IPOs and Catalysts/Events, Global Equity Research Ltd

Arun George

IPOs and Catalysts/Events

Uncompromised, Independent, Conflict-Free Research

Global Equity Research Ltd

Global Equity Research was started in 2017 by a group of experienced research professionals. It was founded on a passionate belief in the importance and the need for uncompromised, independent, conflict-free research. We aim to provide differentiated and actionable primary and bottom up fundamental research.

Event-Driven

Shinko Electric Industries / Event-Driven

<ul>
<li>After months of speculation, <a href="https://www.smartkarma.com/entities/shinko-electric-industries" target="_blank" data-smartkarma-citation="entities:15066:1" rel="noopener">Shinko Electric Industries (6967 JP)</a> has recommended the JIC alliance’s preconditional tender offer of JPY5,920 per share, an 18.9% premium to the undisturbed price (31 May). </li>
<li>The pre-condition relates to regulatory approvals in Japan, China, Korea, and possibly Vietnam. The offeror may waive the pre-condition. The offer is long-dated and expected to start in August 2024.</li>
<li>The minimum acceptance condition requires a 33.3% minority acceptance rate. Despite the low 7.1% premium to the last close, the offer resulted from a competing bidding process. </li>
</ul>


After months of speculation, Shinko Electric Industries (6967 JP) has recommended the JIC alliance’s preconditional tender offer of JPY5,920 per share, an 18.9% premium to the undisturbed price (31 May). 
The pre-condition relates to regulatory approvals in Japan, China, Korea, and possibly Vietnam. The offeror may waive the pre-condition. The offer is long-dated and expected to start in August 2024.
The minimum acceptance condition requires a 33.3% minority acceptance rate. Despite the low 7.1% premium to the last close, the offer resulted from a competing bidding process. 


Shinko Electric (6967 JP): JIC’s Pre-Conditional Tender Offer at JPY5,920

<ul>
<li>
<a href="https://www.reuters.com/markets/deals/mitsubishi-corp-considering-bid-fujitsus-chip-unit-shinko-electric-sources-2023-10-17/" target="_blank" rel="noopener">Reuters reported</a> that <a href="https://www.smartkarma.com/entities/mitsubishi-corp" target="_blank" data-smartkarma-citation="entities:20668:1" rel="noopener">Mitsubishi Corp (8058 JP)</a> is considering a joint bid for <a href="https://www.smartkarma.com/entities/fujitsu-ltd" target="_blank" data-smartkarma-citation="entities:16968:1" rel="noopener">Fujitsu Ltd (6702 JP)</a>’s 50% stake in <a href="https://www.smartkarma.com/entities/shinko-electric-industries" target="_blank" data-smartkarma-citation="entities:15066:1" rel="noopener">Shinko Electric Industries (6967 JP)</a>. </li>
<li>Fujitsu first flagged a potential stake sale in its 1HFY22 results last October. Previously rumoured suitors include Apollo Global Management, Bain Capital, Dai Nippon Printing, JIC and KKR.</li>
<li>Shinko’s shares are up 73% YTD, which is not excessive compared to <a href="https://www.smartkarma.com/entities/ibiden-co-ltd" target="_blank" data-smartkarma-citation="entities:16630:1" rel="noopener">Ibiden Co Ltd (4062 JP)</a> (up 63.2% YTD). The valuation is undemanding, which facilitates a potential offer.</li>
</ul>



Reuters reported that Mitsubishi Corp (8058 JP) is considering a joint bid for Fujitsu Ltd (6702 JP)’s 50% stake in Shinko Electric Industries (6967 JP). 
Fujitsu first flagged a potential stake sale in its 1HFY22 results last October. Previously rumoured suitors include Apollo Global Management, Bain Capital, Dai Nippon Printing, JIC and KKR.
Shinko’s shares are up 73% YTD, which is not excessive compared to Ibiden Co Ltd (4062 JP) (up 63.2% YTD). The valuation is undemanding, which facilitates a potential offer.


