Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

Event-Driven

Hyundai Home Shopping Network / Event-Driven

<ul>
<li>
This article discusses the potential inclusions and exclusions of KOSPI200 rebalance inDecember 2023 (especially those that are highlighted by the locals). 
</li>
<li>Stocks that are expected to be added to the KOSPI200 index include Posco DX, HD Hyundai Electric, Sam-A Aluminum, TCC Steel, and Dentium. </li>
<li>Stocks that are expected to be excluded in the KOSPI200 index Include Zinus, Handsome, Cuckoo Homesys, Taekwang Industrial, and Hyundai Home Shopping.</li>
</ul>



This article discusses the potential inclusions and exclusions of KOSPI200 rebalance inDecember 2023 (especially those that are highlighted by the locals). 

Stocks that are expected to be added to the KOSPI200 index include Posco DX, HD Hyundai Electric, Sam-A Aluminum, TCC Steel, and Dentium. 
Stocks that are expected to be excluded in the KOSPI200 index Include Zinus, Handsome, Cuckoo Homesys, Taekwang Industrial, and Hyundai Home Shopping.


KOSPI200 Rebalance in December 2023 Highlighted by Locals

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

Value Added Technologies / Index Rebalance

<ul>
<li>Following the two tender offers, Han &amp; Co now holds more than 90% of the common shares in <a href="https://www.smartkarma.com/entities/lutronic-corp" target="_blank" data-smartkarma-citation="entities:2250:1" rel="noopener">Lutronic Corp (085370 KS)</a> and is looking to buy the remaining shares.</li>
<li>
<a href="https://www.smartkarma.com/entities/lutronic-corp" target="_blank" data-smartkarma-citation="entities:2250:1" rel="noopener">Lutronic Corp (085370 KS)</a> is a member of the <a href="https://www.smartkarma.com/entities/kosdaq-150-index" target="_blank" data-smartkarma-citation="entities:31077:1" rel="noopener">KOSDAQ 150 Index</a> and delisting would mean an index replacement. <a href="https://www.smartkarma.com/entities/value-added-technologies" target="_blank" data-smartkarma-citation="entities:9946:1" rel="noopener">Value Added Technologies (043150 KS)</a> is a potential inclusion.</li>
<li>
<a href="https://www.smartkarma.com/entities/value-added-technologies" target="_blank" data-smartkarma-citation="entities:9946:1" rel="noopener">Value Added Technologies (043150 KS)</a> has underperformed its peers and trades cheaper on nearly all valuation parameters.</li>
</ul>


Following the two tender offers, Han &amp; Co now holds more than 90% of the common shares in Lutronic Corp (085370 KS) and is looking to buy the remaining shares.

Lutronic Corp (085370 KS) is a member of the KOSDAQ 150 Index and delisting would mean an index replacement. Value Added Technologies (043150 KS) is a potential inclusion.

Value Added Technologies (043150 KS) has underperformed its peers and trades cheaper on nearly all valuation parameters.


KOSDAQ150 Ad Hoc Index Rebalance Preview: VAT Could Replace Lutronic

Equity Bottom-Up

<ul>
<li>Sindoh Co Ltd (029530 KS) is the 24th company in our Korea Small Cap Gems series. </li>
<li>Sindoh has one of the highest net cash/market cap ratios in the entire Korean stock market. Net cash at end of 1Q 2023 was 226% of its market cap. </li>
<li>Sindoh's operations turned around in 1Q 2023. It had sales of 105.5 billion won (up 26.6% YoY) and operating profit of 9.8 billion won (turned black) in 1Q 2023.</li>
</ul>


Sindoh Co Ltd (029530 KS) is the 24th company in our Korea Small Cap Gems series. 
Sindoh has one of the highest net cash/market cap ratios in the entire Korean stock market. Net cash at end of 1Q 2023 was 226% of its market cap. 
Sindoh's operations turned around in 1Q 2023. It had sales of 105.5 billion won (up 26.6% YoY) and operating profit of 9.8 billion won (turned black) in 1Q 2023.


Korea Small Cap Gem #24: Sindoh Co [Net Cash More than 220% of Market Cap]

Cross Asset Strategy

<ul>
<li>As a result of the likely implementation of the changes to the block deal pre-disclosure rules in Korea, numerous block deal sales are likely in the next 2-3 months.</li>
<li>Block deal sales worth 50 billion won or more totaled 5.2 trillion won in 2022. As of 17 July 2023, it was 1.1 trillion won.</li>
<li>We provide shareholding structures of the top 20 stocks in KOSDAQ and a few companies in this list could announce block deal sales in 2H 2023. </li>
</ul>


As a result of the likely implementation of the changes to the block deal pre-disclosure rules in Korea, numerous block deal sales are likely in the next 2-3 months.
Block deal sales worth 50 billion won or more totaled 5.2 trillion won in 2022. As of 17 July 2023, it was 1.1 trillion won.
We provide shareholding structures of the top 20 stocks in KOSDAQ and a few companies in this list could announce block deal sales in 2H 2023. 


Block Deals Pre-Disclosure Rule Changes in Korea Likely to Be Implemented Around October 2023

Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

<ul>
<li>On 9 June, skin and cosmetic treatment play <a href="https://www.smartkarma.com/entities/lutronic-corp" target="_blank" data-smartkarma-citation="entities:2250:1" rel="noopener">Lutronic Corp (085370 KS)</a> announced a Tender Offer from Korean PE outfit Hahn &amp; Company.</li>
<li>After acquiring 19.41% from Lutronic's CEO at ₩ 36,700, Hahn will launch an Offer for all remaining shares at the same price. </li>
<li>This Offer Price is a lifetime high. There is no minimum tendering condition. </li>
</ul>


On 9 June, skin and cosmetic treatment play Lutronic Corp (085370 KS) announced a Tender Offer from Korean PE outfit Hahn &amp; Company.
After acquiring 19.41% from Lutronic's CEO at ₩ 36,700, Hahn will launch an Offer for all remaining shares at the same price. 
This Offer Price is a lifetime high. There is no minimum tendering condition. 


Lutronic (085370 KS): Hahn & Co Tender Offer

South Korea

Osstem Implant Co., Ltd. manufactures dental implant system. The Company also markets dental management software. Osstem Implant provides products for dental surgery and exports abroad.

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Osstem Implant (048260 KS)

KOSPI200 Rebalance in December 2023 Highlighted by Locals

This article discusses the potential inclusions and exclusions of KOSPI200 rebalance in December 2023 (especially those that are highlighted by the...

Douglas Kim

KOSDAQ150 Ad Hoc Index Rebalance Preview: VAT Could Replace Lutronic

HanCo holds over 90% of the shares in Lutronic. if Lutronic is delisted, Value Added Tech could be added to the KOSDAQ150 Index. Value Added Tech...

Brian Freitas

Korea Small Cap Gem #24: Sindoh Co [Net Cash More than 220% of Market Cap]

Sindoh has one of the highest net cash/market cap ratios in the entire Korean stock market. Net cash at end of 1Q 2023 was 226% of its market cap.

Douglas Kim

Block Deals Pre-Disclosure Rule Changes in Korea Likely to Be Implemented Around October 2023

As a result of the likely implementation of the changes to the block deal pre-disclosure rules in Korea, numerous block deal sales are likely in...

Douglas Kim

Lutronic (085370 KS): Hahn & Co Tender Offer

Buy the deal at the price where it makes sense. The current gross/annualised is ~1%/10.5%. If you are a LO investor still holding, and you are...

David Blennerhassett

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