Julie Lee

Equity Bottom-Up

<p>Nexon had announced in-line 3Q20 results and lackluster guidance for 4Q20 as expected. Its 4Q20 results may not be strong as its mobile game ranking has declined in Korea during 4Q20, though it can be partially offset by potentially better than expected game industry sales in Korea amid worsening COVID. </p><p>However, we believe Nexon still has long-term investment value to be unlocked and a few positives may outweigh its near term weak earnings;  1) new games from Embark Studios, and 2) increasing possibility of DNF mobile launch and introduction of two new DNF IP based games. We will examine the details of these positives below. </p>

Nexon had announced in-line 3Q20 results and lackluster guidance for 4Q20 as expected. Its 4Q20 results may not be strong as its mobile game ranking has declined in Korea during 4Q20, though it can be partially offset by potentially better than expected game industry sales in Korea amid worsening COVID. However, we believe Nexon still has long-term investment value to be unlocked and a few positives may outweigh its near term weak earnings;  1) new games from Embark Studios, and 2) increasing possibility of DNF mobile launch and introduction of two new DNF IP based games. We will examine the details of these positives below. 

Nexon (3659.T): Games from Embark Studios and Improving Chance of DNF Launch

Korea / Special Situations, Clepsydra Capital

Sanghyun Park

Korea / Special Situations

Event-Driven

<p>Nexon GT hit nearly 10x 30D DTV last Friday. It eventually wrapped up the day with a 9% gain.</p><p>It was attributable to the market rumor that Nexon KJJ may give it another try.</p><p>Yes, selling the company.</p><section class="figure"><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/172/204/original/chart.png?1605584095" class="editor-image img-responsive" data-smartkarma-image-id="172204"></figure></section><section class="figure"><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/172/205/original/chart%20%281%29.png?1605584106" class="editor-image img-responsive" data-smartkarma-image-id="172205"></figure></section><section class="figure"><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/172/206/original/chart%20%282%29.png?1605584114" class="editor-image img-responsive" data-smartkarma-image-id="172206"></figure></section><table class="table table-striped">
<colgroup>
<col width="70">
<col width="70">
</colgroup>
<tbody>
<tr>
<td style="width: 351.818px;" data-sheets-value='{"1":2,"2":"Item"}'>Item</td>
<td style="text-align: right; width: 350.909px;" data-sheets-value='{"1":2,"2":"Value"}'>Value</td>
</tr>
<tr>
<td style="width: 351.818px;" data-sheets-value='{"1":2,"2":"Name"}' data-sheets-numberformat='{"1":5,"2":"m\"/\"d\"/\"yy"}'>Name</td>
<td style="text-align: right; width: 350.909px;" data-sheets-value='{"1":2,"2":"Nexon GT Co Ltd"}' data-sheets-numberformat='{"1":4,"2":"[$₩]#,##0"}' data-sheets-formula='=googlefinance(R[1]C[0], "name")'>Nexon GT Co Ltd</td>
</tr>
<tr>
<td style="width: 351.818px;" data-sheets-value='{"1":2,"2":"Ticker"}' data-sheets-numberformat='{"1":5,"2":"m\"/\"d\"/\"yy"}'>Ticker</td>
<td style="text-align: right; width: 350.909px;" data-sheets-value='{"1":2,"2":"041140"}' data-sheets-numberformat='{"1":4,"2":"[$₩]#,##0"}' data-sheets-formula="=R[0]C[-4]">041140</td>
</tr>
<tr>
<td style="width: 351.818px;">MC (₩B)</td>
<td style="text-align: right; width: 350.909px;">468.7</td>
</tr>
<tr>
<td style="width: 351.818px;">PE (x)</td>
<td style="text-align: right; width: 350.909px;">17.58</td>
</tr>
<tr>
<td style="width: 351.818px;">RSI (14)</td>
<td style="text-align: right; width: 350.909px;">14.02</td>
</tr>
<tr>
<td style="width: 351.818px;" data-sheets-value='{"1":2,"2":"52WH"}'>52WH</td>
<td style="text-align: right; width: 350.909px;" data-sheets-value='{"1":3,"3":-0.37995337995337997}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}' data-sheets-formula="=(R5C[-4]-R[0]C[1])/R[0]C[1]">-38.00%</td>
</tr>
<tr>
<td style="width: 351.818px;" data-sheets-value='{"1":2,"2":" - Date"}'>- Date</td>
<td style="text-align: right; width: 350.909px;" data-sheets-value='{"1":3,"3":44053.64583333333}' data-sheets-numberformat='{"1":5,"2":"m\"/\"d\"/\"yy"}' data-sheets-formula='=index(googlefinance(R[-2]C[0], "price", today()-365, today()), (match(max(index(googlefinance(R[-2]C[0], "price", today()-365, today()), 0, 2)), index(googlefinance(R[-2]C[0], "price", today()-365, today()), 0, 2), 0)), 1)'>8/10/20</td>
