Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

Event-Driven

Lotte Non Life Insurance Co / Event-Driven

<ul>
<li>It was reported in numerous local media that the sale process of Lotte Non Life Insurance Co (000400 KS) could start in October 2023.</li>
<li>There are four companies including Shinhan Financial (055550 KS), Hana Financial (086790 KS), Woori Financial Group (316140 KS), and Kyobo Life Insurance that may be interested in acquiring Lotte Non-Life Insurance. </li>
<li>Minority shareholders are not likely to benefit from this potential huge management M&amp;A premium of Lotte Non-Life Insurance. </li>
</ul>


It was reported in numerous local media that the sale process of Lotte Non Life Insurance Co (000400 KS) could start in October 2023.
There are four companies including Shinhan Financial (055550 KS), Hana Financial (086790 KS), Woori Financial Group (316140 KS), and Kyobo Life Insurance that may be interested in acquiring Lotte Non-Life Insurance. 
Minority shareholders are not likely to benefit from this potential huge management M&amp;A premium of Lotte Non-Life Insurance. 


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

<ul>
<li>The <a href="https://www.smartkarma.com/entities/mirae-asset-tiger-top-10-etf" target="_blank" data-smartkarma-citation="entities:36042:1" rel="noopener">Mirae Asset Tiger Top 10 ETF (292150 KS)</a> tracks the FnGuide Top 10 Index and has an AUM of over US$1bn.</li>
<li>We currently forecast one potential change at the next rebalance in December. There is another set of changes that could also take place.</li>
<li>There has been a big increase in short interest on a couple of stocks while the rise has been more gradual on the other stocks.</li>
</ul>


The Mirae Asset Tiger Top 10 ETF (292150 KS) tracks the FnGuide Top 10 Index and has an AUM of over US$1bn.
We currently forecast one potential change at the next rebalance in December. There is another set of changes that could also take place.
There has been a big increase in short interest on a couple of stocks while the rise has been more gradual on the other stocks.


FnGuide Top10 Index Rebalance Preview: Good Historical Performance; One Potential Change in December

Equity Bottom-Up

<ul>
<li>We discuss the importance of Hyundai Motor generating nearly 11.5 trillion won in operating profit in 2023, which is likely to be the highest among all Korean companies. </li>
<li>Hyundai Motor and Kia Corp combined are expected to generate operating profit of 20.7 trillion won in 2023, representing 57% of total operating profit of the top 10 Korean companies.</li>
<li>In 2023, Hyundai Motor plans a full-scale world-wide roll-out of its EV Ioniq 6. Furthermore, it set a dividend payout ratio at 25% or higher.</li>
</ul>


We discuss the importance of Hyundai Motor generating nearly 11.5 trillion won in operating profit in 2023, which is likely to be the highest among all Korean companies. 
Hyundai Motor and Kia Corp combined are expected to generate operating profit of 20.7 trillion won in 2023, representing 57% of total operating profit of the top 10 Korean companies.
In 2023, Hyundai Motor plans a full-scale world-wide roll-out of its EV Ioniq 6. Furthermore, it set a dividend payout ratio at 25% or higher.


Hyundai Motor: Highest Operating Profit Among All Korean Companies in 2023

Korea / Special Situations, Clepsydra Capital

Sanghyun Park

Korea / Special Situations

Korea / Special Sits, Pairs, Index Rebalancing

Clepsydra Capital

Investigate special situations, pairs, and index rebalancing trades in Korea.

<ul>
<li>Samsung SDI and LG Chem are expected to be newly included in the index, while Hana Financial and KT&amp;G Corporation are predicted to be excluded.</li>
<li>The correlation between the price movement and the flow direction on the rebalancing trading day of constituent changes from the past reviews was quite high.</li>
<li>We can set the price impact expectation for the upcoming review even more aggressively, given that the size of the flow x DTV is more significant than in previous cases.</li>
</ul>


Samsung SDI and LG Chem are expected to be newly included in the index, while Hana Financial and KT&amp;G Corporation are predicted to be excluded.
The correlation between the price movement and the flow direction on the rebalancing trading day of constituent changes from the past reviews was quite high.
We can set the price impact expectation for the upcoming review even more aggressively, given that the size of the flow x DTV is more significant than in previous cases.


Price/Flow Impact on Four Constituent Changes in KODEX Top 5 Plus ETF Rebalancing in June

Celltrion Healthcare   / Equity Bottom-Up

<ul>
<li>In this insight, we discuss the alpha generation through companies that have been buying back their shares in the Korean stock market in 1Q 2023.</li>
<li>We provide a list of 23 stocks in the Korean stock market that have announced share buyback programs in 1Q 2023.</li>
<li>Some of the larger companies (with more than 1 trillion won in market cap) that have recently announced share buybacks including Celltrion Healthcare have been outperforming the market.</li>
</ul>


In this insight, we discuss the alpha generation through companies that have been buying back their shares in the Korean stock market in 1Q 2023.
We provide a list of 23 stocks in the Korean stock market that have announced share buyback programs in 1Q 2023.
Some of the larger companies (with more than 1 trillion won in market cap) that have recently announced share buybacks including Celltrion Healthcare have been outperforming the market.


Alpha Generation Through Share Buybacks in Korea: 1Q 2023

South Korea

Shinhan Financial Group Co., Ltd., a holding company, provides a full range of consumer and commercial banking-related financial services.  The company's main businesses include banking, securities brokerage, trust banking, and assets management to individuals, businesses, and other financial institutions.

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Shinhan Financial Group Adr (SHG US)

Lotte Non-Life Insurance: Who Will Buy?

There are four companies including Shinhan Financial, Hana Financial, Woori Financial Group, and Kyobo Life Insurance that may be interested in...

Douglas Kim

FnGuide Top10 Index Rebalance Preview: Good Historical Performance; One Potential Change in December

A long add/short delete trade has performed well historically. Currently, there is one add/delete pair in Dec; that could increase to two. Short...

Brian Freitas

Hyundai Motor: Highest Operating Profit Among All Korean Companies in 2023

In this insight, we discuss the importance of Hyundai Motor generating nearly 11.5 trillion won in operating profit in 2023, which is likely to be...

Douglas Kim

Price/Flow Impact on Four Constituent Changes in KODEX Top 5 Plus ETF Rebalancing in June

This post presents a Long Short basket trade idea on the four potential constituent changes in the KODEX Top 5 Plus TR ETF rebalancing in June.

Sanghyun Park

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