Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

Equity Capital Markets

Myoung Shin Industrial Co.,Ltd / Equity Capital Markets

Myungshin Industrial, which is one of the Korean auto parts suppliers to Tesla, is getting ready to complete its IPO in November. The IPO price range is from 4,900 won to 5,800 won. The IPO base deal size is from $67 million to $79 million. Mirae Asset Daewoo Securities is the lead underwriter of the IPO. The book-building for the institutional investors starts on 5 November 2020.
The company has experienced tremendous growth in sales and profits in the past five years. Its sales jumped by 42.9% CAGR from 2016 to 2019. Its operating profit surged from 9.5 billion won in 2016 to 59.6 billion won in 2019. In 1H 2020, the company generated sales of 354.8 billion won (down 6.4% YoY), and an operating profit of 22.8 billion won (down 24.5% YoY).

Myungshin Industrial, which is one of the Korean auto parts suppliers to Tesla, is getting ready to complete its IPO in November. The IPO price range is from 4,900 won to 5,800 won. The IPO base deal size is from $67 million to $79 million. Mirae Asset Daewoo Securities is the lead underwriter of the IPO. The book-building for the institutional investors starts on 5 November 2020.
The company has experienced tremendous growth in sales and profits in the past five years. Its sales jumped by 42.9% CAGR from 2016 to 2019. Its operating profit surged from 9.5 billion won in 2016 to 59.6 billion won in 2019. In 1H 2020, the company generated sales of 354.8 billion won (down 6.4% YoY), and an operating profit of 22.8 billion won (down 24.5% YoY). 

Myungshin Industrial IPO Preview - A Korean Hot Stamping Auto Parts Supplier to Tesla

Private Capital Markets

<a href="http://www.koreaninvestors.com/?p=12720" target="_blank" rel="noopener">Socar Inc</a> became another South Korean unicorn last month, valuing the company around 1.1 trillion won after received new funding worth 50 billion won from SG Private Equity in September. This follows an investment of 50 billion won from SoftBank Ventures and LB Private Equity in early 2020. Established in 2011, Socar is now the biggest mobility, car-sharing platform in Korea.

Socar Inc became another South Korean unicorn last month, valuing the company around 1.1 trillion won after received new funding worth 50 billion won from SG Private Equity in September. This follows an investment of 50 billion won from SoftBank Ventures and LB Private Equity in early 2020. Established in 2011, Socar is now the biggest mobility, car-sharing platform in Korea.

Socar: The Biggest Car-Sharing Platform in Korea Becomes the Next Unicorn

Cross Asset Strategy

<div class="content-highlight">
It has been nearly five years that I have contributed on the Smartkarma research platform. In this insight, I share some of the details of the 12 major "bread &amp; butter" IPOs &amp; EVENT-DRIVEN trading strategies in Korea. The main purpose of this insight is to provide a broad overview of the key investment strategies of these IPOs &amp; event-driven strategies in Korea so that the readers become more aware of them and put them into action on a repeatable and consistent basis. 
Nonetheless, I would like to emphasize that although these IPOs &amp; EVENT-DRIVEN (also called Special Situations) strategies are put into 12 major categories, the art of investing is capitalizing on the optimal risk/reward opportunities of each investment, which is often a BEAST of its own.
</div>The following are the 12 major IPOs &amp; EVENT-DRIVEN trading strategies in Korea that I have detailed in this report:<ul>
<li>IPOs (Take Partial Profits at 100% of IPO Price) &amp; Let the Winners Run</li>
<li>IPOs (Track the Key Shareholding Companies Ahead of IPOs)</li>
<li>Big Share Transfer from Chairman/Chairwoman to Children</li>
<li>Holding Companies (Pre-Formations &amp; Pair Trades)</li>
<li>Indices Inclusions &amp; Exclusions (Index Arbitrage)</li>
<li>Share Buybacks, Owners Purchases, &amp; Stock Option Grants</li>
<li>Rights Offerings: Short the Stock (Pre Rights Offering) &amp; Buy the Rights or Subscribe to the Newly Issued Shares at Discount</li>
<li>Restructuring &amp; Change in CEO</li>
<li>Spin-Offs, Split-Offs, and Carve-Outs</li>
<li>Prefs vs. Common</li>
<li>Placements</li>
<li>Mergers &amp; Acquisitions/Tender Offers/Activism</li>
</ul>


