Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

Event-Driven

<ul>
<li>In this insight, we discuss the five most aggressive corporate activist firms that have been moving the Korean equity market in the past year.</li>
<li>They include Align Partners Capital Management, KCGI, Flashlight Capital Partners, Truston, and LIFE Asset Management.</li>
<li>Share prices of 15 companies that the corporate activist firms have invested in Korea are up on average 9.7% YTD, outperforming KOSPI which is up 7.1% in the same period.</li>
</ul>


In this insight, we discuss the five most aggressive corporate activist firms that have been moving the Korean equity market in the past year.
They include Align Partners Capital Management, KCGI, Flashlight Capital Partners, Truston, and LIFE Asset Management.
Share prices of 15 companies that the corporate activist firms have invested in Korea are up on average 9.7% YTD, outperforming KOSPI which is up 7.1% in the same period.


Five Most Aggressive Corporate Activists Moving the Korean Market: Align, KCGI, FCP, Truston, & LIFE

<ul>
<li>In early December, the divorce settlement between SK Group Chairman Chey Tae-Won and his former wife Roh So-Young was finalized after 6+ years of long proceedings.</li>
<li>The end of the divorce settlement means that there is now a greater probability of SK Inc materially cancelling some of its treasury shares in 2023. </li>
<li>Our SoTP valuation of SK Inc suggests an implied valuation of 260,712 won per share, suggesting 28.1% upside from current levels.</li>
</ul>


In early December, the divorce settlement between SK Group Chairman Chey Tae-Won and his former wife Roh So-Young was finalized after 6+ years of long proceedings.
The end of the divorce settlement means that there is now a greater probability of SK Inc materially cancelling some of its treasury shares in 2023. 
Our SoTP valuation of SK Inc suggests an implied valuation of 260,712 won per share, suggesting 28.1% upside from current levels.


SK Inc: Chairman Chey's Divorce Settlement Finalized + SoTP Valuation Analysis

Global Healthcare Analyst

Tina Banerjee

Equity Bottom-Up

SK Biopharmaceuticals   / Equity Bottom-Up

<ul>
<li>
<a href="https://www.smartkarma.com/entities/sk-biopharmaceuticals-co-ltd" target="_blank" data-smartkarma-citation="entities:28966:1" rel="noopener">SK Biopharmaceuticals Co Ltd (326030 KS)</a> is reporting continued stellar performance of its flagship drug cenobamate in US, with Q2 sales rising 114% y/y and 27% q/q to KRW40.3 billion.</li>
<li>Thus far, cenobamate has been launched in the U.S. and EU. The company is looking to launch the drug in Korea, China, and Japan in 2025.</li>
<li>Going forward, the company is expected to narrow its losses, and should turn profitable in 2024. The company is expected to launch new drug, carisbamate in global market in 2025.</li>
</ul>



SK Biopharmaceuticals Co Ltd (326030 KS) is reporting continued stellar performance of its flagship drug cenobamate in US, with Q2 sales rising 114% y/y and 27% q/q to KRW40.3 billion.
Thus far, cenobamate has been launched in the U.S. and EU. The company is looking to launch the drug in Korea, China, and Japan in 2025.
Going forward, the company is expected to narrow its losses, and should turn profitable in 2024. The company is expected to launch new drug, carisbamate in global market in 2025.


SK Biopharmaceuticals (326030 KS): Strong Xcopri US Sales Not Reflected in Share Price Performance

<ul>
<li>Our base case target price of 276,567 won suggests a 37% upside from current levels for SK Inc. Our base case valuation assumes a 30% holdco discount.</li>
<li>At DPS of 8,000 won, this would represent dividend yield of 4% at current price of 202,000 won.</li>
<li>The three largest holdcos/quasi holdcos in Korea which include Samsung C&amp;T, SK Inc, and LG Corp have strongly outperformed KOSPI this year. </li>
</ul>


Our base case target price of 276,567 won suggests a 37% upside from current levels for SK Inc. Our base case valuation assumes a 30% holdco discount.
At DPS of 8,000 won, this would represent dividend yield of 4% at current price of 202,000 won.
The three largest holdcos/quasi holdcos in Korea which include Samsung C&amp;T, SK Inc, and LG Corp have strongly outperformed KOSPI this year. 


