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

<div><div><h2>Offering size</h2></div></div><div>
<p>HK inno.N offers 10.1M shares, which account for 43.75% of the pre-IPO total shares, of which 55-75% are allocated to institutions. It will be listed on KOSDAQ.</p>
<div class="content-highlight">
<p><strong>Who is HK inno.N?</strong></p>
<p>HK inno.N was a subsidiary of CJ Group, established in April 2014 through a physical spin-off of CJ CheilJedang's pharmaceutical business.</p>
<p>However, HK inno.N was acquired by Kolmar Korea on April 18, 2018, and <strong>the corporate name was changed from CJ Healthcare Co., Ltd. to HK Innoen Co., Ltd. in February 2020</strong>.</p>
</div>
<table class="table table-striped">
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<tr><td colspan="2" rowspan="1" data-sheets-value='{"1":2,"2":"Offering size"}'>Offering size</td></tr>
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<td data-sheets-value='{"1":2,"2":"Ticker"}' data-sheets-formula="=R[-44]C[0]">Ticker</td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"195940"}' data-sheets-numberformat='{"1":2,"2":"[$₩-412]#,##0","3":1}' data-sheets-formula="=R[-44]C[0]">195940</td>
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<td data-sheets-value='{"1":2,"2":"Bourse"}' data-sheets-formula="=R[-44]C[0]">Bourse</td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"KOSDAQ"}' data-sheets-numberformat='{"1":2,"2":"[$₩-412]#,##0","3":1}' data-sheets-formula="=R[-44]C[0]">KOSDAQ</td>
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<td data-sheets-value='{"1":2,"2":"Offering"}'><strong>Offering</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":10117000}' data-sheets-numberformat='{"1":2,"2":"#,##0","3":1}' data-sheets-formula="=R[-41]C[0]"><strong>10,117,000</strong></td>
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<td data-sheets-value='{"1":2,"2":"- % of pre-IPO SO"}'><strong>- % of pre-IPO SO</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0.43752029050620755}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}' data-sheets-formula="=R[-39]C[0]"><strong>43.75%</strong></td>
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<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%"}'><strong>55.00~75.00%</strong></td>
</tr>
<tr><td colspan="2" rowspan="1" data-sheets-value='{"1":2,"2":"Source: DART"}'>Source: DART</td></tr>
</tbody>
</table>
<div><h2>Split</h2></div>
<div>
<p>This IPO is a split offering with a primary of 57.14% and a secondary of 42.86%. As a result, this offering will see a capital increase rate of 25% with a shareholding dilution of 20%. This IPO is free of any additional options: cornerstone, clawback, or greenshoe.</p>
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<tr><td colspan="2" rowspan="1" data-sheets-value='{"1":2,"2":"Split"}'>Split</td></tr>
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<td data-sheets-value='{"1":2,"2":"Primary %"}'><strong>Primary %</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0.571414450924187}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}' data-sheets-formula="=R[-41]C[0]"><strong>57.14%</strong></td>
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<td data-sheets-value='{"1":2,"2":"Secondary %"}'><strong>Secondary %</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0.428585549075813}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}' data-sheets-formula="=R[-40]C[0]"><strong>42.86%</strong></td>
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<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":0.2500054165677954}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}' data-sheets-formula="=R[-38]C[0]">25.00%</td>
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<td data-sheets-value='{"1":2,"2":"Dilution"}'>Dilution</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0.20000346658836743}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}' data-sheets-formula="=R[-38]C[0]">20.00%</td>
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<tr><td colspan="2" rowspan="1" data-sheets-value='{"1":2,"2":"Source: DART"}'>Source: DART</td></tr>
</tbody>
</table>
</div>
<div><div><h2>Schedule</h2></div></div>
<div>
<p>The book opens on July 13 (for overseas investors) and runs until July 26. The allotment will be on July 28 as the offering price is finalized. The subscription falls on July 29.</p>
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<tr><td colspan="2" rowspan="1" data-sheets-value='{"1":2,"2":"Schedule"}'>Schedule</td></tr>
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<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":44390}' data-sheets-numberformat='{"1":5,"2":"yyyy. m. d","3":1}'><strong>2021. 7. 13</strong></td>
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<td data-sheets-value='{"1":2,"2":"Book close"}'>Book close</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":44403}' data-sheets-numberformat='{"1":5,"2":"yyyy. m. d","3":1}'>2021. 7. 26</td>
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<td data-sheets-value='{"1":2,"2":"Allotment"}'><strong>Allotment</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":44405}' data-sheets-numberformat='{"1":5,"2":"yyyy. m. d","3":1}'><strong>2021. 7. 28</strong></td>
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<td data-sheets-value='{"1":2,"2":"Subscription"}'><strong>Subscription</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":44406}' data-sheets-numberformat='{"1":5,"2":"yyyy. m. d","3":1}'><strong>2021. 7. 29</strong></td>
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<tr>
<td data-sheets-value='{"1":2,"2":"Payment"}'>Payment</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":44411}' data-sheets-numberformat='{"1":5,"2":"yyyy. m. d","3":1}'>2021. 8. 3</td>
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<td data-sheets-value='{"1":2,"2":"Listing"}'>Listing</td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"TBA"}'>TBA</td>
</tr>
<tr><td colspan="2" rowspan="1" data-sheets-value='{"1":2,"2":"Source: DART"}'>Source: DART</td></tr>
</tbody>
</table>
</div>
<div><h2>Pricing</h2></div>
<div>
