Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

Douglas Research Advisory

Equity Bottom-Up

<ul>
<li>We have a Positive view of KT Corp (030200 KS) due to three main reasons.</li>
<li>First, KT has started to implement aggressive capital return policy (returning 50% of net income through dividends and share buybacks/cancellations). Two other reasons include Corporate Value Up and higher Smartscore.</li>
<li>KT Corp has been the best performing stock among the three major Korean telcos in the past one year. KT Corp's shares are up 27.9% in the past one year.</li>
</ul>


We have a Positive view of KT Corp (030200 KS) due to three main reasons.
First, KT has started to implement aggressive capital return policy (returning 50% of net income through dividends and share buybacks/cancellations). Two other reasons include Corporate Value Up and higher Smartscore.
KT Corp has been the best performing stock among the three major Korean telcos in the past one year. KT Corp's shares are up 27.9% in the past one year.


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

Event-Driven

Sinopec Engineering Group H / Event-Driven

<ul>
<li>The WisdomTree Emerging Markets SmallCap Dividend Index is a fundamentally weighted index that measures the performance of small cap stocks within Emerging Markets.</li>
<li>The changes at the October rebalance were announced after market close on 4 October with implementation scheduled at the close on 16 October.</li>
<li>There are 8 trading days to implementation and there are a bunch of stocks with over 2x ADV to trade.</li>
</ul>


The WisdomTree Emerging Markets SmallCap Dividend Index is a fundamentally weighted index that measures the performance of small cap stocks within Emerging Markets.
The changes at the October rebalance were announced after market close on 4 October with implementation scheduled at the close on 16 October.
There are 8 trading days to implementation and there are a bunch of stocks with over 2x ADV to trade.


WisdomTree Emerging Markets SmallCap Dividend Index Rebalance: US$1bn to Trade

<ul>
<li>Foreign investors have continued buying <a href="https://www.smartkarma.com/entities/kt-corp" target="_blank" data-smartkarma-citation="entities:1112:1" rel="noopener">KT Corp (030200 KS)</a> and the stock has outperformed <a href="https://www.smartkarma.com/entities/sk-telecom-co-ltd-bbccd86c-474d-4a4d-946d-10e911a225a2" target="_blank" data-smartkarma-citation="entities:395:1" rel="noopener">SK Telecom (017670 KS)</a>, though not by a lot. </li>
<li>Foreign buying has pushed foreign room in <a href="https://www.smartkarma.com/entities/kt-corp" target="_blank" data-smartkarma-citation="entities:1112:1" rel="noopener">KT Corp (030200 KS)</a> below 3.75% and the stock could be deleted from a global index at the next rebalance.</li>
<li>There will be some interesting trading dynamics in <a href="https://www.smartkarma.com/entities/kt-corp" target="_blank" data-smartkarma-citation="entities:1112:1" rel="noopener">KT Corp (030200 KS)</a> over the next couple of months and there will be trading opportunities versus its peers.</li>
</ul>


Foreign investors have continued buying KT Corp (030200 KS) and the stock has outperformed SK Telecom (017670 KS), though not by a lot. 
Foreign buying has pushed foreign room in KT Corp (030200 KS) below 3.75% and the stock could be deleted from a global index at the next rebalance.
There will be some interesting trading dynamics in KT Corp (030200 KS) over the next couple of months and there will be trading opportunities versus its peers.


KT Corp (030200 KS): Foreign Room Drops Below Critical Level; Passive Selling to Come

<ul>
<li>Our NAV analysis of LG Corp suggests an implied market cap of 16.3 trillion won or 103,781 won per share which is 16% higher than current share price.</li>
<li>For holdco discount, we used a 50% holdco discount. If investors perceive improvement in value (such as through corporate governance improvements), the holdco discount on LG Corp would decline.</li>
<li>LG Corp's shares are up 5.9% in the past six months, outperforming all the major LG Group related companies including LG Chem, LG H&amp;H, LG Electronics, and LG Energy Solution. </li>
</ul>


Our NAV analysis of LG Corp suggests an implied market cap of 16.3 trillion won or 103,781 won per share which is 16% higher than current share price.
For holdco discount, we used a 50% holdco discount. If investors perceive improvement in value (such as through corporate governance improvements), the holdco discount on LG Corp would decline.
LG Corp's shares are up 5.9% in the past six months, outperforming all the major LG Group related companies including LG Chem, LG H&amp;H, LG Electronics, and LG Energy Solution. 