SK Inc: Solid Dividends, Ongoing Buyback, and Emphasis on Value Should Lead to Outperformance

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.

<ul>
<li>In the wake of this incident, the presidential office suggested that Kakao Corp should be brought into the framework of regulation as a national infrastructure operator.</li>
<li>This is likely to be the leading investment point that attracts the most attention from the market for Kakao.</li>
<li>Regulatory risks will inevitably act as a structural and long-term discount factor for Kakao Corp, and we need to design a short position based on this angle.</li>
</ul>


In the wake of this incident, the presidential office suggested that Kakao Corp should be brought into the framework of regulation as a national infrastructure operator.
This is likely to be the leading investment point that attracts the most attention from the market for Kakao.
Regulatory risks will inevitably act as a structural and long-term discount factor for Kakao Corp, and we need to design a short position based on this angle.


Shorting Angle on Kakao Corp in the Wake of an Unprecedented Server Failure Incident

South Korea

Posco DX Company Ltd. provides information and technology services. The Company provides computer systems design, computer and server merchant wholesale, computer and office machine repair and maintenance services. Posco DX also offers eic engineering, smart factory, wireless networking equipment, steel manufacturing, and digital video recorder manufacturing services.

LG Display Co., Ltd. develops and manufactures digital display products.  The Company's products include thin film transistor-liquid crystal displays (TFT-LCD) for notebook and desktop computer monitors, TVs, mobile phones, and medical equipment.  LG Display provides its products mainly to overseas markets.

LG Innotek Co., Ltd. develops and produces cellular phone parts such as mini vibration motors, LCD modules, light emitting diode (LED), camera modules, protection circuit modules. The Company also manufactures liquid crystal displays (LCD) and plasma display panels (PDP) parts such as inverters, intelligent power modules, multi chip modules, and tuners.

Samsung SDS Co., Ltd. provides information technology services, such as consulting and technical services. The Company also offers outsourcing services including application outsourcing, IT infrastructure outsourcing, and cloud computing.

Samsung Electro-Mechanics Co., Ltd. manufactures a variety of electronic components used in computers, audio and video products, industrial electronics, and telecommunication equipment. The Company's products include multi-layer boards and capacitors, optical Pick Ups, deflection yokes (DY), keyboards, speakers, and light emitting diode (LED) products.

Samsung Electro Mechanics Co, Ltd. (009150 KS)

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.

NCSOFT Corporation develops and markets on-line games that enable users to play over the Internet and computer software, such as web editing software.  The Company also designs and constructs databases, Intranet, and commercial Internet access systems.

COSMOAM&T Co., Ltd. manufactures, sells, and exports blank video & audio recording tapes including back-coated tapes, high speed recordable tapes, and video head cleaners.  The Company also produces recordable and rewritable optical discs, such as compact discs (CD), mini discs (MD), and digital video discs (DVD).

LEENO Industrial Inc. develops and manufactures various testers.  The Company's products include integrated circuit (IC) test sockets, test probe pins used in semiconductor industry.

Hyundai Autoever Corp. provides information technology services. The Company offers system integration, system management, information system development, and other services. Hyundai Autoever offers services worldwide.

Zhejiang Chint Electrics Co., Ltd. manufactures low voltage electric appliances. The Company's products include high, Medium and low voltage electrical apparatus, power transmission and distribution equipment, and measuring meters and instruments.

Mercury Systems, Inc. designs, manufactures, and markets real-time digital signal processing computer systems.  The Company's systems transform sensor generated data into information which can be displayed as images for human interpretation or subjected to additional computer analysis.  Products are marketed to the defense electronics and medical diagnostic imaging businesses.

Xinte Energy Co., Limited solar-grade polysilicon producer and PV project contractor. The Company provides polysilcon production, sales of electricity, engineering and construction contracting, inverter manufacturing, and PV wafer and module manufacturing.

