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

<p>The following six major IPOs will debut in the Korean stock market in the second half of this year.</p><table class="table table-striped">
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<td data-sheets-value='{"1":2,"2":"Major IPOs in Korea later this year"}'>Major IPOs in Korea later this year</td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"Tentative listing date"}'>Tentative listing date</td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"Target valuation"}'><div><div>Estimated target valuation</div></div></td>
</tr>
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<td data-sheets-value='{"1":2,"2":"Hyundai Heavy Industries"}'>Hyundai Heavy Industries</td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"September"}'>September</td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"₩4.5~5.3T"}'>₩4.5T~₩5.3T</td>
</tr>
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<td data-sheets-value='{"1":2,"2":"Kakao Pay"}'><strong>Kakao Pay</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"October"}'><strong>October</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"₩8.0~12.0T"}'><strong>₩7.0T~₩11.0T</strong></td>
</tr>
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<td data-sheets-value='{"1":2,"2":"Simone Accessory"}'>Simone Accessory Collection</td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"October"}'>October</td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"₩2.0T"}'>₩2.0T</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Hyundai Engineering"}'>Hyundai Engineering</td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"4th quarter"}'>4th quarter</td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"₩7.0~9.0T"}'>₩8.0T~₩10.0T</td>
</tr>
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<td data-sheets-value='{"1":2,"2":"Netmarble Neo"}'>Netmarble Neo</td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"4th quarter"}'>4th quarter</td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"₩2.0T"}'>₩2.0T</td>
</tr>
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<td data-sheets-value='{"1":2,"2":"LG Energy Solution"}'><strong>LG Energy Solution</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"4th quarter"}'><strong>4th quarter or next year</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"₩50.0~70.0T"}'><strong>₩50.0T~₩70.0T</strong></td>
</tr>
<tr><td colspan="3" rowspan="1" data-sheets-value='{"1":2,"2":"Source: Local news outlets"}'>Source: Local news outlets</td></tr>
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</table><ul>
<li>First of all, <strong>Hyundai Heavy Industries</strong> will complete its listing by the end of September.</li>
<li>
<strong>Kakao Pay</strong> will submit a revised IPO prospectus next week and complete the listing process by October.</li>
<li>
<strong>Hyundai Engineering</strong>, in charge of plant and infrastructure at Hyundai Motor Group, is also expected to debut on the KOSPI around November. Hyundai Engineering's valuation is estimated at up to ₩10T.</li>
<li>In addition, <strong>Simone Accessory Collection</strong> and <strong>Netmarble Neo</strong> are also expected to make a debut on the KOSPI in the fourth quarter. They are each aiming for an IPO valuation of ₩2T.</li>
<li>However, <strong>LG Energy Solutions</strong>, originally scheduled to go public in October, is highly likely to delay the IPO schedule due to the GM recall incident this week.</li>
</ul>

The following six major IPOs will debut in the Korean stock market in the second half of this year.







Major IPOs in Korea later this year
Tentative listing date
Estimated target valuation


Hyundai Heavy Industries
September
₩4.5T~₩5.3T


Kakao Pay
October
₩7.0T~₩11.0T


Simone Accessory Collection
October
₩2.0T


Hyundai Engineering
4th quarter
₩8.0T~₩10.0T


Netmarble Neo
4th quarter
₩2.0T


LG Energy Solution
4th quarter or next year
₩50.0T~₩70.0T

Source: Local news outlets


First of all, Hyundai Heavy Industries will complete its listing by the end of September.

Kakao Pay will submit a revised IPO prospectus next week and complete the listing process by October.

Hyundai Engineering, in charge of plant and infrastructure at Hyundai Motor Group, is also expected to debut on the KOSPI around November. Hyundai Engineering's valuation is estimated at up to ₩10T.
In addition, Simone Accessory Collection and Netmarble Neo are also expected to make a debut on the KOSPI in the fourth quarter. They are each aiming for an IPO valuation of ₩2T.
However, LG Energy Solutions, originally scheduled to go public in October, is highly likely to delay the IPO schedule due to the GM recall incident this week.


Kakao Pay Listing Resumes Next Week, but LG Energy Solution IPO Delayed Possibly to Next Year

Head of Research, IPOs & Placements, Aequitas Research

Sumeet Singh

Head of Research, IPOs & Placements

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.

Resonac Holdings  / Equity Capital Markets

<p><a href="https://www.smartkarma.com/entities/showa-denko-k-k" target="_blank" data-smartkarma-citation="entities:1496:1" rel="noopener">Showa Denko K.K. (4004 JP)</a> aims to raise around US$745m via a global follow-on offering. Proceeds from the placement will be used to finance its planned capex across its different business segments.</p><p>In this note, we will talk about the deal dynamics and run the deal through our ECM framework.</p>

Showa Denko K.K. (4004 JP) aims to raise around US$745m via a global follow-on offering. Proceeds from the placement will be used to finance its planned capex across its different business segments.In this note, we will talk about the deal dynamics and run the deal through our ECM framework.