<p>HK inno.N used EV/EBITDA. The corporate value was determined after selecting three local pharmaceutical companies: 1. Yuhan, 2. Chong Kun Dang Pharmaceutical, and 3. Daewoong Pharmaceutical. The respective EV/EBITDA multiples are 25.93x for Yuhan, 10.30x for Chong Kun Dang, and 26.8x for Daewoong Pharm.</p>
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<td data-sheets-value='{"1":2,"2":"Valuation peers: EV/EBITDA"}'>Valuation peers: EV/EBITDA</td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"Yuhan Corp"}' data-sheets-formula='=googlefinance(R[1]C[0], "name")'>Yuhan Corp</td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"Chong Kun Dang Pharmaceutical Corp"}' data-sheets-formula='=googlefinance(R[1]C[0], "name")'>Chong Kun Dang Pharmaceutical Corp</td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"Daewoong Pharmaceutical Co., Ltd."}' data-sheets-formula='=googlefinance(R[1]C[0], "name")'>Daewoong Pharmaceutical Co., Ltd.</td>
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<td data-sheets-value='{"1":2,"2":"Ticker"}'>Ticker</td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"000100"}' data-sheets-formula='="000100"'>000100</td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"185750"}' data-sheets-formula='="185750"'>185750</td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"069620"}' data-sheets-formula='="069620"'>069620</td>
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<td data-sheets-value='{"1":2,"2":"Shares outstanding"}'>Shares outstanding</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":69972959}' data-sheets-numberformat='{"1":2,"2":"#,##0"}'>69,972,959</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":11426099}' data-sheets-numberformat='{"1":2,"2":"#,##0"}'>11,426,099</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":11586575}' data-sheets-numberformat='{"1":2,"2":"#,##0"}'>11,586,575</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Reference share price: MIN[1W Avg, 1M Avg, 1D Close] at June 22, 2021"}'>Reference share price: MIN[1W Avg, 1M Avg, 1D Close] on June 22, 2021</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":63300}' data-sheets-numberformat='[null,4,"[$₩]#,##0",1]'>₩63,300</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":130841}' data-sheets-numberformat='[null,4,"[$₩]#,##0",1]'>₩130,841</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":154000}' data-sheets-numberformat='[null,4,"[$₩]#,##0",1]'>₩154,000</td>
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<tr>
<td data-sheets-value='{"1":2,"2":"Reference market cap"}'>Reference market cap</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":4429.2883047}' data-sheets-numberformat='[null,2,"$#,##0.0B",1]' data-sheets-formula="=R[-1]C[0]*R[-2]C[0]/1000000000">$4,429.3B</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":1495.002219259}' data-sheets-numberformat='[null,2,"$#,##0.0B",1]' data-sheets-formula="=R[-1]C[0]*R[-2]C[0]/1000000000">$1,495.0B</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":1784.33255}' data-sheets-numberformat='[null,2,"$#,##0.0B",1]' data-sheets-formula="=R[-1]C[0]*R[-2]C[0]/1000000000">$1,784.3B</td>
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<tr>
<td data-sheets-value='{"1":2,"2":"Preferred share market cap"}'>Preferred share market cap</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":71.683}' data-sheets-numberformat='[null,2,"$#,##0.0B",1]'>$71.7B</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0}' data-sheets-numberformat='[null,2,"$#,##0.0B",1]'>$0.0B</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0}' data-sheets-numberformat='[null,2,"$#,##0.0B",1]'>$0.0B</td>
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<tr>
<td data-sheets-value='{"1":2,"2":"Net debt"}'>Net debt</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":-440.398}' data-sheets-numberformat='[null,2,"$#,##0.0B",1]'>-$440.4B</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":-7.554}' data-sheets-numberformat='[null,2,"$#,##0.0B",1]'>-$7.6B</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":225.79}' data-sheets-numberformat='[null,2,"$#,##0.0B",1]'>$225.8B</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Enterprise value (EV)"}'>Enterprise value (EV)</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":4060.5733046999994}' data-sheets-numberformat='[null,2,"$#,##0.0B",1]' data-sheets-formula="=R[-3]C[0]+R[-2]C[0]+R[-1]C[0]">$4,060.6B</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":1487.4482192589999}' data-sheets-numberformat='[null,2,"$#,##0.0B",1]' data-sheets-formula="=R[-3]C[0]+R[-2]C[0]+R[-1]C[0]">$1,487.4B</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":2010.12255}' data-sheets-numberformat='[null,2,"$#,##0.0B",1]' data-sheets-formula="=R[-3]C[0]+R[-2]C[0]+R[-1]C[0]">$2,010.1B</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"EBITDA: 2Q20~1Q21"}'>EBITDA: 2Q20~1Q21</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":156.583}' data-sheets-numberformat='[null,2,"$#,##0.0B",1]'>$156.6B</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":144.368}' data-sheets-numberformat='[null,2,"$#,##0.0B",1]'>$144.4B</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":75.002}' data-sheets-numberformat='[null,2,"$#,##0.0B",1]'>$75.0B</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"EV/EBITDA"}'><strong>EV/EBITDA</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":25.93240201490583}' data-sheets-numberformat='[null,2,"0.00x"]' data-sheets-formula="=R[-2]C[0]/R[-1]C[0]"><strong>25.93x</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":10.303171196241548}' data-sheets-numberformat='[null,2,"0.00x"]' data-sheets-formula="=R[-2]C[0]/R[-1]C[0]"><strong>10.30x</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":26.800919308818433}' data-sheets-numberformat='[null,2,"0.00x"]' data-sheets-formula="=R[-2]C[0]/R[-1]C[0]"><strong>26.80x</strong></td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Average EV/EBITDA"}'><strong>Average EV/EBITDA</strong></td>
<td colspan="3" rowspan="1" style="text-align: center;" data-sheets-value='{"1":3,"3":21.012164173321935}' data-sheets-numberformat='[null,2,"0.00x"]' data-sheets-formula="=average(R[-1]C[0]:R[-1]C[2])"><strong>21.01x</strong></td>
</tr>
