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>The KRX officially unveiled the results of the December rebalancing for KOSDAQ 150. We have <strong>a total of 15 additions and 15 deletions</strong> from the regular rebalancing.</li>
<li>The following trade-suitable stocks among the additions are <strong>Bioneer Corp, TK Chemical, AptaBio Therapeutics, Cellid, and Ecopro HN</strong>.</li>
<li>Among the deletions, these are worthy of our attention: <strong>SK Materials, Crystal Genomics, G-TreeBNT, and Icure Pharmaceutical</strong>
</li>
</ul>


The KRX officially unveiled the results of the December rebalancing for KOSDAQ 150. We have a total of 15 additions and 15 deletions from the regular rebalancing.
The following trade-suitable stocks among the additions are Bioneer Corp, TK Chemical, AptaBio Therapeutics, Cellid, and Ecopro HN.
Among the deletions, these are worthy of our attention: SK Materials, Crystal Genomics, G-TreeBNT, and Icure Pharmaceutical



15 Adds & 15 Deletes in KOSDAQ 150 Rebalancing: Passive Impact & Trade Approaches

Pan-Asia Index Rebalances/ Events/ Delta One, Periscope Analytics

Brian Freitas

Pan-Asia Index Rebalances/ Events/ Delta One

Index Rebalance

<ul>
<li>There are 15 inclusions and 15 exclusions for 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> at the next rebalance to be implemented at the close on 9 December.</li>
<li>The inclusions were expected but there are a few surprises among the deletions as the Information Technology sector was spared at the expense of the Health Care sector.</li>
<li>Over the last couple of months, the inclusions have given up their early gains versus the deletions. With the announcement made, the inclusions could outperform over the next few weeks.</li>
</ul>


There are 15 inclusions and 15 exclusions for the KOSDAQ 150 Index (KOSDQ150 INDEX) at the next rebalance to be implemented at the close on 9 December.
The inclusions were expected but there are a few surprises among the deletions as the Information Technology sector was spared at the expense of the Health Care sector.
Over the last couple of months, the inclusions have given up their early gains versus the deletions. With the announcement made, the inclusions could outperform over the next few weeks.