Showa Denko Placement - Relatively Large Deal, past Deal Didn’t Do Well

Equity Bottom-Up

<h2><strong>First, the details of the recall newly announced by GM are as follows.</strong></h2><div class="content-highlight"><ul>
<li>GM announced additional recalls for 2019-2022 Chevrolet Bolt models sold in the U.S. and Canada. GM plans to obtain compensation for the recall costs from LG Chem and LG Electronics.</li>
<li>The recall cost is US$1B (about ₩1.18T), and it covers 73,000 Chevrolet Bolts.</li>
<li>GM is already in the process of recalling 69,000 Bolt electric vehicles worldwide. Two car fires that occurred in a Bolt electric vehicle equipped with a battery of LG Chem (LG Energy Solution) were the reason for the recall decision.</li>
<li>Including the additional recall announced this time, the total number of recalls will increase to 142,000 units. Therefore, the total cost of the recall would be US$1.8T: the US$1B of this recall + the US$0.8B recall costs already in process. This is about ₩2.13T.</li>
<li>Specific provisioning and sharing ratios are determined according to the results of a cause investigation jointly conducted by GM, LG Electronics, and LG Chem (LG Energy Solution).</li>
</ul></div>

First, the details of the recall newly announced by GM are as follows.
GM announced additional recalls for 2019-2022 Chevrolet Bolt models sold in the U.S. and Canada. GM plans to obtain compensation for the recall costs from LG Chem and LG Electronics.
The recall cost is US$1B (about ₩1.18T), and it covers 73,000 Chevrolet Bolts.
GM is already in the process of recalling 69,000 Bolt electric vehicles worldwide. Two car fires that occurred in a Bolt electric vehicle equipped with a battery of LG Chem (LG Energy Solution) were the reason for the recall decision.
Including the additional recall announced this time, the total number of recalls will increase to 142,000 units. Therefore, the total cost of the recall would be US$1.8T: the US$1B of this recall + the US$0.8B recall costs already in process. This is about ₩2.13T.
Specific provisioning and sharing ratios are determined according to the results of a cause investigation jointly conducted by GM, LG Electronics, and LG Chem (LG Energy Solution).


Dip-Buy LG Chem on GM Recall: To What Extent Will It Be Reflected in LG ES 2Q Operating Profit?

Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

<div class="content-highlight">
<p>On July 14th, the Korean Exchange announced that it will announce three new KRX Climate Change related indices on July 19th. The Climate Change index is an index designed to help attract investment by giving higher investment weight to listed companies that have secured low-carbon-related technologies and products.</p>
<p>According to KRX, it has developed these indices to meet various demands in the context of growing global interest in climate change issues and the expansion of environmental, social and governance (ESG) investments. </p>
</div>


On July 14th, the Korean Exchange announced that it will announce three new KRX Climate Change related indices on July 19th. The Climate Change index is an index designed to help attract investment by giving higher investment weight to listed companies that have secured low-carbon-related technologies and products.
According to KRX, it has developed these indices to meet various demands in the context of growing global interest in climate change issues and the expansion of environmental, social and governance (ESG) investments. 


The Launch of Three New Climate Change Indices by the KRX

Founder/CEO of ROK Advisory, ROK Advisory LLC

Ken S. Kim

Founder/CEO of ROK Advisory

ROK Advisory LLC

ROK is an independent research advisory firm. We guide you to minimize the information gap between foreign and local investors in Northeast Asia with a focus in Korea, Taiwan and Japan.

Independent Research Advisory Firm

Event-Driven

<p>is <a href="https://www.smartkarma.com/entities/lg-electronics-inc" target="_blank" data-smartkarma-citation="entities:8814:1" rel="noopener">LG Electronics (066570 KS)</a> overvalued or undervalued?   It depends on the what investors see as the right comps and given the current situation regards to <a href="https://www.smartkarma.com/entities/didi-chuxing-inc" target="_blank" data-smartkarma-citation="entities:27467:1" rel="noopener">DiDi Chuxing (DIDI US)</a> ,  there is a growing possibility that <a href="https://www.smartkarma.com/entities/apple-inc" target="_blank" data-smartkarma-citation="entities:666:1" rel="noopener">Apple Inc (AAPL US)</a> looks to diversify away from <a href="https://www.smartkarma.com/entities/hon-hai-precision-industry-co-ltd" target="_blank" data-smartkarma-citation="entities:745:1" rel="noopener">Hon Hai Precision Industry (2317 TT)</a> sooner versus later. </p>

is LG Electronics (066570 KS) overvalued or undervalued?   It depends on the what investors see as the right comps and given the current situation regards to DiDi Chuxing (DIDI US) ,  there is a growing possibility that Apple Inc (AAPL US) looks to diversify away from Hon Hai Precision Industry (2317 TT) sooner versus later. 

Does LG Group Hold Leverage over Apple and Not the Other Way Around?

South Korea

LG Chem Ltd. is a chemical manufacturer. The Company's products include petrochemicals, plastic resins, and engineering plastics. LG Chem also produces industrial and electronic materials.

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LG Chem (051915 KS)

Kakao Pay Listing Resumes Next Week, but LG Energy Solution IPO Delayed Possibly to Next Year

This post delivers the latest news on the listing schedule of Kakao Pay and LG Energy Solution and discusses potential impacts on their share prices.

Sanghyun Park

Showa Denko Placement - Relatively Large Deal, past Deal Didn’t Do Well

Showa Denko K.K. (4004 JP) aims to raise around US$745m via a global follow-on offering. Proceeds from the placement will be used to finance its...

Sumeet Singh

Dip-Buy LG Chem on GM Recall: To What Extent Will It Be Reflected in LG ES 2Q Operating Profit?

This post details GM's new recalls and estimates to what extent they will be reflected in LG Energy Solution's 2Q operating profit.

Sanghyun Park

The Launch of Three New Climate Change Indices by the KRX

On July 14th, the Korean Exchange announced that it will announce three new KRX Climate Change related indices on July 19th.

Douglas Kim

Does LG Group Hold Leverage over Apple and Not the Other Way Around?

Apple needs LG more than vice versa? The current situation might force Apple to diversify away from Hon Hai faster than anticipated

Ken S. Kim

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