI 200 adds - screening"}'>KOSPI 200 adds - screening</td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"Ticker"}'>Ticker</td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"Cumulative average daily market cap"}'>Cumulative average daily market cap</td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"Average daily market cap ranking"}'>Average daily market cap ranking</td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"Cumulative average daily trading value"}'>Cumulative average daily trading value</td>
</tr>
<tr>
<td></td>
<td style="text-align: right;"></td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"&gt; 15th percentile"}'>&gt; 15th percentile</td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"&lt; 90.00%"}'>&lt; 90.00%</td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"&gt; 15th percentile"}'><div><div>&gt; 15th percentile</div></div></td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"PI Advanced Materials Co Ltd"}'><strong>PI Advanced Materials</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":178920}'>178920</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0.19436336904045193}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}'><strong>19.44%</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0.8148148148148148}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}'><strong>81.48%</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0.8313253012048193}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}'>83.13%</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Myoung Shin Industrial Co Ltd"}'><strong>Myoung Shin Industrial</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"009900"}'>009900</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0.18064633216832338}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}'><strong>18.06%</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0.6388888888888888}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}'><strong>63.89%</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0.9681528662420382}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}'>96.82%</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"SL Corp"}'><strong>SL Corp</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"005850"}'>005850</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0.16233071177081637}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}'><strong>16.23%</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0.7222222222222222}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}'><strong>72.22%</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0.6751592356687899}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}'>67.52%</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Meritz Financial Group Inc"}'><strong>Meritz Financial Group</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":138040}'>138040</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0.18331189030260275}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}'><strong>18.33%</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0.8947368421052632}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}'><strong>89.47%</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0.6268656716417911}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}'>62.69%</td>
</tr>
<tr><td colspan="5" rowspan="1" data-sheets-value='{"1":2,"2":"Source: KRX &amp; FnGuide"}'>Source: KRX &amp; FnGuide</td></tr>
</tbody>
</table><div class="content-highlight"><p>F&amp;F (383220), Iljin Hysolus (271940), and SD Biosensor (137310) are also meeting the inclusion screening requirements. But they do not meet the minimum listing period of 6 months, so they will not be included in the index for this rebalancing. At their current market caps, they will likely join KOSPI 200 in the June rebalancing next year.</p></div><p>Below are the passive inflow estimates for each likely addition. Meritz Financial Group and SL Corp are expected to experience significant passive inflow at 1.91x and 1.69x compared to ADTV, respectively.</p><table class="table table-striped">
<colgroup>
<col width="100">
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<tbody>
<tr>
<td data-sheets-value='{"1":2,"2":"KOSPI 200 adds - passive inflow"}'>KOSPI 200 adds - passive inflow</td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"Ticker"}'>Ticker</td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"Estimated passive inflow"}'>Estimated passive inflow</td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"Shares in"}'>Shares-in</td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"Days to buy"}'>Days to buy (est. passive inflow / ADTV)</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"PI Advanced Materials Co Ltd"}'><strong>PI Advanced Materials</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":178920}'>178920</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":10.825840665461046}' data-sheets-numberformat='{"1":2,"2":"₩#,##0.0B"}'>₩10.8B</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":214798.42590200488}' data-sheets-numberformat='{"1":2,"2":"#,##0","3":1}'>214,798</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0.9039685638683741}' data-sheets-numberformat='{"1":2,"2":"#,##0.00x","3":1}'><strong>0.90x</strong></td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Myoung