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.

Equity Capital Markets

LG Energy Solution / Equity Capital Markets

LG Energy Solution produces and sells batteries. The Company manufactures and sells automobile batteries, small batteries, energy storage system batteries, and other products. LG Energy Solution markets its products worldwide.

<ul>
<li>The local market’s buzzing that LG Chem could face a 200-300 billion KRW tax hit from Pillar Two next year, with LGES ramping up U.S. production.</li>
<li>LG Chem may be reconsidering its plan to sell 2% of its LGES stake, dropping ownership below 80%, shifting the tax burden to LGES instead of itself.</li>
<li>Flagging this now—LG Chem’s tax burden looms. Consider shorting LGES or a long-short with LG Chem, plus prep for the 2T KRW block deal with the pre-disclosure process.</li>
</ul>


The local market’s buzzing that LG Chem could face a 200-300 billion KRW tax hit from Pillar Two next year, with LGES ramping up U.S. production.
LG Chem may be reconsidering its plan to sell 2% of its LGES stake, dropping ownership below 80%, shifting the tax burden to LGES instead of itself.
Flagging this now—LG Chem’s tax burden looms. Consider shorting LGES or a long-short with LG Chem, plus prep for the 2T KRW block deal with the pre-disclosure process.


LG Chem's Tax Alarm: Pillar Two Tax Could Soar Next Year + LGES Block Deal on the Horizon

APAC IPOs & Placements, Aequitas Research

Clarence Chu

APAC IPOs & Placements

IPOs and Placements coverage across Asia Pacific

Aequitas Research

We cover all listing across the Asia Pacific along with follow-up placements. As of Dec 2020, our team had covered 539 IPOs with a hit rate of 73.5% and 685 placements with a hit rate of 66.8%.

We combine fundamental bottom-up views with our proprietary quantitative framework to provide a holistic coverage across new listings and placements. Our coverage includes pre-IPO notes before the deal is launched, follow-up analysis once the deal is live and post-listing trading analysis as well.

<ul>
<li>
<a href="https://www.smartkarma.com/entities/mnc-solution" target="_blank" data-smartkarma-citation="entities:44082:1" rel="noopener">MNC Solution (MNC KS)</a> MNC Solutions is looking to raise US$200m in its upcoming Korea IPO.</li>
<li>MNC Solutions (MNC) supplies high-precision control components for maritime and aviation weaponry, and travel devices for stabilization to the defense industry.</li>
<li>In this note, we look at the firm’s past performance.</li>
</ul>



MNC Solution (MNC KS) MNC Solutions is looking to raise US$200m in its upcoming Korea IPO.
MNC Solutions (MNC) supplies high-precision control components for maritime and aviation weaponry, and travel devices for stabilization to the defense industry.
In this note, we look at the firm’s past performance.


MNC Solutions Pre-IPO - Momentum Has Been Very Strong, Although Some Corp Gov Issues to Watch For

Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

Douglas Research Advisory

<ul>
<li>Our valuation analysis suggests an implied price per share of 120,295 won for MNC Solution, which is 29% above the high end of the IPO price range. </li>
<li>Our base case valuation is based on EV/EBITDA of 24.1x which is 30% higher than the average EV/EBITDA multiple of the comps in 2023.</li>
<li>We believe a premium valuation to the comps' valuation multiple is appropriate due to higher sales growth, operating margins, and ROE.</li>
</ul>


Our valuation analysis suggests an implied price per share of 120,295 won for MNC Solution, which is 29% above the high end of the IPO price range. 
Our base case valuation is based on EV/EBITDA of 24.1x which is 30% higher than the average EV/EBITDA multiple of the comps in 2023.
We believe a premium valuation to the comps' valuation multiple is appropriate due to higher sales growth, operating margins, and ROE.


IsuPetasys Co., Ltd. manufactures printed circuit boards (PCBs) specializing in high multilayer PCBs.  The Company exports its products to Cisco Systems, Brocade Communications Systems, and Sun Microsystems in the United States.

<ul>
<li>I initially skipped this rights issue due to the tight 15% discount and lack of hedge options, but today’s 20% drop opens up a potential angle worth exploring.</li>
<li>Today’s selloff stems from pushback on ISU Petasys entering the battery business, not just dilution concerns. This means there’s a high chance we’ll see a lot of leftover, unsold shares.</li>
<li>The strategy is to grab stock rights cheaply or go for the public offering. The main risk is whether the 15% spread holds until listing, but the case is strong.</li>
</ul>


I initially skipped this rights issue due to the tight 15% discount and lack of hedge options, but today’s 20% drop opens up a potential angle worth exploring.
Today’s selloff stems from pushback on ISU Petasys entering the battery business, not just dilution concerns. This means there’s a high chance we’ll see a lot of leftover, unsold shares.
The strategy is to grab stock rights cheaply or go for the public offering. The main risk is whether the 15% spread holds until listing, but the case is strong.


ISU Petasys Rights Issue: Today’s Wild Price Action Has Opened up a Fresh Trading Angle

<ul>
<li>MNC Solution is getting ready to complete its IPO in KOSPI in December 2024. MNC Solution specializes in motion control components for the defense industry.</li>
<li>Total offering amount ranges from 240 billion won to 280 billion won. At the high end of the IPO price range, the company's expected market cap is 882 billion won.</li>
<li>The company generated operating profit of 16.9 billion won (up 100.9% YoY). It has one of the strongest sales and profit growth among recent IPOs in Korea.</li>
</ul>


MNC Solution is getting ready to complete its IPO in KOSPI in December 2024. MNC Solution specializes in motion control components for the defense industry.
Total offering amount ranges from 240 billion won to 280 billion won. At the high end of the IPO price range, the company's expected market cap is 882 billion won.
The company generated operating profit of 16.9 billion won (up 100.9% YoY). It has one of the strongest sales and profit growth among recent IPOs in Korea.


Coverage of South Korea IPOs & Placements

South Korea ECM
Coverage of South Korea IPOs & Placements

LG Chem's Tax Alarm: Pillar Two Tax Could Soar Next Year + LGES Block Deal on the Horizon

LG Chem's tax situation is on the radar: Pillar Two tax hit could explode next year, and a LGES stake block deal appears to be coming down the...

Sanghyun Park

MNC Solutions Pre-IPO - Momentum Has Been Very Strong, Although Some Corp Gov Issues to Watch For

MNC Solution (MNC KS) MNC Solutions is looking to raise US$200m in its upcoming Korea IPO. In this note, we look at the firm’s past performance.

Clarence Chu

MNC Solution IPO Valuation Analysis

Our valuation analysis suggests an implied price per share of 120,295 won for MNC Solution, which is 29% above the high end of the IPO price range.

Douglas Kim

ISU Petasys Rights Issue: Today’s Wild Price Action Has Opened up a Fresh Trading Angle

This post dives into why today’s wild price action in ISU Petasys, following last Friday’s 500 billion KRW rights offer, has unlocked a fresh...

Sanghyun Park

MNC Solution IPO Preview

MNC Solution is getting ready to complete its IPO in KOSPI in December 2024. MNC Solution specializes in motion control components for the defense...

Douglas Kim