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 review period for a bunch of indices ended last week though the announcement of the changes will take 4-6 weeks.</li>
<li>There are no rebalance implementations in the coming week though focus will move to the implementation of the <a href="https://www.smartkarma.com/entities/housing-development-finance" target="_blank" data-smartkarma-citation="entities:252:1" rel="noopener">HDFC Limited</a>/ <a href="https://www.smartkarma.com/entities/hdfc-bank-ltd-4b6b7a92-9087-468d-9dbe-ab169e77f014" target="_blank" data-smartkarma-citation="entities:558:1" rel="noopener">HDFC Bank</a> merger and index changes the following week.</li>
<li>There were big inflows to China focused ETF with a lot of money going into Semiconductor and Chip focused ETFs.</li>
</ul>


The review period for a bunch of indices ended last week though the announcement of the changes will take 4-6 weeks.
There are no rebalance implementations in the coming week though focus will move to the implementation of the HDFC Limited/ HDFC Bank merger and index changes the following week.
There were big inflows to China focused ETF with a lot of money going into Semiconductor and Chip focused ETFs.


Index Rebalance & ETF Flow Recap: KQ150, LQ45, PCOMP, HDFC/HDFCB, Delta Electronics, Redox IPO, AMFI

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.

Hyundai Energy Solutions / Index Rebalance

<ul>
<li>KRX Semicon has experienced a considerable increase in AUM due to the recent AI rally. Two ETFs tracking SEMICON have a combined AUM of ₩0.6T.</li>
<li>The following five stocks are screened as potential additions: ITM Semiconductor, Hyundai Energy Solutions, TEMC, Fine Semitech, and AT Technology.  </li>
<li>While it may not be a major flow event, it still presents a trading opportunity worth considering, especially in September, which is relatively less eventful in terms of flows.</li>
</ul>


KRX Semicon has experienced a considerable increase in AUM due to the recent AI rally. Two ETFs tracking SEMICON have a combined AUM of ₩0.6T.
The following five stocks are screened as potential additions: ITM Semiconductor, Hyundai Energy Solutions, TEMC, Fine Semitech, and AT Technology.  
While it may not be a major flow event, it still presents a trading opportunity worth considering, especially in September, which is relatively less eventful in terms of flows.


Flow Trading Opportunities Brought by the AI Rally: KRX Semicon Rebalancing in September

Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

Equity Capital Markets

<ul>
<li>TEMC announced its IPO price of 28,000 won, which was lower than the IPO price range of 32,000 won to 38,000 won.</li>
<li>There were 560 institutions that participated in the IPO bookbuilding survey and the demand ratio was 31.3 to 1.</li>
<li>Our base valuation is 38,363 won per share, representing a 37% upside to the IPO price of 28,000 won. The reduced IPO price has made the IPO more attractive.</li>
</ul>


TEMC announced its IPO price of 28,000 won, which was lower than the IPO price range of 32,000 won to 38,000 won.
There were 560 institutions that participated in the IPO bookbuilding survey and the demand ratio was 31.3 to 1.
Our base valuation is 38,363 won per share, representing a 37% upside to the IPO price of 28,000 won. The reduced IPO price has made the IPO more attractive.


TEMC: Reduces IPO Price & Bookbuilding Results

<ul>
<li>Our base valuation of TEMC is target price of 38,363 won per share. At the mid point of the IPO price range, our target price would represent a 10% upside. </li>
<li>Typically, we require a 15-20% upside in terms of target price versus the IPO price. In this case, given the lack of upside, we have a Negative View. </li>
<li>Our target price is based on a target P/E of 8.5x in 2023 which is the average P/E of the comps.</li>
</ul>


Our base valuation of TEMC is target price of 38,363 won per share. At the mid point of the IPO price range, our target price would represent a 10% upside. 
Typically, we require a 15-20% upside in terms of target price versus the IPO price. In this case, given the lack of upside, we have a Negative View. 
Our target price is based on a target P/E of 8.5x in 2023 which is the average P/E of the comps.


<ul>
<li>TEMC is getting ready to complete its IPO in Korea in January 2023. TEMC is a materials company that produces specialty gases for the semiconductor and display production processes.</li>
<li>The IPO price range is from 32,000 won to 38,000 won and the expected market cap is expected to be from 361 billion won to 429 billion won. </li>
<li>The company's sales increased at a 57.4% CAGR from 2019 to 2021. Its sales exploded higher by <strong>254% YoY</strong> to reach 238 billion won in 1Q-3Q 2022.</li>
</ul>


TEMC is getting ready to complete its IPO in Korea in January 2023. TEMC is a materials company that produces specialty gases for the semiconductor and display production processes.
The IPO price range is from 32,000 won to 38,000 won and the expected market cap is expected to be from 361 billion won to 429 billion won. 
The company's sales increased at a 57.4% CAGR from 2019 to 2021. Its sales exploded higher by 254% YoY to reach 238 billion won in 1Q-3Q 2022.


South Korea

TEMC Co., Ltd. operates industrial gas manufacturing businesses. The Company produces rare gases, mixed gases, and other products. TEMC conducts businesses across worldwide.

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Temc (425040 KS)

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TEMC IPO Valuation Analysis

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TEMC IPO Preview

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Douglas Kim

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