Shin Industrial Co Ltd"}'><strong>Myoung Shin Industrial</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"009900"}'>009900</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":10.991761963498126}' data-sheets-numberformat='{"1":2,"2":"₩#,##0.0B"}'>₩11.0B</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":427695.0180349466}' data-sheets-numberformat='{"1":2,"2":"#,##0","3":1}'>427,695</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0.30905100286068315}' data-sheets-numberformat='{"1":2,"2":"#,##0.00x","3":1}'><strong>0.31x</strong></td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"SL Corp"}'><strong>SL Corp</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"005850"}'>005850</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":6.550051172140481}' data-sheets-numberformat='{"1":2,"2":"₩#,##0.0B"}'>₩6.6B</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":254370.91930642645}' data-sheets-numberformat='{"1":2,"2":"#,##0","3":1}'>254,371</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":1.6851889200919719}' data-sheets-numberformat='{"1":2,"2":"#,##0.00x","3":1}'><strong>1.69x</strong></td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Meritz Financial Group Inc"}'><strong>Meritz Financial Group</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":138040}'>138040</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":15.155515711760314}' data-sheets-numberformat='{"1":2,"2":"₩#,##0.0B"}'>₩15.2B</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":470668.18980622094}' data-sheets-numberformat='{"1":2,"2":"#,##0","3":1}'>470,668</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":1.905338234034025}' data-sheets-numberformat='{"1":2,"2":"#,##0.00x","3":1}'><strong>1.91x</strong></td>
</tr>
<tr><td colspan="5" rowspan="1" data-sheets-value='{"1":2,"2":"Source: KRX &amp; FnGuide"}'>Source: KRX &amp; FnGuide</td></tr>
</tbody>
</table><h2>Deletes</h2><p>Below is the list of the likely deletions based on the average daily market cap from May 1 to yesterday. Of these five candidates, the first three have a higher chance of leaving the index. Then, one of the last two (Lotte Himart or LX Hausys) will likely join the rest to leave the index.</p><table class="table table-striped">
<colgroup>
<col width="100">
<col width="100">
<col width="100">
<col width="100">
<col width="100">
</colgroup>
<tbody>
<tr>
<td data-sheets-value='{"1":2,"2":"KOSPI 200 deletes - screening"}'>KOSPI 200 deletes - screening</td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"Ticker"}'>Ticker</td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"Cumulative average daily market cap"}'>Cumulative average daily market cap</td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"Average daily market cap ranking"}'>Average daily market cap ranking</td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"Cumulative average daily trading value"}'>Cumulative average daily trading value</td>
</tr>
<tr>
<td></td>
<td style="text-align: right;"></td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"&gt; 15th percentile"}'>&lt; 15th percentile</td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"&gt; 110.00%"}'>&gt; 110.00%</td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"&gt; 15th percentile"}'><div><div>&gt; 15th percentile</div></div></td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Samyang Foods Co Ltd"}'><strong>Samyang Foods</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"003230"}'>003230</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0.09118900815365227}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}'><strong>9.12%</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":1.2173913043478262}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}'><strong>121.74%</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0.5416666666666667}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}'>54.17%</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Ilyang Pharmaceutical Co., Ltd"}'><strong>Ilyang Pharmaceutical</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"007570"}'>007570</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0.05931317465504915}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}'><strong>5.93%</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":1.4444444444444444}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}'><strong>144.44%</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0.5614035087719298}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}'>56.14%</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"LX Holdings Corp"}'><strong>LX Holdings</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":383800}'>383800</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0.09812342876337998}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}'><strong>9.81%</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":1.2}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}'><strong>120.00%</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0.5176470588235293}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}'>51.76%</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"LOTTE Himart Co Ltd"}'><strong>LOTTE