<tr><td colspan="4" rowspan="1" data-sheets-value='{"1":2,"2":"Source: DART"}'>Source: DART</td></tr>
</tbody>
</table>
</div>
<div><div>The combined EV/EBITDA multiple of 21.01 times was applied to the EBITDA of ₩115.5B from the second quarter of last year to the first quarter of this year.</div></div>
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<tr><td colspan="3" rowspan="1" data-sheets-value='{"1":2,"2":"HK inno.N: EV/EBITDA"}'>HK inno.N: EV/EBITDA</td></tr>
<tr>
<td data-sheets-value='{"1":2,"2":"EBITDA: 2Q20~1Q21"}'>EBITDA: 2Q20~1Q21</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":115.526}' data-sheets-numberformat='[null,2,"₩#,##0.0B",1]'>₩115.5B</td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"A"}'>A</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"EV/EBITDA"}'>EV/EBITDA</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":21.012164173321935}' data-sheets-numberformat='[null,2,"0.00x"]' data-sheets-formula="=R[-5]C[0]">21.01x</td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"B"}' data-sheets-numberformat='[null,2,"₩#,##0.0B",1]'>B</td>
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<td data-sheets-value='{"1":2,"2":"Enterprise value (EV)"}'>Enterprise value (EV)</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":2427.194}' data-sheets-numberformat='[null,2,"₩#,##0.0B",1]'>₩2,427.2B</td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"C = A X B"}' data-sheets-numberformat='[null,2,"₩#,##0.0B",1]'>C = A X B</td>
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<tr>
<td data-sheets-value='{"1":2,"2":"Net debt"}'>Net debt</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":376.158}' data-sheets-numberformat='[null,2,"₩#,##0.0B",1]'>₩376.2B</td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"D"}' data-sheets-numberformat='[null,2,"₩#,##0.0B",1]'>D</td>
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<td data-sheets-value='{"1":2,"2":"Market cap"}'><strong>Market cap</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":2051.036}' data-sheets-numberformat='[null,2,"₩#,##0.0B",1]' data-sheets-formula="=R[-2]C[0]-R[-1]C[0]"><strong>₩2,051.0B</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"E = C - D"}' data-sheets-numberformat='[null,2,"₩#,##0.0B",1]'><strong>E = C - D</strong></td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Post-IPO total shares"}'>Post-IPO total shares</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":28904499}' data-sheets-numberformat='[null,2,"#,##0",1]' data-sheets-formula="=Terms!R[-2]C[0]">28,904,499</td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"F"}' data-sheets-numberformat='[null,2,"₩#,##0.0B",1]'>F</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Price per share"}'><strong>Price per share</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":70959.05727340232}' data-sheets-numberformat='[null,2,"[$₩-412]#,##0",1]' data-sheets-formula="=R[-2]C[0]*1000000000/R[-1]C[0]"><strong>₩70,959</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"G = E / F"}' data-sheets-numberformat='[null,2,"₩#,##0.0B",1]'><strong>G = E / F</strong></td>
</tr>
<tr><td colspan="3" rowspan="1" data-sheets-value='{"1":2,"2":"Source: DART"}'>Source: DART</td></tr>
</tbody>
</table></div>
<div><p>The indicative price band is between ₩50,000 and ₩59,000. This is obtained by applying a discount rate of 16.85% to 29.54% to the market cap of ₩2,051.0B calculated through EV/EBITDA.</p></div>
<div><table class="table table-striped">
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<col width="150">
<col width="150">
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<td data-sheets-value='{"1":2,"2":"Indicative price band"}'>Indicative price band</td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"Low"}'>Low</td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"High"}'>High</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Price"}'><strong>Price</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":50000}' data-sheets-numberformat='[null,2,"[$₩-412]#,##0",1]'><strong>₩50,000</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":59000}' data-sheets-numberformat='[null,2,"[$₩-412]#,##0",1]'><strong>₩59,000</strong></td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Base deal size"}'>Base deal size</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":505.85}' data-sheets-numberformat='[null,2,"₩#,##0.0B",1]' data-sheets-formula="=R[-1]C[0]*Terms!R8C2/1000000000">₩505.9B</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":596.903}' data-sheets-numberformat='[null,2,"₩#,##0.0B",1]' data-sheets-formula="=R[-1]C[0]*Terms!R8C2/1000000000">₩596.9B</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":" - Institutional allotment"}'>- Institutional allotment</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":278.21750000000003}' data-sheets-numberformat='[null,2,"₩#,##0.0B",1]' data-sheets-formula="=R[-1]C[0]*Terms!R12C2">₩278.2B</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":328.29665000000006}' data-sheets-numberformat='[null,2,"₩#,##0.0B",1]' data-sheets-formula="=R[-1]C[0]*Terms!R12C2">₩328.3B</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Implied market cap"}'><strong>Implied market cap</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":1445.22495}' data-sheets-numberformat='[null,2,"₩#,##0.0B",1]' data-sheets-formula="=R[-3]C[0]*Terms!R18C2/1000000000"><strong>₩1,445.2B</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":1705.365441}' data-sheets-numberformat='[null,2,"₩#,##0.0B",1]' data-sheets-formula="=R[-3]C[0]*Terms!R18C2/1000000000"><strong>₩1,705.4B</strong></td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":" - Discount"}'><strong>- Discount</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0.2953683163045407}' data-sheets-numberformat='[null,3,"0.00%",1]' data-sheets-formula="=(R21C2-R[-4]C[0])/R21C2"><strong>29.54%</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0.16853461323935803}' data-sheets-numberformat='[null,3,"0.00%",1]' data-sheets-formula="=(R21C2-R[-4]C[0])/R21C2"><strong>16.85%</strong></td>
</tr>
<tr><td colspan="3" rowspan="1" data-sheets-value='{"1":2,"2":"Source: DART"}'>Source: DART</td></tr>
</tbody>
</table></div>
</div>