Shinko Electric (6967 JP): Bidders Circle for Fujitsu’s Stake

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>Following its planned section transfer, <a href="https://www.smartkarma.com/entities/lx-semicon-co-ltd" target="_blank" data-smartkarma-citation="entities:20670:1" rel="noopener">LX Semicon (108320 KS)</a> will be deleted from 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> at the close on 2 November and replaced by <a href="https://www.smartkarma.com/entities/nextin-inc" target="_blank" data-smartkarma-citation="entities:36097:1" rel="noopener">Nextin (348210 KS)</a>.</li>
<li>Passive trackers will need to buy over 4.5 days of ADV on <a href="https://www.smartkarma.com/entities/nextin-inc" target="_blank" data-smartkarma-citation="entities:36097:1" rel="noopener">Nextin (348210 KS)</a> and sell over 1.5 days of ADV on <a href="https://www.smartkarma.com/entities/lx-semicon-co-ltd" target="_blank" data-smartkarma-citation="entities:20670:1" rel="noopener">LX Semicon (108320 KS)</a>. </li>
<li>Belonging to the Information Technology sector, there is zero chance of <a href="https://www.smartkarma.com/entities/lx-semicon-co-ltd" target="_blank" data-smartkarma-citation="entities:20670:1" rel="noopener">LX Semicon (108320 KS)</a> being added to the <a href="https://www.smartkarma.com/entities/korea-stock-exchange-kospi-200-index" target="_blank" data-smartkarma-citation="entities:26021:1" rel="noopener">Korea Stock Exchange Kospi 200 Index (KOSPI2 INDEX)</a>.</li>
</ul>


Following its planned section transfer, LX Semicon (108320 KS) will be deleted from the KOSDAQ 150 Index at the close on 2 November and replaced by Nextin (348210 KS).
Passive trackers will need to buy over 4.5 days of ADV on Nextin (348210 KS) and sell over 1.5 days of ADV on LX Semicon (108320 KS). 
Belonging to the Information Technology sector, there is zero chance of LX Semicon (108320 KS) being added to the Korea Stock Exchange Kospi 200 Index (KOSPI2 INDEX).


KOSDAQ150 Ad Hoc Index Rebalance: LX Semicon OUT, Nextin IN

<p>The KRX has announced the list of inclusions and exclusions to the <a href="https://www.smartkarma.com/entities/kosdaq-150-index" target="_blank" data-smartkarma-citation="entities:31077:1" rel="noopener">KOSDAQ 150 Index (KOSDQ150 INDEX)</a> today. The rebalance is effective after the close of trading on 10 June.</p><p>There are 16 inclusions into and exclusions from the index at the June review with an estimated one-way turnover of 7.04%.</p><table class="table table-striped">
<colgroup>
<col>
<col>
<col>
<col>
</colgroup>
<tbody>
<tr>
<td colspan="2" style="text-align: center; width: 233pt;"><h3>Inclusions</h3></td>
<td colspan="2" style="text-align: center; width: 242pt;"><h3>Exclusions</h3></td>
</tr>
<tr>
<td><strong>Code</strong></td>
<td><strong>Name</strong></td>
<td><strong>Code</strong></td>
<td><strong>Name</strong></td>
</tr>
<tr>
<td>015750.KQ</td>
<td>Sungwoo Hitech Co Ltd</td>
<td>018290.KQ</td>
<td>VT GMP Co Ltd</td>
</tr>
<tr>
<td>018000.KQ</td>
<td>Unison Co Ltd</td>
<td>034950.KQ</td>
<td>Korea Ratings Corp</td>
</tr>
<tr>
<td>027360.KQ</td>
<td>AJu IB Investment Co Ltd</td>
<td>035810.KQ</td>
<td>Easy Holdings Co Ltd</td>
</tr>
<tr>
<td>036810.KQ</td>
<td>Fine Semitech Corp</td>
<td>052020.KQ</td>
<td>STCube Inc</td>
</tr>
<tr>
<td>041190.KQ</td>
<td>Woori Technology Investment Co Ltd</td>
<td>052260.KQ</td>
<td>Hyundai BioLand Co Ltd</td>
</tr>
<tr>
<td>053030.KQ</td>
<td>Binex Co Ltd</td>
<td>060570.KQ</td>
<td>Dream Us Co</td>
</tr>
<tr>
<td>082270.KQ</td>
<td>GemVax &amp; KAEL Co Ltd</td>
<td>065660.KQ</td>
<td>Anterogen Co Ltd</td>
</tr>
<tr>
<td>100090.KQ</td>
<td>Samkang M&amp;T Co Ltd</td>
<td>082920.KQ</td>
<td>Vitzrocell Co Ltd</td>
</tr>
<tr>
<td>131290.KQ</td>
<td>TSE Co Ltd</td>
<td>092730.KQ</td>
<td>NeoPharm Co Ltd</td>
</tr>
<tr>
<td>131970.KQ</td>
<td>Tesna Inc</td>
<td>143240.KQ</td>
<td>Saramin HR Co Ltd</td>
</tr>
<tr>
<td>140860.KQ</td>
<td>Park Systems Corp</td>
<td>194700.KQ</td>
<td>Novarex Co Ltd</td>
</tr>
<tr>
<td>166090.KQ</td>
<td>Hana Materials Inc</td>
<td>214370.KQ</td>
<td>Caregen Co Ltd</td>
</tr>
<tr>
<td>175250.KQ</td>
<td>Icure Pharmaceutical Inc</td>
<td>215000.KQ</td>
<td>Golfzon Co Ltd</td>
</tr>
<tr>
<td>194480.KQ</td>
<td>Devsisters Corp</td>
<td>237880.KQ</td>
<td>Clio Cosmetics Co Ltd</td>
</tr>
<tr>
<td>222800.KQ</td>
<td>Simmtech Co Ltd</td>
<td>239610.KQ</td>
<td>HL Science Co Ltd</td>
</tr>
<tr>
<td>323990.KQ</td>
<td>Vaxcell Bio Therapeutics</td>
<td>243840.KQ</td>
<td>Shin Heung Energy &amp; Electronics Co Ltd</td>
</tr>
</tbody>
</table><p>There are 12 trading days to implementation of the changes and there are a lot of additions and deletions that have over 2 days of ADV to trade. There will be a lot of action in the next few days on the names with higher ADV to trade.</p><p>With short selling limited to the constituents 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 (KOSDQ150 INDEX)</a>, shorting the inclusions will be tough while selling/shorting the deletions is a lot easier since they are current index constituents. The inclusions could outperform the deletions till a couple of days before implementation date, while there could be a high risk/reward reverse trade if the outperformance is significant.</p>

