Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

Event-Driven

<ul>
<li>Although Lionheart Studio announced that it will cancel its IPO this year, it is highly likely that the company will complete its IPO by 1H 2023.</li>
<li>If Lionheart Studio does not proceed with an IPO, Kakao Games has to pay to Lionheart CEO Kim Jae-Young and other major shareholders as much as 1.2 trillion won.</li>
<li>We would argue that Kakao Games' earnings estimates are overly aggressive and there is a strong likelihood of 30%+ earnings downgrade for Kakao Games by the consensus in 2023.</li>
</ul>


Although Lionheart Studio announced that it will cancel its IPO this year, it is highly likely that the company will complete its IPO by 1H 2023.
If Lionheart Studio does not proceed with an IPO, Kakao Games has to pay to Lionheart CEO Kim Jae-Young and other major shareholders as much as 1.2 trillion won.
We would argue that Kakao Games' earnings estimates are overly aggressive and there is a strong likelihood of 30%+ earnings downgrade for Kakao Games by the consensus in 2023.


Kakao Games: Further Downside Risk as IPO of Lionheart Studio Likely in 1H 2023

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.

<ul>
<li>LG Chem's deletion is almost a done deal. The pouch-type pack goes to LG Energy, and the cathode business is not big enough to beat L&amp;F.</li>
<li>Chunbo is an additive field that this index has not included so far. So, Chunbo will be added as a new addition rather than replacing someone else.</li>
<li>SK IE Tech is quite tricky. The key is to see separator and elecfoil as the same field. If so, SK IET is likely to replace Iljin Materials.</li>
</ul>


LG Chem's deletion is almost a done deal. The pouch-type pack goes to LG Energy, and the cathode business is not big enough to beat L&amp;F.
Chunbo is an additive field that this index has not included so far. So, Chunbo will be added as a new addition rather than replacing someone else.
SK IE Tech is quite tricky. The key is to see separator and elecfoil as the same field. If so, SK IET is likely to replace Iljin Materials.


Solactive Lithium Index Rebalancing: Noteworthy Names in Korea Before the Announcement

<ul>
<li>Long/Short basket trading on an equal weight using only six stocks for a 10% ceiling reversion with SungEel and Sebitchem would have delivered a daily yield of close to 2%.</li>
<li>An outright position on SungEel and Sebitchem and the biggest mover, Ecopro BM, alone would have delivered a pretty juicy yield of 4.2%.</li>
<li>The rebalancing of this ETF is an event that allows you to bet on highly predictable share price movements by forming a basket with a relatively small number of stocks.</li>
</ul>


Long/Short basket trading on an equal weight using only six stocks for a 10% ceiling reversion with SungEel and Sebitchem would have delivered a daily yield of close to 2%.
An outright position on SungEel and Sebitchem and the biggest mover, Ecopro BM, alone would have delivered a pretty juicy yield of 4.2%.
The rebalancing of this ETF is an event that allows you to bet on highly predictable share price movements by forming a basket with a relatively small number of stocks.


Tracing Back TIGER (WISE) Battery ETF Rebalancing on October 13

Equity Capital Markets

<ul>
<li>Yunsung F&amp;C is a leading maker of materials mixing equipment that are used in the rechargeable battery production.</li>
<li>The IPO price range is from 53,000 won to 62,000 won and offering amount is from 106 billion won to 124 billion won. The book building starts on 26 October. </li>
<li>According to the bankers' valuation, the expected IPO market cap range is from 423 billion won to 495 billion won. </li>
</ul>


Yunsung F&amp;C is a leading maker of materials mixing equipment that are used in the rechargeable battery production.
The IPO price range is from 53,000 won to 62,000 won and offering amount is from 106 billion won to 124 billion won. The book building starts on 26 October. 
According to the bankers' valuation, the expected IPO market cap range is from 423 billion won to 495 billion won. 


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

Equity Bottom-Up

<ul>
<li>Why <a href="https://www.smartkarma.com/entities/kakaobank-corp" target="_blank" data-smartkarma-citation="entities:33501:1" rel="noopener">KakaoBank (323410 KS)</a> , <a href="https://www.smartkarma.com/entities/kakao-games-corp" target="_blank" data-smartkarma-citation="entities:26730:1" rel="noopener">Kakao Games Corp (293490 KS)</a> and <a href="https://www.smartkarma.com/entities/kakao-pay-corp" target="_blank" data-smartkarma-citation="entities:29675:1" rel="noopener">Kakao Pay (377300 KS)</a> were hit recently</li>
<li>Aside from the sum of the 3, why <a href="https://www.smartkarma.com/entities/kakao-corp" target="_blank" data-smartkarma-citation="entities:15002:1" rel="noopener">Kakao Corp (035720 KS)</a> is getting hit further</li>
<li>Are near the bottom or is there more to go? </li>
</ul>


Why KakaoBank (323410 KS) , Kakao Games Corp (293490 KS) and Kakao Pay (377300 KS) were hit recently
Aside from the sum of the 3, why Kakao Corp (035720 KS) is getting hit further
Are near the bottom or is there more to go? 


Is Kakao Cheap or Not? Actions Louder than Words

South Korea

LG Energy Solution produces and sells batteries. The Company manufactures and sells automobile batteries, small batteries, energy storage system batteries, and other products. LG Energy Solution markets its products worldwide.

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LG Energy Solution (373220 KS)

Kakao Games: Further Downside Risk as IPO of Lionheart Studio Likely in 1H 2023

We would argue that Kakao Games' earnings estimates are overly aggressive and there is a strong likelihood of 30%+ earnings downgrade for Kakao...

Douglas Kim

Solactive Lithium Index Rebalancing: Noteworthy Names in Korea Before the Announcement

This post discusses the notable Korean stocks in the upcoming rebalancing of the Solactive Lithium Index (Global X ETF: LIT).

Sanghyun Park

Tracing Back TIGER (WISE) Battery ETF Rebalancing on October 13

This post traces back and backtests the rebalancing of the WISE Battery ETF, which occurred last Thursday, to examine the correction degree of net...

Sanghyun Park

Yunsung F&C IPO Preview

Yunsung F&C is a leading maker of materials mixing equipment that are used in the rechargeable battery production. The expected IPO market cap...

Douglas Kim

Is Kakao Cheap or Not? Actions Louder than Words

Has Kakao bottomed or is there further downside from here? We examine why the stock is more likely to fall and what investors are using as...

Ken S. Kim

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