In today’s briefing:
- Korea Short Selling Comeback: How Pre-Registering Accounts Will Affect the Trading Scene
- LG Corp Plans to Buy 250 Billion Won of LG Chem and LG Electronics + 2 Major LG Group IPOs in 2025
- NPS Stake in Korea Zinc Revealed: EGM Vote Locked, Short Play in Focus
- Coway: Doubling Total Shareholder Returns to 40% of Consolidated Net Income
- EQD | Asia January Vol Roadmap: Outsized Moves, Outsized Volatility
Korea Short Selling Comeback: How Pre-Registering Accounts Will Affect the Trading Scene
- KRX and FSS confirmed the NSDS is ready and account registration numbers will be issued, confirming short selling will resume on April 1st, despite no official FSC statement yet.
- Today’s buzz is about pre-registration for short selling, with FSS tracking accounts down to individual desks. This could limit short-selling flexibility, despite addressing the overseas lending issue.
- Exposing too much info on short-selling accounts could shrink securities lending participants, causing supply-demand imbalances, spiking borrowing fees, and creating unique trading opportunities early on.
LG Corp Plans to Buy 250 Billion Won of LG Chem and LG Electronics + 2 Major LG Group IPOs in 2025
- On 6 January, LG Corp announced that it plans to purchase 250 billion won worth of LG Electronics and LG Chem from 6 January to 7 March 2025.
- The share buybacks would represent 1.5% and 0.7% of LG Chem and LG Electronics’ market cap, respectively.
- Our base case NAV valuation analysis of LG Corp suggests implied NAV of 14.7 trillion won or NAV per share of 93,430 won, which is 25% higher than current price.
NPS Stake in Korea Zinc Revealed: EGM Vote Locked, Short Play in Focus
- NPS’s stake has dropped, and most minority shareholders are passive. NPS might oppose cumulative voting, so Choi’s chances of getting 67% support at the EGM on the 23rd are slim.
- The showdown is between MBK’s 14 picks and Choi’s 7. Without cumulative voting, even with NPS’s shares, Choi’s chances of beating MBK are slim.
- If you’re short on Korea Zinc, holding seems fine. Backwardation in Jan-Feb futures isn’t steep, so a new position before the EGM could also be worth a shot.
Coway: Doubling Total Shareholder Returns to 40% of Consolidated Net Income
- Coway announced a significantly higher total shareholder return plan, nearly doubling total shareholder returns of consolidated net income from current 20% to about 40% in the next three years.
- Coway has low valuation multiples. It is currently trading at EV/EBITDA of 4.1x, P/E of 8.1x, and P/B of 1.4x based on 2025 consensus earnings estimates.
- We believe that the combination of improved shareholder returns and low valuation multiples are likely to lead to outperformance of Coway versus the market in the next 6-12 months.
EQD | Asia January Vol Roadmap: Outsized Moves, Outsized Volatility
- Gold is historically a strong January performer, rising 65% of the time. Nifty declines 70% of the time in January with all January’s since 2019 negative.
- Wide gap in Kospi vs Nikkei implied vol when viewed in light of their respective price performances over the past 1 and 3 months.
- Most markets typically see peak volatility in the first week of the month with prices typically trading heavy in the 2nd half of the month.
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