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

SubscriptionIljin Hysolus was decided at ₩34,300, which is the upper end of the indicative price band. As a result, Iljin Hysolus raises ₩373.6B through this IPO, with a market cap of ₩1.25T.Aggressive IPO pricing could be expected from a fairly favorable institutional response in the bookbuilding. As the competition rate for institutional subscriptions recorded 1,471 to 1, it was again close to a historical record.Iljin Hysolus also raised more than ₩36T in margin in retail subscriptions. This is by far the highest level among IPOs of this size (around ₩1T).









Subscription by institution type
Institution
%
Demand
%


1. Local publicly raised funds
256
15.89%
1,442,953,000
16.37%


2. Local brokerages/investment advisories
19
1.18%
111,838,000
1.27%


3. Local pensions, funds managing proprietary assets, banks, and insurance companies
225
13.97%
1,198,819,000
13.60%


4. Local others (discretionary investment companies, mostly local hedge funds)
764
47.42%
4,215,805,000
47.83%


5. Foreign (foreign IPO funds &amp; hedge funds)
125
7.76%
674,141,000
7.65%


6. Foreign others (mostly local hot money)
222
13.78%
1,170,285,000
13.28%


Total
1,611
100.00%
8,813,841,000
100.00%


Institutional subscription rate
1,471.01

Source: DART

And virtually all institutions, regardless of institution type, put prices in the upper end of the indicative price band.








Pricing by institution type
Above the upper end + Unspecified
% of total demands
Holding tendencies


1. Local publicly raised funds
94.53%
15.83%
Long-term


2. Local brokerages/investment advisories
89.47%
1.16%
Short-term


3. Local pensions, funds managing proprietary assets, banks, and insurance companies
92.00%
12.84%
Long-term


4. Local others (discretionary investment companies, mostly local hedge funds)
95.68%
46.15%
Short-term


5. Foreign (foreign IPO funds &amp; hedge funds)
98.40%
7.65%
Long or short-term, depends


6. Foreign others (mostly local hot money)
91.44%
11.99%
Short-term

Source: DART

AllocationIn the ESOP subscription, more forfeited shares occurred than expected. As a result, institutional allocation rose to 66.9%, and retail took 30%. Compared to post-IPO SO, institutional investors will hold 20.07%, retail will retain 9%, and ESOP will sit on 0.93%.The allocation ratio among institutional investors is also quite ideal. The proportion of locally publicly raised funds and pension funds with long-term holding tendencies (nearly half of the institutional offering) is also not bad, given its size. In addition, it is a good start for a company of this size by securing foreign ownership of more than 7%, which can be said to be an indicator of increasing external credibility in the initial stage of listing.









Allocation by investor type
Initial allocation
% of the institutional offering
% of the total offering
% of post-IPO SO