Himart</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"071840"}'>071840</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0.09733771137498692}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}'><strong>9.73%</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":1.1388888888888888}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}'><strong>113.89%</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0.5605095541401274}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}'>56.05%</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"LX Hausys Ltd"}'><strong>LX Hausys</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":108670}'>108670</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0.10423769792069448}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}'><strong>10.42%</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":1.16}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}'><strong>116.00%</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0.6705882352941177}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}'>67.06%</td>
</tr>
<tr><td colspan="5" rowspan="1" data-sheets-value='{"1":2,"2":"Source: KRX &amp; FnGuide"}'>Source: KRX &amp; FnGuide</td></tr>
</tbody>
</table><p>Below are the passive outflow estimates for each likely deletion. Samyang Foods and Lotte Himart will likely suffer the harshest passive outflow at 2.40x and 2.12x compared to ADTV, respectively.</p><table class="table table-striped">
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<col width="100">
<col width="100">
<col width="100">
<col width="100">
<col width="100">
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<tbody>
<tr>
<td data-sheets-value='{"1":2,"2":"KOSPI 200 deletes - passive outflow"}'>KOSPI 200 deletes - passive outflow</td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"Ticker"}'>Ticker</td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"Estimated passive outflow"}'>Estimated passive outflow</td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"Shares-out"}'>Shares-out</td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"Days to cover"}'>Days to cover (est. passive outflow / ADTV)</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Samyang Foods Co Ltd"}'><strong>Samyang Foods</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"003230"}'>003230</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":4}' data-sheets-numberformat='{"1":2,"2":"₩#,##0.0B"}'>₩4.0B</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":46948.35680751174}' data-sheets-numberformat='{"1":2,"2":"#,##0","3":1}'>46,948</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":2.3955941922623576}' data-sheets-numberformat='{"1":2,"2":"#,##0.00x","3":1}'><strong>2.40x</strong></td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Ilyang Pharmaceutical Co., Ltd"}'><strong>Ilyang Pharmaceutical</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"007570"}'>007570</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":5.999999999999999}' data-sheets-numberformat='{"1":2,"2":"₩#,##0.0B"}'>₩6.0B</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":207972.27036395145}' data-sheets-numberformat='{"1":2,"2":"#,##0","3":1}'>207,972</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":1.1713189148648702}' data-sheets-numberformat='{"1":2,"2":"#,##0.00x","3":1}'><strong>1.17x</strong></td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"LX Holdings Corp"}'><strong>LX Holdings</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":383800}'>383800</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":5.999999999999999}' data-sheets-numberformat='{"1":2,"2":"₩#,##0.0B"}'>₩6.0B</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":673400.6734006733}' data-sheets-numberformat='{"1":2,"2":"#,##0","3":1}'>673,401</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":1.7705475669560264}' data-sheets-numberformat='{"1":2,"2":"#,##0.00x","3":1}'><strong>1.77x</strong></td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"LOTTE Himart Co Ltd"}'><strong>LOTTE Himart</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"071840"}'>071840</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":4}' data-sheets-numberformat='{"1":2,"2":"₩#,##0.0B"}'>₩4.0B</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":139616.05584642233}' data-sheets-numberformat='{"1":2,"2":"#,##0","3":1}'>139,616</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":2.1244720753282564}' data-sheets-numberformat='{"1":2,"2":"#,##0.00x","3":1}'><strong>2.12x</strong></td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"LX Hausys Ltd"}'><strong>LX Hausys</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":108670}'>108670</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":8}' data-sheets-numberformat='{"1":2,"2":"₩#,##0.0B"}'>₩8.0B</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":108695.65217391304}' data-sheets-numberformat='{"1":2,"2":"#,##0","3":1}'>108,696</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":1.2487943625014968}' data-sheets-numberformat='{"1":2,"2":"#,##0.00x","3":1}'><strong>1.25x</strong></td>
</tr>
<tr><td colspan="5" rowspan="1" data-sheets-value='{"1":2,"2":"Source: KRX &amp; FnGuide"}'>Source: KRX &amp; FnGuide</td></tr>
</tbody>
</table>