Offering size
HK inno.N offers 10.1M shares, which account for 43.75% of the pre-IPO total shares, of which 55-75% are allocated to institutions. It will be listed on KOSDAQ.

Who is HK inno.N?
HK inno.N was a subsidiary of CJ Group, established in April 2014 through a physical spin-off of CJ CheilJedang's pharmaceutical business.
However, HK inno.N was acquired by Kolmar Korea on April 18, 2018, and the corporate name was changed from CJ Healthcare Co., Ltd. to HK Innoen Co., Ltd. in February 2020.







Offering size

Ticker
195940


Bourse
KOSDAQ


Offering
10,117,000


- % of pre-IPO SO
43.75%


Institutional allotment
55.00~75.00%

Source: DART


Split

This IPO is a split offering with a primary of 57.14% and a secondary of 42.86%. As a result, this offering will see a capital increase rate of 25% with a shareholding dilution of 20%. This IPO is free of any additional options: cornerstone, clawback, or greenshoe.






Split

Primary %
57.14%


Secondary %
42.86%


Capital increase rate
25.00%


Dilution
20.00%

Source: DART



Schedule

The book opens on July 13 (for overseas investors) and runs until July 26. The allotment will be on July 28 as the offering price is finalized. The subscription falls on July 29.






Schedule

Book open
2021. 7. 13


Book close
2021. 7. 26


Allotment
2021. 7. 28


Subscription
2021. 7. 29


Payment
2021. 8. 3


Listing
TBA

Source: DART



Pricing

HK inno.N used EV/EBITDA. The corporate value was determined after selecting three local pharmaceutical companies: 1. Yuhan, 2. Chong Kun Dang Pharmaceutical, and 3. Daewoong Pharmaceutical. The respective EV/EBITDA multiples are 25.93x for Yuhan, 10.30x for Chong Kun Dang, and 26.8x for Daewoong Pharm.









Valuation peers: EV/EBITDA
Yuhan Corp
Chong Kun Dang Pharmaceutical Corp
Daewoong Pharmaceutical Co., Ltd.


Ticker
000100
185750
069620


Shares outstanding
69,972,959
11,426,099
11,586,575


Reference share price: MIN[1W Avg, 1M Avg, 1D Close] on June 22, 2021
₩63,300
₩130,841
₩154,000


Reference market cap
$4,429.3B
$1,495.0B
$1,784.3B


Preferred share market cap
$71.7B
$0.0B
$0.0B


Net debt
-$440.4B
-$7.6B
$225.8B


Enterprise value (EV)
$4,060.6B
$1,487.4B
$2,010.1B


EBITDA: 2Q20~1Q21
$156.6B
$144.4B
$75.0B


EV/EBITDA
25.93x
10.30x
26.80x


Average EV/EBITDA
21.01x

Source: DART



The combined EV/EBITDA multiple of 21.01 times was applied to the EBITDA of ₩115.5B from the second quarter of last year to the first quarter of this year.







HK inno.N: EV/EBITDA

EBITDA: 2Q20~1Q21
₩115.5B
A


EV/EBITDA
21.01x
B


Enterprise value (EV)
₩2,427.2B
C = A X B


Net debt
₩376.2B
D


Market cap
₩2,051.0B
E = C - D


Post-IPO total shares
28,904,499
F


Price per share
₩70,959
G = E / F

Source: DART


The indicative price band is between ₩50,000 and ₩59,000. This is obtained by applying a discount rate of 16.85% to 29.54% to the market cap of ₩2,051.0B calculated through EV/EBITDA.








