Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

Douglas Research Advisory

Event-Driven

<ul>
<li>On 8 May, it was mentioned in numerous local media that Naver is under pressure from the Japanese government to sell its stake in LINE.</li>
<li>One of the reasons behind Japanese government's efforts to force Naver to sell its stake in LINE is due a major data breach incident in November 2023.</li>
<li>Based on our current understanding of this situation, the most likely scenario is for Naver to sell about 20-30% stake in A Holdings (the controlling shareholder of LINE) to SoftBank.</li>
</ul>


On 8 May, it was mentioned in numerous local media that Naver is under pressure from the Japanese government to sell its stake in LINE.
One of the reasons behind Japanese government's efforts to force Naver to sell its stake in LINE is due a major data breach incident in November 2023.
Based on our current understanding of this situation, the most likely scenario is for Naver to sell about 20-30% stake in A Holdings (the controlling shareholder of LINE) to SoftBank.


Naver: Under Pressure from the Japanese Government To Sell Its Stake in LINE

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>Naver doesn't view the sale of its A Holdings stake unfavorably; insiders suggest it's been planning this move since last year.</li>
<li>Market speculation suggests Naver was disappointed by Softbank's rejection of CLOVA X in LINE, prompting plans to sell A Holdings stake for AI development. A sale agreement is expected soon.</li>
<li>The method through which Softbank secures funds for this acquisition is worth the attention from a short-term trading perspective.</li>
</ul>


Naver doesn't view the sale of its A Holdings stake unfavorably; insiders suggest it's been planning this move since last year.
Market speculation suggests Naver was disappointed by Softbank's rejection of CLOVA X in LINE, prompting plans to sell A Holdings stake for AI development. A sale agreement is expected soon.
The method through which Softbank secures funds for this acquisition is worth the attention from a short-term trading perspective.


Local Reports in Korea Regarding A Holdings Stake Sale Between Naver & Softbank

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.

Equity Capital Markets

<ul>
<li>Aequitas Research's weekly update on the IPOs, placements, lockup expiry and other ECM linked events that were covered by the team over the past week.</li>
<li>On the IPO front, the coming week  to see two more listing, with both likely to do well.</li>
<li>On the placement front, Japan continued to dominate the ECM flows, with India, Taiwan and Australia joining in.</li>
</ul>


Aequitas Research's weekly update on the IPOs, placements, lockup expiry and other ECM linked events that were covered by the team over the past week.
On the IPO front, the coming week  to see two more listing, with both likely to do well.
On the placement front, Japan continued to dominate the ECM flows, with India, Taiwan and Australia joining in.


ECM Weekly (22nd July 2024) - Kokusai, Honda, ASICS, ZIP, Invincible, Hyundai, Premier, Timee, Sanil

Asia Pac IPO & Placement Research, China biotech, Aequitas Research

Ke Yan, CFA, FRM

Asia Pac IPO & Placement Research, China biotech

Quantitative Analysis

<ul>
<li>We analyzed the changes in foreign holdings of KRX stocks as of Jul 19th which has an aggregated holding worth USD563.2bn.</li>
<li>We estimate that foreign flows to be outflows of USD350mln. We tabulate the league table for top changes by value for 1W/4W/1Y and top stocks held by foreign institutions.</li>
<li>We highlight foreign changes in Samsung Heavy In, Sk Hynix, Samsung Electronics, Doosan Bobcat.</li>
</ul>


We analyzed the changes in foreign holdings of KRX stocks as of Jul 19th which has an aggregated holding worth USD563.2bn.
We estimate that foreign flows to be outflows of USD350mln. We tabulate the league table for top changes by value for 1W/4W/1Y and top stocks held by foreign institutions.
We highlight foreign changes in Samsung Heavy In, Sk Hynix, Samsung Electronics, Doosan Bobcat.


KRX Foreign Holding Weekly (Jul 19th): Samsung Heavy In, Samsung Electronics, Doosan Bobcat

<ul>
<li>Naver Corp (035420 KS) is trying to complete the IPO of its affiliate <strong>Webtoon Entertainment</strong> in the US stock market as early as<strong> June 2024. </strong>
</li>
<li>The expected value of Webtoon Entertainment (post IPO) is about US$3 billion to US$4 billion. Webtoon Entertainment is seeking to raise about US$500 million in this IPO. </li>
<li>The IPO of Webtoon Entertainment in the US is likely to have a positive impact on Naver Corp (035420 KS).</li>
</ul>


Naver Corp (035420 KS) is trying to complete the IPO of its affiliate Webtoon Entertainment in the US stock market as early as June 2024. 

The expected value of Webtoon Entertainment (post IPO) is about US$3 billion to US$4 billion. Webtoon Entertainment is seeking to raise about US$500 million in this IPO. 
The IPO of Webtoon Entertainment in the US is likely to have a positive impact on Naver Corp (035420 KS).


Initial Thoughts on the Webtoon Entertainment IPO

South Korea

Kakao Corp. provides Internet portal services such as news, free e-mail, and leisure information.  The Company also offers cross-platform mobile messaging application that allows users to exchange messages.

AfreecaTV CO.,LTD. provides digital media storage, streaming, downloading, video on demand, advertising services, contents delivery network, and internet games.

