Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

Private Capital Markets

<ul>
<li>Megazone Cloud is the number one cloud managed service provider (MSP) in Korea. </li>
<li>Megazone Cloud was last valued at about 2.4 trillion won (as of August 2022) as it attracted 450 billion won funding from MBK Partners and IMM Private Equity.</li>
<li>Megazone Cloud has an important partnership with Amazon Web Services (AWS) as it became the first company in Korea to be a partner for AWS in the local cloud market.</li>
</ul>


Megazone Cloud is the number one cloud managed service provider (MSP) in Korea. 
Megazone Cloud was last valued at about 2.4 trillion won (as of August 2022) as it attracted 450 billion won funding from MBK Partners and IMM Private Equity.
Megazone Cloud has an important partnership with Amazon Web Services (AWS) as it became the first company in Korea to be a partner for AWS in the local cloud market.


Megazone Cloud: Number One Cloud MSP Provider (Unicorn) In Korea Led by Partnership with AWS

Cross Asset Strategy

<ul>
<li>We believe that there is a relatively high probability that the Korean government will lower the highest corporate tax rate bracket from 25% to 22% starting next year.</li>
<li>A 3% change in corporate tax rate should result in about 4% higher net profit for Korean companies.</li>
<li>Among the top 30 companies in Korea, we believe the companies with the biggest impact on lowering their tax rates include LG Electronics, Naver, Kakao Corp, SK Innovation, and KT&amp;G. </li>
</ul>


We believe that there is a relatively high probability that the Korean government will lower the highest corporate tax rate bracket from 25% to 22% starting next year.
A 3% change in corporate tax rate should result in about 4% higher net profit for Korean companies.
Among the top 30 companies in Korea, we believe the companies with the biggest impact on lowering their tax rates include LG Electronics, Naver, Kakao Corp, SK Innovation, and KT&amp;G. 


Lower Corporate Tax Rate in Korea Could Be an Extra Alpha Kicker

<ul>
<li>In this insight, we discuss the recent buying and selling by the Korea National Pension Service (NPS) of Korean stocks.</li>
<li>Of the 176 Korean stocks in which NPS reported changes in ownerships in 2Q 2022, NPS increased its stakes in 115 companies and reduced stakes in 61 companies.</li>
<li>NPS mostly increased stakes in aerospace, defense, construction equipment, and energy sectors while reducing stakes in telecom and tourism related stocks.</li>
</ul>


In this insight, we discuss the recent buying and selling by the Korea National Pension Service (NPS) of Korean stocks.
Of the 176 Korean stocks in which NPS reported changes in ownerships in 2Q 2022, NPS increased its stakes in 115 companies and reduced stakes in 61 companies.
NPS mostly increased stakes in aerospace, defense, construction equipment, and energy sectors while reducing stakes in telecom and tourism related stocks.


NPS Sells SK Bioscience, Naver, & LG Electronics and Buys Kakao Bank, Lotte Corp, & Samyang Foods

Consumer Analyst / Channel Surveillance Specialist, Trudence Capital Advisors

Pranav Bhavsar

Consumer Analyst / Channel Surveillance Specialist

Trudence Capital Advisors

Trudence Capital Advisors Private Limited is a SEBI-registered Research Analyst, holding SEBI registration number INH000015747. Our firm is dedicated to providing independent and unbiased research on Indian mid to large-cap companies. Trudence Capital is known for its counter-consensus views, with a focus on forensic research and on-ground primary investigations. Our research approach is thorough, involving detailed analysis of accounting practices and governance, alongside extensive channel checks.

Independent & Unbiased Research

Equity Bottom-Up

<ul>
<li>The demand environment for offline electronic retailers has been good in Q1, the macro factors also point to good growth for FY23. </li>
<li>Companies like <a href="https://www.smartkarma.com/entities/haier-smart-home-co-ltd-b3ef445f-0f54-4586-8c58-9073de98d60e" target="_blank" data-smartkarma-citation="entities:31105:1" rel="noopener">Haier Smart Home Co Ltd (6690 HK)</a> and <a href="https://www.smartkarma.com/entities/samsung-electronics-co-ltd" target="_blank" data-smartkarma-citation="entities:191:1" rel="noopener">Samsung Electronics (005930 KS)</a> have done well. <a href="https://www.smartkarma.com/entities/voltas-ltd" target="_blank" data-smartkarma-citation="entities:19924:1" rel="noopener">Voltas Ltd (VOLT IN)</a> has not been able to recover. </li>
<li>Indian consumer no longer wants everything cheap, assuming affordability, quality and brand value is taking prominence. </li>
</ul>


The demand environment for offline electronic retailers has been good in Q1, the macro factors also point to good growth for FY23. 
Companies like Haier Smart Home Co Ltd (6690 HK) and Samsung Electronics (005930 KS) have done well. Voltas Ltd (VOLT IN) has not been able to recover. 
Indian consumer no longer wants everything cheap, assuming affordability, quality and brand value is taking prominence. 


India Channel Insight #41 | Haier, Samsung, Voltas

Equity Capital Markets

<ul>
<li>Our base case valuation of Winia Aid is target price of 21,724 won per share, which is 34% higher than the high end of the IPO price range.</li>
<li>Winia Aid had ROE of 29% in 2021 which was much higher than the comps' average of 9.6% in 2021. </li>
<li>The company's core businesses include after sales service and logistics for Winia Group electronics related products and Apple after sales service and support.</li>
</ul>


Our base case valuation of Winia Aid is target price of 21,724 won per share, which is 34% higher than the high end of the IPO price range.
Winia Aid had ROE of 29% in 2021 which was much higher than the comps' average of 9.6% in 2021. 
The company's core businesses include after sales service and logistics for Winia Group electronics related products and Apple after sales service and support.


South Korea

LG Electronics Inc. manufactures and markets digital display equipment and home appliances. The Company produces and markets flat panel televisions, A/V products, washing machines, air conditioners and refrigerators as well as telecommunications equipment such as smart phones and tablets.

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LG Electronics (066570 KS)

Megazone Cloud: Number One Cloud MSP Provider (Unicorn) In Korea Led by Partnership with AWS

Megazone Cloud is the number one cloud managed service provider (MSP) in Korea. Megazone Cloud became the first company in Korea to be a partner...

Douglas Kim

Lower Corporate Tax Rate in Korea Could Be an Extra Alpha Kicker

We believe that there is a relatively high probability that the Korean government will lower the highest corporate tax rate bracket from 25% to 22%...

Douglas Kim

NPS Sells SK Bioscience, Naver, & LG Electronics and Buys Kakao Bank, Lotte Corp, & Samyang Foods

NPS moves the Korean stock market more than any other investor. In this insight, we discuss the recent buying and selling by the Korea National...

Douglas Kim

India Channel Insight #41 | Haier, Samsung, Voltas

The Indian durables market is witnessing changing consumer behaviour aiding an optimistic outlook for FY23 along increasing competitive intensity...

Pranav Bhavsar

Winia Aid IPO Valuation Analysis

Our base case valuation of Winia Aid is target price of 21,724 won per share, which is 34% higher than the high end of the IPO price range. We...

Douglas Kim

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