Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

Equity Bottom-Up

<div class="content-highlight">
<p>In this insight, we discuss about the increasing signs that the crisis involving the global supply chains may be thawing out. This insight is broken down into the following three parts:</p>
<p><strong> I. Five Major Reasons Causing Global Supply Chain Problems</strong></p>
<p><strong>II. Global Supply Chain Crisis - Signs of Thawing Out?</strong></p>
<p><strong>III. Long/Short Ideas Under the Thesis of the Global Supply Chain Crisis Showing Signs of Thawing Out [Long Orion Corp &amp; Short HMM]</strong></p>
</div>


In this insight, we discuss about the increasing signs that the crisis involving the global supply chains may be thawing out. This insight is broken down into the following three parts:
 I. Five Major Reasons Causing Global Supply Chain Problems
II. Global Supply Chain Crisis - Signs of Thawing Out?
III. Long/Short Ideas Under the Thesis of the Global Supply Chain Crisis Showing Signs of Thawing Out [Long Orion Corp &amp; Short HMM]


Global Supply Chain Crisis - Signs of Thawing Out?

Head of Research, IPOs & Placements, Aequitas Research

Sumeet Singh

Head of Research, 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.

Equity Capital Markets

<p><a href="https://www.smartkarma.com/entities/sm-line-corp" target="_blank" data-smartkarma-citation="entities:34535:1" rel="noopener">SM Line Corp (076710 KS)</a> (SML) is looking to raise US$710m by selling a mix of primary and secondary shares in its South Korea IPO.</p><p>SML, a subsidiary of Samra Midas (SM) Group, is a global shipping company that mainly engages in maritime freight transportation. It also operates a construction business that provides housing construction and civil engineering services.</p><p>We will take a look at SML’s fundamentals, industry outlook and share our thoughts on valuation.</p>

SM Line Corp (076710 KS) (SML) is looking to raise US$710m by selling a mix of primary and secondary shares in its South Korea IPO.SML, a subsidiary of Samra Midas (SM) Group, is a global shipping company that mainly engages in maritime freight transportation. It also operates a construction business that provides housing construction and civil engineering services.We will take a look at SML’s fundamentals, industry outlook and share our thoughts on valuation.

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.

Event-Driven

<p>In a regulatory filing, HMM said it had decided to repay 600 billion won worth of permanent CB (#191 owned by KOBC: Korea Ocean Business Corporation) in advance. That is, HMM will exercise its right to claim for early redemption. If the CB holder (KOBC) agrees, HMM will make the CB repayment on December 9.</p><p><a href="https://engkind.krx.co.kr/common/disclsviewer.do?method=search&amp;acptNo=20211026000136&amp;docno=&amp;formProcsCd=070&amp;language=english" target="_blank" rel="noopener">The link to the English regulatory filing is here.</a></p><section class="figure"><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/237/523/original/1.png?1635227576" class="editor-image img-responsive" data-smartkarma-image-id="237523"></figure></section><div class="content-caption">(Source: KRX KIND)</div><p>The #191 perpetual convertible bonds were exclusively issued to KOBC in March 2017. The conversion price is ₩7,173, and if KOBC converts all of them, it will obtain 83,647,009 ordinary shares, causing a share dilution of 16.4%.</p><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/237/524/original/image?1635227656" class="editor-image img-responsive" data-smartkarma-image-id="237524"></figure><div class="content-caption">(Source: DART)</div><div class="content-highlight"><p><strong>However, there is a catch here. Suppose the KOBC exercises the right to claim conversion before the scheduled repayment date. In that case, the CB will be converted to HMM's new stock, regardless of HMM's decision to exercise its right to claim for early redemption.</strong></p></div><p>Yes, the KOBC reserves the right to convert this CB into HMM stocks at ₩7,173 per share at any time. It is still a quarter of HMM's current share price. The market profit obtained by converting CB into stock alone amounts to about 1.86 trillion won.</p>

In a regulatory filing, HMM said it had decided to repay 600 billion won worth of permanent CB (#191 owned by KOBC: Korea Ocean Business Corporation) in advance. That is, HMM will exercise its right to claim for early redemption. If the CB holder (KOBC) agrees, HMM will make the CB repayment on December 9.The link to the English regulatory filing is here.(Source: KRX KIND)The #191 perpetual convertible bonds were exclusively issued to KOBC in March 2017. The conversion price is ₩7,173, and if KOBC converts all of them, it will obtain 83,647,009 ordinary shares, causing a share dilution of 16.4%.(Source: DART)However, there is a catch here. Suppose the KOBC exercises the right to claim conversion before the scheduled repayment date. In that case, the CB will be converted to HMM's new stock, regardless of HMM's decision to exercise its right to claim for early redemption.Yes, the KOBC reserves the right to convert this CB into HMM stocks at ₩7,173 per share at any time. It is still a quarter of HMM's current share price. The market profit obtained by converting CB into stock alone amounts to about 1.86 trillion won.