</tr>
<tr>
<td style="width: 351.818px;" data-sheets-value='{"1":2,"2":"52WL"}'>52WL</td>
<td style="text-align: right; width: 350.909px;" data-sheets-value='{"1":3,"3":3.169278996865204}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}' data-sheets-formula="=(R5C[-4]-R[0]C[1])/R[0]C[1]">316.93%</td>
</tr>
<tr>
<td style="width: 351.818px;" data-sheets-value='{"1":2,"2":" - Date"}'>- Date</td>
<td style="text-align: right; width: 350.909px;" data-sheets-value='{"1":3,"3":43909.64583333333}' data-sheets-numberformat='{"1":5,"2":"m\"/\"d\"/\"yy"}' data-sheets-formula='=index(googlefinance(R[-4]C[0], "price", today()-365, today()), (match(min(index(googlefinance(R[-4]C[0], "price", today()-365, today()), 0, 2)), index(googlefinance(R[-4]C[0], "price", today()-365, today()), 0, 2), 0)), 1)'>3/19/20</td>
</tr>
<tr>
<td style="width: 351.818px;" data-sheets-value='{"1":2,"2":"20D SMA"}'>20D SMA</td>
<td style="text-align: right; width: 350.909px;" data-sheets-value='{"1":3,"3":0.03645978291121627}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}' data-sheets-formula="=(R5C2-R304C[11])/R304C[11]">3.68%</td>
</tr>
<tr>
<td style="width: 351.818px;" data-sheets-value='{"1":2,"2":"20D EMA"}'>20D EMA</td>
<td style="text-align: right; width: 350.909px;" data-sheets-value='{"1":3,"3":0.8282098276395986}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}' data-sheets-formula="=(R5C2-R304C[12])/R304C[12]">-0.09%</td>
</tr>
<tr>
<td style="width: 351.818px;" data-sheets-value='{"1":2,"2":"1M Δ"}'>1M Δ</td>
<td style="text-align: right; width: 350.909px;" data-sheets-value='{"1":3,"3":-0.007462686567164179}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}' data-sheets-formula='=(googlefinance(R[-7]C2, "price")-index(googlefinance(R[-7]C2, "price", today()-30), 2,2))/index(googlefinance(R[-7]C2, "price", today()-30), 2,2)'>-0.75%</td>
</tr>
<tr>
<td style="width: 351.818px;" data-sheets-value='{"1":2,"2":"1M SD"}'>1M SD</td>
<td style="text-align: right; width: 350.909px;" data-sheets-value='{"1":3,"3":0.04843325495420494}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}' data-sheets-formula='=stdev.s(index((googlefinance(R3C[-4], "price", today()-30, today())), 0, 2))/average(index((googlefinance(R3C[-4], "price", today()-30, today())), 0, 2))'>4.84%</td>
</tr>
<tr>
<td style="width: 351.818px;" data-sheets-value='{"1":2,"2":"3M Δ"}'>3M Δ</td>
<td style="text-align: right; width: 350.909px;" data-sheets-value='{"1":3,"3":-0.2887700534759358}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}' data-sheets-formula='=(googlefinance(R[-9]C2, "price")-index(googlefinance(R[-9]C2, "price", today()-90), 2,2))/index(googlefinance(R[-9]C2, "price", today()-90), 2,2)'>-28.88%</td>
</tr>
<tr>
<td style="width: 351.818px;" data-sheets-value='{"1":2,"2":"3M SD"}'>3M SD</td>
<td style="text-align: right; width: 350.909px;" data-sheets-value='{"1":3,"3":0.15250497055360993}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}' data-sheets-formula='=stdev.s(index((googlefinance(R3C[-4], "price", today()-90, today())), 0, 2))/average(index((googlefinance(R3C[-4], "price", today()-90, today())), 0, 2))'>15.25%</td>
</tr>
<tr>
<td style="width: 351.818px;" data-sheets-value='{"1":2,"2":"6M Δ"}'>6M Δ</td>
<td style="text-align: right; width: 350.909px;" data-sheets-value='{"1":3,"3":0.6440049443757726}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}' data-sheets-formula='=(googlefinance(R[-11]C2, "price")-index(googlefinance(R[-11]C2, "price", today()-180), 2,2))/index(googlefinance(R[-11]C2, "price", today()-180), 2,2)'>64.40%</td>
</tr>
<tr>
<td style="width: 351.818px;" data-sheets-value='{"1":2,"2":"6M SD"}'>6M SD</td>
<td style="text-align: right; width: 350.909px;" data-sheets-value='{"1":3,"3":0.24890197224978697}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}' data-sheets-formula='=stdev.s(index((googlefinance(R3C[-4], "price", today()-180, today())), 0, 2))/average(index((googlefinance(R3C[-4], "price", today()-180, today())), 0, 2))'>24.89%</td>
</tr>
<tr><td colspan="2" style="width: 723.636px;" data-sheets-value='{"1":2,"2":"Source: Google Finance"}'>Source: Google Finance</td></tr>
</tbody>
</table>

