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.

Event-Driven

Pearl Abyss resumes trading today after a 3-day suspension due to a 1:5 stock split.The float is 41.72% at a post-split SO of 65.9M. The FO sits at 23.88% with a DTV of 0.27% SO. 30D avg x Open is 3.64%p.The base price is ₩67,300 at an MC of ₩4.35T.





PearlAbyss Corp

Ticker
263750


Stock split
1 to 5


Pre-split SO
13,235,600


Post-split SO
65,949,250


Float
41.72%


FO
23.88%30


30D DTV/SO
0.27%


30D avg x Open
3.64%p


Trading resumption
2021. 4. 16


- Suspension period
3 sessions


MC (₩B)
4,353.8


Base
₩67,300

Source: KRX

Reviewing Kakao post-split d-dayNow, look at Kakao's early morning momentum trading yesterday.Kakao also underwent a 1:5 stock split only one day ahead of Pearl Abyss.The float is 71.86% at a post-split SO of 443.8M. The FO sits at 34.15% with a DTV of 0.63% SO.As can be seen, Kakao is more liquid than Pearl Abyss, but daily price volatility is lower as 30D avg x Open is 2.64%p.The base price is ₩67,300 at an MC of ₩4.35T.





Kakao Corp

Ticker
035720


Stock split
1 to 5


Pre-split SO
88,704,620


Post-split SO
443,809,305


Float
71.86%


FO
34.15%


30D DTV/SO
0.63%


30D avg. x Open
2.85%


Trading resumption
2021. 4. 15


- Suspension period
3 sessions

Source: KRX

The base was ₩112,000 on the post-split d-day, April 15.The gap was 7.97% from the previous session as the price opened at ₩120,500. It then quickly soared to ₩132,500, a 10% flash gain in the very early morning.





Kakao Corp on post-split d-day (April 15)

Ticker
035720


MC (₩B)
53,479.0


x DTV
6.11x


TV
16,940,427.0


TV/SO
3.82%


Base
₩112,000


Close
₩120,500


Open
₩120,500


High
₩132,500


Low
₩118,000


Δ Daily
7.97%


Gap
7.97%


x Open
12.03%p


Open-High
9.96%


U Wick
-82.76%


Body
0.00%


D Wick
17.24%

Source: KRX

The benchmark (KOSPI 200) rose 1.51% during the 3-day suspension. Kakao's 1W and 1M yields were 11.38% and 21.30%, respectively.The local street consensus on 12M forward PER has risen by 14.29% MoM. 





Kakao Corp

Ticker
035720


K200 during the suspension
1.51%


52WH
₩112,200


- % to current
-0.53%


- Date
2021. 4. 9


52WL
₩31,813


- % to current
250.80%


- Date
2020. 4. 16


1W yield
11.38%


1M yield
21.30%

Source: KRX












Kakao Corp
2021. 4. 16
T-1M
T-3M
T-6M
T-1Y


Sales
5,559.3
5,529.1
5,354.6
4,925.6
4,390.1


OP
777.2
775.5
757.8
682.8
539.2


NP to controlling stake
573.0
585.8
610.9
544.0
403.9


EPS (₩)
6,456
6,604
6,902
6,164
4,644


PER (x)
86.40
72.80
65.40
59.80
34.30


12M PER (x)
75.10
65.71
63.63
62.46
42.01


TP (₩)
558,364
561,208
486,240
434,583
215,174

Source: FnGuide



Pearl Abyss Post-Split D-Day Momentum Trading, Reflecting Kakao D-Day Movement

APAC IPOs & Placements

Zhen Zhou, Toh

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.

Equity Capital Markets

<p>Kakao's founder, Kim Beom-Su, is looking sell about US$450m worth of shares.</p><p> In this note, we will share our thoughts and run the deal through our ECM framework.  </p><p>We have covered earlier placements in:</p><ul>
<li>
<a href="https://www.smartkarma.com/insights/kakao-corp-placement-a-quick-trade-post-solid-4q-results" target="_blank" data-smartkarma-citation="insights:29848" rel="noopener">Kakao Corp Placement - A Quick Trade Post Solid 4Q Results</a> </li>
<li>
<a href="https://www.smartkarma.com/insights/kakao-corp-placement-poor-track-and-seems-to-be-an-unexpected-deal" target="_blank" data-smartkarma-citation="insights:9804" rel="noopener">Kakao Corp Placement - Poor Track Record and Seems to Be an Unexpected Deal</a> </li>
</ul>

Kakao's founder, Kim Beom-Su, is looking sell about US$450m worth of shares. In this note, we will share our thoughts and run the deal through our ECM framework.  We have covered earlier placements in:

Kakao Corp Placement - A Quick Trade Post Solid 4Q Results 

Kakao Corp Placement - Poor Track Record and Seems to Be an Unexpected Deal 


Kakao Corp Placement - Selldown by Founder

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.