HMM Perpetual Bond Conversion Situation Update for Short Position

<p>Today (October 13), HMM posted a "CEO Letter to Shareholders" on its website.</p><div class="content-highlight"><p><a href="http://www.hmm21.com/cms/company/irk/disclosure/dart/1209953_12686.jsp" target="_blank" rel="noopener">Here is the link to the HMM CEO Letter to Shareholders.</a></p></div><p>As shareholders' dissatisfaction grew over <a href="https://www.smartkarma.com/entities/hmm-co-ltd" target="_blank" data-smartkarma-citation="entities:13494:1" rel="noopener">HMM Co., Ltd. (011200 KS)</a> 's recent sharp decline in share price, the company's CEO Bae Jae-hoon took out a shareholder-friendly policy card including dividends to appease shareholders.</p><p>The first sentence of this letter is straightforward and clear: <strong>"We are reviewing shareholder-friendly policies due to shareholders' concerns about the share price decline."</strong> In fact, HMM shares have been corrected more than 40% since peaking at the end of May.</p><section class="figure"><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/234/908/original/6.png?1634131311" class="editor-image img-responsive" data-smartkarma-image-id="234908"></figure><hr>
<p><strong>So let's take a look at what this CEO letter contains. There are some pretty significant parts.</strong></p></section><h2>1. Dividend</h2><section class="figure"><p>The first is a dividend. HMM has explicitly stated that it is considering a dividend payment.</p>
<p>However, the company said that at this time, there is no available profit that can pay dividends under the local commercial law. It is because HMM still has a massive accumulated deficit, which stood at ₩4.44T as of the end of 2020. According to local commercial law, dividends are not allowed when there is a deficit. <strong>But the company said that the deficit situation is getting better, so it will actively consider paying dividends when dividend-payable profits are generated. FYI, it will only know the status of this year's deficit size at the end of this year.</strong></p>
<figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/234/909/original/1.png?1634131586" class="editor-image img-responsive" data-smartkarma-image-id="234909"></figure></section><h2>2. Massive CB Conversion (Share Dilution) Risk</h2><p>The second is the massive CB conversion risk. That is, this letter tried to address the concern about the possible conversion of the ₩600B perpetual convertible bonds held by KOBC into stocks: the '#191 CB' issued in March 2017. The conversion price is ₩7,173, and if KOBC converts all of them, it will obtain 83,647,009 ordinary shares, causing a share dilution of 16.4%.</p><section class="figure"><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/234/923/original/3.png?1634134729" class="editor-image img-responsive" data-smartkarma-image-id="234923"></figure><p>Now, HMM stressed in this letter that it might opt for early full repayment of these CBs as the company is in good cash condition due to the recent brisk business. <strong>But there is a catch here. It also clarified that even if it wanted early full repayment, it wouldn't be able to refuse CB conversion into stocks if the bondholder (KOBC: Korea Ocean Business Corporation) made a request.</strong></p></section><div>
<figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/234/910/original/2.png?1634132720" class="editor-image img-responsive" data-smartkarma-image-id="234910"></figure><h2>3. Illegal shorting activities</h2>
<section class="figure"><p>This part is also fun. First, HMM said that it had not found any illegal short-selling activities so far.</p>
<p>However, <strong>local retail investors are arguing that KDB (Korea Development Bank) and KOBC are artificially lowering the stock price to facilitate the sale of their controlling stake. In response, HMM adamantly denied the allegation.</strong> HMM also revealed that KDB and KOBC are not lending their HMM shares to short-sellers.</p>
<figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/234/920/original/4.png?1634133557" class="editor-image img-responsive" data-smartkarma-image-id="234920"></figure></section><section class="figure"><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/234/921/original/5.png?1634133615" class="editor-image img-responsive" data-smartkarma-image-id="234921"></figure></section>
</div>

