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.

Event-Driven

<ul>
<li>Korea’s seeing classic sector rotation: H1 hot money is exiting shipbuilding and defense ETFs, with 7% of AUM out in a week, as traders hunt the next wave of flows.</li>
<li>Short-Term plays focus on two angles: policy-driven sectors like retail/dividends, and less-run names. Secondary batteries lead flows, topping local sector ETF net inflows lately.</li>
<li>Sector rotation trades focus on Sept 11 rebalances: TIGER Secondary Battery TOP 10 and KRX Semis. Long-short setups on top names plus rotation flows could spark notable price moves.</li>
</ul>


Korea’s seeing classic sector rotation: H1 hot money is exiting shipbuilding and defense ETFs, with 7% of AUM out in a week, as traders hunt the next wave of flows.
Short-Term plays focus on two angles: policy-driven sectors like retail/dividends, and less-run names. Secondary batteries lead flows, topping local sector ETF net inflows lately.
Sector rotation trades focus on Sept 11 rebalances: TIGER Secondary Battery TOP 10 and KRX Semis. Long-short setups on top names plus rotation flows could spark notable price moves.


Tracing Korea’s Flow Dynamics: Short-Term Sector Rotation Plays

<ul>
<li>Battery-Sector rotation is heating up in Korea as active ETFs sharply boost LG Energy Solution and Samsung SDI, signaling renewed sector focus amid ESS growth and easing valuation pressures.</li>
<li>Watch for supply-demand dislocations during battery-sector ETF rebalances; top-heavy names may see concentrated flows, amplifying trading intensity and driving larger-than-normal price swings.</li>
<li>The 25% cap reversion could move LG Energy Solution down and SK Innovation up ~5pp, with flows hitting -0.2x/+0.6x DTV, potentially amplified by aggressive sector inflows.</li>
</ul>


Battery-Sector rotation is heating up in Korea as active ETFs sharply boost LG Energy Solution and Samsung SDI, signaling renewed sector focus amid ESS growth and easing valuation pressures.
Watch for supply-demand dislocations during battery-sector ETF rebalances; top-heavy names may see concentrated flows, amplifying trading intensity and driving larger-than-normal price swings.
The 25% cap reversion could move LG Energy Solution down and SK Innovation up ~5pp, with flows hitting -0.2x/+0.6x DTV, potentially amplified by aggressive sector inflows.


Playing Korea’s Hot Secondary Battery Sector Rotation

Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

Douglas Research Advisory

<ul>
<li>On 30 July, SK Innovation (096770 KS) announced that it plans to merge its subsidiaries SK On and SK Enmove. The merged company will be launched on 1 November.</li>
<li><strong>SK Group has announced a massive 8 trillion won capital raise plan involving this deal including paid-in capital increase of 2 trillion won for SK Innovation and SK On each. </strong></li>
<li>We provide three major reasons why we are negative on this merger/capital raise. </li>
</ul>


On 30 July, SK Innovation (096770 KS) announced that it plans to merge its subsidiaries SK On and SK Enmove. The merged company will be launched on 1 November.
SK Group has announced a massive 8 trillion won capital raise plan involving this deal including paid-in capital increase of 2 trillion won for SK Innovation and SK On each. 
We provide three major reasons why we are negative on this merger/capital raise. 


A Merger Between SK On and SK Enmove + A Massive 8 Trillion Won in Capital Raise

<ul>
<li>Facing tough fundraising, SK avoided a rights issue, opting for a complex deal to limit dilution and ease investor worries.</li>
<li>It all hinges on how the market views SK On’s cleanup plus Enmove’s steady cash flow—SK Innovation looks oversold, making this a decent long setup.</li>
<li>Enmove’s stable earnings boost SK On’s P&amp;L, likely triggering a rerate for SK Innovation and setting up a classic NAV compression trade.</li>
</ul>


Facing tough fundraising, SK avoided a rights issue, opting for a complex deal to limit dilution and ease investor worries.
It all hinges on how the market views SK On’s cleanup plus Enmove’s steady cash flow—SK Innovation looks oversold, making this a decent long setup.
Enmove’s stable earnings boost SK On’s P&amp;L, likely triggering a rerate for SK Innovation and setting up a classic NAV compression trade.


SK Innovation Cleanup: Watch Out for a Classic NAV Compression Play

<ul>
<li>SK Innovation is considering on using its treasury shares to inject capital into its EV battery making subsidiary SK On. </li>
<li>The appraisal rights exercise price is 111,943 won per share (15% higher than current price). Many minority shareholders are likely to exercise their appraisal rights in SK Innovation.</li>
<li>We remain Bearish on SK Innovation. We continue to be negative on the SK Innovation and SK E&amp;S merger. Plus, we are concerned about the continued weakness at SK On. </li>
</ul>


SK Innovation is considering on using its treasury shares to inject capital into its EV battery making subsidiary SK On. 
The appraisal rights exercise price is 111,943 won per share (15% higher than current price). Many minority shareholders are likely to exercise their appraisal rights in SK Innovation.
We remain Bearish on SK Innovation. We continue to be negative on the SK Innovation and SK E&amp;S merger. Plus, we are concerned about the continued weakness at SK On. 


SK Innovation: Considering on Using Its Treasury Shares to Inject Capital into SK On

South Korea

SK Innovation Co., Ltd. refines, markets, and distributes oil.  The Company produces a variety of petroleum products, such as gasoline, kerosene, liquefied petroleumgas (LPG), and diesel oil.  SK Energy also manufactures petrochemical p roducts, including paraxylene, synthetic resins, styrene monomer, and ethylene.

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SK Innovation (096770 KS)

Tracing Korea’s Flow Dynamics: Short-Term Sector Rotation Plays

This post traces liquidity waves in the Korean stock market, highlighting short-term plays driven by sector rotation and flow dynamics.

Sanghyun Park

Playing Korea’s Hot Secondary Battery Sector Rotation

This post covers how to play the secondary battery sector rotation — one of the most talked-about themes in the Korean market right now.

Sanghyun Park

A Merger Between SK On and SK Enmove + A Massive 8 Trillion Won in Capital Raise

SK Innovation announced that it plans to merge its subsidiaries SK On and SK Enmove.We provide three major reasons why we are Negative on this...

Douglas Kim

SK Innovation Cleanup: Watch Out for a Classic NAV Compression Play

This post dives into SK Innovation’s cleanup disclosure today, unpacking how these moves set the stage for an opportunity in a classic NAV...

Sanghyun Park

SK Innovation: Considering on Using Its Treasury Shares to Inject Capital into SK On

After the market close on 25 June, SK Innovation announced it will purchase a 30% stake in its lubricant business subsidiary SK Enmove (previously...

Douglas Kim

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