Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

Equity Capital Markets

LG Energy Solution / Equity Capital Markets

<ul>
<li>In this insight, we discuss the first day trading strategy of LG Energy Solution amid market turmoil.</li>
<li>Due to the recent risk-off sentiment, the prudent course of action would be to take a more moderate upside view on how much LG Energy Solution's stock price could overshoot.</li>
<li>Our base case valuation for LG Energy Solution (373220 KS) remains 424,093 won per share, which is 41% higher than the IPO price of 300,000 won.</li>
</ul>


In this insight, we discuss the first day trading strategy of LG Energy Solution amid market turmoil.
Due to the recent risk-off sentiment, the prudent course of action would be to take a more moderate upside view on how much LG Energy Solution's stock price could overshoot.
Our base case valuation for LG Energy Solution (373220 KS) remains 424,093 won per share, which is 41% higher than the IPO price of 300,000 won.


LG Energy Solution IPO: First Day Trading Strategy Amid Market Turmoil

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

<ul>
<li>The LG Energy listing will likely distort the overall market flow. One is replacement trading with LG Chem in the local battery ETFs.
</li>
<li>One sure thing is that KODEX and TIGER will do this replacement trading. And these ETF operators will reportedly conduct it for three trading days from February 9-11. 
</li>
<li>LG Chem has recently undergone a significant share price correction, this amount of passive outflow is highly likely to directly impact share price movement during the 3-day rebalancing trading window. 
</li>
</ul>


The LG Energy listing will likely distort the overall market flow. One is replacement trading with LG Chem in the local battery ETFs.

One sure thing is that KODEX and TIGER will do this replacement trading. And these ETF operators will reportedly conduct it for three trading days from February 9-11. 

LG Chem has recently undergone a significant share price correction, this amount of passive outflow is highly likely to directly impact share price movement during the 3-day rebalancing trading window. 



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.

<ul>
<li>
<a href="https://www.smartkarma.com/entities/lg-energy-solution" target="_blank" data-smartkarma-citation="entities:33464:1" rel="noopener">LG Energy Solution (373220 KS)</a> (LGES) raised US$10.8bn in its South Korea IPO, after pricing at the top-end of  the IPO price range .</li>
<li>LGES is the EV battery unit of LG Chem and it was spun off in December last year. The company is a major supplier to customers including Tesla and GM.</li>
<li>LGES will be included into MSCI and KOSPI. But MSCI’s fast entry could likely be scheduled with February’s quarterly review which will be effective only on 1st of March.</li>
</ul>



LG Energy Solution (373220 KS) (LGES) raised US$10.8bn in its South Korea IPO, after pricing at the top-end of  the IPO price range .
LGES is the EV battery unit of LG Chem and it was spun off in December last year. The company is a major supplier to customers including Tesla and GM.
LGES will be included into MSCI and KOSPI. But MSCI’s fast entry could likely be scheduled with February’s quarterly review which will be effective only on 1st of March.


LG Energy IPO Trading - Allocations, Index, and Updates

Japan/Asia Long-Short, LightStream Research

Mio Kato

Japan/Asia Long-Short

Long-Short Analysis on Japan, Asia and the World

LightStream Research

LightStream conducts quantitatively rigorous and data-driven analysis with a focus on Japan and Asia.

We consistently cover the Tech, Consumer and Industrial sectors, and provide ECM and Events coverage more broadly.

We supplement traditional qualitative insights from company relationships with a robust quantitative foundation that examines as much historical data as is available.
We further refine the accuracy of our insights and calls through the use of alternative data to flesh out current trends, and through a valuation framework that emphasises non-superficial peer group selection and a proper attempt to understand the metrics and changes that have driven security valuations in the past.

<ul>
<li>LG Energy Solutions priced its IPO at the top of the range amid massive oversubscription numbers. </li>
<li>If anything it was slightly surprising that pricing was not raised above the range. </li>
<li>Nevertheless, we feel prospects here are mixed even if slightly tilted positive.</li>
</ul>


LG Energy Solutions priced its IPO at the top of the range amid massive oversubscription numbers. 
If anything it was slightly surprising that pricing was not raised above the range. 
Nevertheless, we feel prospects here are mixed even if slightly tilted positive.


LG Energy IPO – What to Watch Leading Into Listing Day

<ul>
<li>Aequitas Research puts out a weekly update on the deals that were covered by the team recently along with updates for upcoming IPOs.</li>
<li>
<a href="https://www.smartkarma.com/entities/lg-energy-solution" target="_blank" data-smartkarma-citation="entities:33464:1" rel="noopener">LG Energy Solution (373220 KS)</a> saw strong retail demand for its mega US$10bn+ IPO.</li>
<li>Other IPO markets (ex-Korea) are starting to show signs of life. There were no major placements this week.</li>
</ul>


Aequitas Research puts out a weekly update on the deals that were covered by the team recently along with updates for upcoming IPOs.

LG Energy Solution (373220 KS) saw strong retail demand for its mega US$10bn+ IPO.
Other IPO markets (ex-Korea) are starting to show signs of life. There were no major placements this week.


ECM Weekly (23rd Jan 2022) - Hyundai Engineering, KakaoBank, Wanda, AInnovation, Cloudr, LG Energy

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)

LG Energy Solution IPO: First Day Trading Strategy Amid Market Turmoil

We discuss the first day trading strategy of LG Energy Solution amid market turmoil. Our base case valuation for LG Energy Solution remains 424,093...

Douglas Kim

LG Chem Passive Outflow Summary

The LG Energy listing will likely distort the overall market flow. One is replacement trading with LG Chem in the local battery ETFs. This post...

Sanghyun Park

LG Energy IPO Trading - Allocations, Index, and Updates

LG Energy Solution (LGES) raised US$10.8bn in its South Korea IPO, after pricing at the top-end of the IPO price range. LGES will be included into...

Sumeet Singh

LG Energy IPO – What to Watch Leading Into Listing Day

LG Energy Solutions priced its IPO at the top of the range amid massive oversubscription numbers. Nevertheless, we feel prospects here are mixed...

Mio Kato

ECM Weekly (23rd Jan 2022) - Hyundai Engineering, KakaoBank, Wanda, AInnovation, Cloudr, LG Energy

Aequitas Research puts out a weekly update on the deals that were covered by the team recently along with updates for upcoming IPOs.

Sumeet Singh

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52-week Range

Market Cap (USDm)

P/E

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