<p><a href="https://www.smartkarma.com/entities/grabtaxi-holdings-pte-ltd" target="_blank" data-smartkarma-citation="entities:26950:1" rel="noopener">Grab (0967655D SP)</a> is Southeast Asia’s leading super-app and the largest online delivery platform, ride-hailing platform and digital wallet payments platform in Southeast Asia, according to Euromonitor. Grab intends to go public in the US through a SPAC merger with <a href="https://www.smartkarma.com/entities/altimeter-growth-corp" target="_blank" data-smartkarma-citation="entities:33007:1" rel="noopener">Altimeter Growth Corp (AGC US)</a>.</p><p>In <a href="https://www.smartkarma.com/insights/grab-spac-deal-delivering-the-goods" target="_blank" data-smartkarma-citation="insights:50305" rel="noopener">Grab SPAC Deal: Delivering the Goods</a>, we looked at Grab's fundamentals and management forecasts. We noted that Grab is using its super-app status to deliver high-growth with declining loss margin and cash burn. While certain management forecasts seem bullish, the overall forecasts are not outlandish.  </p><p>In this note, we look at the valuation. As a reminder, the deal values Grab at a post-money market cap of $39.6 billion and post-money EV of $31.3 billion. The deal implies 9.6x 2022 EV/Sales based on Grab’s forecasted adjusted net revenue.</p><div class="content-highlight">
<p>At first glance, Grab's implied multiples are eye-watering in comparison to global peers related to its delivery and mobility businesses. However, we think that judging Grab's multiples based on such peers is missing the point. Grab's key competitive advantage and investor pitch is that it can be credibly billed as a super-app rather than just a leading app in a narrow market category.</p>
<p>Super-apps tend to be rare and investors are starved of publicly listed opportunities. With the regulatory heat turned up on the Chinese super-apps, alternative super-app plays in Asia are likely to be in demand. When judged against global super-apps, Grab's implied multiples seems more justifiable for its forecast growth.  </p>
</div>

Grab (0967655D SP) is Southeast Asia’s leading super-app and the largest online delivery platform, ride-hailing platform and digital wallet payments platform in Southeast Asia, according to Euromonitor. Grab intends to go public in the US through a SPAC merger with Altimeter Growth Corp (AGC US).In Grab SPAC Deal: Delivering the Goods, we looked at Grab's fundamentals and management forecasts. We noted that Grab is using its super-app status to deliver high-growth with declining loss margin and cash burn. While certain management forecasts seem bullish, the overall forecasts are not outlandish.  In this note, we look at the valuation. As a reminder, the deal values Grab at a post-money market cap of $39.6 billion and post-money EV of $31.3 billion. The deal implies 9.6x 2022 EV/Sales based on Grab’s forecasted adjusted net revenue.
At first glance, Grab's implied multiples are eye-watering in comparison to global peers related to its delivery and mobility businesses. However, we think that judging Grab's multiples based on such peers is missing the point. Grab's key competitive advantage and investor pitch is that it can be credibly billed as a super-app rather than just a leading app in a narrow market category.
Super-apps tend to be rare and investors are starved of publicly listed opportunities. With the regulatory heat turned up on the Chinese super-apps, alternative super-app plays in Asia are likely to be in demand. When judged against global super-apps, Grab's implied multiples seems more justifiable for its forecast growth.  


Grab SPAC Deal: A Sensible Super-App Valuation?

Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

<ul>
<li>In this insight, we provide some details of Dunamu's IPO as it appears that the company may be leaning towards listing in the US. Dunamu is one of the largest cryptocurrency exchanges in Korea.</li>
<li>We compare Dunamu to Coinbase which is expected to complete its direct listing in April. The expected value of Dunamu is wide ranging, depending upon how Coinbase is valued. If we assume Coinbase is valued at $100 billion (high case), the valuation range for Dunamu would be from $10 billion to $20 billion (using 10% to 20% valuation relative to Coinbase). If we assume Coinbase is valued at $40 billion, the valuation range for Dunamu would be from $4 billion to $8 billion (using 10% to 20% valuation relative to Coinbase).</li>
<li>Some of the major investors of Dunamu include Kakao Corp, Hanwha Securities, and Woori Tech Investment. We provide sensitivity analysis of Dunamu's valuation on these three companies. </li>
</ul>


In this insight, we provide some details of Dunamu's IPO as it appears that the company may be leaning towards listing in the US. Dunamu is one of the largest cryptocurrency exchanges in Korea.
We compare Dunamu to Coinbase which is expected to complete its direct listing in April. The expected value of Dunamu is wide ranging, depending upon how Coinbase is valued. If we assume Coinbase is valued at $100 billion (high case), the valuation range for Dunamu would be from $10 billion to $20 billion (using 10% to 20% valuation relative to Coinbase). If we assume Coinbase is valued at $40 billion, the valuation range for Dunamu would be from $4 billion to $8 billion (using 10% to 20% valuation relative to Coinbase).
Some of the major investors of Dunamu include Kakao Corp, Hanwha Securities, and Woori Tech Investment. We provide sensitivity analysis of Dunamu's valuation on these three companies. 