Nexon GT hit nearly 10x 30D DTV last Friday. It eventually wrapped up the day with a 9% gain.It was attributable to the market rumor that Nexon KJJ may give it another try.Yes, selling the company.






Item
Value


Name
Nexon GT Co Ltd


Ticker
041140


MC (₩B)
468.7


PE (x)
17.58


RSI (14)
14.02


52WH
-38.00%


- Date
8/10/20


52WL
316.93%


- Date
3/19/20


20D SMA
3.68%


20D EMA
-0.09%


1M Δ
-0.75%


1M SD
4.84%


3M Δ
-28.88%


3M SD
15.25%


6M Δ
64.40%


6M SD
24.89%

Source: Google Finance



Nexon: Speculation Checking & Valuation Level for Building a Position

Pan-Asia Index Rebalances/ Events/ Delta One, Periscope Analytics

Brian Freitas

Pan-Asia Index Rebalances/ Events/ Delta One

Quantitative Analysis

<div><p>The Asia Short Interest weekly looks at moves in market wide short interest and highlights movements in stock specific short interest across Hong Kong, Japan, Korea and Taiwan using the last available data published by the relevant authorities.</p></div><div><p>Hong Kong saw shorts rise on <a href="https://www.smartkarma.com/entities/ind-comm-bk-of-china-h" target="_blank" data-smartkarma-citation="entities:1119:1" rel="noopener">ICBC (H) (1398 HK)</a>, <a href="https://www.smartkarma.com/entities/pccw-ltd" target="_blank" data-smartkarma-citation="entities:873:1" rel="noopener">PCCW Ltd (8 HK)</a>, <a href="https://www.smartkarma.com/entities/china-construction-bank-h" target="_blank" data-smartkarma-citation="entities:45:1" rel="noopener">China Construction Bank H (939 HK)</a> and <a href="https://www.smartkarma.com/entities/ping-an-insurance-grp-co-of-china-ltd" target="_blank" data-smartkarma-citation="entities:12880:1" rel="noopener">Ping An Insurance (H) (2318 HK)</a> while there was short covering on <a href="https://www.smartkarma.com/entities/meituan-dianping" target="_blank" data-smartkarma-citation="entities:26970:1" rel="noopener">Meituan (3690 HK)</a>, <a href="https://www.smartkarma.com/entities/alibaba-group" target="_blank" data-smartkarma-citation="entities:28434:1" rel="noopener">Alibaba Group (9988 HK)</a>, <a href="https://www.smartkarma.com/entities/hong-kong-exchanges-clearing" target="_blank" data-smartkarma-citation="entities:490:1" rel="noopener">HKEX (388 HK)</a> and <a href="https://www.smartkarma.com/entities/hsbc-holdings-plc" target="_blank" data-smartkarma-citation="entities:516:1" rel="noopener">HSBC Holdings (5 HK)</a>. Shorts increased in Communication Services, Consumer Staples and Financials stocks and decreased in Consumer Discretionary names.</p></div><div><p>In Japan, stocks that saw the most shorts were <a href="https://www.smartkarma.com/entities/nexon-co-ltd" target="_blank" data-smartkarma-citation="entities:16032:1" rel="noopener">Nexon (3659 JP)</a>, <a href="https://www.smartkarma.com/entities/ana-holdings-inc" target="_blank" data-smartkarma-citation="entities:5308:1" rel="noopener">Ana Holdings (9202 JP)</a>, <a href="https://www.smartkarma.com/entities/fast-retailing-co-ltd" target="_blank" data-smartkarma-citation="entities:751:1" rel="noopener">Fast Retailing (9983 JP)</a> and <a href="https://www.smartkarma.com/entities/sbi-holdings-inc" target="_blank" data-smartkarma-citation="entities:10928:1" rel="noopener">Sbi Holdings (8473 JP)</a> while shorts decreased on <a