Indicative price band
Low
High


Price
₩50,000
₩59,000


Base deal size
₩505.9B
₩596.9B


- Institutional allotment
₩278.2B
₩328.3B


Implied market cap
₩1,445.2B
₩1,705.4B


- Discount
29.54%
16.85%

Source: DART




HK Inno.N (Formerly CJ Healthcare) IPO: Offering Detail & Valuation Issues

Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

<p>HK Inno.N ("Inno.N") is getting ready for an IPO in the Korean stock market. The IPO price range is from 50,000 won to 59,000 won. The company is offering 10.1 million shares in this IPO including 5.8 million new shares and 4.3 million old shares. The IPO deal size is from $447 million to $527 million.</p><p>According to the bankers' valuation, the expected market cap after the IPOs is from 1.4 trillion won ($1.2 billion) to 1.7 trillion won ($1.5 billion). The book building for the institutional investors starts on 22 July 2021. Korea Investment &amp; Securites and Samsung Securities are the lead underwriters of this IPO. </p><p><a href="https://www.smartkarma.com/entities/korea-kolmar-co-ltd" target="_blank" data-smartkarma-citation="entities:7985:1" rel="noopener">Korea Kolmar (161890 KS)</a> is the controlling shareholder of <a href="https://www.hkn24.com/news/articleView.html?idxno=319760" target="_blank" rel="noopener">HK Inno.N</a> with a 52.7% stake in the company. </p><p>HK Inno.N IPO will be on KOSDAQ. At the high end of the IPO price range, this would be valued at 1.7 trillion won. Currently, there are 23 stocks that have more than 1.7 trillion won in market cap on KOSDAQ. </p><table class="table table-striped">
<colgroup>
<col>
<col>
</colgroup>
<tbody>
<tr>
<td style="width: 248pt;"><div><strong>Deal Specifics of the HK Inno.N IPO:</strong></div></td>
<td style="width: 310pt;"> </td>
</tr>
<tr>
<td>Lead underwriters of the IPO: </td>
<td style="width: 310pt;">Korea Investment &amp; Securities, Samsung Securities</td>
</tr>
<tr>
<td>Expected IPO price per share: </td>
<td style="width: 310pt;">50,000 won (low)/59,000 won (high)</td>
</tr>
<tr>
<td>Number of Shares for IPO:</td>
<td style="width: 310pt;">10.1m shares (5.8m new shares and 4.3m old shares)</td>
</tr>
<tr>
<td>IPO base deal size: </td>
<td style="width: 310pt;">US$447 mn (low);  US$527 mn (high)</td>
</tr>
<tr>
<td>Expected common shares outstanding, fully diluted (post-IPO):  </td>
<td style="width: 310pt;">28.9m shares</td>
</tr>
<tr>
<td>Expected market cap after IPO:</td>
<td style="width: 310pt;">1,445 billion won (low)/1,705 billion won (high)</td>
</tr>
<tr>
<td>Book open: </td>
<td style="text-align: left; width: 310pt;">22-Jul-21</td>
</tr>
<tr>
<td>Book closed:</td>
<td style="text-align: left; width: 310pt;">26-Jul-21</td>
</tr>
<tr>
<td>Listing date: </td>
<td style="text-align: left; width: 310pt;">TBC</td>
</tr>
<tr>
<td>Source: Company data</td>
<td style="width: 310pt;"> </td>
</tr>
</tbody>
</table>

HK Inno.N ("Inno.N") is getting ready for an IPO in the Korean stock market. The IPO price range is from 50,000 won to 59,000 won. The company is offering 10.1 million shares in this IPO including 5.8 million new shares and 4.3 million old shares. The IPO deal size is from $447 million to $527 million.According to the bankers' valuation, the expected market cap after the IPOs is from 1.4 trillion won ($1.2 billion) to 1.7 trillion won ($1.5 billion). The book building for the institutional investors starts on 22 July 2021. Korea Investment &amp; Securites and Samsung Securities are the lead underwriters of this IPO. Korea Kolmar (161890 KS) is the controlling shareholder of HK Inno.N with a 52.7% stake in the company. HK Inno.N IPO will be on KOSDAQ. At the high end of the IPO price range, this would be valued at 1.7 trillion won. Currently, there are 23 stocks that have more than 1.7 trillion won in market cap on KOSDAQ. 






Deal Specifics of the HK Inno.N IPO:
 


Lead underwriters of the IPO: 
Korea Investment &amp; Securities, Samsung Securities


Expected IPO price per share: 
50,000 won (low)/59,000 won (high)


Number of Shares for IPO:
10.1m shares (5.8m new shares and 4.3m old shares)


IPO base deal size: 
US$447 mn (low);  US$527 mn (high)


Expected common shares outstanding, fully diluted (post-IPO):  
28.9m shares


Expected market cap after IPO:
1,445 billion won (low)/1,705 billion won (high)