KOSPI 200 December rebalancing's review period is May 1 to October 31.AddsBelow is the list of the likely additions based on the average daily market cap from May 1 to yesterday. All of them have a pretty decent shot at joining KOSPI 200 at this point.









KOSPI 200 adds - screening
Ticker
Cumulative average daily market cap
Average daily market cap ranking
Cumulative average daily trading value




&gt; 15th percentile
&lt; 90.00%
&gt; 15th percentile


PI Advanced Materials
178920
19.44%
81.48%
83.13%


Myoung Shin Industrial
009900
18.06%
63.89%
96.82%


SL Corp
005850
16.23%
72.22%
67.52%


Meritz Financial Group
138040
18.33%
89.47%
62.69%

Source: KRX &amp; FnGuide

F&amp;F (383220), Iljin Hysolus (271940), and SD Biosensor (137310) are also meeting the inclusion screening requirements. But they do not meet the minimum listing period of 6 months, so they will not be included in the index for this rebalancing. At their current market caps, they will likely join KOSPI 200 in the June rebalancing next year.Below are the passive inflow estimates for each likely addition. Meritz Financial Group and SL Corp are expected to experience significant passive inflow at 1.91x and 1.69x compared to ADTV, respectively.









KOSPI 200 adds - passive inflow
Ticker
Estimated passive inflow
Shares-in
Days to buy (est. passive inflow / ADTV)


PI Advanced Materials
178920
₩10.8B
214,798
0.90x


Myoung Shin Industrial
009900
₩11.0B
427,695
0.31x


SL Corp
005850
₩6.6B
254,371
1.69x


Meritz Financial Group
138040
₩15.2B
470,668
1.91x

Source: KRX &amp; FnGuide

DeletesBelow is the list of the likely deletions based on the average daily market cap from May 1 to yesterday. Of these five candidates, the first three have a higher chance of leaving the index. Then, one of the last two (Lotte Himart or LX Hausys) will likely join the rest to leave the index.









KOSPI 200 deletes - screening
Ticker
Cumulative average daily market cap
Average daily market cap ranking
Cumulative average daily trading value




&lt; 15th percentile
&gt; 110.00%
&gt; 15th percentile


Samyang Foods
003230
9.12%
121.74%
54.17%


Ilyang Pharmaceutical
007570
5.93%
144.44%
56.14%


LX Holdings
383800
9.81%
120.00%
51.76%


LOTTE Himart
071840
9.73%
113.89%
56.05%


LX Hausys
108670
10.42%
116.00%
67.06%

Source: KRX &amp; FnGuide

Below are the passive outflow estimates for each likely deletion. Samyang Foods and Lotte Himart will likely suffer the harshest passive outflow at 2.40x and 2.12x compared to ADTV, respectively.









KOSPI 200 deletes - passive outflow
Ticker
Estimated passive outflow
Shares-out
Days to cover (est. passive outflow / ADTV)