It has been nearly five years that I have contributed on the Smartkarma research platform. In this insight, I share some of the details of the 12 major "bread &amp; butter" IPOs &amp; EVENT-DRIVEN trading strategies in Korea. The main purpose of this insight is to provide a broad overview of the key investment strategies of these IPOs &amp; event-driven strategies in Korea so that the readers become more aware of them and put them into action on a repeatable and consistent basis. 
Nonetheless, I would like to emphasize that although these IPOs &amp; EVENT-DRIVEN (also called Special Situations) strategies are put into 12 major categories, the art of investing is capitalizing on the optimal risk/reward opportunities of each investment, which is often a BEAST of its own.
The following are the 12 major IPOs &amp; EVENT-DRIVEN trading strategies in Korea that I have detailed in this report:
IPOs (Take Partial Profits at 100% of IPO Price) &amp; Let the Winners Run
IPOs (Track the Key Shareholding Companies Ahead of IPOs)
Big Share Transfer from Chairman/Chairwoman to Children
Holding Companies (Pre-Formations &amp; Pair Trades)
Indices Inclusions &amp; Exclusions (Index Arbitrage)
Share Buybacks, Owners Purchases, &amp; Stock Option Grants
Rights Offerings: Short the Stock (Pre Rights Offering) &amp; Buy the Rights or Subscribe to the Newly Issued Shares at Discount
Restructuring &amp; Change in CEO
Spin-Offs, Split-Offs, and Carve-Outs
Prefs vs. Common
Placements
Mergers &amp; Acquisitions/Tender Offers/Activism


12 Major IPOs & Event-Driven Trading Strategies in the Korean Stock Market

Korea / Special Sits, Pairs, Index Rebalancing, Clepsydra Capital

Sanghyun Park

Korea / Special Sits, Pairs, Index Rebalancing

Event-Driven

Hyundai Mobis resumes buyback starting today (October 5).Mobis announced the 3-year shareholder return plan from 2019 to 2021, including a ₩1T buyback and ₩1.1T dividends.This time, the target is 0.96M ordinary shares, a bit less than the last one (1.3M shares for ₩323B). It represents 1.03% of the SO. At the previous close, it amounts to ₩226B, of which 28% will get canceled.The lock-up of the remaining bought-back shares is six months.It is the second buyback since the announcement. So, we will have one or two more buybacks by the end of 2021 for the remaining ₩450B to hit the ₩1T target.





Overview

Name
HYUNDAI MOBIS CO., LTD.


Ticker
012330


Shares outstanding
95,058,668


- Common
95,054,694


- Pref
3,974


Treasury shares
1,617,535


- Common
1,617,535


- Pref
0


Target qty.
983,000


- % of SO
1.03%


- Common
983,000


- % of total common shares
1.03%


- % of common treasury shares
60.77%


- Pref
0


- % of total pref shares
-


- % of pref treasury shares
-


Treasury shares after buyback
2,600,535


- % of SO
2.74%


- % of common
2.74%


- % of pref
-


Total value
₩226,090,000,000


- Common
₩226,090,000,000


- Pref
₩0


Market cap
₩21,863,493,640,000


- % of market cap
1.03%


Equity
₩23,500,426,547,075


- % of equity
0.96%


Cancellation
₩62,500,000,000


- % of total buyback
27.64%


- Qty.
271,739


Lock up for the remaining
Six months

Source: DART

The execution is until December 28, which gives us a total of 60 trading days.The daily limit is 130,000, a quarter of the 1M ADT, 11% of the target, and 0.1% of the SO.If it buys an equal quantity each day, 16K will be the number, representing 3.7% of the DTV.Hyundai Motor Securities will execute the trading, and it will buy all shares openly in the market.






Execution

Buyback begins
2020. 10. 5


Buyback ends
2020. 12. 28


Bankers
Hyundai Motor Securities


Method
Openly in the market (no off-hours block trade)


Daily limit
110,050


- % of 1M DTV
25.00%


- % of target qty.
11.20%


- % of the total common shares
0.12%


Number of trading days
60


Average daily equal buyback qty.
16,383


- % of 1M DTV
3.71%


- % of target qty.
1.67%


- % of the total common shares
0.02%


Value of average daily equal buyback qty.
₩3,768,166,667


Market cap
₩21,863,493,640,000


ADTV
₩101,511,420,000

Source: DART &amp; Google Finance


The treasury shares now account for 1.7%. The buyback/cancellation will put it at 2.5% of the SO. The major shareholders' stake will rise to 31.3% after the cancellation.