LG Corp: Updated NAV Analysis Amid Ongoing Corporate Value Up Program in Korea

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>As of last Friday, SKT has utilized 86.2 billion won out of the allotted 300 billion won for share buybacks, resulting in the acquisition of 1,810,242 shares.</li>
<li>If there are indications of the foreign room potentially falling to a risky level, SKT will likely proceed with an aggressive buyback, targeting 20-30% of the daily trading volume.</li>
<li>Another particularly intriguing observation is the absence of local retail flow directed towards SKT. This indicates there is still potential momentum for an upward price movement at this juncture.</li>
</ul>


As of last Friday, SKT has utilized 86.2 billion won out of the allotted 300 billion won for share buybacks, resulting in the acquisition of 1,810,242 shares.
If there are indications of the foreign room potentially falling to a risky level, SKT will likely proceed with an aggressive buyback, targeting 20-30% of the daily trading volume.
Another particularly intriguing observation is the absence of local retail flow directed towards SKT. This indicates there is still potential momentum for an upward price movement at this juncture.


Analyzing Proactive Flow Trading Targeting SK Telecom's Passive Movements

South Korea

LG Uplus Corp., an affiliate of LG Group, provides a wide range of personal communications services (PCS) using code division multiple access (CDMA) technology.  The Company offers call forwarding, call and data transfer, call waiting, voice mail, Internet-phone, prepaid call, and authentication text-to-speech (TTS) services.

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

LG Uplus Corp (032640 KS)

Asian Dividend Gems: KT Corp

Positive outlook on KT Corp (030200 KS) due to aggressive capital return policy, Corporate Value Up, and higher Smartscore leading to strong stock...

Douglas Kim

WisdomTree Emerging Markets SmallCap Dividend Index Rebalance: US$1bn to Trade

There are 370 adds/257 deletes for the WisdomTree Emerging Markets SmallCap Dividend Index. Round-trip trade is around US$1bn. There is big impact...

Brian Freitas

KT Corp (030200 KS): Foreign Room Drops Below Critical Level; Passive Selling to Come

KT Corp's foreign room has dropped below 3.75% and that could result in deletion from a global index in November. Foreign buying has been...

Brian Freitas

LG Corp: Updated NAV Analysis Amid Ongoing Corporate Value Up Program in Korea

Our NAV analysis of LG Corp suggests an implied market cap of 16.3 trillion won or 103,781 won per share which is 16% higher than current share price.

Douglas Kim

Analyzing Proactive Flow Trading Targeting SK Telecom's Passive Movements

This post examines proactive flow trading focused on SK Telecom's passive movements until the end of next month, with its ongoing share buyback...

Sanghyun Park

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

Asian Dividend Gems: KT Corp

​Positive outlook on KT Corp (030200 KS) due to aggressive capital return policy, Corporate Value Up, and higher Smartscore leading to strong stock...

Douglas Kim

WisdomTree Emerging Markets SmallCap Dividend Index Rebalance: US$1bn to Trade

There are 370 adds/257 deletes for the WisdomTree Emerging Markets SmallCap Dividend Index. Round-trip trade is around US$1bn. There is big impact...

Brian Freitas

KT Corp (030200 KS): Foreign Room Drops Below Critical Level; Passive Selling to Come

KT Corp's foreign room has dropped below 3.75% and that could result in deletion from a global index in November. Foreign buying has been...

Brian Freitas

LG Corp: Updated NAV Analysis Amid Ongoing Corporate Value Up Program in Korea

Our NAV analysis of LG Corp suggests an implied market cap of 16.3 trillion won or 103,781 won per share which is 16% higher than current share price.

Douglas Kim

Analyzing Proactive Flow Trading Targeting SK Telecom's Passive Movements

This post examines proactive flow trading focused on SK Telecom's passive movements until the end of next month, with its ongoing share buyback...

Sanghyun Park

Positive outlook on KT Corp (030200 KS) due to aggressive capital return policy, Corporate Value Up, and higher Smartscore leading to strong stock...