Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

Thematic (Sector/Industry)

There were four new<a href="http://www.koreaherald.com/view.php?ud=20211013001007" target="_blank" rel="noopener"> metaverse related ETFs</a> were launched in Korea on 13 October for the first time ever in the Korean stock market. The first three ETFs (KBSTAR iSelect Metaverse, Hanaro Fn K-Metaverse MZ, and Tiger Fn Metaverse) are passive funds. KODEX K-Metaverse Active is an active fund. These four new ETFs are as follows:1) Tiger Fn Metaverse (managed by Mirae Asset Global Investment)2) KBSTAR iSelect Metaverse (managed by KB Asset Management)3) Hanaro Fn K-Metaverse MZ (managed by NH Amundi Asset Management)4) KODEX K-Metaverse Active  (managed by Samsung Asset Management)The stocks that are included in these metaverse related names also tend to be higher beta ones that could perform much better in a rising market environment. However, because these stocks tend to be higher beta stocks with high valuation multiples, it could be challenging for these stocks to outperform the market when the market downturn occurs.

There were four new metaverse related ETFs were launched in Korea on 13 October for the first time ever in the Korean stock market. The first three ETFs (KBSTAR iSelect Metaverse, Hanaro Fn K-Metaverse MZ, and Tiger Fn Metaverse) are passive funds. KODEX K-Metaverse Active is an active fund. These four new ETFs are as follows:1) Tiger Fn Metaverse (managed by Mirae Asset Global Investment)2) KBSTAR iSelect Metaverse (managed by KB Asset Management)3) Hanaro Fn K-Metaverse MZ (managed by NH Amundi Asset Management)4) KODEX K-Metaverse Active  (managed by Samsung Asset Management)The stocks that are included in these metaverse related names also tend to be higher beta ones that could perform much better in a rising market environment. However, because these stocks tend to be higher beta stocks with high valuation multiples, it could be challenging for these stocks to outperform the market when the market downturn occurs. 

Listing of 4 New Metaverse Related ETFs in Korea

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In this insight, we provide 8 examples of how metaverse is revolutionizing numerous businesses in Korea. We also provide a list of Korean companies that are actively trying to expand their metaverse businesses. Because metaverse is in the initial stages of growth for many of these businesses, their contributions to their companies' sales and profits may not be meaningful right now. However, they are experiencing a significant popularity. Metaverse is certainly one of the key industry trends that is likely to have a multi-years impact on the companies mentioned in this insight.
The term "metaverse" was first coined by the writer Neal Stephenson in his 1992 science fiction novel <a href="https://digiday.com/marketing/wtf-is-the-metaverse/" target="_blank" rel="noopener">Snow Crash </a>where metaverse refers to a popular virtual world where the main characters are equipped with augmented technologies. 
Metaverse refers to a computerized domain where the users can share their virtual encounters. Still in the beginning phases of advancement, metaverse has become more important in key industries industries including technology, media, and telecom. In addition, metaverse is also impacting other major industries such as retail, gaming, and fashion. 
Metaverse will empower its users to be more engaged in online shopping, web-based media, entertainment, and share virtual encounters. Metaverse is often considered as a "coming together" of numerous technologies including augmented reality (AR), virtual reality (VR), 5G, smartphones, and distributed computing. Up until recently, the gaming industry has been driving the demand for metaverse. However, greater improvements in technologies have allowed metaverse to flourish in other industries as well. 
South Korea is one of the key countries driving the metaverse industry globally. This is one of the leaders in this area and there will be numerous, interesting opportunities involving metaverse in Korea. 
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In this insight, we provide 8 examples of how metaverse is revolutionizing numerous businesses in Korea. We also provide a list of Korean companies that are actively trying to expand their metaverse businesses. Because metaverse is in the initial stages of growth for many of these businesses, their contributions to their companies' sales and profits may not be meaningful right now. However, they are experiencing a significant popularity. Metaverse is certainly one of the key industry trends that is likely to have a multi-years impact on the companies mentioned in this insight.
The term "metaverse" was first coined by the writer Neal Stephenson in his 1992 science fiction novel Snow Crash where metaverse refers to a popular virtual world where the main characters are equipped with augmented technologies. 
Metaverse refers to a computerized domain where the users can share their virtual encounters. Still in the beginning phases of advancement, metaverse has become more important in key industries industries including technology, media, and telecom. In addition, metaverse is also impacting other major industries such as retail, gaming, and fashion. 
Metaverse will empower its users to be more engaged in online shopping, web-based media, entertainment, and share virtual encounters. Metaverse is often considered as a "coming together" of numerous technologies including augmented reality (AR), virtual reality (VR), 5G, smartphones, and distributed computing. Up until recently, the gaming industry has been driving the demand for metaverse. However, greater improvements in technologies have allowed metaverse to flourish in other industries as well. 
South Korea is one of the key countries driving the metaverse industry globally. This is one of the leaders in this area and there will be numerous, interesting opportunities involving metaverse in Korea. 