KOSDAQ150 Index Rebalance: Pullback Done; Buy Adds & Sell Deletes

<div><p>The Korea Exchange (KRX) will announce the results of the December 2021 review 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> in November. The constituent changes will be effective after the close of trading on 9 December.</p></div><div>
<p>With the review period complete, we see 15 potential inclusions and exclusions for the index at the December rebalance.</p>
<p>The potential inclusions are <a href="https://www.smartkarma.com/entities/bioneer-corp" target="_blank" data-smartkarma-citation="entities:11487:1" rel="noopener">Bioneer Corp (064550 KS)</a>, <a href="https://www.smartkarma.com/entities/bnc-korea-co-ltd" target="_blank" data-smartkarma-citation="entities:34785:1" rel="noopener">BNC Korea (256840 KS)</a>, <a href="https://www.smartkarma.com/entities/cellid-co-ltd" target="_blank" data-smartkarma-citation="entities:34892:1" rel="noopener">Cellid (299660 KS)</a>, <a href="https://www.smartkarma.com/entities/nanos-co-ltd" target="_blank" data-smartkarma-citation="entities:16796:1" rel="noopener">Nanos Co Ltd (151910 KS)</a>, <a href="https://www.smartkarma.com/entities/aptabio-therapeutics-inc" target="_blank" data-smartkarma-citation="entities:34894:1" rel="noopener">AptaBio Therapeutics (293780 KS)</a>, <a href="https://www.smartkarma.com/entities/access-bio-inc-kdr" target="_blank" data-smartkarma-citation="entities:5729:1" rel="noopener">Access Bio Inc (950130 KS)</a>, <a href="https://www.smartkarma.com/entities/wonik-qnc-corp" target="_blank" data-smartkarma-citation="entities:6828:1" rel="noopener">Wonik QnC Corp (074600 KS)</a>, <a href="https://www.smartkarma.com/entities/komico-ltd" target="_blank" data-smartkarma-citation="entities:24033:1" rel="noopener">KoMiCo Ltd. (183300 KS)</a>, <a href="https://www.smartkarma.com/entities/tk-chemical-corp" target="_blank" data-smartkarma-citation="entities:13428:1" rel="noopener">TK Chemical (104480 KS)</a>, <a href="https://www.smartkarma.com/entities/kona-i-co-ltd" target="_blank" data-smartkarma-citation="entities:19695:1" rel="noopener">Kona I Co Ltd (052400 KS)</a>, <a href="https://www.smartkarma.com/entities/coocon-corp" target="_blank" data-smartkarma-citation="entities:32234:1" rel="noopener">Coocon Corp (294570 KS)</a>, <a href="https://www.smartkarma.com/entities/interpark-holdings-corp" target="_blank" data-smartkarma-citation="entities:12073:1" rel="noopener">Interpark Holdings (035080 KS)</a>, <a href="https://www.smartkarma.com/entities/dk-d-i-co-ltd" target="_blank" data-smartkarma-citation="entities:9948:1" rel="noopener">Dk D&amp;I Co Ltd (033310 KS)</a>, <a href="https://www.smartkarma.com/entities/saraminhr-co-ltd" target="_blank" data-smartkarma-citation="entities:8494:1" rel="noopener">SaraminHR (143240 KS)</a> and <a href="https://www.smartkarma.com/entities/intellian-technologies-inc" target="_blank" data-smartkarma-citation="entities:34895:1" rel="noopener">Intellian Technologies (189300 KS)</a>.</p>
<p>The potential deletions are <a href="https://www.smartkarma.com/entities/lemon-co-ltd" target="_blank" data-smartkarma-citation="entities:28841:1" rel="noopener">Lemon Co Ltd (294140 KQ)</a>, <a href="https://www.smartkarma.com/entities/g-treebnt-co-ltd" target="_blank" data-smartkarma-citation="entities:1933:1" rel="noopener">G Treebnt (115450 KS)</a>, <a href="https://www.smartkarma.com/entities/spigen-korea-co-ltd" target="_blank" data-smartkarma-citation="entities:9852:1" rel="noopener">Spigen Korea (192440 KS)</a>, <a href="https://www.smartkarma.com/entities/wisol-co-ltd" target="_blank" data-smartkarma-citation="entities:14463:1" rel="noopener">Wisol Co Ltd (122990 KS)</a>, <a href="https://www.smartkarma.com/entities/dongkuk-structures-constru" target="_blank" data-smartkarma-citation="entities:20412:1" rel="noopener">Dongkuk Structures &amp; Constru (100130 KS)</a>, <a href="https://www.smartkarma.com/entities/ubiquoss-inc" target="_blank" data-smartkarma-citation="entities:14341:1" rel="noopener">Ubiquoss Holding (078070 KS)</a>, <a href="https://www.smartkarma.com/entities/icure-pharm-inc" target="_blank" data-smartkarma-citation="entities:27142:1" rel="noopener">Icure Pharm Inc (175250 KS)</a>, <a href="https://www.smartkarma.com/entities/winix-inc" target="_blank" data-smartkarma-citation="entities:19972:1" rel="noopener">Winix Inc (044340 KS)</a>, <a href="https://www.smartkarma.com/entities/telcon-inc" target="_blank" data-smartkarma-citation="entities:15231:1" rel="noopener">Telcon Inc (200230 KS)</a>, <a href="https://www.smartkarma.com/entities/danawa-co-ltd" target="_blank" data-smartkarma-citation="entities:7191:1" rel="noopener">Danawa Co Ltd (119860 KS)</a>, <a href="https://www.smartkarma.com/entities/advanced-process-systems-corporation" target="_blank" data-smartkarma-citation="entities:24087:1" rel="noopener">Advanced Process Systems (265520 KS)</a>, <a href="https://www.smartkarma.com/entities/toptec-co-ltd" target="_blank" data-smartkarma-citation="entities:7332:1" rel="noopener">Toptec Co Ltd (108230 KS)</a>, <a href="https://www.smartkarma.com/entities/optoelectronics-solutions-co" target="_blank" data-smartkarma-citation="entities:2098:1" rel="noopener">Optoelectronics Solutions Co (138080 KS)</a>, <a href="https://www.smartkarma.com/entities/daea-ti-co-ltd" target="_blank" data-smartkarma-citation="entities:1473:1" rel="noopener">Daea Ti Co Ltd (045390 KS)</a> and <a href="https://www.smartkarma.com/entities/unison-co-ltd-south-korea" target="_blank" data-smartkarma-citation="entities:18617:1" rel="noopener">Unison Co Ltd (018000 KS)</a>.</p>
<p><a href="https://www.smartkarma.com/entities/huons-co-ltd" target="_blank" data-smartkarma-citation="entities:16275:1" rel="noopener">Huons Co Ltd (084110 KS)</a> is a very close add and the corresponding deletion is <a href="https://www.smartkarma.com/entities/koentec-co-ltd" target="_blank" data-smartkarma-citation="entities:4049:1" rel="noopener">Koentec Co Ltd (029960 KS)</a>.</p>
<p>One-way turnover is estimated at 6.95% and the impact on the expected deletions is a lot higher than the impact on the expected inclusions.</p>
<p>The potential inclusions outperformed the potential deletions in August before returns flatlined in September and then dropped in October. There could be outperformance from now to the announcement of the changes.</p>
</div>