Daou Technology Inc. designs and constructs Internet-based information systems using system integration technologies.  The Company, through its subsidiary companies, provides on-line security trading service and markets computer peripheral devices, such as printer, hardware, and software.

Connectwave Co., Ltd. operates as an online shopping portal site. The Company provides price comparing and shopping information providing service. Connectwave also generates income from advertisement.

Ahnlab, Inc. designs and develops anti-virus solutions for network server systems, personal computers, and e-business data systems.  The Company also offers consulting service and develops Internet security applications.

Feelingk Co., Ltd. provides end-to-end solutions for the wireless Internet system.  The Company's products includes WAP gateway, Short Messaging Service Center (SMSC), and Push Proxy Gateway (PPG).  Feelingk provides wireless solution to major mobile telecom service providers such as SK and LG telecom.

BusinessOn Communication Co., Ltd operates software as a service company. The Company provides electronic tax bill, integrated purchase management, electronic contract, purchase confirmation, and default registration services. BusinessOn Communication also offers online advertising services.

Kt alpha Co., Ltd. provides Internet connectivity services. The Company also offers web portal services, electronic commerce hosting, media publishing, and application hosting services. Kt alpha offers services in Korea.

Medifron DBT Co., Ltd. researches and develops pharmaceuticals for neuropathic pain, agonists and others. The Company also engages in sale of pharmaceuticals and patent license businesses. The other business division provides real-time voice contents for Internet services and distributes computer peripheral such as LCD monitor, printer, and mouse, through online shopping malls.

e-Credible Co., Ltd. provides an electronic credit evaluation system to help checking business partners' financial status.  The company also develops an enterprise resource supply system to activate e-commerce within the companies network.

Baidu, Inc. operates an Internet search engine. The Company offers algorithmic search, enterprise search, news, MP3, and image searches, voice assistance, online storage, and navigation services. Baidu serves clients globally.

eBay Inc. operates an online trading community.  The Company's service is used by buyers and sellers for the exchange of products and services such as coins, collectibles, computers, memorabilia, stamps and toys, as well as concert and sporting tickets.  eBay also offers, through a subsidiary, secure online payment services.

Akamai Technologies, Inc. provides services for accelerating and improving the delivery of content and applications over the Internet; ranging from live and on-demand streaming video capabilities to conventional content on websites, to tools that help people transact business and reach out to new and existing customers.

East Money Information Co., Ltd. operates online financial information platform.  The Company's products include internet advertising and financial data.

AppFolio, Inc. provides cloud-based software solutions. The Company offers a cloud-based property management software that allows apartment and residential property managers to market, manage, and grow their business. AppFolio conducts business in the United States.

Zillow Group, Inc. provides e-commerce services. The Company provides information about homes, real estate listings, and mortgages through their website and mobile applications. Zillow serves homeowners, buyers, sellers, renters, and real estate professionals throughout the United States.

VeriSign Inc provides domain names and Internet security, enabling the world to connect online with reliability and confidence, anytime, anywhere. The Company ensures the security, stability and resiliency of key Internet infrastructure including the .com and .net top-level domains among others. VeriSign also offers intelligence-driven security services.

Info Edge (India) Limited operates an online job posting website. The website offers services for recruiters, job seekers, and employers. The Company also operates  an online matrimonial website for prospective brides, grooms, and relatives.

GoDaddy, Inc. provides a cloud-based web platform for small businesses, web design professionals and individuals. The Company's platform provides applications that help them connect to their customers, manage their businesses and get found online.

Wix.com Ltd. operates and develops a web platform. The Company's platform offers solutions that enable businesses, organizations, professionals and individuals to develop customized websites and application platforms.

Naver Corp. provides Internet site with web portal services, such as search engine, online game and content development.  The Company also offers marketing service through text and banner advertisement.

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Naver Corp (035420 KS)

Naver: Under Pressure from the Japanese Government To Sell Its Stake in LINE

Seong Tae-Yoon (a senior official at South Korean Presidential Office) confirmed that Naver will not be forced to sell its stake in Line Yahoo. He...

Douglas Kim

Local Reports in Korea Regarding A Holdings Stake Sale Between Naver & Softbank

This post offers insights and updates sourced locally regarding the ongoing A Holdings stake sale negotiations between Naver and Softbank.

Sanghyun Park

ECM Weekly (22nd July 2024) - Kokusai, Honda, ASICS, ZIP, Invincible, Hyundai, Premier, Timee, Sanil

Aequitas Research's weekly update on the IPOs, placements, lockup expiry and other ECM linked events that were covered by the team over the past week.

Sumeet Singh

KRX Foreign Holding Weekly (Jul 19th): Samsung Heavy In, Samsung Electronics, Doosan Bobcat

We analyzed KRX foreign holding data for the past week and highlighted foreign holding changes in Samsung Heavy In, Sk Hynix, Samsung Electronics,...

Ke Yan, CFA, FRM

Initial Thoughts on the Webtoon Entertainment IPO

Naver is trying to complete the IPO of its affiliate Webtoon Entertainment in the US stock market. The expected value of Webtoon Entertainment is...

Douglas Kim

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