How Is Metaverse Revolutionizing Businesses in Korea? Virtual Humans Rozy & Lucy Are Just a Start

Cross Asset Strategy

<blockquote><a href="https://twitter.com/TimSweeneyEpic/status/1432647669864878083?ref_src=twsrc%5Etfw%7Ctwcamp%5Etweetembed%7Ctwterm%5E1432647669864878083%7Ctwgr%5E%7Ctwcon%5Es1_&amp;ref_url=https%3A%2F%2Fwww.pcgamer.com%2Fsouth-korea-passes-law-with-major-implications-for-apple-vs-epic%2F" target="_blank" rel="noopener">Korea</a> is first in open platforms! Korea has rejected digital commerce monopolies and recognized open platforms as a right. This marks a major milestone in the 45-year history of personal computing. It began in Cupertino, but the forefront today is in Seoul. (Tim Sweeney - Founder of Epic Games)</blockquote>In a landmark case (an amendment of the Telecommunications Business Act), the <a href="https://www.wsj.com/articles/google-apple-hit-in-south-korea-by-worlds-first-law-ending-their-dominance-over-app-store-payments-11630403335" target="_blank" rel="noopener">Korean government</a> announced on 31 August that Google and Apple will need to open their app stores to alternative payment systems in South Korea. This change in regulation is likely to negatively impact Google and Apple's lucrative commissions on digital sales.A new bill was passed by the Korean National Assembly on 31 August which will significantly reduce Google and Apple's dominance of digital sales on their app platforms. The final step is for President Moon to sign this bill but it is almost a near certainty that he will sign this bill. The following are the major companies/sectors that could benefit from the change in law:<ul>
<li><a href="https://www.smartkarma.com/entities/naver-corp" target="_blank" data-smartkarma-citation="entities:16029:1" rel="noopener">Naver Corp (035420 KS)</a></li>
<li><a href="https://www.smartkarma.com/entities/kakao-corp" target="_blank" data-smartkarma-citation="entities:15002:1" rel="noopener">Kakao Corp (035720 KS)</a></li>
<li>Korean Telcos</li>
<li>Korean Game Companies</li>
<li>Korean Entertainment/Music/Movies/Drama Companies </li>
</ul>

Korea is first in open platforms! Korea has rejected digital commerce monopolies and recognized open platforms as a right. This marks a major milestone in the 45-year history of personal computing. It began in Cupertino, but the forefront today is in Seoul. (Tim Sweeney - Founder of Epic Games)In a landmark case (an amendment of the Telecommunications Business Act), the Korean government announced on 31 August that Google and Apple will need to open their app stores to alternative payment systems in South Korea. This change in regulation is likely to negatively impact Google and Apple's lucrative commissions on digital sales.A new bill was passed by the Korean National Assembly on 31 August which will significantly reduce Google and Apple's dominance of digital sales on their app platforms. The final step is for President Moon to sign this bill but it is almost a near certainty that he will sign this bill. The following are the major companies/sectors that could benefit from the change in law:
Naver Corp (035420 KS)
Kakao Corp (035720 KS)
Korean Telcos
Korean Game Companies
Korean Entertainment/Music/Movies/Drama Companies 


Korean Government Forces Google & Apple To Open Their App Stores to Alternative Payments

Technical Analyst, Vermilion Research

Joe Jasper

Technical Analyst

Technical and Quantitative Research

Vermilion Research

Vermilion’s objective is to deliver timely, actionable, and unique technical research to professional investors through the application of our various technical indicators.