Institutional
55.00%
66.90%
66.90%
20.07%


1. Local publicly raised funds
-
36.20%
24.22%
7.26%


2. Local Br/IA
-
1.66%
1.11%
0.33%


3. Local pension, etc.
-
11.20%
7.49%
2.25%


4. Local others
-
15.94%
10.67%
3.20%


5. Foreign
-
34.65%
23.18%
6.95%


6. Foreign, other
-
0.35%
0.23%
0.07%


Retail
25.00%
-
30.00%
9.00%


ESOP
20.00%
-
3.10%
0.93%

Source: DART



Iljin Hysolus IPO: Allocation, Lockups, & Float Schedule

Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

<div class="content-highlight">
<p>Iljin Hysolus reduced its IPO price range. The company announced that it will reduce the IPO price range from 30,300 won to 37,300 won previously to 25,700 won to 34,300 won, respectively. This represents a decline of 8% to 15%.</p>
<p>The IPO deal size has been revised down to US$243 million to US$325 million. The expected market cap after the IPO is from 933 billion won (low) to 1,245 billion won (high). The book building for the institutional investors starts on 19 August 2021. </p>
<p><strong>Our revised base case valuation of Iljin Hysolus is implied market cap of 940 billion won or 25,898 won per share, which represents 1% higher than the low end of the IPO price range of 25,700 won. Given the lack of upside, we continue to maintain a NEGATIVE view of this IPO and we would avoid this IPO. </strong></p>
</div><table class="table table-striped">
<colgroup>
<col>
<col>
</colgroup>
<tbody>
<tr>
<td style="width: 240pt;">Deal Specifics of the Iljin Hysolus IPO (Revised):</td>
<td style="width: 238pt;"> </td>
</tr>
<tr>
<td style="width: 240pt;">Lead underwriters of the IPO: </td>
<td style="width: 238pt;">Mirae Asset Securities, Samsung Securities</td>
</tr>
<tr>
<td style="width: 240pt;">Expected IPO price per share: </td>
<td style="width: 238pt;">25,700 won (low)/34,300 won (high)</td>
</tr>
<tr>
<td style="width: 240pt;">Number of Shares for IPO:</td>
<td style="width: 238pt;">10.89m shares (7.26m new shares and 3.63m old shares)</td>
</tr>
<tr>
<td style="width: 240pt;">IPO base deal size: </td>
<td style="width: 238pt;">US$243 mn (low);  US$325 mn (high)</td>
</tr>
<tr>
<td style="width: 240pt;">Expected common shares outstanding, fully diluted (post-IPO):  </td>
<td style="width: 238pt;">36.31m shares</td>
</tr>
<tr>
<td style="width: 240pt;">Expected market cap after IPO:</td>
<td style="width: 238pt;">933 billion won (low)/1,245 billion won (high)</td>
</tr>
<tr>
<td style="width: 240pt;">Book open: </td>
<td style="text-align: left; width: 238pt;">19-Aug-21</td>
</tr>
<tr>
<td style="width: 240pt;">Book closed:</td>
<td style="text-align: left; width: 238pt;">20-Aug-21</td>
</tr>
<tr>
<td style="width: 240pt;">Listing date: </td>
<td style="text-align: left; width: 238pt;">TBD</td>
</tr>
<tr>
<td style="width: 240pt;">Source: Company data</td>
<td style="width: 238pt;"> </td>
</tr>
</tbody>
</table>


Iljin Hysolus reduced its IPO price range. The company announced that it will reduce the IPO price range from 30,300 won to 37,300 won previously to 25,700 won to 34,300 won, respectively. This represents a decline of 8% to 15%.
The IPO deal size has been revised down to US$243 million to US$325 million. The expected market cap after the IPO is from 933 billion won (low) to 1,245 billion won (high). The book building for the institutional investors starts on 19 August 2021. 
Our revised base case valuation of Iljin Hysolus is implied market cap of 940 billion won or 25,898 won per share, which represents 1% higher than the low end of the IPO price range of 25,700 won. Given the lack of upside, we continue to maintain a NEGATIVE view of this IPO and we would avoid this IPO. 







Deal Specifics of the Iljin Hysolus IPO (Revised):
 


Lead underwriters of the IPO: 
Mirae Asset Securities, Samsung Securities


Expected IPO price per share: 
25,700 won (low)/34,300 won (high)


Number of Shares for IPO:
10.89m shares (7.26m new shares and 3.63m old shares)


IPO base deal size: 
US$243 mn (low);  US$325 mn (high)


Expected common shares outstanding, fully diluted (post-IPO):  
36.31m shares


Expected market cap after IPO:
933 billion won (low)/1,245 billion won (high)


Book open: 
19-Aug-21


Book closed:
20-Aug-21


Listing date: 
TBD


Source: Company data
 




<p>Our base case valuation of Iljin Hysolus is implied market cap of 817.6 billion won or 22,517 won per share. This represents 26% lower than the low end of the IPO price range of 30,300 won. Given the lower target price versus the IPO price range, we would AVOID this deal. </p><div><p>Established in 2012, Iljin Hysolus is a hydrogen mobility-related parts company that provides hydrogen fuel tanks and modules based on hydrogen storage technology. The company supplied hydrogen fuel tanks for the first time in the industry to the Tucson hydrogen electric vehicle, which Hyundai Motors successfully commercialized in 2014. Since then, it has been supplying hydrogen fuel tanks to hydrogen fuel cell vehicles (FCEV) 'Nexo' and hydrogen buses. </p></div>

Our base case valuation of Iljin Hysolus is implied market cap of 817.6 billion won or 22,517 won per share. This represents 26% lower than the low end of the IPO price range of 30,300 won. Given the lower target price versus the IPO price range, we would AVOID this deal. Established in 2012, Iljin Hysolus is a hydrogen mobility-related parts company that provides hydrogen fuel tanks and modules based on hydrogen storage technology. The company supplied hydrogen fuel tanks for the first time in the industry to the Tucson hydrogen electric vehicle, which Hyundai Motors successfully commercialized in 2014. Since then, it has been supplying hydrogen fuel tanks to hydrogen fuel cell vehicles (FCEV) 'Nexo' and hydrogen buses. 

