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.

Event-Driven

<ul>
<li>The ruling party's KOSPI 5,000 task force is now eyeing low PBR names with talk of direct penalties — a sharper shift from the prior admin’s soft-touch value-up approach.</li>
<li>Low PBR penalties may bypass the Assembly, fast-tracked via KRX or enforcement rule tweaks — rollout could follow swiftly post commercial code passage, possibly within 2–3 months.</li>
<li>Market’s zeroing in on low PBR, high ROE large caps — with 0.8x flagged as the penalty line, 56 KRW 1T+ names screen as potential re-rating plays.</li>
</ul>


The ruling party's KOSPI 5,000 task force is now eyeing low PBR names with talk of direct penalties — a sharper shift from the prior admin’s soft-touch value-up approach.
Low PBR penalties may bypass the Assembly, fast-tracked via KRX or enforcement rule tweaks — rollout could follow swiftly post commercial code passage, possibly within 2–3 months.
Market’s zeroing in on low PBR, high ROE large caps — with 0.8x flagged as the penalty line, 56 KRW 1T+ names screen as potential re-rating plays.


Fresh Low-PBR Policy Color Hitting the Local Tape Today

<ul>
<li>Due to NAV accuracy issues, locals favor sigma plays within ±2σ bands over classic stub trades, with aggressive traders rotating longs and shorts around ±1σ.</li>
<li>Avoid trending divergence periods; these eight targets usually mean-revert well, but H1 this year showed unusually deep divergence—important to consider for current sigma plays.</li>
<li>As of today, no 20-day MA sigmas trigger trades, but holding company strength drives price ratios—a trend likely lasting post-election—suggesting ±2σ sigma plays with longs in holdcos.</li>
</ul>


Due to NAV accuracy issues, locals favor sigma plays within ±2σ bands over classic stub trades, with aggressive traders rotating longs and shorts around ±1σ.
Avoid trending divergence periods; these eight targets usually mean-revert well, but H1 this year showed unusually deep divergence—important to consider for current sigma plays.
As of today, no 20-day MA sigmas trigger trades, but holding company strength drives price ratios—a trend likely lasting post-election—suggesting ±2σ sigma plays with longs in holdcos.


A Practical Guide to Stub Arb Trade in the Korean Stock Market

Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

Douglas Research Advisory

Equity Bottom-Up

<ul>
<li>SK Square (402340 KS) announced a solid corporate value up plan pushing up its share price by 8.8% to 87,500 won on 22 November.</li>
<li>Major highlights of the corporate value up plan included cancellation of 200 billion won of treasury shares, higher ROE target, and achieve 1x PBR ratio (nearly double the current ratio).</li>
<li>Our NAV analysis of SK Square suggests NAV of 15.2 trillion won or 112,822 won per share, representing 29% higher than current share price.</li>
</ul>


SK Square (402340 KS) announced a solid corporate value up plan pushing up its share price by 8.8% to 87,500 won on 22 November.
Major highlights of the corporate value up plan included cancellation of 200 billion won of treasury shares, higher ROE target, and achieve 1x PBR ratio (nearly double the current ratio).
Our NAV analysis of SK Square suggests NAV of 15.2 trillion won or 112,822 won per share, representing 29% higher than current share price.


SK Square: A Solid Corporate Value Up Plan Likely to Lead to Continued Outperformance

<ul>
<li>LG CNS has been one of the hottest stocks in the Korean stocks market in the past one month (up 87%), sharply outperforming KOSPI.</li>
<li><em><strong>The biggest driver of LG CNS's share price in the past month has been that this company has the potential to become a leading stablecoin platform in Korea.  </strong></em></li>
<li>Many investors believe that LG CNS has the expertise in blockchain/AI/cryptocurrency backend solutions to become one of the leading Won based stablecoin platforms in Korea.</li>
</ul>


LG CNS has been one of the hottest stocks in the Korean stocks market in the past one month (up 87%), sharply outperforming KOSPI.
The biggest driver of LG CNS's share price in the past month has been that this company has the potential to become a leading stablecoin platform in Korea.  
Many investors believe that LG CNS has the expertise in blockchain/AI/cryptocurrency backend solutions to become one of the leading Won based stablecoin platforms in Korea.


Why Is LG CNS One of the Hottest Stocks in Korea in the Past One Month? Answer: Stablecoin Platform

<ul>
<li>Hynix's potential 15% stake in Kioxia doesn't violate the 20% rule because KFTC's mandatory stake rule doesn't apply to foreign investments.</li>
<li>SK Group may transfer Hynix's 15% Kioxia stake to SK Square by splitting Hynix and merging its investment arm with SK Square for future AI investments.</li>
<li>SK Square may attract more attention than Hynix short-term, as Kioxia's stake via Hynix could boost market expectations for value transfer to SK Square.</li>
</ul>


Hynix's potential 15% stake in Kioxia doesn't violate the 20% rule because KFTC's mandatory stake rule doesn't apply to foreign investments.
SK Group may transfer Hynix's 15% Kioxia stake to SK Square by splitting Hynix and merging its investment arm with SK Square for future AI investments.
SK Square may attract more attention than Hynix short-term, as Kioxia's stake via Hynix could boost market expectations for value transfer to SK Square.


Understanding Potential Issues Within SK Group from Hynix's Kioxia CB Conversion

South Korea

SK Square Co., Ltd. operates as an investment company. The Company invests in semiconductors, information and communications technologies, and other industries. SK Square conducts businesses in South Korea.

Price Gauge
52-week Range	0.00 - 0.00
Market Cap (USDm)	0.00
P/E	0.00
Dividend (Yield)	0.00

SK Square (402340 KS)

Fresh Low-PBR Policy Color Hitting the Local Tape Today

This post dives into newly leaked low-PBR crackdown details from the ruling party that began circulating in the local market today.

Sanghyun Park

A Practical Guide to Stub Arb Trade in the Korean Stock Market

This post offers a practical guide to stub trades in Korea, where NAV is tricky, so most traders focus on relative value or sigma plays instead of...

Sanghyun Park

SK Square: A Solid Corporate Value Up Plan Likely to Lead to Continued Outperformance

SK Square announced a solid corporate value up plan including a cancellation of 200 billion won of treasury shares, higher ROE target, and higher...

Douglas Kim

Why Is LG CNS One of the Hottest Stocks in Korea in the Past One Month? Answer: Stablecoin Platform

The biggest driver of LG CNS's share price in the past month has been that this company has the potential to become a leading stablecoin platform...

Douglas Kim

Understanding Potential Issues Within SK Group from Hynix's Kioxia CB Conversion

This post dives into the potential issues about how Kioxia's IPO could affect Hynix and the whole SK Group that the market needs to clear up.

Sanghyun Park

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)