Book open: 
22-Jul-21


Book closed:
26-Jul-21


Listing date: 
TBC


Source: Company data
 




Event-Driven

<p>The KRX has just confirmed SK IE Tech's fast entry into KOSPI 200 for June 11.</p><p>As pre-announced, SK IE Technology replaces HDC Holdings for its entry into KOSPI 200. As for KRX 100, it replaces Kolmar Korea.</p><table class="table table-striped">
<colgroup>
<col width="100">
<col width="100">
<col width="100">
<col width="100">
<col width="100">
</colgroup>
<tbody>
<tr>
<td style="width: 172.727px;" data-sheets-value='{"1":2,"2":"KODEX 200"}'>KODEX 200</td>
<td style="width: 151.818px;" data-sheets-value='{"1":2,"2":"Addition"}'>Addition</td>
<td style="width: 78.1818px;" data-sheets-value='{"1":2,"2":"Ticker"}'>Ticker</td>
<td style="width: 159.091px;" data-sheets-value='{"1":2,"2":"Deletion"}'>Deletion</td>
<td style="width: 78.1818px;" data-sheets-value='{"1":2,"2":"Ticker"}'>Ticker</td>
</tr>
<tr>
<td style="width: 172.727px;" data-sheets-value='{"1":2,"2":"KOSPI 200"}'><strong>KOSPI 200</strong></td>
<td style="width: 151.818px;" data-sheets-value='{"1":2,"2":"SK IE Technology Co Ltd"}' data-sheets-formula='=googlefinance(R[0]C[1], "name")'><strong>SK IE Technology Co Ltd</strong></td>
<td style="width: 78.1818px;" data-sheets-value='{"1":2,"2":"361610"}' data-sheets-numberformat='[null,2,"₩#,##0.0B",1]' data-sheets-formula='="361610"'><strong>361610</strong></td>
<td style="width: 159.091px;" data-sheets-value='{"1":2,"2":"HDC Holdings Co Ltd"}' data-sheets-formula='=googlefinance(R[0]C[1], "name")'><strong>HDC Holdings Co Ltd</strong></td>
<td style="width: 78.1818px;" data-sheets-value='{"1":2,"2":"012630"}' data-sheets-formula='="012630"'><strong>012630</strong></td>
</tr>
<tr>
<td style="width: 172.727px;" data-sheets-value='{"1":2,"2":"KOSPI 200 Energy Chemical"}'>KOSPI 200 Energy &amp; Chemicals</td>
<td style="width: 151.818px;" data-sheets-value='{"1":2,"2":"SK IE Technology Co Ltd"}' data-sheets-formula='=googlefinance(R[0]C[1], "name")'>SK IE Technology Co Ltd</td>
<td style="width: 78.1818px;" data-sheets-value='{"1":2,"2":"361610"}' data-sheets-numberformat='[null,2,"₩#,##0.0B",1]' data-sheets-formula='="361610"'>361610</td>
<td style="width: 159.091px;" data-sheets-value='{"1":2,"2":"None"}'>None</td>
<td style="width: 78.1818px;" data-sheets-value='{"1":2,"2":"-"}'>-</td>
</tr>
<tr>
<td style="width: 172.727px;" data-sheets-value='{"1":2,"2":"KOSPI 200 Construction"}'>KOSPI 200 Constructions</td>
<td style="width: 151.818px;" data-sheets-value='{"1":2,"2":"None"}'>None</td>
<td style="width: 78.1818px;" data-sheets-value='{"1":2,"2":"-"}'>-</td>
<td style="width: 159.091px;" data-sheets-value='{"1":2,"2":"HDC Holdings Co Ltd"}' data-sheets-formula='=googlefinance(R[0]C[1], "name")'>HDC Holdings Co Ltd</td>
<td style="width: 78.1818px;" data-sheets-value='{"1":2,"2":"012630"}' data-sheets-formula='="012630"'>012630</td>
</tr>
<tr>
<td style="width: 172.727px;" data-sheets-value='{"1":2,"2":"KOSPI 200 Mid &amp; Small Cap"}'>KOSPI 200 MidSmallCap</td>
<td style="width: 151.818px;" data-sheets-value='{"1":2,"2":"Hyundai Marine &amp; Fire Insurance Co., Ltd"}' data-sheets-formula='=googlefinance(R[0]C[1], "name")'>Hyundai Marine &amp; Fire</td>
<td style="width: 78.1818px;" data-sheets-value='{"1":2,"2":"001450"}' data-sheets-numberformat='[null,2,"₩#,##0.0B",1]' data-sheets-formula='="001450"'>001450</td>
<td style="width: 159.091px;" data-sheets-value='{"1":2,"2":"HDC Holdings Co Ltd"}' data-sheets-formula='=googlefinance(R[0]C[1], "name")'>HDC Holdings Co Ltd</td>
<td style="width: 78.1818px;" data-sheets-value='{"1":2,"2":"012630"}' data-sheets-formula='="012630"'>012630</td>
</tr>
<tr>
<td style="width: 172.727px;" data-sheets-value='{"1":2,"2":"KOSPI ex KOSPI 200"}'>KOSPI 200 ex-KOSPI</td>
<td style="width: 151.818px;" data-sheets-value='{"1":2,"2":"HDC Holdings Co Ltd"}' data-sheets-formula='=googlefinance(R[0]C[1], "name")'>HDC Holdings Co Ltd</td>
<td style="width: 78.1818px;" data-sheets-value='{"1":2,"2":"012630"}' data-sheets-formula='="012630"'>012630</td>
<td style="width: 159.091px;" data-sheets-value='{"1":2,"2":"SK IE Technology Co Ltd"}' data-sheets-formula='=googlefinance(R[0]C[1], "name")'>SK IE Technology Co Ltd</td>