<p>Iljin Hysolus is getting ready to complete its IPO in Korea in August. Iljin Hysolus is a company specializing in eco-friendly hydrogen fuel storage solutions of the Iljin Group. The company is offering 10.89 million shares, of which 7.26 million is for new shares and 3.63 million is for the old shares. </p><p>The IPO price range is from 30,300 won to 37,300 won. The IPO base deal size is from $289 million to $356 million. According to the bankers' valuation, the expected market cap of the company is from 1.1 trillion won to 1.35 trillion won. The book building for the institutional investors starts on August 8th. Mirae Asset Securities and Samsung Securites are the lead bankers on this deal. </p><table class="table table-striped">
<colgroup>
<col>
<col>
</colgroup>
<tbody>
<tr>
<td style="width: 240pt;"><div><strong>Deal Specifics of the Iljin Hysolus IPO:</strong></div></td>
<td style="width: 238pt;"> </td>
</tr>
<tr>
<td>Lead underwriters of the IPO: </td>
<td style="width: 238pt;">Mirae Asset Securities, Samsung Securities</td>
</tr>
<tr>
<td><strong>Expected IPO price per share: </strong></td>
<td style="width: 238pt;"><strong>30,300 won (low)/37,300 won (high)</strong></td>
</tr>
<tr>
<td>Number of Shares for IPO:</td>
<td style="width: 238pt;">10.89m shares (7.26m new shares and 3.63m old shares)</td>
</tr>
<tr>
<td>IPO base deal size: </td>
<td style="width: 238pt;">US$289 mn (low);  US$356 mn (high)</td>
</tr>
<tr>
<td>Expected common shares outstanding, fully diluted (post-IPO):  </td>
<td style="width: 238pt;">36.31m shares</td>
</tr>
<tr>
<td><strong>Expected market cap after IPO:</strong></td>
<td style="width: 238pt;"><strong>1,100 billion won (low)/1,354 billion won (high)</strong></td>
</tr>
<tr>
<td>Book open: </td>
<td style="text-align: left; width: 238pt;">8-Aug-21</td>
</tr>
<tr>
<td>Book closed:</td>
<td style="text-align: left; width: 238pt;">9-Aug-21</td>
</tr>
<tr>
<td>Listing date: </td>
<td style="text-align: left; width: 238pt;">TBD</td>
</tr>
<tr>
<td>Source: Company data</td>
<td style="width: 238pt;"> </td>
</tr>
</tbody>
</table>

Iljin Hysolus is getting ready to complete its IPO in Korea in August. Iljin Hysolus is a company specializing in eco-friendly hydrogen fuel storage solutions of the Iljin Group. The company is offering 10.89 million shares, of which 7.26 million is for new shares and 3.63 million is for the old shares. The IPO price range is from 30,300 won to 37,300 won. The IPO base deal size is from $289 million to $356 million. According to the bankers' valuation, the expected market cap of the company is from 1.1 trillion won to 1.35 trillion won. The book building for the institutional investors starts on August 8th. Mirae Asset Securities and Samsung Securites are the lead bankers on this deal. 






Deal Specifics of the Iljin Hysolus IPO:
 


Lead underwriters of the IPO: 
Mirae Asset Securities, Samsung Securities


Expected IPO price per share: 
30,300 won (low)/37,300 won (high)


Number of Shares for IPO:
10.89m shares (7.26m new shares and 3.63m old shares)


IPO base deal size: 
US$289 mn (low);  US$356 mn (high)


Expected common shares outstanding, fully diluted (post-IPO):  
36.31m shares


Expected market cap after IPO:
1,100 billion won (low)/1,354 billion won (high)


Book open: 
8-Aug-21


Book closed:
9-Aug-21


Listing date: 
TBD


Source: Company data
 




South Korea

Iljin Hysolus Co Ltd operates environmental problem solving businesses. The Company provides hydrogen solutions, CNG solutions, diesel solutions and other services. Iljin Hysolus conducts businesses in South Korea.

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Iljin Hysolus (271940 KS)

Iljin Hysolus IPO: Allocation, Lockups, & Float Schedule

This post summarizes the allocation/lockup results and float schedule of the red hot local IPO, Iljin Hysolus, a hydrogen solution provider.

Sanghyun Park

Iljin Hysolus Reduces IPO Price Range

Iljin Hysolus reduced its IPO price range. The company announced that it will reduce the IPO price range to 25,700 won to 34,300 won. We continue...

Douglas Kim

Iljin Hysolus IPO Valuation Analysis

Our base case valuation of Iljin Hysolus is implied market cap of 817.6 billion won or 22,517 won per share. Given the lower target price versus...

Douglas Kim

Iljin Hysolus IPO Preview

Iljin Hysolus is getting ready to complete its IPO in Korea in August. The IPO base deal size is from $289 million to $356 million.

Douglas Kim

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