Today (October 13), HMM posted a "CEO Letter to Shareholders" on its website.Here is the link to the HMM CEO Letter to Shareholders.As shareholders' dissatisfaction grew over HMM Co., Ltd. (011200 KS) 's recent sharp decline in share price, the company's CEO Bae Jae-hoon took out a shareholder-friendly policy card including dividends to appease shareholders.The first sentence of this letter is straightforward and clear: "We are reviewing shareholder-friendly policies due to shareholders' concerns about the share price decline." In fact, HMM shares have been corrected more than 40% since peaking at the end of May.
So let's take a look at what this CEO letter contains. There are some pretty significant parts.1. DividendThe first is a dividend. HMM has explicitly stated that it is considering a dividend payment.
However, the company said that at this time, there is no available profit that can pay dividends under the local commercial law. It is because HMM still has a massive accumulated deficit, which stood at ₩4.44T as of the end of 2020. According to local commercial law, dividends are not allowed when there is a deficit. But the company said that the deficit situation is getting better, so it will actively consider paying dividends when dividend-payable profits are generated. FYI, it will only know the status of this year's deficit size at the end of this year.
2. Massive CB Conversion (Share Dilution) RiskThe second is the massive CB conversion risk. That is, this letter tried to address the concern about the possible conversion of the ₩600B perpetual convertible bonds held by KOBC into stocks: the '#191 CB' issued in March 2017. The conversion price is ₩7,173, and if KOBC converts all of them, it will obtain 83,647,009 ordinary shares, causing a share dilution of 16.4%.Now, HMM stressed in this letter that it might opt for early full repayment of these CBs as the company is in good cash condition due to the recent brisk business. But there is a catch here. It also clarified that even if it wanted early full repayment, it wouldn't be able to refuse CB conversion into stocks if the bondholder (KOBC: Korea Ocean Business Corporation) made a request.
3. Illegal shorting activities
This part is also fun. First, HMM said that it had not found any illegal short-selling activities so far.
However, local retail investors are arguing that KDB (Korea Development Bank) and KOBC are artificially lowering the stock price to facilitate the sale of their controlling stake. In response, HMM adamantly denied the allegation. HMM also revealed that KDB and KOBC are not lending their HMM shares to short-sellers.



