Japan/Asia Long-Short, LightStream Research

Mio Kato

Japan/Asia Long-Short

Long-Short Analysis on Japan, Asia and the World

LightStream Research

LightStream conducts quantitatively rigorous and data-driven analysis with a focus on Japan and Asia.

We consistently cover the Tech, Consumer and Industrial sectors, and provide ECM and Events coverage more broadly.

We supplement traditional qualitative insights from company relationships with a robust quantitative foundation that examines as much historical data as is available.
We further refine the accuracy of our insights and calls through the use of alternative data to flesh out current trends, and through a valuation framework that emphasises non-superficial peer group selection and a proper attempt to understand the metrics and changes that have driven security valuations in the past.

Event-Driven

<ul>
<li>Our enthusiasm for the LG Energy Solutions IPO has been rather muted given a plethora of red flags and demanding valuations. </li>
<li>However, given market enthusiasm for the name, the underperformance of parent LG Chem created an opportunity. </li>
<li>A 16% move in four days has corrected most of the discrepancy though and it is time to leave in our view.</li>
</ul>


Our enthusiasm for the LG Energy Solutions IPO has been rather muted given a plethora of red flags and demanding valuations. 
However, given market enthusiasm for the name, the underperformance of parent LG Chem created an opportunity. 
A 16% move in four days has corrected most of the discrepancy though and it is time to leave in our view.


LG Chem – Holdco Discount Narrowed Like a Charm… Time to Exit

SGX Market Strategist, Equity & Fixed Income, Singapore Exchange Ltd (SGX)

Geoff Howie

SGX Market Strategist, Equity & Fixed Income

Asia’s leading multi-asset exchange

Singapore Exchange Ltd (SGX)

Singapore Exchange is Asia’s leading and trusted market infrastructure, facilitating the exchange of capital and ideas to create value for people, businesses and economies. As a multi-asset exchange operating equity, fixed income and derivatives markets to the highest regulatory standards, SGX is a vertically integrated business that provides listing, trading, clearing, settlement, depository and data services.

With about 40% of listed companies and over 80% of listed bonds originating outside of Singapore as well as established linkages across the region and in Europe, SGX is Asia’s most international and connected exchange. Offering a full suite of derivatives products across Asian equity indices, commodities and currencies, SGX is the world’s most liquid international market for the benchmark equity indices of China, India, Japan and ASEAN.

As Asia’s pioneering central counterparty, SGX is globally recognised for its risk management and clearing capabilities, and was one of the first globally to adopt the Principles for Financial Market Infrastructure.

Headquartered in AAA-rated Singapore, SGX has over 800 employees including offices in Beijing, Chicago, Hong Kong, London, New York, Mumbai, San Francisco, Shanghai and Tokyo.

Equity Bottom-Up

Hyundai Engineering & Construction / Equity Bottom-Up

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

<ul>
<li>As for the themed indexes, a lot of confusion arises from inclusion timing and whether to replace LG Chem with LG Energy OR include both LG Energy and LG Chem.</li>
<li>TIGER and KODEX will likely implement it <strong>right after February 9</strong>, seven trading days after listing.</li>
<li>The possibility that LG Chem and LG Energy will both remain in these themed indexes is near zero. <strong>LG Energy will replace LG Chem</strong>.</li>
</ul>


As for the themed indexes, a lot of confusion arises from inclusion timing and whether to replace LG Chem with LG Energy OR include both LG Energy and LG Chem.
TIGER and KODEX will likely implement it right after February 9, seven trading days after listing.
The possibility that LG Chem and LG Energy will both remain in these themed indexes is near zero. LG Energy will replace LG Chem.


LG Energy Themed ETFs Methodology Changes: Latest Situation Update

IPOs and Catalysts/Events, Global Equity Research Ltd

Arun George

IPOs and Catalysts/Events

Uncompromised, Independent, Conflict-Free Research

Global Equity Research Ltd

Global Equity Research was started in 2017 by a group of experienced research professionals. It was founded on a passionate belief in the importance and the need for uncompromised, independent, conflict-free research. We aim to provide differentiated and actionable primary and bottom up fundamental research.

<ul>
<li>
<a href="https://www.smartkarma.com/entities/lg-energy-solution" target="_blank" data-smartkarma-citation="entities:33464:1" rel="noopener">LG Energy Solution (LGENERGY KS)</a> has launched its IPO to raise US$9.2-10.8 billion at the price range of KRW257,000-300,000 per share.</li>
<li>In <a href="https://www.smartkarma.com/insights/lg-energy-solution-ipo-initiation-amp-my-ride" target="_blank" data-smartkarma-citation="insights:62402" rel="noopener">LG Energy Solution IPO Initiation: Amp My Ride</a>, we stated that LGES has attractive fundamentals with a strong backlog, healthy revenue growth and improving margins.</li>
<li>Our base-case DCF value is KRW321,594 per share, 15% above the mid-point of the IPO price range. Our DCF sensitivity analysis shows that the IPO price remains attractive. </li>
</ul>



LG Energy Solution (LGENERGY KS) has launched its IPO to raise US$9.2-10.8 billion at the price range of KRW257,000-300,000 per share.
In LG Energy Solution IPO Initiation: Amp My Ride, we stated that LGES has attractive fundamentals with a strong backlog, healthy revenue growth and improving margins.
Our base-case DCF value is KRW321,594 per share, 15% above the mid-point of the IPO price range. Our DCF sensitivity analysis shows that the IPO price remains attractive. 


LG Energy Solution IPO: DCF Scenario Analysis

Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

<ul>
<li>Why has LG Chem's share price fallen so much in the past two months and why is this falling trend likely to be near its end? </li>
<li>With the IPO bookbuilding of LG Energy Solution only a week away, many investors are placing a greater positive emphasis on the potential value of LG Energy Solution.</li>
<li>Our base case NAV analysis of LG Chem is 744,246 won, which is 20.4% higher than the current price. We assume 424,093 won for LG Energy Solution target price. </li>
</ul>


Why has LG Chem's share price fallen so much in the past two months and why is this falling trend likely to be near its end? 
With the IPO bookbuilding of LG Energy Solution only a week away, many investors are placing a greater positive emphasis on the potential value of LG Energy Solution.
Our base case NAV analysis of LG Chem is 744,246 won, which is 20.4% higher than the current price. We assume 424,093 won for LG Energy Solution target price. 


NAV Analysis of LG Chem Suggests Excessive Selling Overdone

South Korea

LG Chem Ltd. is a chemical manufacturer.  The Company's products include petrochemicals, plastic resins, and engineering plastics.  LG Chem also produces industrial and electronic materials.

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LG Chem Ltd (051910 KS)

LG Chem – Holdco Discount Narrowed Like a Charm… Time to Exit

Market enthusiasm for the LG Energy IPO and the underperformance of parent LG Chem created an opportunity. A 16% move in four days has corrected...

Mio Kato

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Singapore Exchange Ltd (SGX)

LG Energy Themed ETFs Methodology Changes: Latest Situation Update

This post updates the latest situations on LG Energy's inclusion into the battery-themed ETFs: inclusion timing and whether to replace LG Chem.

Sanghyun Park

LG Energy Solution IPO: DCF Scenario Analysis

Our base-case DCF value is KRW321,594 per share, 15% above the mid-point of the IPO price range. Our DCF sensitivity analysis shows that the IPO...

Arun George

NAV Analysis of LG Chem Suggests Excessive Selling Overdone

We believe LG Chem's share price has fallen too excessively in the past two months. Our base case NAV analysis of LG Chem is 744,246 won, which is...

Douglas Kim

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