href="https://www.smartkarma.com/entities/familymart-co-ltd" target="_blank" data-smartkarma-citation="entities:320:1" rel="noopener">FamilyMart Co Ltd (8028 JP)</a>, <a href="https://www.smartkarma.com/entities/toshiba-corp" target="_blank" data-smartkarma-citation="entities:637:1" rel="noopener">Toshiba Corp (6502 JP)</a>, <a href="https://www.smartkarma.com/entities/sumitomo-mitsui-financial-group-inc" target="_blank" data-smartkarma-citation="entities:217:1" rel="noopener">Sumitomo Mitsui Financial Group (8316 JP)</a> and <a href="https://www.smartkarma.com/entities/advantest-corp" target="_blank" data-smartkarma-citation="entities:18107:1" rel="noopener">Advantest Corp (6857 JP)</a>. Sectorally, shorts increased on Communication Services, while shorts were covered on Information Technology and Consumer Staples names.</p></div><div><p>Shorts increased in Korea for the week. Biggest increase in shorts were on <a href="https://www.smartkarma.com/entities/samsung-electronics-co-ltd" target="_blank" data-smartkarma-citation="entities:191:1" rel="noopener">Samsung Electronics (005930 KS)</a>, <a href="https://www.smartkarma.com/entities/sk-hynix-inc" target="_blank" data-smartkarma-citation="entities:16955:1" rel="noopener">SK Hynix (000660 KS)</a>, <a href="https://www.smartkarma.com/entities/lg-household-health-care" target="_blank" data-smartkarma-citation="entities:6501:1" rel="noopener">LG Household &amp; Health Care (051900 KS)</a>, <a href="https://www.smartkarma.com/entities/lg-chem-ltd" target="_blank" data-smartkarma-citation="entities:3583:1" rel="noopener">LG Chem Ltd (051910 KS)</a> and <a href="https://www.smartkarma.com/entities/naver-corp" target="_blank" data-smartkarma-citation="entities:16029:1" rel="noopener">Naver Corp (035420 KS)</a>. </p></div><div><p>Stocks in Taiwan that saw the highest increase in shorts were <a href="https://www.smartkarma.com/entities/taiwan-semiconductor-manufacturing-company" target="_blank" data-smartkarma-citation="entities:11230:1" rel="noopener">TSMC (2330 TT)</a>, <a href="https://www.smartkarma.com/entities/au-optronics-corp" target="_blank" data-smartkarma-citation="entities:6704:1" rel="noopener">Au Optronics (2409 TT)</a>, <a href="https://www.smartkarma.com/entities/acer-inc" target="_blank" data-smartkarma-citation="entities:15726:1" rel="noopener">Acer Inc (2353 TT)</a> and <a href="https://www.smartkarma.com/entities/catcher-technology-co-ltd" target="_blank" data-smartkarma-citation="entities:4957:1" rel="noopener">Catcher Technology (2474 TT)</a> while shorts were covered on <a href="https://www.smartkarma.com/entities/walsin-technology-corp" target="_blank" data-smartkarma-citation="entities:11084:1" rel="noopener">Walsin Technology (2492 TT)</a>, <a href="https://www.smartkarma.com/entities/nanya-technology-corp" target="_blank" data-smartkarma-citation="entities:3269:1" rel="noopener">Nanya Technology (2408 TT)</a>, <a href="https://www.smartkarma.com/entities/novatek-microelectronics-corp" target="_blank" data-smartkarma-citation="entities:10904:1" rel="noopener">Novatek Microelectronics Corp (3034 TT)</a> and <a href="https://www.smartkarma.com/entities/ta-chen-stainless-pipe-co" target="_blank" data-smartkarma-citation="entities:2519:1" rel="noopener">Ta Chen Stainless Pipe Co (2027 TT)</a>. </p></div>

