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.

Event-Driven

<ul>
<li>The transaction completes on 28 February and the distribution in-specie of 49% new <a href="https://www.smartkarma.com/entities/sembcorp-marine-ltd" target="_blank" data-smartkarma-citation="entities:11:1" rel="noopener">Sembcorp Marine (SMM SP)</a> shares will be credited to <a href="https://www.smartkarma.com/entities/keppel-corp-ltd" target="_blank" data-smartkarma-citation="entities:12:1" rel="noopener">Keppel Corp (KEP SP)</a>'s shareholders on 1 March.   </li>
<li>While the potential index inclusions are likely to support new SMM shares, there is likely to be greater short-term downward pressure from the overhang created by the distribution in-specie. </li>
<li>New SMM trades at a premium P/NAV multiple of 1.81x vs peers. However, New SMM’s order book of S$18.1 billion implies an undemanding EV/order book of 0.60x vs historical ranges.</li>
</ul>


The transaction completes on 28 February and the distribution in-specie of 49% new Sembcorp Marine (SMM SP) shares will be credited to Keppel Corp (KEP SP)'s shareholders on 1 March.   
While the potential index inclusions are likely to support new SMM shares, there is likely to be greater short-term downward pressure from the overhang created by the distribution in-specie. 
New SMM trades at a premium P/NAV multiple of 1.81x vs peers. However, New SMM’s order book of S$18.1 billion implies an undemanding EV/order book of 0.60x vs historical ranges.


Sembcorp Marine (SMM SP): Short-Term Share Overhang Vs the Long-Term Value

<ul>
<li>
<a href="https://www.smartkarma.com/entities/keppel-corp-ltd" target="_blank" data-smartkarma-citation="entities:12:1" rel="noopener">Keppel Corp (KEP SP)</a>’s EGM on 8 December requires majority shareholder approval of two ordinary resolutions. The IFA notes that the transaction terms are “<em>not prejudicial</em>” to minorities.</li>
<li>Keppel shareholders will be supportive due to attractive terms. The other key conditions precedent is <a href="https://www.smartkarma.com/entities/sembcorp-marine-ltd" target="_blank" data-smartkarma-citation="entities:11:1" rel="noopener">Sembcorp Marine (SMM SP)</a> shareholders and regulatory approvals (SGX-ST and Maritime Port Authority of Singapore). </li>
<li>The deal is expected to close by the end of the year. Our Keppel SoTP valuation is S$8.30 per share, which is 12% above the last close.</li>
</ul>



Keppel Corp (KEP SP)’s EGM on 8 December requires majority shareholder approval of two ordinary resolutions. The IFA notes that the transaction terms are “not prejudicial” to minorities.
Keppel shareholders will be supportive due to attractive terms. The other key conditions precedent is Sembcorp Marine (SMM SP) shareholders and regulatory approvals (SGX-ST and Maritime Port Authority of Singapore). 
The deal is expected to close by the end of the year. Our Keppel SoTP valuation is S$8.30 per share, which is 12% above the last close.


Keppel (KEP SP) Vote on Keppel O&M and Sembcorp Marine Transaction on 8 Dec

Head of Research, IPOs & Placements, Aequitas Research

Sumeet Singh

Head of Research, 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.

HD Hyundai Heavy Industries  / Event-Driven

<ul>
<li>Hyundai Heavy Industries (HHI) was listed on Korea Exchange on 17th September, 2021. Its one year lock-up will expire on 17th Sep, 2022.</li>
<li>Hyundai Heavy Industries (HHI) is a South Korean shipbuilder. The company is majority owned by Korea Shipbuilding &amp; Offshore Engineering (009540 KS) after the latter’s spin-off in 2019.</li>
<li>In this note, we will talk about the upcoming lock-up expiry, along with recent updates.</li>
</ul>


Hyundai Heavy Industries (HHI) was listed on Korea Exchange on 17th September, 2021. Its one year lock-up will expire on 17th Sep, 2022.
Hyundai Heavy Industries (HHI) is a South Korean shipbuilder. The company is majority owned by Korea Shipbuilding &amp; Offshore Engineering (009540 KS) after the latter’s spin-off in 2019.
In this note, we will talk about the upcoming lock-up expiry, along with recent updates.


