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.

Equity Capital Markets

<ul>
<li>
<a href="https://www.smartkarma.com/entities/sanil-electric-co-ltd" target="_blank" data-smartkarma-citation="entities:43687:1" rel="noopener">Sanil Electric (062040 KS)</a>, a Korean industrial transformer manufacturer, is seeking to raise up to US$165 million.</li>
<li>In <a href="https://www.smartkarma.com/insights/sanil-electric-ipo-the-bull-case" target="_blank" data-smartkarma-citation="insights:150440" rel="noopener">Sanil Electric IPO: The Bull Case</a>, we highlighted the key elements of the bull case. In this note, we outline the bear case.</li>
<li>The bear case rests on rapidly slowing growth, high customer concentration, mid-tier revenue growth and mid-tier FCF margin compared to peers.</li>
</ul>



Sanil Electric (062040 KS), a Korean industrial transformer manufacturer, is seeking to raise up to US$165 million.
In Sanil Electric IPO: The Bull Case, we highlighted the key elements of the bull case. In this note, we outline the bear case.
The bear case rests on rapidly slowing growth, high customer concentration, mid-tier revenue growth and mid-tier FCF margin compared to peers.


Asia Pac IPO & Placement Research, China biotech, Aequitas Research

Ke Yan, CFA, FRM

Asia Pac IPO & Placement Research, China biotech

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.

Quantitative Analysis

<ul>
<li>We analyzed the changes in foreign holdings of KRX Stocks as of Jun 28th which has an aggregated holding worth USD564.4bn.</li>
<li>We estimate that foreign flows to be inflows of USD33mln. We tabulate the league table for top changes by value for 1W/4W/1Y and top stocks held by foreign institutions.</li>
<li>We highlight foreign changes in Samsung Electronics, Sk Hynix, Samsung SDI, Celltrion.</li>
</ul>


We analyzed the changes in foreign holdings of KRX Stocks as of Jun 28th which has an aggregated holding worth USD564.4bn.
We estimate that foreign flows to be inflows of USD33mln. We tabulate the league table for top changes by value for 1W/4W/1Y and top stocks held by foreign institutions.
We highlight foreign changes in Samsung Electronics, Sk Hynix, Samsung SDI, Celltrion.


KRX Foreign Holding Weekly (Jun 28th): Samsung Electronics, Sk Hynix, Samsung SDI, Celltrion

<ul>
<li>
<a href="https://www.smartkarma.com/entities/sanil-electric-co-ltd" target="_blank" data-smartkarma-citation="entities:43687:1" rel="noopener">Sanil Electric (062040 KS)</a>, a Korean industrial transformer manufacturer, is seeking to raise up to US$165 million.    </li>
<li>The IPO is a pure primary raise of 7.6 million shares at an IPO price range of KRW24,000-30,000. Book building will run from 9 to 15 July.</li>
<li>The bull case rests on US-led rapid revenue growth, high barriers to entry, good revenue visibility, improving margins, top-quartile margin performance and modest leverage.</li>
</ul>



Sanil Electric (062040 KS), a Korean industrial transformer manufacturer, is seeking to raise up to US$165 million.    
The IPO is a pure primary raise of 7.6 million shares at an IPO price range of KRW24,000-30,000. Book building will run from 9 to 15 July.
The bull case rests on US-led rapid revenue growth, high barriers to entry, good revenue visibility, improving margins, top-quartile margin performance and modest leverage.


Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

Douglas Research Advisory

<ul>
<li>With the development of new and renewable energy, transmission and distribution network bottlenecks are worsening in many countries, and there is a strong demand for new transmission and distribution networks.</li>
<li>China is virtually excluded from competition for the US market. This situation has resulted in increased new orders for companies such as Sanil Electric. </li>
<li>Our base case valuation of Sanil Electric is target price of 58,593 won, which is 95% higher than the high end of the IPO price range (30,000 won).</li>
</ul>


With the development of new and renewable energy, transmission and distribution network bottlenecks are worsening in many countries, and there is a strong demand for new transmission and distribution networks.
China is virtually excluded from competition for the US market. This situation has resulted in increased new orders for companies such as Sanil Electric. 
Our base case valuation of Sanil Electric is target price of 58,593 won, which is 95% higher than the high end of the IPO price range (30,000 won).


<ul>
<li>Our base case valuation of Sanil Electric is market cap of 1.8 trillion won or target price of 58,593 won (95% higher than the high end of the IPO price). </li>
<li>Sanil Electric has higher sales growth, operating margins, and ROE than the comps. </li>
<li>We estimate Sanil Electric to generate sales of 283.4 billion won (up 32.1% YoY) and operating profit of 79 billion won (up 69.6% YoY) in 2024. </li>
</ul>


Our base case valuation of Sanil Electric is market cap of 1.8 trillion won or target price of 58,593 won (95% higher than the high end of the IPO price). 
Sanil Electric has higher sales growth, operating margins, and ROE than the comps. 
We estimate Sanil Electric to generate sales of 283.4 billion won (up 32.1% YoY) and operating profit of 79 billion won (up 69.6% YoY) in 2024. 


South Korea

Hyundai Electric & Energy Systems (HE&E), which makes various electric equipment including transformers, switchgear, motors, low & medium voltage circuit breakers, power electronics, and power electronics & control systems.

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Hyundai Electric & Energy (267260 KS)

Sanil Electric IPO: The Bear Case

The bear case rests on rapidly slowing growth, high customer concentration, mid-tier revenue growth and mid-tier FCF margin compared to peers.

Arun George

KRX Foreign Holding Weekly (Jun 28th): Samsung Electronics, Sk Hynix, Samsung SDI, Celltrion

We analyzed KRX foreign holding data for the past week and highlighted foreign holding changes in Samsung Electronics, Sk Hynix, Samsung SDI,...

Ke Yan, CFA, FRM

Sanil Electric IPO: The Bull Case

The bull case rests on US-led rapid revenue growth, high barriers to entry, good revenue visibility, improving margins, top-quartile margin...

Arun George

Sanil Electric IPO Industry Analysis

With the development of new and renewable energy, transmission and distribution network bottlenecks are worsening in many countries, and there is a...

Douglas Kim

Sanil Electric IPO Valuation Analysis

Our base case valuation of Sanil Electric is market cap of 1.8 trillion won or target price of 58,593 won (95% higher than the high end of the IPO...

Douglas Kim

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