Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

Event-Driven

<ul>
<li>It was announced that founder of Socar Lee Jae-Woong purchased 336,000 additional shares of Socar. This signals a potential M&amp;A fight for Socar between Lee Jae-Woong/related parties and Lotte Rental.</li>
<li>Founder Lee Jae-Woong and related parties currently own 37.8% stake in Socar versus Lotte Rental which has 32.9% stake.   </li>
<li>Socar is currently trading at more attractive valuations and we like the company's aggressive strategy to raise profitability. </li>
</ul>


It was announced that founder of Socar Lee Jae-Woong purchased 336,000 additional shares of Socar. This signals a potential M&amp;A fight for Socar between Lee Jae-Woong/related parties and Lotte Rental.
Founder Lee Jae-Woong and related parties currently own 37.8% stake in Socar versus Lotte Rental which has 32.9% stake.   
Socar is currently trading at more attractive valuations and we like the company's aggressive strategy to raise profitability. 


A Potential Fight for Management Rights of Socar Between Lee Jae-Woong and Lotte Rental

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 short interest of KRX Stocks as of Nov 10th which has an aggregated short interest worth USD12.0bn.</li>
<li>We tabulate league table for top short by value and short as multiple of ADT, as well as weekly increases &amp; decreases in short value, short as multiple of ADT.</li>
<li>We highlight short interest changes in Medytox, Lg Energy Solution, Kakao, Krafton, Amorepacific.</li>
</ul>


We analyzed the changes in short interest of KRX Stocks as of Nov 10th which has an aggregated short interest worth USD12.0bn.
We tabulate league table for top short by value and short as multiple of ADT, as well as weekly increases &amp; decreases in short value, short as multiple of ADT.
We highlight short interest changes in Medytox, Lg Energy Solution, Kakao, Krafton, Amorepacific.


KRX Short Interest Weekly (Nov 10th): Short Covers for LG Energy, Kakao, Krafton, Amorepacific

Global Emerging Market Equities, Propitious Research

Wium Malan, CFA

Global Emerging Market Equities

Independent, Fundamental Quantitative Research

Propitious Research

Fully independent, fundamental and quantitative equity research, focused on companies in the Telecommunication, Media, Technology, Internet and Healthcare sectors in the Global Emerging Markets. Idea generation focused on Quality stocks, trading below their intrinsic Value, with sound Corporate Governance.

<ul>
<li>An overview (and output) of our machine learning-driven GEM screening model, which seeks to find the best medium-term long ideas within the top 100 stocks in the MSCI GEM Index.</li>
<li>The model is based on 1) a quantitative multifactor screening model, enhanced by two AI Technology-based approaches; 2) a Deep Neural Network model, and 3) a Recurrent Neural Network model.</li>
<li>Developed over roughly 4 years and implemented in its current state for over 3 years, the model has a solid real-world alpha-generating performance track record, discussed in detail below.</li>
</ul>


An overview (and output) of our machine learning-driven GEM screening model, which seeks to find the best medium-term long ideas within the top 100 stocks in the MSCI GEM Index.
The model is based on 1) a quantitative multifactor screening model, enhanced by two AI Technology-based approaches; 2) a Deep Neural Network model, and 3) a Recurrent Neural Network model.
Developed over roughly 4 years and implemented in its current state for over 3 years, the model has a solid real-world alpha-generating performance track record, discussed in detail below.


<ul>
<li>In this insight, we discuss the increasing probability of Kakao Corp (035720 KS) losing its controlling shareholding of KakaoBank (323410 KS).</li>
<li>The FSS Chairman Lee Bok-Hyun emphasized that the FSS may punish Kakao Corp for a potential stock manipulation of S.M.Entertainment amid the M&amp;A tender offer process earlier this year.</li>
<li>At this point, the higher probability event appears to be a combination of fine and Kakao Corp selling at least 10% of its stake in Kakao Bank to another company.</li>
</ul>


In this insight, we discuss the increasing probability of Kakao Corp (035720 KS) losing its controlling shareholding of KakaoBank (323410 KS).
The FSS Chairman Lee Bok-Hyun emphasized that the FSS may punish Kakao Corp for a potential stock manipulation of S.M.Entertainment amid the M&amp;A tender offer process earlier this year.
At this point, the higher probability event appears to be a combination of fine and Kakao Corp selling at least 10% of its stake in Kakao Bank to another company.