Hyundai Heavy IPO Lock-Up - Last of the Lockups with Employees Coming Free

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>Iljin HySolus and Hyundai Heavy Industries will release the ESOP volumes, 0.82% and 3.93% of SO, on September 1st and 17th. They have risen 2.3% and 145.8% from the listings.</li>
<li>Despite the small profit, it seems more probable that the Iljin HySolus ESOP will attempt to dispose of its shares immediately after the release, potentially leading to another price correction.</li>
<li>On the other hand, I would seek a hedge for the HHI ESOP lockup release. I would look at KSOE as a hedge for my short position on HHI.</li>
</ul>


Iljin HySolus and Hyundai Heavy Industries will release the ESOP volumes, 0.82% and 3.93% of SO, on September 1st and 17th. They have risen 2.3% and 145.8% from the listings.
Despite the small profit, it seems more probable that the Iljin HySolus ESOP will attempt to dispose of its shares immediately after the release, potentially leading to another price correction.
On the other hand, I would seek a hedge for the HHI ESOP lockup release. I would look at KSOE as a hedge for my short position on HHI.


ESOP Lockup Releases: Iljin HySolus & Hyundai Heavy Industries

<ul>
<li>The KDIC sold a 2.33% stake in Woori Financial through an after-hours block sale. From a passive flow perspective, this is quite similar to KSOE's HHI block deals yesterday.</li>
<li>Woori is likely to show a similar share price movement as HHI. Expectations for the passive inflow effect must have dissipated, and a short-term share price correction is now inevitable.</li>
<li>However, the passive inflow sizes are still too substantial. With this in mind, we need to consider a strategy that approaches this price correction as a re-entry opportunity.</li>
</ul>


The KDIC sold a 2.33% stake in Woori Financial through an after-hours block sale. From a passive flow perspective, this is quite similar to KSOE's HHI block deals yesterday.
Woori is likely to show a similar share price movement as HHI. Expectations for the passive inflow effect must have dissipated, and a short-term share price correction is now inevitable.
However, the passive inflow sizes are still too substantial. With this in mind, we need to consider a strategy that approaches this price correction as a re-entry opportunity.


Woori Financial Block Deals: Another Shares Let-Go Event for Passive Buying

South Korea

HD Korea Shipbuilding & Offshore Engineering Co., Ltd. operates as a shipbuilding and offshore company. The Company provides industrial plant engineering, special and naval shipbuilding, marine engine and machinery, industrial machinery and energy services. HD Korea Shipbuilding & Offshore Engineering markets its products worldwide.

HD Korea Shipbuilding & Offshore Engineering (009540 KS)

HD Korea Shipbuilding & Offshore Engineering

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HD Korea Shipbuilding & Offshore Engineering (009540 KS)

Keppel (KEP SP) Vote on Keppel O&M and Sembcorp Marine Transaction on 8 Dec

The transaction is a win-win for both sets of shareholders. The vote requires majority shareholder approval. Our Keppel SoTP valuation is S$8.30...

Arun George

Hyundai Heavy IPO Lock-Up - Last of the Lockups with Employees Coming Free

Hyundai Heavy Industries (HHI) was listed on Korea Exchange on 17th September, 2021. Its one year lock-up will expire on 17th Sep, 2022.

Sumeet Singh

ESOP Lockup Releases: Iljin HySolus & Hyundai Heavy Industries

This post investigates the two ESOP lockup releases we will see in September in Korea: Iljin HySolus and Hyundai Heavy Industries.

Sanghyun Park

Woori Financial Block Deals: Another Shares Let-Go Event for Passive Buying

This post examines the Woori Financial Group block deals by the KDIC this morning, which should be another shares let-go event for passive buying,...

Sanghyun Park

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

Sembcorp Marine (SMM SP): Short-Term Share Overhang Vs the Long-Term Value

In the short term, Keppel's distribution in-specie of new SMM shares creates an overhang. Longer-term new SMM’s order book of S$18.1 billion...

Arun George

Keppel (KEP SP) Vote on Keppel O&M and Sembcorp Marine Transaction on 8 Dec

The transaction is a win-win for both sets of shareholders. The vote requires majority shareholder approval. Our Keppel SoTP valuation is S$8.30...

Arun George

Hyundai Heavy IPO Lock-Up - Last of the Lockups with Employees Coming Free

Hyundai Heavy Industries (HHI) was listed on Korea Exchange on 17th September, 2021. Its one year lock-up will expire on 17th Sep, 2022.

Sumeet Singh

ESOP Lockup Releases: Iljin HySolus & Hyundai Heavy Industries

This post investigates the two ESOP lockup releases we will see in September in Korea: Iljin HySolus and Hyundai Heavy Industries.

Sanghyun Park

Woori Financial Block Deals: Another Shares Let-Go Event for Passive Buying

This post examines the Woori Financial Group block deals by the KDIC this morning, which should be another shares let-go event for passive buying,...

Sanghyun Park