IPOs and Catalysts/Events, Global Equity Research Ltd

Arun George

IPOs and Catalysts/Events

Uncompromised, Independent, Conflict-Free Research

Global Equity Research Ltd

Global Equity Research was started in 2017 by a group of experienced research professionals. It was founded on a passionate belief in the importance and the need for uncompromised, independent, conflict-free research. We aim to provide differentiated and actionable primary and bottom up fundamental research.

Equity Capital Markets

LG Energy Solution / Equity Capital Markets

<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 (LGENERGY KS)</a> has launched its IPO to raise US$9.2-10.8 billion at the price range of KRW257,000-300,000 per share.</li>
<li>In <a href="https://www.smartkarma.com/insights/lg-energy-solution-ipo-initiation-amp-my-ride" target="_blank" data-smartkarma-citation="insights:62402" rel="noopener">LG Energy Solution IPO Initiation: Amp My Ride</a>, we stated that LGES has attractive fundamentals with a strong backlog, healthy revenue growth and improving margins.</li>
<li>Our base-case DCF value is KRW321,594 per share, 15% above the mid-point of the IPO price range. Our DCF sensitivity analysis shows that the IPO price remains attractive. </li>
</ul>



LG Energy Solution (LGENERGY KS) has launched its IPO to raise US$9.2-10.8 billion at the price range of KRW257,000-300,000 per share.
In LG Energy Solution IPO Initiation: Amp My Ride, we stated that LGES has attractive fundamentals with a strong backlog, healthy revenue growth and improving margins.
Our base-case DCF value is KRW321,594 per share, 15% above the mid-point of the IPO price range. Our DCF sensitivity analysis shows that the IPO price remains attractive. 


LG Energy Solution IPO: DCF Scenario Analysis

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 is being benchmarked against CATL for its IPO valuation and we believe this is incorrect.</li>
<li>CATL’s position within China’s supply chain and LFP technology should drive a significant premium against other North Asian peers in our view. </li>
<li>If LG Energy were to simply be benchmarked against Samsung SDI it starts to look expensive and while a premium may be reasonable we do not consider it a given.</li>
</ul>


LG Energy is being benchmarked against CATL for its IPO valuation and we believe this is incorrect.
CATL’s position within China’s supply chain and LFP technology should drive a significant premium against other North Asian peers in our view. 
If LG Energy were to simply be benchmarked against Samsung SDI it starts to look expensive and while a premium may be reasonable we do not consider it a given.


Pan-Asia Index Rebalances/ Events/ Delta One, Periscope Analytics

Brian Freitas

Pan-Asia Index Rebalances/ Events/ Delta One

Event-Driven

<ul>
<li>The review period for the June rebalance of the <a href="https://www.smartkarma.com/entities/korea-stock-exchange-kospi-200-index" target="_blank" data-smartkarma-citation="entities:26021:1" rel="noopener">KOSPI2 INDEX</a> ends 30 April. The KRX will announce the changes in May with implementation at the close on 9 June.</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 (LGENERGY KS)</a> could get Fast Entry to the KOSPI200 Index in March. <a href="https://www.smartkarma.com/entities/hyundai-engineering-co-ltd" target="_blank" data-smartkarma-citation="entities:33008:1" rel="noopener">Hyundai Engineering Co Ltd (HEC KS)</a> needs a price jump to get Fast Entry.</li>
<li>We see 6 potential changes to the KOSPI200 in June; most of these are high probability. The potential adds are already outperforming the potential deletes - there should be more.</li>
</ul>


The review period for the June rebalance of the KOSPI2 INDEX ends 30 April. The KRX will announce the changes in May with implementation at the close on 9 June.

LG Energy Solution (LGENERGY KS) could get Fast Entry to the KOSPI200 Index in March. Hyundai Engineering Co Ltd (HEC KS) needs a price jump to get Fast Entry.
We see 6 potential changes to the KOSPI200 in June; most of these are high probability. The potential adds are already outperforming the potential deletes - there should be more.


KOSPI200 June Index Rebalance Preview: High Probability Adds/Deletes

Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

Equity Bottom-Up

<ul>
<li>Why has LG Chem's share price fallen so much in the past two months and why is this falling trend likely to be near its end? </li>
<li>With the IPO bookbuilding of LG Energy Solution only a week away, many investors are placing a greater positive emphasis on the potential value of LG Energy Solution.</li>
<li>Our base case NAV analysis of LG Chem is 744,246 won, which is 20.4% higher than the current price. We assume 424,093 won for LG Energy Solution target price. </li>
</ul>


Why has LG Chem's share price fallen so much in the past two months and why is this falling trend likely to be near its end? 
With the IPO bookbuilding of LG Energy Solution only a week away, many investors are placing a greater positive emphasis on the potential value of LG Energy Solution.
Our base case NAV analysis of LG Chem is 744,246 won, which is 20.4% higher than the current price. We assume 424,093 won for LG Energy Solution target price. 


NAV Analysis of LG Chem Suggests Excessive Selling Overdone

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>Given the AUM of the Global X Lithium Battery ETF (ticker: LIT), the potential passive impact on LG Energy and LG Chem should be worthy of our careful attention.</li>
<li>If LIT revises its methodology, the timing to include LG Energy is expected to be the April rebalancing.</li>
<li>LG Energy will have a 2-3% index weight, welcoming a passive inflow of ₩130-200B (0.2-0.3% of SO). In contrast, ₩232.1B from LIT will likely escape LG Chem, 0.5% of SO.</li>
</ul>


Given the AUM of the Global X Lithium Battery ETF (ticker: LIT), the potential passive impact on LG Energy and LG Chem should be worthy of our careful attention.
If LIT revises its methodology, the timing to include LG Energy is expected to be the April rebalancing.
LG Energy will have a 2-3% index weight, welcoming a passive inflow of ₩130-200B (0.2-0.3% of SO). In contrast, ₩232.1B from LIT will likely escape LG Chem, 0.5% of SO.


LG Energy Passive Flow from Overseas ETFs: Global X Lithium & Battery (LIT)

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: DCF Scenario Analysis

Our base-case DCF value is KRW321,594 per share, 15% above the mid-point of the IPO price range. Our DCF sensitivity analysis shows that the IPO...

Arun George

LG Energy IPO - Valuation

LG Energy is being benchmarked against CATL and Samsung SDI but we believe a comparison against Samsung SDI alone is more accurate and makes LG...

Mio Kato

KOSPI200 June Index Rebalance Preview: High Probability Adds/Deletes

There could be 2 changes to the KOSPI200 in March & then another 6 in June. Historically, the adds outperform the deletes and the first couple of...

Brian Freitas

NAV Analysis of LG Chem Suggests Excessive Selling Overdone

We believe LG Chem's share price has fallen too excessively in the past two months. Our base case NAV analysis of LG Chem is 744,246 won, which is...

Douglas Kim

LG Energy Passive Flow from Overseas ETFs: Global X Lithium & Battery (LIT)

There is another factor worth noting from the perspective of LG Energy's post-listing passive flow. This is LG Chem/LG Energy swapping in the...

Sanghyun Park

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