The Asia Short Interest weekly looks at moves in market wide short interest and highlights movements in stock specific short interest across Hong Kong, Japan, Korea and Taiwan using the last available data published by the relevant authorities.Hong Kong saw shorts rise on ICBC (H) (1398 HK), PCCW Ltd (8 HK), China Construction Bank H (939 HK) and Ping An Insurance (H) (2318 HK) while there was short covering on Meituan (3690 HK), Alibaba Group (9988 HK), HKEX (388 HK) and HSBC Holdings (5 HK). Shorts increased in Communication Services, Consumer Staples and Financials stocks and decreased in Consumer Discretionary names.In Japan, stocks that saw the most shorts were Nexon (3659 JP), Ana Holdings (9202 JP), Fast Retailing (9983 JP) and Sbi Holdings (8473 JP) while shorts decreased on FamilyMart Co Ltd (8028 JP), Toshiba Corp (6502 JP), Sumitomo Mitsui Financial Group (8316 JP) and Advantest Corp (6857 JP). Sectorally, shorts increased on Communication Services, while shorts were covered on Information Technology and Consumer Staples names.Shorts increased in Korea for the week. Biggest increase in shorts were on Samsung Electronics (005930 KS), SK Hynix (000660 KS), LG Household &amp; Health Care (051900 KS), LG Chem Ltd (051910 KS) and Naver Corp (035420 KS). Stocks in Taiwan that saw the highest increase in shorts were TSMC (2330 TT), Au Optronics (2409 TT), Acer Inc (2353 TT) and Catcher Technology (2474 TT) while shorts were covered on Walsin Technology (2492 TT), Nanya Technology (2408 TT), Novatek Microelectronics Corp (3034 TT) and Ta Chen Stainless Pipe Co (2027 TT). 

Asia Short Interest Weekly: ICBC, PCCW, Meituan, HKEX, Nexon, FamilyMart, Samsung, TSMC, Acer

Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

Pan-Asia Catalysts/Events

Quiddity Advisors

<p>A brief thinkpiece about where <a href="https://www.smartkarma.com/entities/nexon-co-ltd" target="_blank" data-smartkarma-citation="entities:16032:1" rel="noopener">Nexon (3659 JP)</a> sits vs its peers and history. Conclusions are that NEXON is not dramatically expensive to its peers on a Forward EV/EBIT multiple basis. You would need another 5+% into the close to be comfortable with a clean short-term trade given the change in Real World Float</p><p>Original insight is <a href="https://www.smartkarma.com/insights/familymart-delisting-and-its-nikkei-225-replacement-is-nexon-3659" target="_blank" data-smartkarma-citation="insights:44429" rel="noopener">Familymart Delisting and Its Nikkei 225 Replacement Is Nexon (3659)</a>.</p><p>More below the fold.  </p>

