In today’s briefing:
- KOSPI Size Indices: Lots of Change as Averaging Starts
- Front-Running the Dec KOSPI 200: Heavy Industries Names Set Up the Real Flow Trade
- M&A Battle for APlus Asset Advisor Heats Up Amid Tender Offer
- Naver Financial and Dunamu Finalizes the Merger Ratio
KOSPI Size Indices: Lots of Change as Averaging Starts
- The review period for the March rebalance of the KOSPI Size Indices will commence on 1 December and will end on 28 February.
- Nearing the start of the averaging period, we forecast 34 migrating stocks. Among new listings, 1 stock could be added to LargeCap, 2 to MidCap and 2 to SmallCap.
- The upward migrations have outperformed the downward migrations by a lot over the last 3 months. The gap in returns versus the KOSPI2 INDEX is a lot smaller.
Front-Running the Dec KOSPI 200: Heavy Industries Names Set Up the Real Flow Trade
- IT adds barely move (~0.1x DTV), but Heavy Industries pops: Sanil/Hanwha Engine draw ~0.4x DTV inflows, while Hanwha Vision faces ~0.6x DTV passive outflow.
- June precedent: HD Marine Solution grabbed ~0.3x DTV extra inflow and ripped ~12% pre-rebalance, handily outperforming the tape and other KOSPI 200 adds.
- Play the same setup: focus on Heavy Industries flow pockets—Sanil, Hanwha Engine, Hanwha Vision out—and eye entries starting Monday ahead of the Dec 8 go-live.
M&A Battle for APlus Asset Advisor Heats Up Amid Tender Offer
- There appears to be a M&A battle heating up for APlus Asset Advisor. This is because it was reported that Aplus Asset Advisor Chairman Kwak Geun-ho has increased his stake.
- Chairman Kwak Geun-ho purchased additional 30,904 shares of Aplus Asset’s common stock over three trading days and his stake increased by 0.14 percentage points from 20.06% to 20.20%.
- In the next 3-6 months, we expect additional upside to the stock price (to 10,000 won to 12,000 won) as more investors perceive this could be an attractive M&A target.
Naver Financial and Dunamu Finalizes the Merger Ratio
- On 26 November, Naver Financial and Dunamu finalized the merger ratio. Under the proposed share swap, one share of Dunamu will be exchanged for 2.54 shares of Naver Financial.
- Dunamu’s equity value is 15.1 trillion won, and Naver Financial’s is 4.9 trillion won.
- Overall, we have a positive view of this merger and it is likely to positively impact Naver’s share price as well.
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