HMM CEO Letter to Shareholders Concerning Share Price Decline

<h2>Offering terms</h2><p>One of Korea's major flag-carrying maritime transporter (only behind HMM in size), SM Line, put out the IPO prospectus. It will be listed on the KOSDAQ market around late November. The total offering is 34 million shares, representing 50% of the current number of shares outstanding. The institutional allotment is 68.5~75.0% of the offering.</p><table class="table table-striped">
<colgroup>
<col width="100">
<col width="100">
</colgroup>
<tbody>
<tr><td colspan="2" rowspan="1" data-sheets-value='{"1":2,"2":"Offering size"}'>Offering size</td></tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Ticker"}'>Ticker</td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"TBA"}' data-sheets-numberformat='{"1":2,"2":"[$₩-412]#,##0","3":1}' data-sheets-formula="=R[1]C[-2]">076710</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Bourse"}'>Bourse</td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"KOSPI"}'>KOSPI</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Pre-IPO SO"}'>Pre-IPO SO</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":67688440}' data-sheets-numberformat='{"1":2,"2":"#,##0","3":1}' data-sheets-formula="=R[1]C[-2]">67,688,440</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Offering"}'><strong>Offering</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":33844220}' data-sheets-numberformat='{"1":2,"2":"#,##0","3":1}' data-sheets-formula="=R[3]C[-2]"><strong>33,844,220</strong></td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"- % of SO"}'><strong>- % of SO</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0.5}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}' data-sheets-formula="=Terms!R[5]C[-2]"><strong>50.00%</strong></td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"- Institutional allotment"}'><strong>- Institutional allotment</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"55.00~75.00%"}' data-sheets-formula="=Terms!R[5]C[-2]"><strong>68.50~75.00%</strong></td>
</tr>
<tr><td colspan="2" rowspan="1" data-sheets-value='{"1":2,"2":"Source: DART"}'>Source: DART</td></tr>
</tbody>
</table><p>This is a split offering at a 50:50 ratio. So the capital increase rate is 25%, with a share dilution at 20%.</p><table class="table table-striped">
<colgroup>
<col width="100">
<col width="100">
</colgroup>
<tbody>
<tr><td colspan="2" rowspan="1" data-sheets-value='{"1":2,"2":"Split"}'>Split</td></tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Primary %"}'><strong>Primary %</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0.5}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}' data-sheets-formula="=Terms!R[3]C[-2]"><strong>50.00%</strong></td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Secondary %"}'><strong>Secondary %</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0.5}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}' data-sheets-formula="=Terms!R[4]C[-2]"><strong>50.00%</strong></td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Post-IPO shares outstanding"}'>Post-IPO shares outstanding</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":84610550}' data-sheets-numberformat='{"1":2,"2":"#,##0","3":1}' data-sheets-formula="=R[-9]C[0]+Terms!R[2]C[-2]">84,610,550</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Capital increase rate"}'>Capital increase rate</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0.25}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}' data-sheets-formula="=Terms!R[4]C[-2]">25.00%</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Dilution"}'>Dilution</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0.2}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}' data-sheets-formula="=Terms!R[4]C[-2]">20.00%</td>
</tr>
<tr><td colspan="2" rowspan="1" data-sheets-value='{"1":2,"2":"Source: DART"}'>Source: DART</td></tr>
</tbody>
</table><p>The book opens on November 1, and the allotment will be disclosed on November 3. The subscription follows on November 4, followed by the payment on November 9. The listing date will be announced later.</p><table class="table table-striped">
<colgroup>
<col width="100">
<col width="100">
</colgroup>
<tbody>
<tr><td colspan="2" rowspan="1" data-sheets-value='{"1":2,"2":"Schedule"}'>Schedule</td></tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Book open"}'><strong>Book open</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":44501}' data-sheets-numberformat='{"1":5,"2":"yyyy\". \"mm\". \"dd","3":1}'><strong>2021. 11. 01</strong></td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Book close"}'><strong>Book close</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":44502}' data-sheets-numberformat='{"1":5,"2":"yyyy\". \"mm\". \"dd","3":1}'><strong>2021. 11. 02</strong></td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Allotment"}'>Allotment</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":44503}' data-sheets-numberformat='{"1":5,"2":"yyyy\". \"mm\". \"dd","3":1}'>2021. 11. 03</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Subscription"}'>Subscription</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":44446}' data-sheets-numberformat='{"1":5,"2":"yyyy\". \"mm\". \"dd","3":1}'>2021. 11. 04</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Payment"}'><strong>Payment</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":44449}' data-sheets-numberformat='{"1":5,"2":"yyyy\". \"mm\". \"dd","3":1}'><strong>2021. 11. 09</strong></td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Listing"}'>Listing</td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"-"}'>-</td>
</tr>
<tr><td colspan="2" rowspan="1" data-sheets-value='{"1":2,"2":"Source: DART"}'>Source: DART</td></tr>
</tbody>
</table><p>The share of the largest shareholder will be 60% after listing. The stake is locked for six months. And the amount of inflow through the public offering is 40% of the post-IPO total shares.</p><table class="table table-striped">
<colgroup>
<col width="100">
<col width="100">
<col width="100">
<col width="100">
</colgroup>
<tbody>
<tr>
<td data-sheets-value='{"1":2,"2":"Shareholders"}'>Shareholders</td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"Shares"}'>Shares</td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"Post-IPO shareholding %"}'>Post-IPO shareholding %</td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"Lockup"}'>Lockup</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"TK Chemicals"}'>TK Chemicals</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":18646232}' data-sheets-numberformat='{"1":2,"2":"#,##0","3":1}'>18,646,232</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0.2204}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}'>22.04%</td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"6 months"}'>6 months</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Samra Midas"}'>Samra Midas</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":17846733}' data-sheets-numberformat='{"1":2,"2":"#,##0","3":1}'>17,846,733</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0.2109}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}'>21.09%</td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"6 months"}'>6 months</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Samra Inc"}'>Samra Inc</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":14273365}' data-sheets-numberformat='{"1":2,"2":"#,##0","3":1}'>14,273,365</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0.1687}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}'>16.87%</td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"6 months"}'>6 months</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":" - Major shareholder"}'><strong>- Major shareholder total</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":50766330}' data-sheets-numberformat='{"1":2,"2":"#,##0","3":1}' data-sheets-formula="=sum(R[-3]C[0]:R[-1]C[0])"><strong>50,766,330</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0.6}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}' data-sheets-formula="=sum(R[-3]C[0]:R[-1]C[0])"><strong>60.00%</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"6 months"}'><strong>6 months</strong></td>
</tr>
<tr><td colspan="4"></td></tr>
<tr>
<td data-sheets-value='{"1":2,"2":"ESOP (post-IPO)"}'>ESOP (post-IPO)</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":507663}' data-sheets-numberformat='{"1":2,"2":"#,##0","3":1}'>507,663</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0.006}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}'>0.60%</td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"1 year"}'>1 year</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"IPO"}'>IPO</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":33336557}' data-sheets-numberformat='{"1":2,"2":"#,##0","3":1}'>33,336,557</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0.394}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}'>39.40%</td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"-"}' data-sheets-numberformat='{"1":2,"2":"#,##0","3":1}'>-</td>
</tr>
<tr><td colspan="4" data-sheets-value='{"1":2,"2":"Source: DART"}'>Source: DART</td></tr>
</tbody>
</table>