The KRX has announced the list of inclusions and exclusions to the KOSDAQ 150 Index (KOSDQ150 INDEX) today. The rebalance is effective after the close of trading on 10 June.There are 16 inclusions into and exclusions from the index at the June review with an estimated one-way turnover of 7.04%.








Inclusions
Exclusions


Code
Name
Code
Name


015750.KQ
Sungwoo Hitech Co Ltd
018290.KQ
VT GMP Co Ltd


018000.KQ
Unison Co Ltd
034950.KQ
Korea Ratings Corp


027360.KQ
AJu IB Investment Co Ltd
035810.KQ
Easy Holdings Co Ltd


036810.KQ
Fine Semitech Corp
052020.KQ
STCube Inc


041190.KQ
Woori Technology Investment Co Ltd
052260.KQ
Hyundai BioLand Co Ltd


053030.KQ
Binex Co Ltd
060570.KQ
Dream Us Co


082270.KQ
GemVax &amp; KAEL Co Ltd
065660.KQ
Anterogen Co Ltd


100090.KQ
Samkang M&amp;T Co Ltd
082920.KQ
Vitzrocell Co Ltd


131290.KQ
TSE Co Ltd
092730.KQ
NeoPharm Co Ltd


131970.KQ
Tesna Inc
143240.KQ
Saramin HR Co Ltd


140860.KQ
Park Systems Corp
194700.KQ
Novarex Co Ltd


166090.KQ
Hana Materials Inc
214370.KQ
Caregen Co Ltd


175250.KQ
Icure Pharmaceutical Inc
215000.KQ
Golfzon Co Ltd


194480.KQ
Devsisters Corp
237880.KQ
Clio Cosmetics Co Ltd


222800.KQ
Simmtech Co Ltd
239610.KQ
HL Science Co Ltd


323990.KQ
Vaxcell Bio Therapeutics
243840.KQ
Shin Heung Energy &amp; Electronics Co Ltd


There are 12 trading days to implementation of the changes and there are a lot of additions and deletions that have over 2 days of ADV to trade. There will be a lot of action in the next few days on the names with higher ADV to trade.With short selling limited to the constituents of the KOSDAQ 150 Index (KOSDQ150 INDEX), shorting the inclusions will be tough while selling/shorting the deletions is a lot easier since they are current index constituents. The inclusions could outperform the deletions till a couple of days before implementation date, while there could be a high risk/reward reverse trade if the outperformance is significant.

KOSDAQ150 Index Rebalance: 16 Changes & Large Turnover

Korea / Special Sits, Pairs, Index Rebalancing, Clepsydra Capital

Sanghyun Park

Korea / Special Sits, Pairs, Index Rebalancing

Clepsydra Capital

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

AnnouncementThe KRX has just announced the results of the KOSDAQ 150 semi-annual rebalancing. The KRX will reflect the changes in the index calculation at the close of June 10. 16 in total newly make KOSPI 200, while 16 names leave the index.Ecopro HN (new listing) will be added to the index on May 31 but will be deleted on June 11.