The Korea Exchange (KRX) will announce the results of the December 2021 review of the KOSDAQ 150 Index (KOSDQ150 INDEX) in November. The constituent changes will be effective after the close of trading on 9 December.
With the review period complete, we see 15 potential inclusions and exclusions for the index at the December rebalance.
The potential inclusions are Bioneer Corp (064550 KS), BNC Korea (256840 KS), Cellid (299660 KS), Nanos Co Ltd (151910 KS), AptaBio Therapeutics (293780 KS), Access Bio Inc (950130 KS), Wonik QnC Corp (074600 KS), KoMiCo Ltd. (183300 KS), TK Chemical (104480 KS), Kona I Co Ltd (052400 KS), Coocon Corp (294570 KS), Interpark Holdings (035080 KS), Dk D&amp;I Co Ltd (033310 KS), SaraminHR (143240 KS) and Intellian Technologies (189300 KS).
The potential deletions are Lemon Co Ltd (294140 KQ), G Treebnt (115450 KS), Spigen Korea (192440 KS), Wisol Co Ltd (122990 KS), Dongkuk Structures &amp; Constru (100130 KS), Ubiquoss Holding (078070 KS), Icure Pharm Inc (175250 KS), Winix Inc (044340 KS), Telcon Inc (200230 KS), Danawa Co Ltd (119860 KS), Advanced Process Systems (265520 KS), Toptec Co Ltd (108230 KS), Optoelectronics Solutions Co (138080 KS), Daea Ti Co Ltd (045390 KS) and Unison Co Ltd (018000 KS).
Huons Co Ltd (084110 KS) is a very close add and the corresponding deletion is Koentec Co Ltd (029960 KS).
One-way turnover is estimated at 6.95% and the impact on the expected deletions is a lot higher than the impact on the expected inclusions.
The potential inclusions outperformed the potential deletions in August before returns flatlined in September and then dropped in October. There could be outperformance from now to the announcement of the changes.


KOSDAQ150 Index Rebalance Preview: 15 Potential Changes and Large Turnover

Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

Equity Capital Markets

<div class="content-highlight"><p>Our base case valuation of SM Line Corp is implied market cap of 1.3 trillion won or 14,837 won per share. This represents 18% lower than the low end of the IPO price range level of 18,000 won. Given the lack of upside relative to the IPO price range, we would avoid this IPO. To value SM Line Corp, we used an EV/EBITDA multiple of 2.0x, which is the median valuation multiple of its peers in 2022. </p></div><p>Due to the sharp increase in container freight rates in the past year, there has also been a significant increase in new orders for these container ships, especially in 2021. In addition, there are increasing indications that suggest the container shipping industry may undergo a sharp contraction starting 2023, especially as these new container ships come to market.</p><div class="content-highlight">
<p>SM Group has a very complicated shareholding structure and this remains one of the key risks of SM Line Corp. Major shareholders of SM Line Corp include SM Samra Midas (41.4% stake), <a href="https://www.smartkarma.com/entities/tk-chemical-corp" target="_blank" data-smartkarma-citation="entities:13428:1" rel="noopener">Tk Chemical (104480 KS)</a> (29.55%), and Samra Corp (29.09%). Woo Oh-Hyun (born in 1953), the chairman of the SM Group, owns a 74% stake in Samra Midas. His first son Woo Ki-Won owns the remaining 26% stake in Samra Midas. Woo Oh-Hyun also owns a 68.8% stake in Samra Corp. Given that the chairman Woo O-Hyun is 69 years old, there may be some discussions of a transfer of the controlling ownership of SM Line Corp to his first son over the next 2-3 years.</p>
<p>This will remain a key stumbling block for the stock as many retail investors in Korea have concerns that the company could intentionally depress the company's share price in order to reduce the potential inheritance taxes associated with the share transfer from the father to his son.</p>
</div>