Samyang Foods
003230
₩4.0B
46,948
2.40x


Ilyang Pharmaceutical
007570
₩6.0B
207,972
1.17x


LX Holdings
383800
₩6.0B
673,401
1.77x


LOTTE Himart
071840
₩4.0B
139,616
2.12x


LX Hausys
108670
₩8.0B
108,696
1.25x

Source: KRX &amp; FnGuide



KOSPI 200 December Rebalancing: 5 Adds/Deletes & Special Considerations

<p>Below is KOSPI 200's screening methodology for the regular bi-annual rebalancing. The rebalancing trading will occur at the close on <strong>December 9</strong>, and the review period is <strong>May 1 to October 31</strong>. We will likely hear the rebalancing results in late November.</p><table class="table table-striped">
<colgroup>
<col width="150">
<col width="800">
</colgroup>
<tbody>
<tr><td colspan="2" data-sheets-value='{"1":2,"2":"Status (₩B)"}'>KOSPI 200 bi-annual rebalancing</td></tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Rebalancing"}'>Rebalancing</td>
<td data-sheets-value='{"1":2,"2":"Biannually"}' data-sheets-numberformat='{"1":2,"2":"#,##0"}'>Biannually</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":" - Effective date"}'>- Effective date</td>
<td data-sheets-value='{"1":2,"2":"Next trading day of 2nd Thursday of June &amp; December"}' data-sheets-numberformat='{"1":2,"2":"#,##0"}'>Next trading day of 2nd Thursday of June &amp; December</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":" - December"}'>- Implementation</td>
<td data-sheets-value='{"1":3,"3":44540}' data-sheets-numberformat='{"1":5,"2":"mmmm d, yyyy","3":1}'>December 10, 2021</td>
</tr>
<tr>
<td><strong>- Rebalancing trading</strong></td>
<td><strong>December 9, 2021</strong></td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":" - Review period"}'><strong>- Review period</strong></td>
<td data-sheets-value='{"1":2,"2":"May 1 to October 31, 2021"}'><strong>May 1 to October 31, 2021</strong></td>
</tr>
<tr>
<td rowspan="6" data-sheets-value='{"1":2,"2":"Screening"}'><div><strong>Screening</strong></div></td>
<td rowspan="6" data-sheets-value='{"1":2,"2":"Select candidates for each sector in order by the cumulative average daily market cap (the cumulative cut-off at the 15th percentile). Include the first company that crosses the 15th percentile mark. Exclude those whose cumulative average daily trading value is below the 15th percentile. Also, exclude those new entrants whose average daily market cap ranking is above 110%. If not reach a full 200 members in the first and second screenings, then re-select the current constituents whose average daily market cap ranking is within 110%. Select additional names among the unselected current constituents by the average daily market cap regardless of classification."}' data-sheets-numberformat='{"1":2,"2":"#,##0"}'><ul>
<li><strong>Select candidates for each sector in order by the cumulative average daily market cap (the cumulative cut-off at the 15th percentile).</strong></li>
<li><strong>Include the first company that crosses the 15th percentile mark. Exclude those whose cumulative average daily trading value is below the 15th percentile.</strong></li>
<li><strong>Also, exclude those new entrants whose average daily market cap ranking is above 110%.</strong></li>
<li><strong>If not reach 200 members in the first and second screenings, then re-select the current constituents whose average daily market cap ranking is within 110%.</strong></li>
<li><strong>Select additional names among the unselected current constituents by the average daily market cap regardless of classification.</strong></li>
</ul></td>
</tr>
<tr></tr>
<tr></tr>
<tr></tr>
<tr></tr>
<tr></tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Total float MC (₩B)"}'>Total float MC (₩B)</td>
<td data-sheets-value='{"1":3,"3":1247667.684}' data-sheets-numberformat='{"1":2,"2":"#,##0.0"}'>1,247,667.7</td>
</tr>
<tr><td colspan="2" data-sheets-value='{"1":2,"2":"Source: KRX"}'>Source: KRX</td></tr>
</tbody>
</table><section class="figure"><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/231/157/original/1.png?1632295209" class="editor-image img-responsive" data-smartkarma-image-id="231157"></figure></section>

Below is KOSPI 200's screening methodology for the regular bi-annual rebalancing. The rebalancing trading will occur at the close on December 9, and the review period is May 1 to October 31. We will likely hear the rebalancing results in late November.





KOSPI 200 bi-annual rebalancing

Rebalancing
Biannually


- Effective date
Next trading day of 2nd Thursday of June &amp; December


- Implementation
December 10, 2021


- Rebalancing trading
December 9, 2021


- Review period
May 1 to October 31, 2021


Screening

Select candidates for each sector in order by the cumulative average daily market cap (the cumulative cut-off at the 15th percentile).
Include the first company that crosses the 15th percentile mark. Exclude those whose cumulative average daily trading value is below the 15th percentile.
Also, exclude those new entrants whose average daily market cap ranking is above 110%.
If not reach 200 members in the first and second screenings, then re-select the current constituents whose average daily market cap ranking is within 110%.
Select additional names among the unselected current constituents by the average daily market cap regardless of classification.








Total float MC (₩B)
1,247,667.7

Source: KRX



KOSPI 200 Bi-Annual Rebalancing Preview (December 9)

Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

<p>In this insight, we discuss the stocks that could get included or excluded in the November 2021 KOSPI 200 rebalance. We highlight 15 stocks that could get included and 10 stocks that could get excluded in the upcoming KOSPI 200 rebalance.</p><div class="content-highlight">
<p>This rebalance of the KOSPI 200 strategy is a type of<strong> momentum-driven strategy.</strong> The 15 stocks that we think could get included in the next KOSPI 200 rebalance have generated strong share price performances <strong>(up 55% on average in the past six months</strong>). </p>
<p>On the other hand, the 10 stocks which we think could get excluded in the next KOSPI 200 rebalance (the bottom 5% of KOSPI 200 index in terms of market cap) have done much worse in terms of their share price performance (<strong>down 6.1% on average in the past six months</strong>). </p>
</div>