KOSDAQ 150 additions
Ticker
KOSDAQ 150 deletions
Ticker


SamKang M&amp;T Co., Ltd
100090
HL Science Co Ltd
239610


Unison Co Ltd
018000
Easy Holdings Co Ltd
035810


Sungwoo Hitech Co Ltd
015750
VT GMP Co Ltd
018290


Icure Pharmaceutical Inc
175250
STCube Inc
052020


Vaxcell Bio Therapeutics
323990
Dream Us Co
060570


Binex Co Ltd
053030
Saramin HR Co Ltd
143240


AJu IB Investment Co Ltd
027360
Shin Heung Energy &amp; Electronics Co Ltd
243840


Woori Technology Investment Co., Ltd.
041190
Vitzrocell Co Ltd
082920


Gemvax &amp; Kael Co Ltd
082270
Hyundai BioLand Co Ltd
052260


Devsisters Corp
194480
Anterogen Co Ltd
065660


Tesna Inc
131970
NeoPharm Co., Ltd.
092730


Simmtech Co Ltd
222800
Novarex Co Ltd
194700


Park Systems Corp
140860
Caregen Co Ltd
214370


TSE Co Ltd
131290
Golfzon Co Ltd
215000


Hana Materials Inc
166090
Clio Cosmetics Co Ltd
237880


Fine Semitech Corp
036810
Korea Ratings Corporation
034950

Source: KRX

Passive flow estimationVaxcell Bio will enjoy the largest passive inflow estimated at ₩41.7B, followed by Gemvax with ₩32.5B. Still, Park Systems will likely welcome the biggest impact as its estimated passive inflow takes 4.53 days to buy. Gemvax and Fine Semitech follow with 4.24 days and 3.55 days to cover, respectively.








KOSDAQ 150 adds - passive inflow
Ticker
Estimated passive inflow
Days to buy


SamKang M&amp;T Co., Ltd
100090
₩19.0B
1.80x


Unison Co Ltd
018000
₩19.6B
2.83x


Sungwoo Hitech Co Ltd
015750
₩12.7B
2.52x


Icure Pharmaceutical Inc
175250
₩13.3B
0.99x


Vaxcell Bio Therapeutics
323990
₩41.7B
0.87x


Binex Co Ltd
053030
₩27.1B
0.30x


AJu IB Investment Co Ltd
027360
₩14.4B
0.43x


Woori Technology Investment Co., Ltd.
041190
₩20.2B
0.21x


Gemvax &amp; Kael Co Ltd
082270
₩32.5B
4.24x


Nanos Co Ltd
151910
₩12.9B
0.60x


Tesna Inc
131970
₩23.0B
2.11x


Simmtech Co Ltd
222800
₩18.6B
1.62x


Park Systems Corp
140860
₩27.1B
4.53x


TSE Co Ltd
131290
₩10.6B
2.03x


Hana Materials Inc
166090
₩20.0B
2.09x


Fine Semitech Corp
036810
₩18.0B
3.55x

Source: KRX &amp; FnGuide

The biggest loser will be Anterogen, likely suffering a passive outflow of ₩19.0B. Golfzon and STCube will also see a substantial amount go away as a result of the rebalancing. But Caregen should be the one to trade as it has the highest days-to-cover ratio at 8.55x. Korea Ratings and STCube also require 5~6 days to cover.








KOSDAQ 150 deletes - passive outflow
Ticker
Estimated passive outflow
Days to cover