<td style="width: 78.1818px;" data-sheets-value='{"1":2,"2":"361610"}' data-sheets-numberformat='[null,2,"₩#,##0.0B",1]' data-sheets-formula='="361610"'>361610</td>
</tr>
<tr>
<td style="width: 172.727px;" data-sheets-value='{"1":2,"2":"KOSPI 200 ex mega cap"}'>KOSPI 200 ex-TOP</td>
<td style="width: 151.818px;" data-sheets-value='{"1":2,"2":"SK IE Technology Co Ltd"}' data-sheets-formula='=googlefinance(R[0]C[1], "name")'>SK IE Technology Co Ltd</td>
<td style="width: 78.1818px;" data-sheets-value='{"1":2,"2":"361610"}' data-sheets-numberformat='[null,2,"₩#,##0.0B",1]' data-sheets-formula='="361610"'>361610</td>
<td style="width: 159.091px;" data-sheets-value='{"1":2,"2":"HDC Holdings Co Ltd"}' data-sheets-formula='=googlefinance(R[0]C[1], "name")'>HDC Holdings Co Ltd</td>
<td style="width: 78.1818px;" data-sheets-value='{"1":2,"2":"012630"}' data-sheets-formula='="012630"'>012630</td>
</tr>
<tr>
<td style="width: 172.727px;" data-sheets-value='{"1":2,"2":"KOSPI 200 Factor-Weighted Series"}'>KOSPI 200 Factor Tilt Series</td>
<td style="width: 151.818px;" data-sheets-value='{"1":2,"2":"SK IE Technology Co Ltd"}' data-sheets-formula='=googlefinance(R[0]C[1], "name")'>SK IE Technology Co Ltd</td>
<td style="width: 78.1818px;" data-sheets-value='{"1":2,"2":"361610"}' data-sheets-numberformat='[null,2,"₩#,##0.0B",1]' data-sheets-formula='="361610"'>361610</td>
<td style="width: 159.091px;" data-sheets-value='{"1":2,"2":"None"}'>None</td>
<td style="width: 78.1818px;" data-sheets-value='{"1":2,"2":"-"}'>-</td>
</tr>
<tr>
<td style="width: 172.727px;" data-sheets-value='{"1":2,"2":"KOSPI 100"}'>KOSPI 100</td>
<td style="width: 151.818px;" data-sheets-value='{"1":2,"2":"SK IE Technology Co Ltd"}' data-sheets-formula='=googlefinance(R[0]C[1], "name")'>SK IE Technology Co Ltd</td>
<td style="width: 78.1818px;" data-sheets-value='{"1":2,"2":"361610"}' data-sheets-numberformat='[null,2,"₩#,##0.0B",1]' data-sheets-formula='="361610"'>361610</td>
<td style="width: 159.091px;" data-sheets-value='{"1":2,"2":"Hyundai Marine &amp; Fire Insurance Co., Ltd"}' data-sheets-formula='=googlefinance(R[0]C[1], "name")'>Hyundai Marine &amp; Fire</td>
<td style="width: 78.1818px;" data-sheets-value='{"1":2,"2":"001450"}' data-sheets-numberformat='[null,2,"₩#,##0.0B",1]' data-sheets-formula='="001450"'>001450</td>
</tr>
<tr>
<td style="width: 172.727px;" data-sheets-value='{"1":2,"2":"KOSPI 50"}'>KOSPI 50</td>
<td style="width: 151.818px;" data-sheets-value='{"1":2,"2":"SK IE Technology Co Ltd"}' data-sheets-formula='=googlefinance(R[0]C[1], "name")'>SK IE Technology Co Ltd</td>
<td style="width: 78.1818px;" data-sheets-value='{"1":2,"2":"361610"}' data-sheets-numberformat='[null,2,"₩#,##0.0B",1]' data-sheets-formula='="361610"'>361610</td>
<td style="width: 159.091px;" data-sheets-value='{"1":2,"2":"Amorepacific Group"}' data-sheets-formula='=googlefinance(R[0]C[1], "name")'>Amorepacific Group</td>
<td style="width: 78.1818px;" data-sheets-value='{"1":2,"2":"002790"}' data-sheets-formula='="002790"'>002790</td>
</tr>
<tr>
<td style="width: 172.727px;" data-sheets-value='{"1":2,"2":"KRX 100"}'><strong>KRX 100</strong></td>
<td style="width: 151.818px;" data-sheets-value='{"1":2,"2":"SK IE Technology Co Ltd"}' data-sheets-formula='=googlefinance(R[0]C[1], "name")'><strong>SK IE Technology Co Ltd</strong></td>
<td style="width: 78.1818px;" data-sheets-value='{"1":2,"2":"361610"}' data-sheets-numberformat='[null,2,"₩#,##0.0B",1]' data-sheets-formula='="361610"'><strong>361610</strong></td>
<td style="width: 159.091px;" data-sheets-value='{"1":2,"2":"Kolmar Korea Co Ltd"}' data-sheets-formula='=googlefinance(R[0]C[1], "name")'><strong>Kolmar Korea Co Ltd</strong></td>
<td style="width: 78.1818px;" data-sheets-value='{"1":2,"2":"161890"}' data-sheets-formula='="161890"'><strong>161890</strong></td>
</tr>
<tr><td colspan="5" rowspan="1" style="width: 723.636px;" data-sheets-value='{"1":2,"2":"Source: KRX"}'>Source: KRX</td></tr>
</tbody>
</table><p><a href="http://global.krx.co.kr/board/GLB0501070000/bbs#view=20417" target="_blank" rel="noopener">Here is the link to the KRX announcement.</a></p>