Our research strategists seek to highlight securities which we believe are at major inflection points, based on our various technical and quantitative indicators, and offer asymmetric risk/return profiles. Our unique research methodology, centered on relative strength, enables our strategists to deliver superior investment recommendations.

Our process begins by organizing the universe of actively traded stocks into discrete sectors, then into industry groups. We then apply our technical and quantitative tools to identify developing price trends. Once attractive trends are identified within a selected sector or group, we screen for individual stocks which we believe offer the best risk/reward profile. We provide a historical perspective that often reveals, through our long-term charts, how price patterns often repeat themselves over time.

Technical Analysis

MSCI Emerging Markets Index / Technical Analysis

We are no longer recommending an overweight to China (MSCI China) due to recent RS deterioration. Our favorite countries remain Taiwan (TAIEX) and India (SENSEX), while Brazil (Bovespa) and South Korea (KOSPI) display improving price and RS trends -- add exposure. MSCI EM Technology and Materials are our top two Sector overweights. Additionally, the EM Health Care Sector shows bullish price and RS inflections, making it a timely Sector to add exposure to at current levels.

We are no longer recommending an overweight to China (MSCI China) due to recent RS deterioration. Our favorite countries remain Taiwan (TAIEX) and India (SENSEX), while Brazil (Bovespa) and South Korea (KOSPI) display improving price and RS trends -- add exposure. MSCI EM Technology and Materials are our top two Sector overweights. Additionally, the EM Health Care Sector shows bullish price and RS inflections, making it a timely Sector to add exposure to at current levels.

Overweight EM Vs. EAFE; Dollar Weakness Continues

Our bullish outlook continues to be supported by ongoing positive market dynamics and the absence of breakdowns for major indexes around the globe. The path of least resistance remains higher and we continue to believe a melt-up is likely in the weeks/months ahead. The global Technology, Discretionary, and Manufacturing Sectors remain leadership -- add exposure/remain overweight. The Financial Sector has been playing catch-up and continues to show signs of price and RS bottoms as expectations rise for a global recovery -- add exposure.

Our bullish outlook continues to be supported by ongoing positive market dynamics and the absence of breakdowns for major indexes around the globe. The path of least resistance remains higher and we continue to believe a melt-up is likely in the weeks/months ahead. The global Technology, Discretionary, and Manufacturing Sectors remain leadership -- add exposure/remain overweight. The Financial Sector has been playing catch-up and continues to show signs of price and RS bottoms as expectations rise for a global recovery -- add exposure.

Global Equity Strategy: Santa Claus Rally Underway

South Korea

Pearl Abyss Corp. operates as a computer games making company. The Company offers games development, games exporting, and other services. Pearl Abyss serves customers worldwide.

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Pearl Abyss (263750 KS)

How Is Metaverse Revolutionizing Businesses in Korea? Virtual Humans Rozy & Lucy Are Just a Start

In this insight, we provide 8 examples of how metaverse is revolutionizing businesses in Korea. We also provide a list of Korean companies that are...

Douglas Kim

Korean Government Forces Google & Apple To Open Their App Stores to Alternative Payments

In a landmark case, the Korean government announced on 31 August that Google and Apple will need to open their app stores to alternative payment...

Douglas Kim

Overweight EM Vs. EAFE; Dollar Weakness Continues

Our favorite countries remain Taiwan (TAIEX) and India (SENSEX), while Brazil (Bovespa) and South Korea (KOSPI) display improving price and RS...

Vermilion Research

Global Equity Strategy: Santa Claus Rally Underway

Our bullish outlook continues to be supported by ongoing positive market dynamics and the absence of breakdowns across indexes, and we continue to...

Vermilion Research

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52-week Range

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