Sanghyun Park

Clepsydra Capital

Event-Driven

<ul>
<li>There is a clear correlation between the resumption of short selling and the overvaluation of stock prices, which was actively reflected when short selling resumed.</li>
<li>So, in this rebalancing as well, we need to target those who have seen a significant share price rise recently while looking at the increasing trend of the loan balance.</li>
<li>The stocks to watch are Meritz Fire and Hana Tour as their recent share price has been the most solid. In particular, Hana Tour is conducting a capital increase.</li>
</ul>

<ul>
<li>Meritz Financial Group and Meritz Fire once again announced stock buybacks worth 100 billion won each. Like last time, this will likely be completed within 2-3 months.</li>
<li>This buyback size is not small: 1.86% and 1.95% of SO. Assuming that the buyback completes with equal volume for 60 trading days, it is 0.08x and 0.06x ADTVs, respectively.</li>
<li>Of particular note is Meritz Fire. It is because the KOSPI 200 inclusion is waiting even after March 1. Approximately ₩0.10T of passive money will flow in.</li>
</ul>

<ul>
<li>
MSCI Korea's February index review period ended last Friday because next Monday is Korea's Lunar New Year holiday.</li>
<li>
Meritz Financial Group and Meritz Fire stayed above the full MCs and float MCs without missing a single day during the 10-day review period.</li>
<li>
Shinpoong's MC was below the lower buffer throughout the review period. Douzone stayed above the lower buffer, but the odds of its exclusion are high as we have two additions.</li>
</ul>

Brian Freitas

<ul>
<li>With 4 trading days complete in the review period, we see 15 potential inclusions and 8 potential deletions at the February QIR. There are few new names in the list.</li>
<li>Some stocks will have same way flow from the FTSE AW/AC trackers in June, while others could have same way flows from KOSPI200 or CSI300 trackers in June.</li>
<li>
<a href="https://www.smartkarma.com/entities/jd-health-international-inc" target="_blank" data-smartkarma-citation="entities:29677:1" rel="noopener">JD Health (6618 HK)</a> has been moving up over the last couple of weeks, <a href="https://www.smartkarma.com/entities/sk-square-co-ltd" target="_blank" data-smartkarma-citation="entities:35264:1" rel="noopener">SK Square (402340 KS)</a> has been holding, while <a href="https://www.smartkarma.com/entities/sea-ltd" target="_blank" data-smartkarma-citation="entities:8509:1" rel="noopener">Sea Ltd (SE US)</a> has sold off.</li>
</ul>

<ul>
<li>Additions: Meritz Financial Group and Meritz Fire (with a YTD price gain of over 40%) are very likely, and Kakao Pay is still the trickiest one.</li>
<li>Deletions: Shinpoong Pharm is the most likely one, but the others remain a slim possibility.</li>
<li>Float rate changes: SK Square is a certainty with the most significant impact, and SKIET and HMM deserve our attention.</li>
</ul>

South Korea

Meritz Fire & Marine Insurance Co., Ltd. provides a variety of non-life insurance services.  The Company's services include auto, fire, casualty, health, travel, leisure, retirement, and pension insurance.

Meritz Fire & Marine Insurance - 000060 KS

Description