Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

Equity Bottom-Up

<ul>
<li>The Korean government announced today that it will allow a fourth telco in Korea in order to reduce the oligopoly structure dominated by the three existing telcos.</li>
<li>This decision to allow another telco in Korea will have a major negative impact on the existing three telcos in Korea.</li>
<li>On a relative basis, we think that this could have a worse impact than LG Uplus as compared to SK Telecom due to greater price sensitivity of LG Uplus' customers.</li>
</ul>


The Korean government announced today that it will allow a fourth telco in Korea in order to reduce the oligopoly structure dominated by the three existing telcos.
This decision to allow another telco in Korea will have a major negative impact on the existing three telcos in Korea.
On a relative basis, we think that this could have a worse impact than LG Uplus as compared to SK Telecom due to greater price sensitivity of LG Uplus' customers.


The Rise of the Fourth Telco in Korea - Breaking the Oligopoly

ESG Analyst, Who's Good

Heejeong (Hollie) Park

ESG Analyst

ASIA’S FIRST AI-DRIVEN ESG INSIGHT PROVIDER

Who's Good

Using AI technologies and public data, Who’s Good provides objective and up-to-date corporate ESG insights on Asian companies.

WHY WHO'S GOOD

* Time-sensitive: Time is the essence in finance. Artificial Intelligence (AI) can process vast amount of information in a short span of time. Our powerful algorithm offers real-time in-depth corporate ESG analysis with out compromising its quality.
* Objective: We turned to public big data and news big data as source to base our analysis on and to preserve impartiality. We leverage 350 public big data sources and 93 news data sources in Korea to uncover insights.
* Insightful: Who’s Good ESG analysis coverage extends to all listed and non-listed companies in Korea. This allows us to provide a comprehensive insight into the Korean market.
* Global approach to ESG: Our ESG research framework is built on international standards and principles including UN Global Compact, ISO 26000, ICGN and CFA Guidelines on Corporate Governance to meet the global standards.

<ul>
<li>Domestic telecom company faced significant fines for false advertising of 5G, the second-largest penalty ever imposed. </li>
<li>Investigations into the telecom market, dominated by a long-term duopoly, are expanding. </li>
<li>Within KT Group's subcontracting process, allegations of favoritism and manipulation in project allocation are currently under investigation by the prosecution.</li>
</ul>


Domestic telecom company faced significant fines for false advertising of 5G, the second-largest penalty ever imposed. 
Investigations into the telecom market, dominated by a long-term duopoly, are expanding. 
Within KT Group's subcontracting process, allegations of favoritism and manipulation in project allocation are currently under investigation by the prosecution.


KT CORPORATION: Fines, Favoritism, and ESG Risks

Thematic (Sector/Industry)

<ul>
<li>In our view, the Korean government could allow a fourth major telco in Korea in the next 1-2 years. </li>
<li>The launch of the fourth major telco in Korea would have a significant negative impact on the three existing Korean telcos. </li>
<li>In the local media, the following companies have been mentioned as potential candidates to inject capital into the 4th telecom operator in Korea: Coupang, Naver, Kakao, Viva Republica, and Shinsegae.</li>
</ul>


In our view, the Korean government could allow a fourth major telco in Korea in the next 1-2 years. 
The launch of the fourth major telco in Korea would have a significant negative impact on the three existing Korean telcos. 
In the local media, the following companies have been mentioned as potential candidates to inject capital into the 4th telecom operator in Korea: Coupang, Naver, Kakao, Viva Republica, and Shinsegae.


When Will the Korean Government Allow the Fourth Telco in Korea?

<ul>
<li>The Starlink service is expected to be launched in Korea in 2Q/3Q 2023. Starlink gained more than 1 million active subscribers globally as of December 2022.</li>
<li>The launch of the Starlink service in Korea is likely to have a positive impact on  companies such as Hanwha Aerospace, Solu-M, Intellian Technologies, and Satrec Initiative.</li>
<li>We like a pair trade involving long (basket of 8 stocks above that are positively impacted by Starlink launch in Korea) and short (three major Korean telcos).</li>
</ul>


The Starlink service is expected to be launched in Korea in 2Q/3Q 2023. Starlink gained more than 1 million active subscribers globally as of December 2022.
The launch of the Starlink service in Korea is likely to have a positive impact on  companies such as Hanwha Aerospace, Solu-M, Intellian Technologies, and Satrec Initiative.
We like a pair trade involving long (basket of 8 stocks above that are positively impacted by Starlink launch in Korea) and short (three major Korean telcos).


Launch of Starlink Service by SpaceX - Impact on 11 Korean Companies

Private Capital Markets

<ul>
<li>Established in 2020, Rebellions is a leading AI based fabless startup in Korea. In February 2023, Rebellions launched a new artificial intelligence chip, challenging the global leader NVIDIA. </li>
<li>According to the company, its ATOM chip targets specific tasks, allowing the chip to consume only about 20% of the power of an Nvidia A100 chip on those tasks. </li>
<li>Since the company's inception, Rebellions raised 122 billion won in funding including 30 billion won from KT. The company was last valued at 350 billion won in June 2022.</li>
</ul>


Established in 2020, Rebellions is a leading AI based fabless startup in Korea. In February 2023, Rebellions launched a new artificial intelligence chip, challenging the global leader NVIDIA. 
According to the company, its ATOM chip targets specific tasks, allowing the chip to consume only about 20% of the power of an Nvidia A100 chip on those tasks. 
Since the company's inception, Rebellions raised 122 billion won in funding including 30 billion won from KT. The company was last valued at 350 billion won in June 2022.


Rebellions: Challenging Nvidia in the AI-Powered Semiconductor Chips

South Korea

KT Corporation provides telecommunication services including local, long distance, and international calling, satellite communication, data transmission, and wireless telephone services in South Korea.  The Company also offers network portal and high-speed Internet access services using asymmetric digital subscriber lines (ADSLs).

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KT Corp (030200 KS)

The Rise of the Fourth Telco in Korea - Breaking the Oligopoly

The Korean government announced today that it will allow a fourth telco in Korea in order to reduce the oligopoly structure dominated by the three...

Douglas Kim

KT CORPORATION: Fines, Favoritism, and ESG Risks

Examining ESG Risks: KT CORPORATION (030200 KS), a leading Korean telecom company, under scrutiny for false 5G ads and favoritism investigation

Heejeong (Hollie) Park

When Will the Korean Government Allow the Fourth Telco in Korea?

The Korean government could allow a fourth major telco in Korea in the next 1-2 years which would have a significant negative impact on the three...

Douglas Kim

Launch of Starlink Service by SpaceX - Impact on 11 Korean Companies

The launch of the SpaceX's Starlink service in Korea in 2Q/3Q 2023 is likely to have a positive impact on companies such as Hanwha Aerospace, Solu...

Douglas Kim

Rebellions: Challenging Nvidia in the AI-Powered Semiconductor Chips

Established in 2020, Rebellions is a leading AI based fabless startup in Korea. In February 2023, Rebellions launched a new artificial intelligence...

Douglas Kim

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