Increasing Probability of Kakao Corp Losing Its Controlling Shareholding of Kakao Bank

<ul>
<li>On 25 October, Eoflow announced that the M&amp;A of Eoflow by Medtronic has been postponed. </li>
<li>The closing date for Eoflow's stock transfer agreement with Medtronic has now been changed to 3 January 2024. </li>
<li>Although we believe Medtronic will continue to pursue Eoflow, the M&amp;A tender offer price could be lowered to about 26,000 won, which would be nearly 20% higher than current price.</li>
</ul>


On 25 October, Eoflow announced that the M&amp;A of Eoflow by Medtronic has been postponed. 
The closing date for Eoflow's stock transfer agreement with Medtronic has now been changed to 3 January 2024. 
Although we believe Medtronic will continue to pursue Eoflow, the M&amp;A tender offer price could be lowered to about 26,000 won, which would be nearly 20% higher than current price.


Medtronic's M&A of Eoflow Timeline Postponed

South Korea

Kakao Corp. provides Internet portal services such as news, free e-mail, and leisure information.  The Company also offers cross-platform mobile messaging application that allows users to exchange messages.

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Kakao Corp (035720 KS)

A Potential Fight for Management Rights of Socar Between Lee Jae-Woong and Lotte Rental

Founder of Socar, Lee Jae-Woong, buys more shares, hinting at a potential M&A battle with Lotte Rental for control of the company.

Douglas Kim

KRX Short Interest Weekly (Nov 10th): Short Covers for LG Energy, Kakao, Krafton, Amorepacific

We analyzed KRX short interest report for the past week and highlight short interest changes in Medytox, Lg Energy Solution, Kakao, Krafton,...

Ke Yan, CFA, FRM

Screening for GEMs: November 2023

This insight provides an overview of our, machine learning-driven, proprietary GEM screening model, based on a Multifactor model, a Deep Neural...

Wium Malan, CFA

Increasing Probability of Kakao Corp Losing Its Controlling Shareholding of Kakao Bank

In this insight, we discuss the increasing probability of Kakao Corp losing its controlling shareholding of Kakao Bank. Kakao Corp could be forced...

Douglas Kim

Medtronic's M&A of Eoflow Timeline Postponed

The M&A between Eoflow and Medtronic has been postponed, with a new closing date set for January 3, 2024. The tender offer price may be lowered to...

Douglas Kim

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

A Potential Fight for Management Rights of Socar Between Lee Jae-Woong and Lotte Rental

​Founder of Socar, Lee Jae-Woong, buys more shares, hinting at a potential M&A battle with Lotte Rental for control of the company.

Douglas Kim

KRX Short Interest Weekly (Nov 10th): Short Covers for LG Energy, Kakao, Krafton, Amorepacific

We analyzed KRX short interest report for the past week and highlight short interest changes in Medytox, Lg Energy Solution, Kakao, Krafton,...

Ke Yan, CFA, FRM

Screening for GEMs: November 2023

This insight provides an overview of our, machine learning-driven, proprietary GEM screening model, based on a Multifactor model, a Deep Neural...

Wium Malan, CFA

Increasing Probability of Kakao Corp Losing Its Controlling Shareholding of Kakao Bank

In this insight, we discuss the increasing probability of Kakao Corp losing its controlling shareholding of Kakao Bank. Kakao Corp could be forced...

Douglas Kim

Medtronic's M&A of Eoflow Timeline Postponed

​The M&A between Eoflow and Medtronic has been postponed, with a new closing date set for January 3, 2024. The tender offer price may be lowered to...

Douglas Kim

Founder of Socar, Lee Jae-Woong, buys more shares, hinting at a potential M&A battle with Lotte Rental for control of the company.

The M&A between Eoflow and Medtronic has been postponed, with a new closing date set for January 3, 2024. The tender offer price may be lowered to...