SUMCO Corporation manufactures silicon wafers for the semiconductor industry. The Company produces silicon wafers used to produce solar batteries as well as ultra-high purity quartz used to produce vessels for silicon manufacturing process. SUMCO markets its products worldwide.

Yandex NV operates an Internet website in Russia.  The Company's website offers an Internet search engine, news, shopping information, blogs, photographs and videos.  Yandex earns its revenues from online advertising.

Kingsoft Corporation Ltd. develops and markets computer software.  The Company develops role-playing computer games and security, word processing, and spreadsheet software.

Technology One Limited is an Australian-based company that is engaged in the development, marketing, sales, implementation, support, and distribution of financial management and enterprise software solutions. The Company has operations in New Zealand, the United Kingdom, the South Pacific, and Malaysia.

Axcelis Technologies, Inc. manufactures components for the semiconductor industry. The Company designs, manufactures and services ion implantation, dry strip, thermal processing and curing equipment used in the fabrication of semiconductor chips. Axcelis Technologies sells their products to semiconductor chip manufacturers worldwide.

MA-COM Technology Solutions Holdings Inc. provides high performance analog semiconductor solutions. The Company supplies semiconductors, active and passive components, and sub-assemblies for use in radio frequency, microwave, and millimeter wave applications. MA-COM Technology Solutions serves customers throughout the United States.

GMO Payment Gateway, Inc. provides credit card transaction services for electronic commerce firms.

SK Holdings Co., Ltd. is a holdings company that is engaged in various industries including energy, chemicals, information technology, semiconductors, marketing, and services businesses in South Korea and internationally.

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SK Inc (034730 KS)

Five Most Aggressive Corporate Activists Moving the Korean Market: Align, KCGI, FCP, Truston, & LIFE

In this insight, we discuss the five most aggressive corporate activist firms that have been moving the Korean equity market in the past year.

Douglas Kim

SK Inc: Chairman Chey's Divorce Settlement Finalized + SoTP Valuation Analysis

In early December, the divorce settlement between SK Group Chairman Chey Tae-Won and his former wife Roh So-Young was finalized after 6+ years of...

Douglas Kim

SK Inc: Solid Dividends, Ongoing Buyback, and Emphasis on Value Should Lead to Outperformance

Our base case target price of 276,567 won suggests a 37% upside from current levels for SK Inc. Our base case valuation assumes a 30% holdco discount.

Douglas Kim

Shorting Angle on Kakao Corp in the Wake of an Unprecedented Server Failure Incident

This post summarizes Kakao's unprecedented server failure incident and examines the leading investment point based on the imminent regulatory risks.

Sanghyun Park

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

Five Most Aggressive Corporate Activists Moving the Korean Market: Align, KCGI, FCP, Truston, & LIFE

In this insight, we discuss the five most aggressive corporate activist firms that have been moving the Korean equity market in the past year.

Douglas Kim

SK Inc: Chairman Chey's Divorce Settlement Finalized + SoTP Valuation Analysis

In early December, the divorce settlement between SK Group Chairman Chey Tae-Won and his former wife Roh So-Young was finalized after 6+ years of...

Douglas Kim

SK Biopharmaceuticals (326030 KS): Strong Xcopri US Sales Not Reflected in Share Price Performance

Flagship drug Xcopri is on high gear in US, thanks to strong efficacy and aggressive promotion. SK Biopharmaceuticals targets Xcopri sales of...

Tina Banerjee

SK Inc: Solid Dividends, Ongoing Buyback, and Emphasis on Value Should Lead to Outperformance

Our base case target price of 276,567 won suggests a 37% upside from current levels for SK Inc. Our base case valuation assumes a 30% holdco discount.

Douglas Kim

Shorting Angle on Kakao Corp in the Wake of an Unprecedented Server Failure Incident

This post summarizes Kakao's unprecedented server failure incident and examines the leading investment point based on the imminent regulatory risks.

Sanghyun Park