Offering termsOne of Korea's major flag-carrying maritime transporter (only behind HMM in size), SM Line, put out the IPO prospectus. It will be listed on the KOSDAQ market around late November. The total offering is 34 million shares, representing 50% of the current number of shares outstanding. The institutional allotment is 68.5~75.0% of the offering.





Offering size

Ticker
076710


Bourse
KOSPI


Pre-IPO SO
67,688,440


Offering
33,844,220


- % of SO
50.00%


- Institutional allotment
68.50~75.00%

Source: DART

This is a split offering at a 50:50 ratio. So the capital increase rate is 25%, with a share dilution at 20%.





Split

Primary %
50.00%


Secondary %
50.00%


Post-IPO shares outstanding
84,610,550


Capital increase rate
25.00%


Dilution
20.00%

Source: DART

The book opens on November 1, and the allotment will be disclosed on November 3. The subscription follows on November 4, followed by the payment on November 9. The listing date will be announced later.





Schedule

Book open
2021. 11. 01


Book close
2021. 11. 02


Allotment
2021. 11. 03


Subscription
2021. 11. 04


Payment
2021. 11. 09


Listing
-

Source: DART

The share of the largest shareholder will be 60% after listing. The stake is locked for six months. And the amount of inflow through the public offering is 40% of the post-IPO total shares.








Shareholders
Shares
Post-IPO shareholding %
Lockup


TK Chemicals
18,646,232
22.04%
6 months


Samra Midas
17,846,733
21.09%
6 months


Samra Inc
14,273,365
16.87%
6 months


- Major shareholder total
50,766,330
60.00%
6 months



ESOP (post-IPO)
507,663
0.60%
1 year


IPO
33,336,557
39.40%
-

Source: DART



SM Line IPO: Offering Terms, Valuation Details, & Risk Analysis

South Korea

Pan Ocean Co., Ltd. is a Korean shipping company that engages in marine transportation business. The Company provides bulk cargo carrier, pure car and truck carrier, container and tanker services.

Korea Line Corporation (KLC) owns and operates a fleet of vessels that carry bulk cargo, such as iron core, coal, hot coils, and liquefied natural gas (LNG). The Company provides exclusive lines for Pohang Iron & Steel, Korea Gas, and Korea Electric under long term contracts.  KLC also offers tramp services, and transports grain, sugar, logs, minerals, and steel products.

Heung-A Shipping Co., Ltd. provides shipping trade services.  The Company also provides chemical tankers to transport petrochemicals in areas that includes Japan, Taiwan, China, and Southeast Asian regions.

KSS LINE LTD provides marine transportation services.  The Company mainly transports items such as gas and chemical products.  KSS LINE provides worldwide gas product transportation, Far East and South East Asia area for chemical product shipping.

Eusu Holdings Co., Ltd. is a holding company, which operates marine transportation services such as container service, bulk service, terminal service, and ship lease.

Korean Air Lines Co., Ltd. operates air transportation services.  The Company's services include passenger and cargo transportation, aircraft maintenance, and air catering.  Korean Air Lines provides domestic and international airline services.

Hyundai Glovis Co., Ltd. provides domestic and international logistic services. The Company's services include domestic transportation, storage, packaging, vehicle logistic, and logistic consulting.  GLOVIS also runs automobile auction market for used vehicle.

