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

<ul>
<li>KOSPI Size Index Series rebalances twice a year in March and September. The base date is February 28. It is a three-month review, so, from December 1 to February 28.</li>
<li>In the KOSPI size index rebalancing, an increase in the buying volume of local institutions for stocks moving from LargeCap to MidCap is generally detected. </li>
<li>14 new MidCap entrants are expected to have a sizable passive impact.</li>
</ul>


KOSPI Size Index Series rebalances twice a year in March and September. The base date is February 28. It is a three-month review, so, from December 1 to February 28.
In the KOSPI size index rebalancing, an increase in the buying volume of local institutions for stocks moving from LargeCap to MidCap is generally detected. 
14 new MidCap entrants are expected to have a sizable passive impact.


KOSPI Size Index Series Rebalancing Screening Results

APAC IPOs & Placements, Aequitas Research

Clarence Chu

APAC 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

Hyundai Engineering   / Equity Capital Markets

<ul>
<li>
<a href="https://www.smartkarma.com/entities/hyundai-engineering-co-ltd" target="_blank" data-smartkarma-citation="entities:33008:1" rel="noopener">Hyundai Engineering Co Ltd (HEC KS)</a> is looking to raise up to US$1bn in its Korea IPO.</li>
<li>There have been a number of news reports since our last note regarding the firm securing projects with an eco-friendly tilt, which could garner investor interest.</li>
<li>Despite its recent share price correction, were HEC to list at our fair value estimate, were one to short the holdco, there exists a 2-12% return potential. </li>
</ul>



Hyundai Engineering Co Ltd (HEC KS) is looking to raise up to US$1bn in its Korea IPO.
There have been a number of news reports since our last note regarding the firm securing projects with an eco-friendly tilt, which could garner investor interest.
Despite its recent share price correction, were HEC to list at our fair value estimate, were one to short the holdco, there exists a 2-12% return potential. 


Hyundai Engineering IPO - Eco-Friendlier However Parent Has Traded Down Since Our Last Note

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/hyundai-engineering-co-ltd" target="_blank" data-smartkarma-citation="entities:33008:1" rel="noopener">Hyundai Engineering Co Ltd (HEC KS)</a> has launched its IPO to raise US$0.8-1.0 billion at the price range of KRW57,900-75,700 per share.</li>
<li>In <a href="https://www.smartkarma.com/insights/hyundai-engineering-ipo-initiation-building-on-good-foundations" target="_blank" data-smartkarma-citation="insights:63360" rel="noopener">Hyundai Engineering IPO Initiation: Building on Good Foundations</a>, we stated that HEC has attractive fundamentals with a strong backlog, healthy book-to-bill, improving 3Q21 revenue growth and improving margins. </li>
<li>In this note, we look at the syndicate's valuation methodology and present our valuation methodology. Our valuation analysis suggests that the IPO price range is unattractive. </li>
</ul>



Hyundai Engineering Co Ltd (HEC KS) has launched its IPO to raise US$0.8-1.0 billion at the price range of KRW57,900-75,700 per share.
In Hyundai Engineering IPO Initiation: Building on Good Foundations, we stated that HEC has attractive fundamentals with a strong backlog, healthy book-to-bill, improving 3Q21 revenue growth and improving margins. 
In this note, we look at the syndicate's valuation methodology and present our valuation methodology. Our valuation analysis suggests that the IPO price range is unattractive. 


Hyundai Engineering IPO: Valuation Insights

Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

<ul>
<li>Our base case valuation of Hyundai Engineering Co Ltd is EV of 3.3 trillion won, implied market cap of 5.4 trillion won, and target price of 67,475 won per share. </li>
<li>This is within the IPO price range of 57,900 won and 75,700 won per share. Given the lack of upside, we have a Negative view of this IPO.</li>
<li>Our base case valuation is based on 6.3x EV/EBITDA valuation multiple using 2022 estimated EBITDA of 526 billion won.</li>
</ul>


Our base case valuation of Hyundai Engineering Co Ltd is EV of 3.3 trillion won, implied market cap of 5.4 trillion won, and target price of 67,475 won per share. 
This is within the IPO price range of 57,900 won and 75,700 won per share. Given the lack of upside, we have a Negative view of this IPO.
Our base case valuation is based on 6.3x EV/EBITDA valuation multiple using 2022 estimated EBITDA of 526 billion won.


Hyundai Engineering IPO Valuation Analysis

<ul>
<li>
<a href="https://www.smartkarma.com/entities/hyundai-engineering-co-ltd" target="_blank" data-smartkarma-citation="entities:33008:1" rel="noopener">Hyundai Engineering Co Ltd (HEC KS)</a> is looking to raise up to US$1bn in its upcoming Korea IPO.</li>
<li>Whilst the firm has a relatively high concentration of international orders in its backlog, 40% in 9M21, it has been on the down trend since 2016.</li>
<li>In this note, we discuss peer comparison, our assumptions and valuation against domestic and international peers.</li>
</ul>



Hyundai Engineering Co Ltd (HEC KS) is looking to raise up to US$1bn in its upcoming Korea IPO.
Whilst the firm has a relatively high concentration of international orders in its backlog, 40% in 9M21, it has been on the down trend since 2016.
In this note, we discuss peer comparison, our assumptions and valuation against domestic and international peers.


Hyundai Engineering Pre-IPO - Unjustifiable Premium to Most Domestic Peers

South Korea

Daewoo Engineering & Construction Co., Ltd. is a general engineering constructor.  The Company's projects include architectural works, such as commercial buildings, public facilities, schools, hospitals, and civil works, such as highways, ports, tunnels, railways, and dams.  Daewoo Engineering & Construction also constructs power plants, and residential buildings.

Daewoo Engineering & Construction (047040 KS)

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Daewoo Engineering & Construction (047040 KS)

KOSPI Size Index Series Rebalancing Screening Results

This post has the screening results of the KOSPI Size Index Series rebalancing: 14 new MidCap entrants are expected to have a sizable passive impact.

Sanghyun Park

Hyundai Engineering IPO - Eco-Friendlier However Parent Has Traded Down Since Our Last Note

Hyundai Engineering Co Ltd (HEC KS) is looking to raise up to US$1bn in its Korea IPO. We discuss updates since our last note and a potential...

Clarence Chu

Hyundai Engineering IPO: Valuation Insights

HEC has launched its IPO to raise US$0.8-1.0 bn. Our valuation analysis suggests that HEC is fairly valued at the low end of the IPO price range....

Arun George

Hyundai Engineering IPO Valuation Analysis

Our target price of Hyundai Engineering Co is 67,475 won per share which is within the IPO price range of 57,900 won and 75,700 won. Given the lack...

Douglas Kim

Hyundai Engineering Pre-IPO - Unjustifiable Premium to Most Domestic Peers

Hyundai Engineering Co Ltd (HEC KS) is looking to raise up to US$1bn in its upcoming Korea IPO. In this note, we discuss peer comparison, our...

Clarence Chu

Price Gauge

52-week Range

Market Cap (USDm)

P/E

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