Zhihu Technology / Equity Capital Markets

<div><p><a href="https://www.smartkarma.com/entities/zhihu-technology-ltd" target="_blank" data-smartkarma-citation="entities:32185:1" rel="noopener">Zhihu Technology (ZH US)</a> is the largest Q&amp;A-inspired online community and one of the top five comprehensive online content communities in China, both in terms of average mobile MAUs and revenue in 2020, according to CIC. Zhihu is acknowledged as the first choice among all online content communities in China where people look for information to make decisions or find answers, according to CIC. Zhihu is backed by <a href="https://www.smartkarma.com/entities/tencent-holdings-ltd" target="_blank" data-smartkarma-citation="entities:26:1" rel="noopener">Tencent Holdings (700 HK)</a>, <a href="https://www.smartkarma.com/entities/beijing-kuaishou-technology-co-ltd" target="_blank" data-smartkarma-citation="entities:29725:1" rel="noopener">Kuaishou Technology (1024 HK)</a> and <a href="https://www.smartkarma.com/entities/baidu-inc" target="_blank" data-smartkarma-citation="entities:179:1" rel="noopener">Baidu (BIDU US)</a>.</p></div><div><p>At the mid-point of the proposed IPO price range of $9.50-11.50 per ADS, Zhihu will have a fully diluted market cap of $6.2 billion. Zhihu will also raise an additional $250 million in a concurrent private placement to <a href="https://www.smartkarma.com/entities/alibaba-group-holding-ltd" target="_blank" data-smartkarma-citation="entities:787:1" rel="noopener">Alibaba Group (BABA US)</a>, <a href="https://www.smartkarma.com/entities/jd-com-inc-adr" target="_blank" data-smartkarma-citation="entities:446:1" rel="noopener">JD.com Inc (ADR) (JD US)</a>, Tencent and Lilith Games. At the mid-point of the IPO price range, the net proceeds including the concurrent private placement are $801.3 million. </p></div><div><div class="content-highlight"><p>In <a href="https://www.smartkarma.com/insights/zhihu-ipo-initiation-question-time" target="_blank" data-smartkarma-citation="insights:48928" rel="noopener">Zhihu IPO Initiation: Question Time</a>, we opined that as the largest Q&amp;A-inspired online community, Zhihu is well-positioned to benefit from favourable industry trends. We concluded that Zhihu’s fundamentals are attractive. Our valuation analysis suggests that the IPO price range is attractive. Overall, we would participate in the IPO. </p></div></div>

Zhihu Technology (ZH US) is the largest Q&amp;A-inspired online community and one of the top five comprehensive online content communities in China, both in terms of average mobile MAUs and revenue in 2020, according to CIC. Zhihu is acknowledged as the first choice among all online content communities in China where people look for information to make decisions or find answers, according to CIC. Zhihu is backed by Tencent Holdings (700 HK), Kuaishou Technology (1024 HK) and Baidu (BIDU US).At the mid-point of the proposed IPO price range of $9.50-11.50 per ADS, Zhihu will have a fully diluted market cap of $6.2 billion. Zhihu will also raise an additional $250 million in a concurrent private placement to Alibaba Group (BABA US), JD.com Inc (ADR) (JD US), Tencent and Lilith Games. At the mid-point of the IPO price range, the net proceeds including the concurrent private placement are $801.3 million. In Zhihu IPO Initiation: Question Time, we opined that as the largest Q&amp;A-inspired online community, Zhihu is well-positioned to benefit from favourable industry trends. We concluded that Zhihu’s fundamentals are attractive. Our valuation analysis suggests that the IPO price range is attractive. Overall, we would participate in the IPO. 

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.

Price Gauge
52-week Range	0.00 - 0.00
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Kakao Corp (035720 KS)

Pearl Abyss Post-Split D-Day Momentum Trading, Reflecting Kakao D-Day Movement

This post examines Pearl Abyss post-split d-day momentum trading after what happened to Kakao on its post-split d-day, which was yesterday.

Sanghyun Park

Kakao Corp Placement - Selldown by Founder

Kakao's founder, Kim Beom-Su, is looking sell about US$450m worth of shares. In this note, we will share our thoughts and run the deal through our...

Zhen Zhou, Toh

Grab SPAC Deal: A Sensible Super-App Valuation?

Grab's implied multiples are eye-watering in comparison to global peers related to its businesses. When judged against other global super-apps,...

Arun George

Initial Thoughts on the Dunamu IPO

In this insight, we provide some details of Dunamu's IPO as it appears that it may be leaning towards listing in the US. Dunamu is one of the...

Douglas Kim

Zhihu IPO: Valuation Insights

At the mid-point of the $9.50-11.50 IPO price range, Zhihu's net proceeds inc. the concurrent private placement is $801.3 million. Our valuation...

Arun George

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