Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

Equity Capital Markets

LG Energy Solution / Equity Capital Markets

<p>In this insight, we provide an update on the <strong>LG Energy Solution IPO. </strong>There have been some concerns that this IPO could get delayed until next year. However, there are increasing signs that suggest that the IPO of LG Energy Solution could get completed as early as in December 2021 to February 2022. </p><p>The <a href="https://finance.naver.com/news/news_read.naver?article_id=0003971386&amp;office_id=011&amp;mode=RANK&amp;typ=0" target="_blank" rel="noopener">local media</a> have mentioned that by the end of this month, the LG Chem could release a specific schedule of the IPO of LG Energy Solution. A main hurdle on this IPO has been the cost of battery recall by GM. The IPO of LG Energy Solution will be able to be completed only if there are clear amount of contributions that the LG Energy Solution has to pay to GM and there are clues that this could get cleared up when <strong>LG Chem announces its 3Q 2021 earnings on 25 October. </strong></p><p>LG Chem currently has a market cap of 54 trillion won ($45 billion). The local media have mentioned that the value of LG Energy Solution could be about <a href="https://biz.chosun.com/stock/stock_general/2021/06/08/AHPP333T65HO7MPBGLPMPSMS3Y/?utm_source=naver&amp;utm_medium=original&amp;utm_campaign=biz" target="_blank" rel="noopener">50 trillion won to 100 trillion won.</a><strong>LG Energy Solution is expected to raise more than 10 trillion won in this IPO, which could make this the largest ever IPO in Korea. </strong></p>

In this insight, we provide an update on the LG Energy Solution IPO. There have been some concerns that this IPO could get delayed until next year. However, there are increasing signs that suggest that the IPO of LG Energy Solution could get completed as early as in December 2021 to February 2022. The local media have mentioned that by the end of this month, the LG Chem could release a specific schedule of the IPO of LG Energy Solution. A main hurdle on this IPO has been the cost of battery recall by GM. The IPO of LG Energy Solution will be able to be completed only if there are clear amount of contributions that the LG Energy Solution has to pay to GM and there are clues that this could get cleared up when LG Chem announces its 3Q 2021 earnings on 25 October. LG Chem currently has a market cap of 54 trillion won ($45 billion). The local media have mentioned that the value of LG Energy Solution could be about 50 trillion won to 100 trillion won.LG Energy Solution is expected to raise more than 10 trillion won in this IPO, which could make this the largest ever IPO in Korea. 

LG Energy Solution - The Biggest IPO in 2021 in Korea?

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Vicki Bryan

Founder & CEO Bond Angle, LLC

Bond Angle, LLC

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<p><strong>Tesla's third quarter deliveries topped 241,000</strong>, trouncing market consensus and my best case estimate.</p><p>That said, it was an easy comp given<strong> new Model Y sales and new market expansions that didn't exist last year</strong>—as I expected. But how much of the beat was <strong>home grown?</strong></p><p>In any case, <strong>bigger numbers</strong> mean bigger numbers<strong>, so I have increased my estimates for third quarter revenue and profits</strong>.</p>

Tesla's third quarter deliveries topped 241,000, trouncing market consensus and my best case estimate.That said, it was an easy comp given new Model Y sales and new market expansions that didn't exist last year—as I expected. But how much of the beat was home grown?In any case, bigger numbers mean bigger numbers, so I have increased my estimates for third quarter revenue and profits.

Tesla Reports Record Q3 Deliveries; Blow Out Quarter Secured

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Granite Bay Capital is an innovation focussed investment company with a deep focus on the companies at the leading edge of innovation across major themes such as AI, ubiquitous computing, sustainability, automation and longevity.

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<h2>Headline Developments</h2><p>Samsung (005930.KS) and Harvard University have published new research outlining the vision of copying the brain’s neuron wiring map into a 3D “neuromorphic” chip. The approach, outlined in this paper, aims to reverse engineer the brain by copying the synaptic connectivity map of the brain (below right) and pasting the map onto a high-density 3D solid-state memory network.</p>

Headline DevelopmentsSamsung (005930.KS) and Harvard University have published new research outlining the vision of copying the brain’s neuron wiring map into a 3D “neuromorphic” chip. The approach, outlined in this paper, aims to reverse engineer the brain by copying the synaptic connectivity map of the brain (below right) and pasting the map onto a high-density 3D solid-state memory network.