Hanjin KAL Corporation is a holding company. The Company, through its subsidiaries, engages in airline, hotel, and travel related services. Hanjin also invests in real estates.

Sun Kwang Co., Ltd. provides harbor loading and unloading, general and hard goods transportation, warehouse, cargo handling, container handling, and stevedoring services.  The Company also extracts and sells sea sand for ready mixed concrete manufacturing.

CJ Logistics Corporation provides logistics services. The Company provides land transportation, maritime transportation, harbor unloading, cargo storage, international logistics processing, and other services. CJ Logistics also provides internet home shopping services. CJ Logistics serves customers worldwide.

Orient Overseas International Ltd, through its subsidiaries, owns and leases ships, operates terminals, and provides freight forwarding and container transportation services.  The Company also develops and invests in properties, leases equipment, and invests in securities.

Kirby Corporation operates a fleet of inland tank barges.  The Company transports industrial chemicals, refined petroleum products, black oil products, and agricultural chemicals.  Kirby also overhauls and services diesel engines employed in marine, power generation, and rail applications.

Kawasaki Kisen Kaisha, Ltd. operates marine cargo and passenger transportation around the world.  The Company provides ocean liner, bulk carrier, car carrier, unscheduled specialized carrier, and energy transportation services. The Company also offers insurance, warehousing, and land transportation services.  Items transported include automobile, grain, petroleum, coal, iron ore, and wood chip.

MISC Berhad owns ships and operates shipping and related services. Through its subsidiaries, the Company provides trucking, warehousing and forwarding service, containers and prime movers repair, and container haulage. MISC Berhad also has operation in trucking and launch operator.

Yang Ming Marine Transport provides transportation services and handles domestic and foreign maritime services on cargos.  The Company also operates warehouse, wharf, tug, barge, and container freight station services as well as repairs, leases, and sells containers and chassis.

Wan Hai Lines Ltd. provides marine transportation and shipping agent services. The Company also purchases, sells, and leases vessels and containers as well as operates container freight stations.

SITC International Holdings Company Ltd. offers marine shipping services.  The Company offers container liner shipping, freight forwarding, customs clearance, shipping agency, and ship brokerage services.  SITC operates in Asia.

Evergreen Marine Corp. (Taiwan) Ltd. transports freight by ships. The Company operates container ships to move freight throughout the world. Evergreen Marine has interests in terminals, airline operations and motor freight transportation, as well as container manufacturing.

Mitsui O.S.K. Lines, Ltd. provides marine transportation, warehousing, and cargo handling services.  The Company operates container ship, specialized carrier, oil tankers, and ferry.  Items transported include coal, iron ore, grain, logs, aluminum, cement, industrial salt, copper ore, wood chips, paper products, chemical products, gasoline and other petroleum products, LPG, and other cargoes.

COSCO SHIPPING Energy Transportation Co., Ltd. offers marine shipping services. The Company provides refined oil transportation, crude oil transportation, and other services. COSCO SHIPPING Energy Transportation also ships iron ores, dry bulks, coal, and other products.

Cosco Shipping Energy Transportation Co. Ltd. (H) (1138 HK)

Cosco Shipping Energy Transportation Co. Ltd. (H)

HMM Co., Ltd. provides marine transportation services.  The Company commands different types of vessels including full container vessels, oil tankers, car carriers, LNG carriers, bulk carriers, and tramps.

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HMM Co., Ltd. (011200 KS)

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Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

Global Supply Chain Crisis - Signs of Thawing Out?

In this insight, we discuss about the increasing signs that the crisis involving the global supply chains may be thawing out.

Douglas Kim

SM Line IPO - Opportunistic Listing

SM Line Corp (076710 KS) (SML) is looking to raise US$710m by selling a mix of primary and secondary shares in its South Korea IPO.

Sumeet Singh

HMM Perpetual Bond Conversion Situation Update for Short Position

This post examines and discusses the latest development in HMM's perpetual bond (exclusively owned by KOBC) conversion situation.

Sanghyun Park

HMM CEO Letter to Shareholders Concerning Share Price Decline

HMM CEO posted a letter to shareholders on the corporate website today concerning the recent share price decline. This letter contains some...

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SM Line IPO: Offering Terms, Valuation Details, & Risk Analysis

SM Line, one of Korea's two flag-carrying maritime transporters, plans to go public. This post details the offering terms and discusses the...

Sanghyun Park