HL Science Co Ltd
239610
₩4.0B
3.19x


Easy Holdings Co Ltd
035810
₩8.0B
1.09x


VT GMP Co Ltd
018290
₩7.5B
1.38x


STCube Inc
052020
₩11.0B
5.77x


Dream Us Co
060570
₩7.5B
3.22x


Saramin HR Co Ltd
143240
₩7.5B
5.46x


Shin Heung Energy &amp; Electronics Co Ltd
243840
₩6.0B
1.30x


Vitzrocell Co Ltd
082920
₩8.0B
4.97x


Hyundai BioLand Co Ltd
052260
₩10.5B
4.20x


Anterogen Co Ltd
065660
₩19.0B
1.64x


NeoPharm Co., Ltd.
092730
₩7.0B
2.29x


Novarex Co Ltd
194700
₩9.0B
1.71x


Caregen Co Ltd
214370
₩9.0B
8.55x


Golfzon Co Ltd
215000
₩11.5B
1.24x


Clio Cosmetics Co Ltd
237880
₩5.0B
0.79x


Korea Ratings Corporation
034950
₩4.0B
6.98x

Source: KRX &amp; FnGuide

Price performanceWe see a mixed performance among the additions on a year-to-date basis. Only 6 of the 16 additions have a positive YTD return.Again, we see a mixed performance among the deletions as well. Only 8 of the 16 deletions have a negative YTD return. Short interestApparently, short-selling actions haven't begun yet. HL Science has the highest ratio of short interest to float shares, but it is still 3% with 1.88 days to cover. STCube faces the longest days to cover at 2.74x. But many investors seem to be in line to short the deletes as most of them carry a pretty heavy loan balance, except for a few names.











KOSDAQ 150 deletes - short interest
Ticker
Short interest to float shares
Days to cover
Loan balance to float shares
Loan balance to ADTV
30-day average daily trade value


HL Science Co Ltd
239610
3.00%
1.88x
9.61%
6.00x
₩1.3B


Easy Holdings Co Ltd
035810
2.79%
0.35x
16.82%
2.12x
₩7.4B


VT GMP Co Ltd
018290
1.45%
0.37x
11.02%
2.78x
₩5.5B


STCube Inc
052020
2.58%
2.74x
6.62%
7.03x
₩1.9B


Dream Us Co
060570
1.00%
0.97x
4.36%
4.26x
₩2.3B


Saramin HR Co Ltd
143240
0.67%
0.84x
5.27%
6.63x
₩1.4B


Shin Heung Energy &amp; Electronics Co Ltd
243840
0.79%
0.40x
6.27%
3.17x
₩4.6B


Vitzrocell Co Ltd
082920
0.86%
0.69x
6.20%
4.95x
₩1.6B


Hyundai BioLand Co Ltd
052260
1.21%
1.43x
5.03%
5.91x
₩2.5B


Anterogen Co Ltd
065660
2.37%
0.43x
20.41%
3.69x
₩11.6B


NeoPharm Co., Ltd.
092730
1.94%
0.43x
26.48%
5.91x
₩3.1B


Novarex Co Ltd
194700
0.39%
0.21x
2.96%
1.59x
₩5.3B


Caregen Co Ltd
214370
0.23%
1.31x
1.68%
9.54x
₩1.1B


Golfzon Co Ltd
215000
0.65%
0.18x
6.84%
1.85x
₩9.2B


Clio Cosmetics Co Ltd
237880
0.69%
0.15x
6.08%
1.35x
₩6.3B


Korea Ratings Corporation
034950
2.35%
0.92x
9.01%
3.53x
₩0.6B

Source: KRX



KOSDAQ 150 Rebalancing Results: Changes, Passive Flow, & Trade Approach

South Korea

Simmtech Co., Ltd. manufactures Printed Circuit Board (PCB) modules.  The Company's Memory Module PCBs are used to expand the semiconductor memory and the Mobile Phone Boards are used in communication devices such as mobile phones and navigation devices.

Price Gauge
52-week Range	0.00 - 0.00
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SIMMTECH Co Ltd (222800 KS)

Shinko Electric (6967 JP): JIC’s Pre-Conditional Tender Offer at JPY5,920

The offer is long-dated. The minimum acceptance condition requires a 33.3% minority acceptance rate. Despite the low premium to the last close, the...

Arun George

Shinko Electric (6967 JP): Bidders Circle for Fujitsu’s Stake

Mitsubishi Corp is the latest rumoured suitor. Shinko’s shares are up 73% YTD, which is not excessive compared to Ibiden (63.2% YTD). The valuation...

Arun George

KOSDAQ150 Ad Hoc Index Rebalance: LX Semicon OUT, Nextin IN

Nextin will replace LX Semicon in the KOSDAQ150 Index at the close on 2 Nov. Passives need to buy over 4.5x ADV on Nextin and sell over 1.5x ADV on...

Brian Freitas

KOSDAQ150 Index Rebalance: 16 Changes & Large Turnover

There are 16 changes to the KOSDAQ150 index resulting in a one-way turnover of 7.04%. The impact on the exclusions is a lot higher than on the...

Brian Freitas

KOSDAQ 150 Rebalancing Results: Changes, Passive Flow, & Trade Approach

The KRX has just announced the results of the KOSPI 200 semi-annual rebalancing. This post examines the passive flow of the adds and deletes as...

Sanghyun Park

Price Gauge

52-week Range

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