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>Trading at only 9x PER with a 5% dividend yield, <a href="https://www.smartkarma.com/entities/xinyi-glass-holdings-ltd" target="_blank" data-smartkarma-citation="entities:11940:1" rel="noopener">Xinyi Glass Holdings (868 HK)</a>  does not sound expensive at all especially when it combines with the index inclusion effect since September 2021. However, its biggest selling product is float glass which the management has confirmed that ties to the performance of the construction sector in China, which is currently under government scrutiny due to the stalled growth and overleverage. </p>
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<a href="https://www.smartkarma.com/entities/flat-glass-group-ltd" target="_blank" data-smartkarma-citation="entities:1108:1" rel="noopener">Flat Glass (6865 HK)</a> 's majority of revenues come from PV glass with a tiny exposure in float glass and household glass. PV glass made up around 83% of the revenue while the other products such as Household Glass, Architectural Glass, and Float Glass made up around 5%, 8%, and 1% respectively. The company benefits from the increasing demand for clean energy. </div>
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<div>One can say that it may be too late to start shorting Xinyi Glass as the share price has decreased by around 30%  in 3 months. However, given the bleak short-term outlook of the property sector in China, the 60% of Xinyi Glass’ revenue from Float Glass may decrease by 25-50% and the price multiple should be lower too.</div>
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<div>On the other hand, going long Flat Glass means participating in the growth of the clean energy and ESG sector that is currently a hot topic in the market plus participating in the Grid Parity in China.</div>
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<figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/231/931/original/image_32347912521632655334114.png?1632655334" class="editor-image img-responsive" data-smartkarma-image-id="231931"></figure>
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<div class="content-remarks">source: Reuters</div>
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Trading at only 9x PER with a 5% dividend yield, Xinyi Glass Holdings (868 HK)  does not sound expensive at all especially when it combines with the index inclusion effect since September 2021. However, its biggest selling product is float glass which the management has confirmed that ties to the performance of the construction sector in China, which is currently under government scrutiny due to the stalled growth and overleverage. 

Flat Glass (6865 HK) 's majority of revenues come from PV glass with a tiny exposure in float glass and household glass. PV glass made up around 83% of the revenue while the other products such as Household Glass, Architectural Glass, and Float Glass made up around 5%, 8%, and 1% respectively. The company benefits from the increasing demand for clean energy. 



One can say that it may be too late to start shorting Xinyi Glass as the share price has decreased by around 30%  in 3 months. However, given the bleak short-term outlook of the property sector in China, the 60% of Xinyi Glass’ revenue from Float Glass may decrease by 25-50% and the price multiple should be lower too.

On the other hand, going long Flat Glass means participating in the growth of the clean energy and ESG sector that is currently a hot topic in the market plus participating in the Grid Parity in China.




source: Reuters


Short Xinyi Glass (868) Vs Long Flat Glass (6865)

<p>Headline Developments SpaceX (private) has completed the world’s first all-civilian mission to space, sending four passengers into Earth’s orbit without any professionally trained astronauts.  The mission lasted 72-hours, setting off on Wednesday last week and landing (below) on Saturday, 30 miles (48 km) east of the Kennedy Space Center in Florida (from where they launched).</p>

Headline Developments SpaceX (private) has completed the world’s first all-civilian mission to space, sending four passengers into Earth’s orbit without any professionally trained astronauts.  The mission lasted 72-hours, setting off on Wednesday last week and landing (below) on Saturday, 30 miles (48 km) east of the Kennedy Space Center in Florida (from where they launched).

United States

General Motors Co. manufactures and markets new cars and trucks. The Company offers features for special needs drivers, OnStar vehicle protection, service, parts, accessories, maintenance, XM satellite radio, features for commercial owners, and more. General Motors offers its vehicles and services worldwide.

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General Motors (GM US)

LG Energy Solution - The Biggest IPO in 2021 in Korea?

In this insight, we provide an update on the LG Energy Solution IPO. There are increasing signs that the IPO of LG Energy Solution could get...

Douglas Kim

Tesla Reports Record Q3 Deliveries; Blow Out Quarter Secured

Q3 deliveries topped 241,000, trouncing market consensus & my best case estimate. It was an easy comp vs weak results last yr on new model & market...

Vicki Bryan

Weekly Innovation Review (WIRE) #51

Samsung (005930.KS) and Harvard University have published new research outlining the vision of copying the brain’s neuron...

Granite Bay Capital

Short Xinyi Glass (868) Vs Long Flat Glass (6865)

Xinyi Glass’ 60% revenue from Float Glass may decrease by 25-50% and the price multiple should be lower too. Going long Flat Glass rides the growth...

Henry Soediarko

Weekly Innovation Review (WIRE) #50

SpaceX (private) has completed the world’s first all-civilian mission to space, sending four passengers into Earth’s orbit without any...

Granite Bay Capital

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