Our base case valuation of SM Line Corp is implied market cap of 1.3 trillion won or 14,837 won per share. This represents 18% lower than the low end of the IPO price range level of 18,000 won. Given the lack of upside relative to the IPO price range, we would avoid this IPO. To value SM Line Corp, we used an EV/EBITDA multiple of 2.0x, which is the median valuation multiple of its peers in 2022. Due to the sharp increase in container freight rates in the past year, there has also been a significant increase in new orders for these container ships, especially in 2021. In addition, there are increasing indications that suggest the container shipping industry may undergo a sharp contraction starting 2023, especially as these new container ships come to market.
SM Group has a very complicated shareholding structure and this remains one of the key risks of SM Line Corp. Major shareholders of SM Line Corp include SM Samra Midas (41.4% stake), Tk Chemical (104480 KS) (29.55%), and Samra Corp (29.09%). Woo Oh-Hyun (born in 1953), the chairman of the SM Group, owns a 74% stake in Samra Midas. His first son Woo Ki-Won owns the remaining 26% stake in Samra Midas. Woo Oh-Hyun also owns a 68.8% stake in Samra Corp. Given that the chairman Woo O-Hyun is 69 years old, there may be some discussions of a transfer of the controlling ownership of SM Line Corp to his first son over the next 2-3 years.
This will remain a key stumbling block for the stock as many retail investors in Korea have concerns that the company could intentionally depress the company's share price in order to reduce the potential inheritance taxes associated with the share transfer from the father to his son.


<div class="content-highlight">
<p>SM Line Corp is getting ready to complete its IPO in the KOSDAQ exchange in the next few weeks. This is the first shipping (marine transportation) company IPO in Korea in 14 years. SM Line Corp is trying to capitalize on the highly bullish environment for shipping companies globally.</p>
<p>The IPO price range is from 18,000 won to 25,000 won. At the high end of the IPO price range, the implied market cap of the company is 2.1 trillion won. The IPO offering amount range is from 609 billion won to 846 billion won. The book building for the institutional investors starts on 1 November. The lead underwrite of the IPO is NH Investment &amp; Securities. </p>
<p>The company plans to use the<a href="https://pulsenews.co.kr/view.php?year=2021&amp;no=826592" target="_blank" rel="noopener"> IPO proceeds</a> to purchase more eco-friendly, green vessels to better respond to stricter carbon emission rules to be applied from 2022. It is also considering on buying used vessels that can be used immediately to capitalize on the current global ship shortages. </p>
</div>


SM Line Corp is getting ready to complete its IPO in the KOSDAQ exchange in the next few weeks. This is the first shipping (marine transportation) company IPO in Korea in 14 years. SM Line Corp is trying to capitalize on the highly bullish environment for shipping companies globally.
The IPO price range is from 18,000 won to 25,000 won. At the high end of the IPO price range, the implied market cap of the company is 2.1 trillion won. The IPO offering amount range is from 609 billion won to 846 billion won. The book building for the institutional investors starts on 1 November. The lead underwrite of the IPO is NH Investment &amp; Securities. 
The company plans to use the IPO proceeds to purchase more eco-friendly, green vessels to better respond to stricter carbon emission rules to be applied from 2022. It is also considering on buying used vessels that can be used immediately to capitalize on the current global ship shortages. 


South Korea

TK Chemical Corporation manufactures and sell synthetic fibers. The Company's main business divisions are polyester business, spandex buisness and PET resin business.

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

TK Chemical (104480 KS)

15 Adds & 15 Deletes in KOSDAQ 150 Rebalancing: Passive Impact & Trade Approaches

The KOSDAQ 150 December rebalancing features a total of 15 additions and 15 deletions. This post details the results as well as the passive impact...

Sanghyun Park

KOSDAQ150 Index Rebalance: Pullback Done; Buy Adds & Sell Deletes

There are 15 changes for the KOSDAQ150 index in December. The impact on the deletions is larger than that on the inclusions. A long adds/short...

Brian Freitas

KOSDAQ150 Index Rebalance Preview: 15 Potential Changes and Large Turnover

At the end of the review period, we see 15 potential changes for the KOSDAQ150 index. Most of the changes are high probability. The adds could...

Brian Freitas

SM Line Corp - IPO Valuation Analysis

Our base case valuation of SM Line Corp is implied market cap of 1.3 trillion won or 14,837 won per share. This represents 18% lower than the low...

Douglas Kim

SM Line Corp IPO Preview

SM Line Corp is getting ready to complete its IPO in the KOSDAQ exchange in the next few weeks. At the high end of the IPO price range, the implied...

Douglas Kim

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)