The KRX has just confirmed SK IE Tech's fast entry into KOSPI 200 for June 11.As pre-announced, SK IE Technology replaces HDC Holdings for its entry into KOSPI 200. As for KRX 100, it replaces Kolmar Korea.









KODEX 200
Addition
Ticker
Deletion
Ticker


KOSPI 200
SK IE Technology Co Ltd
361610
HDC Holdings Co Ltd
012630


KOSPI 200 Energy &amp; Chemicals
SK IE Technology Co Ltd
361610
None
-


KOSPI 200 Constructions
None
-
HDC Holdings Co Ltd
012630


KOSPI 200 MidSmallCap
Hyundai Marine &amp; Fire
001450
HDC Holdings Co Ltd
012630


KOSPI 200 ex-KOSPI
HDC Holdings Co Ltd
012630
SK IE Technology Co Ltd
361610


KOSPI 200 ex-TOP
SK IE Technology Co Ltd
361610
HDC Holdings Co Ltd
012630


KOSPI 200 Factor Tilt Series
SK IE Technology Co Ltd
361610
None
-


KOSPI 100
SK IE Technology Co Ltd
361610
Hyundai Marine &amp; Fire
001450


KOSPI 50
SK IE Technology Co Ltd
361610
Amorepacific Group
002790


KRX 100
SK IE Technology Co Ltd
361610
Kolmar Korea Co Ltd
161890

Source: KRX

Here is the link to the KRX announcement.

SK IE Tech KOSPI 200 Fast-Entry Confirmed for June 11

Korea Short 350: Loan Balance, Short Interest, & % to 52WH

Asian Insight Provider - Actionable ideas, CrossASEAN Research

Henry Soediarko

Asian Insight Provider - Actionable ideas

CrossASEAN Research

At CrossASEAN Research we strive to produce unbiased and differentiated on the ground insights on companies across South East Asia. Our Research is produced for the most part after face to face meetings and conversations with company management to dig deep into the long term vision and strategy of the companies we cover. We seek to deliver investable and actionable themes on sectors and markets across SE Asia, often in collaboration with other Insight Providers across the region, pooling the vast experience of the analysts within the Smartkarma Ecosystem. We also offer bespoke work and tailor made trips for our clients. 

Insights across South East Asia

Equity Bottom-Up

<p>The vaccination has already started in Indonesia and although it may take 15 months to complete, it could be an early catalyst for investors to start booking profit on SIDO especially after it made 25% last year. The business will still grow as Tolak Angin remains the most affordable solution for an immune system compared to the other local and imported brands such as <a href="https://www.smartkarma.com/entities/health-and-happiness-h-h-int" target="_blank" data-smartkarma-citation="entities:20582:1" rel="noopener">Health And Happiness (H&amp;H) (1112 HK)</a> Swisse, which are especially important when the health care system is already overwhelmed. </p>
<div class="content-highlight">
<p>Despite a 25% increase in 2020, Sido is still trading at 5%, 14%, and 26% EV/EBITDA, PER, and PBR discount respectively to the peers. </p>
</div>

The vaccination has already started in Indonesia and although it may take 15 months to complete, it could be an early catalyst for investors to start booking profit on SIDO especially after it made 25% last year. The business will still grow as Tolak Angin remains the most affordable solution for an immune system compared to the other local and imported brands such as Health And Happiness (H&amp;H) (1112 HK) Swisse, which are especially important when the health care system is already overwhelmed. 

Despite a 25% increase in 2020, Sido is still trading at 5%, 14%, and 26% EV/EBITDA, PER, and PBR discount respectively to the peers. 


Sido Muncul (SIDO): Still the Most Affordable Solution in the Pandemic

South Korea

Kolmar Korea Co., Ltd. manufactures and distributes personal care products. The Company produces cosmetics. Kolmar Korea also produces medicine and healthcare products.

Price Gauge
52-week Range	0.00 - 0.00
Market Cap (USDm)	0.00
P/E	0.00
Dividend (Yield)	0.00

Kolmar Korea (161890 KS)

HK Inno.N (Formerly CJ Healthcare) IPO: Offering Detail & Valuation Issues

This post contains information on HK inno.N's initial public offering and summarizes the local street's general view on the valuation.

Sanghyun Park

HK Inno.N IPO Preview

HK Inno.N is getting ready for an IPO in the Korean stock market. The IPO price range is from 50,000 won to 59,000 won. The IPO deal size is from...

Douglas Kim

SK IE Tech KOSPI 200 Fast-Entry Confirmed for June 11

The KRX has just confirmed SK IE Tech's fast entry into KOSPI 200 for June 11. As pre-announced, SK IE Technology replaces HDC Holdings for its...

Sanghyun Park

Korea Short 350: Loan Balance, Short Interest, & % to 52WH

Korea's short selling will resume on May 3 on the KOSPI 200 and KOSDAQ 150 constituents, called 'Short 350'. This post gathers the loan balance,...

Sanghyun Park

Sido Muncul (SIDO): Still the Most Affordable Solution in the Pandemic

The vaccination already started in Indonesia and although it takes 15 months to complete, it could be an early catalyst for investors to book...

Henry Soediarko

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