A brief thinkpiece about where Nexon (3659 JP) sits vs its peers and history. Conclusions are that NEXON is not dramatically expensive to its peers on a Forward EV/EBIT multiple basis. You would need another 5+% into the close to be comfortable with a clean short-term trade given the change in Real World FloatOriginal insight is Familymart Delisting and Its Nikkei 225 Replacement Is Nexon (3659).More below the fold.  

Is It Safe to Short NEXON into the Inclusion?

Chart based progressive global trading strategies, Chart Partners

Thomas Schroeder

Chart based progressive global trading strategies

Chart Partners

Chart Partners objective is to discover medium-term cycle turns and profit opportunities before they unfold, within structural trends while preserving capital with clear degrees of risk. We have real return ideas. 

Markets are dynamic and trading systems must reflect this. It is crucial to determine underlying correlations and lead-lag relationships within global markets and the impact on linked instruments. Our weekly Chartonics product gives you short-term trading strategies that can be applied within the medium and longer term macro trends that are mapped out in our strategy updates. 

Our methodology fuses global market variables and isolates drivers in trends. We specialize in FX, index trade in NY and Asia with a focus on Asian stocks. 

Technical Analysis

<p><a href="https://www.smartkarma.com/entities/nexon-co-ltd" target="_blank" data-smartkarma-citation="entities:16032:1" rel="noopener">Nexon (3659 JP)</a> has registered a bullish gap out of triangulation and supports a push to a new high. Buy support is within the gap zone laying out a bullish near term cycle into what we view as overhead exhaustion near the 3,200 or 3,380 projection zone and that will be followed by an intermediate correction. We like buying near term weakness.</p><p>MACD is coiled for a rally but not expected to confirm a new wave five high for a case of bear divergence that will set the stage for an intermediate corrective cycle toward fresh buy support near 2,300.</p>

Nexon (3659 JP) has registered a bullish gap out of triangulation and supports a push to a new high. Buy support is within the gap zone laying out a bullish near term cycle into what we view as overhead exhaustion near the 3,200 or 3,380 projection zone and that will be followed by an intermediate correction. We like buying near term weakness.MACD is coiled for a rally but not expected to confirm a new wave five high for a case of bear divergence that will set the stage for an intermediate corrective cycle toward fresh buy support near 2,300.

Japan

Nexon Co., Ltd. mainly develops and services, online games for PC and mobile devices. The company also offers consulting services related to online-games. Nexon operates in Japan.

Price Gauge
52-week Range	0.00 - 0.00
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Nexon (3659 JP)

Nexon (3659.T): Games from Embark Studios and Improving Chance of DNF Launch

Nexon still has investment value to be unlocked. A few positives may outweigh near term weakness; 1) new games from Embark Studios, and 2) DNF...

Julie Lee

Nexon: Speculation Checking & Valuation Level for Building a Position

This is fact-checking on last Friday's Nexon sale rumor. I found it unsubstantiated; nevertheless, the circumstance deserves attention. Valuation...

Sanghyun Park

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We highlight the largest changes in short interest on stocks across Hong Kong, Japan, Korea and Taiwan to provide insight into the positions being...

Brian Freitas

Is It Safe to Short NEXON into the Inclusion?

Nexon has bounced on the Nikkei 225 inclusion. It may not have bounced enough to be aggressively short. The forward fundamental multiple isn't...

Travis Lundy

Nexon Tactical Buy into Exhaustive Zone

NEXON bull triangulation sets up a nice tactical long trade to a new high where an intermediate correction is expected on the back of MACD non...

Thomas Schroeder

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52-week Range

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