In this insight, we discuss the stocks that could get included or excluded in the November 2021 KOSPI 200 rebalance. We highlight 15 stocks that could get included and 10 stocks that could get excluded in the upcoming KOSPI 200 rebalance.
This rebalance of the KOSPI 200 strategy is a type of momentum-driven strategy. The 15 stocks that we think could get included in the next KOSPI 200 rebalance have generated strong share price performances (up 55% on average in the past six months). 
On the other hand, the 10 stocks which we think could get excluded in the next KOSPI 200 rebalance (the bottom 5% of KOSPI 200 index in terms of market cap) have done much worse in terms of their share price performance (down 6.1% on average in the past six months). 


Potential Changes of KOSPI 200 Index Components in the November 2021 Rebalance

<div class="content-highlight">
<p>Our NAV valuation of LX Holdings suggests NAV of 1.0 trillion won (13,556 won per share). Our NAV valuation of the company is based on the current market values for the three listed companies including Silicon Works, LG International, and LG Hausys. For MMA, we have used a 50% of its book value at the end of 2020. We have also assumed net cash of 179 billion won which is 0.088 x net cash of LG Corp (Consolidated at End of 1Q 2021). We have also assumed a 35% holdco discount. </p>
<p>We believe there are many investors who purchased Silicon Works, LG International, and LG Hausys ahead of the actual split date and the NAV (post holdco discount) of LX Holdings could be much less than the initial market cap of LX Holdings once it starts trading. Given that our base case value of LX Holdings is 13,556 won and if the final base price is confirmed at above 20,000 won to 25,000 won, for example, we believe in reducing to positions to lower levels. </p>
</div>


Our NAV valuation of LX Holdings suggests NAV of 1.0 trillion won (13,556 won per share). Our NAV valuation of the company is based on the current market values for the three listed companies including Silicon Works, LG International, and LG Hausys. For MMA, we have used a 50% of its book value at the end of 2020. We have also assumed net cash of 179 billion won which is 0.088 x net cash of LG Corp (Consolidated at End of 1Q 2021). We have also assumed a 35% holdco discount. 
We believe there are many investors who purchased Silicon Works, LG International, and LG Hausys ahead of the actual split date and the NAV (post holdco discount) of LX Holdings could be much less than the initial market cap of LX Holdings once it starts trading. Given that our base case value of LX Holdings is 13,556 won and if the final base price is confirmed at above 20,000 won to 25,000 won, for example, we believe in reducing to positions to lower levels. 


LX Holdings - NAV Analysis Suggests A Big Downside Risk

Shares outstandingThe total shares of each company are fixed. There will be no change to it.








Share structure
Pre-split
LG Corp
LX Holdings


Outstanding shares
175,871,808
160,322,613
77,745,975


Common
172,557,131
157,300,993
76,280,690


- Name
LG Corp
LG Corp
LX Holdings


- Ticker
003550
003550
-


- Current price
₩126,500
₩126,500
₩25,300


Pref
3,314,677
3,021,620
1,465,285


- Name
LG Corp 1P
LG Corp 1P
LX Holdings 1P


- Ticker
003555
003555
-


- Current price
₩99,500
₩99,500
₩19,900


Treasury shares - common
0
0
0


Treasury shares - pref
0
0
0


Common excl. treasury shares
172,557,131
157,300,993
76,280,690

Source: DART &amp; KRX

Discount to NAVLG Corp's previous closing price gives a 59.08%discount to the NAV at the last close, translating into a 61.67% discount for LG Corp and a 35.40% premium for LX Holdings.I made some changes in my calculation of NAV. I estimated each holding company's operating operation based on their latest de-consolidated operating profit. It is mostly brand royalty and office rental income. I used operating profit to exclude dividend income. 