Shareholding
Before
After


Kia Motors Corporation
17.28%
17.33%


Chung Mong-koo
7.13%
7.15%


Hyundai Steel Co
5.79%
5.81%


Hyundai Glovis Co Ltd
0.69%
0.69%


Chung Eui-sun
0.32%
0.32%


- Major shareholder
31.22%
31.31%


Korea NPS
11.90%
11.93%


Mirae Asset
5.08%
5.10%


Treasury shares
1.70%
2.46%

Source: DART &amp; FnGuide



Hyundai Mobis Share Buyback: Terms & Trading Dynamics

<div class="content-highlight">
On 29 September, <a href="https://www.smartkarma.com/entities/hyundai-mobis-co-ltd" target="_blank" data-smartkarma-citation="entities:6089:1" rel="noopener">Hyundai Mobis (012330 KS)</a> announced that it will buy back 221 billion won (US$188 million) worth of its shares (983,000 shares), representing 1% of shares outstanding. Of the 221 billion won worth of share repurchase, it will cancel 62.5 billion won worth of shares. The share repurchase will occur from 5 October to 28 December 2020. 
This share buyback is part of the 1 trillion won share buyback program (over 3 years period) that the company announced back in February 2019. Due to the uncertainties associated with COVID-19, Hyundai Mobis decided not to buy back shares in 1H 2020 but now with the COVID-19 partly under control in Korea, the company decided that now is the time to conduct share repurchase again. 
</div>


On 29 September, Hyundai Mobis (012330 KS) announced that it will buy back 221 billion won (US$188 million) worth of its shares (983,000 shares), representing 1% of shares outstanding. Of the 221 billion won worth of share repurchase, it will cancel 62.5 billion won worth of shares. The share repurchase will occur from 5 October to 28 December 2020. 
This share buyback is part of the 1 trillion won share buyback program (over 3 years period) that the company announced back in February 2019. Due to the uncertainties associated with COVID-19, Hyundai Mobis decided not to buy back shares in 1H 2020 but now with the COVID-19 partly under control in Korea, the company decided that now is the time to conduct share repurchase again. 


Hyundai Mobis - Restarts Its Big Share Buyback Program in 4Q 2020

South Korea

Hyundai Motor Company manufactures, sells, and exports passenger cars, trucks, and commercial vehicles. The Company also sells various auto parts and operates auto repair service centers throughout South Korea. Hyundai Motor provides financial services through its subsidiaries.

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Hyundai Motor (005385 KS)

Myungshin Industrial IPO Preview - A Korean Hot Stamping Auto Parts Supplier to Tesla

Myungshin Industrial, which is one of the Korean auto parts suppliers to Tesla, is getting ready to complete its IPO in November.

Douglas Kim

12 Major IPOs & Event-Driven Trading Strategies in the Korean Stock Market

https://mergerarbitragelimited.com/event-driven-investment-strategies/

Douglas Kim

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Myungshin Industrial IPO Preview - A Korean Hot Stamping Auto Parts Supplier to Tesla

Myungshin Industrial, which is one of the Korean auto parts suppliers to Tesla, is getting ready to complete its IPO in November.

Douglas Kim

Socar: The Biggest Car-Sharing Platform in Korea Becomes the Next Unicorn

Socar Inc became another South Korean unicorn last month, valuing the company around 1.1 trillion won after received new funding worth 50 billion...

Douglas Kim

12 Major IPOs & Event-Driven Trading Strategies in the Korean Stock Market

https://mergerarbitragelimited.com/event-driven-investment-strategies/

Douglas Kim

Hyundai Mobis Share Buyback: Terms & Trading Dynamics

Hyundai Mobis resumes Mobis began to buy back starting yesterday. Target is 1.3M shares. This represents 1.36% of SO. At last close, this amounts...

Sanghyun Park

Hyundai Mobis - Restarts Its Big Share Buyback Program in 4Q 2020

On 29 September, Hyundai Mobis (012330 KS) announced that it will buy back 221 billion won (US$188 million) worth of its shares (983,000 shares),...

Douglas Kim