Discount to NAV
Pre-split
LG Corp
LX Holdings


Value of listed holdings
₩41,155.3B
₩39,988.2B
₩1,167.1B


- % of Holdco market cap
188.54%
200.96%
60.48%


Value of unlisted holdings
₩2,631.7B
₩2,516.3B
₩115.4B


Stub value
-₩21,958.5B
-₩22,606.0B
₩647.4B


Stub value per share
-₩127,254
-₩143,712
₩8,488


Value of operating assets
₩7,940.0B
₩7,940.0B
₩0.0B


GAV
₩51,727.0B
₩50,444.6B
₩1,282.5B


GAV per share
₩299,767
₩320,688
₩16,812


Discount to GAV
57.80%
60.55%
-50.48%


Holdco net cash/debt
₩1,941.8B
₩1,770.0B
₩172.0B


Value of pref shares
₩329.8B
₩300.7B
₩29.2B


NAV
₩53,339.0B
₩51,913.9B
₩1,425.3B


NAV per share
₩309,109
₩330,029
₩18,685


Discount to NAV
59.08%
61.67%
-35.40%

Source: DART &amp; KRX

NAV compositionLG Corp has four major listed subsidiaries, accounting for 76.89% of the NAV. LX Holdings features three major listed subsidiaries, responsible for 81.89% of the NAV at the last close.








NAV composition
Pre-split
LG Corp
LX Holdings


LG Chem Ltd
39.36%
40.44%
-


LG Household &amp; Healthcare Ltd
15.03%
15.44%
-


LG Electronics Inc.
15.86%
16.29%
-


LG Uplus Corp
4.59%
4.72%
-


LG HAUSYS, LTD.
0.54%
-
20.29%


LG International Corp
0.59%
-
21.96%


Silicon Works Co Ltd
1.06%
-
39.64%


G II R Inc
0.07%
0.07%
-


LS Electric Co Ltd
0.06%
0.06%
-


LG CNS
2.81%
2.89%
-


Other - unlisted
2.12%
1.96%
8.09%


Operation
14.89%
15.29%
0.00%


Holdco net cash/debt
3.64%
3.41%
12.07%


Value of pref shares
-0.62%
-0.58%
-2.05%

Source: DART &amp; KRX



LG Corp Post-Spinoff NAV Update & Relisting Day Trade Approach

South Korea

LX Hausys, Ltd. manufactures various building materials such as wallcoverings, windows, floor coverings, and acrylic solid surfaces. The Company also produces finishing materials like high-gloss sheets used in home appliances and injection -molded parts & interior coverstocks for auto industry. LX Hausys markets its products worldwide.

Price Gauge
52-week Range	0.00 - 0.00
Market Cap (USDm)	0.00
P/E	0.00
Dividend (Yield)	0.00

LX Hausys Ltd (108670 KS)

KOSPI 200 December Rebalancing: 5 Adds/Deletes & Special Considerations

This post previews the KOSPI 200 December rebalancing: five likely adds and deletes through the regular screening and special considerations for...

Sanghyun Park

KOSPI 200 Bi-Annual Rebalancing Preview (December 9)

This post previews the upcoming regular bi-annual rebalancing of KOSPI 200, whose rebalancing trading will take place on December 9.

Sanghyun Park

Potential Changes of KOSPI 200 Index Components in the November 2021 Rebalance

In this insight, we discuss stocks that could get included or excluded in the November 2021 KOSPI 200 rebalance. We highlight 15 stocks that could...

Douglas Kim

LX Holdings - NAV Analysis Suggests A Big Downside Risk

Our NAV value of LX Holdings suggests NAV of 1.0 trillion won (13,556 won per share). If the final base price is confirmed at above 20,000 won to...

Douglas Kim

LG Corp Post-Spinoff NAV Update & Relisting Day Trade Approach

This post updates each company's discount to the NAV at the last closing prices and discusses the trade approach on the relating day and in the...

Sanghyun Park

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)