Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

Event-Driven

<ul>
<li>Saudi Arabia's Savvy Games Group has a grand ambition to invest in the global gaming industry. It recently announced that it will invest US$37.8 billion in the global gaming industry.</li>
<li>There has been a sharp appreciation of the USD and Riyal versus JPY which could help to accelerate more M&amp;As of Japanese game companies by SGG.</li>
<li>Saudi Arabia's aggressive push to expand into the global gaming industry could aid this sector in the coming months as it could result in further major M&amp;As in this sector.</li>
</ul>


Saudi Arabia's Savvy Games Group has a grand ambition to invest in the global gaming industry. It recently announced that it will invest US$37.8 billion in the global gaming industry.
There has been a sharp appreciation of the USD and Riyal versus JPY which could help to accelerate more M&amp;As of Japanese game companies by SGG.
Saudi Arabia's aggressive push to expand into the global gaming industry could aid this sector in the coming months as it could result in further major M&amp;As in this sector.


Saudi Arabia Gaming: Plans to Invest $38 Billion in Global Game Industry

Japan Specialist

Mark Chadwick

Equity Bottom-Up

<ul>
<li>Nexon’s stock price is down -20% from the highs made in April and -30% from its highs last year.</li>
<li>Nexon is a key beneficiary of the trend to immersive virtual worlds and live game operations</li>
<li>The best pipeline in Nexon’s history will drive higher Free Cash Flows and shareholder returns</li>
</ul>


Nexon’s stock price is down -20% from the highs made in April and -30% from its highs last year.
Nexon is a key beneficiary of the trend to immersive virtual worlds and live game operations
The best pipeline in Nexon’s history will drive higher Free Cash Flows and shareholder returns


Private Capital Markets

<ul>
<li>Shift Up is a game developer in Korea that recently reached the unicorn status. </li>
<li>The company is expected to launch Goddess of Victory: Nikke mobile game and Eve console game on PS5 sometime in late 2022/early 2023. </li>
<li>The CEO of Shift Up Kim Hyung-tae previously worked as an art director at NCsoft. Shift Up is expected to complete an IPO in 2023. </li>
</ul>


Shift Up is a game developer in Korea that recently reached the unicorn status. 
The company is expected to launch Goddess of Victory: Nikke mobile game and Eve console game on PS5 sometime in late 2022/early 2023. 
The CEO of Shift Up Kim Hyung-tae previously worked as an art director at NCsoft. Shift Up is expected to complete an IPO in 2023. 


Shift Up Corp - A Rising Unicorn in the Korean Game Industry

Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

Pan-Asia Catalysts/Events

Quiddity Advisors

<ul>
<li>
<a href="https://www.smartkarma.com/entities/nexon-co-ltd" target="_blank" data-smartkarma-citation="entities:16032:1" rel="noopener">Nexon (3659 JP)</a> reported Q2 earnings and Q3 forecasts today. Everything is generally "in-line" to tilting slightly light. But USD/yen volatility matters a lot. </li>
<li>The company announced a small dividend hike, from largely meaningless to ever-so-slightly less meaningless. And a plan to buy back ¥100bn of shares over 3 years. </li>
<li>The inheritance tax issue remains a big one, but overhang appears delayed and buyback accretion is small, and also appears delated. And there's an index sell at end-September.</li>
</ul>



Nexon (3659 JP) reported Q2 earnings and Q3 forecasts today. Everything is generally "in-line" to tilting slightly light. But USD/yen volatility matters a lot. 
The company announced a small dividend hike, from largely meaningless to ever-so-slightly less meaningless. And a plan to buy back ¥100bn of shares over 3 years. 
The inheritance tax issue remains a big one, but overhang appears delayed and buyback accretion is small, and also appears delated. And there's an index sell at end-September.


Nexon Q2 In-Line, New Buyback Plan Too Small To Matter Near-Term

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>A critical issue arose lately. The Nexon heirs do not have collateral for installment payment. The Korea NTS doesn't accept shares of an unlisted company as collateral for tax payment.</li>
<li>So, the contingency plan is a direct equity sale. The more feasible would be for NXC to sell its stake in Nexon for the convenience of valuation and finding buyers.</li>
<li>The deal size is so large that it can come out in multiple block deals rather than a single buyer deal by the end of October.</li>
</ul>


A critical issue arose lately. The Nexon heirs do not have collateral for installment payment. The Korea NTS doesn't accept shares of an unlisted company as collateral for tax payment.
So, the contingency plan is a direct equity sale. The more feasible would be for NXC to sell its stake in Nexon for the convenience of valuation and finding buyers.
The deal size is so large that it can come out in multiple block deals rather than a single buyer deal by the end of October.


What We Should Know About the Nexon Inheritance Tax Dilemmas

Japan

CAPCOM CO., LTD. develops consumer video game software.  The Company also develops, manufactures, markets, and leases arcade game machines.  Capcom also operates amusement facilities.

Konami Holdings Corporation provides digital entertainment, health and fitness and gaming products. The Company develops and sells video games, mobile games and computer games, gaming machines, pachislot and pachinko machines, and fitness machines as well as operates health and fitness clubs.

ORACLE CORPORATION JAPAN sells a variety of software, including database management system software, application development tools, decision-making support tools, and business related applications.  The Company also provides support services for users.

Trend Micro Incorporated develops and markets anti-virus computer software and internet security software.  The Company also sells its products in the United States, Europe, and Asia.

SQUARE ENIX HOLDINGS CO., LTD. develops and sells entertainment software for home video game consoles including Dragon Quest and Final Fantasy series. The Company also publishes books such as informational guide books for its game software, and comic magazines and books.  Additionally, Square Enix sells character goods and stationery items from its software products.

OBIC Business Consultants Co.,Ltd. develops and markets business solution packaged software. The Company's products include software for accounting, banking, wage calculation, sales management, inventory control, and tax calculation. OBIC Business Consultants Co Ltd. also provides support and training services.

FUJI SOFT INCORPORATED is an independent software developer, specializing in communications and machine control software, business application software for bank and insurance companies, and operating system software.  Fuji Soft also installs, manages, and maintains computer systems.  The Company develops and sells word processing packaged software and also provides internet service.

Koei Tecmo Holdings Co.,Ltd. is a holding company which was established through the merger of Koei Co., Ltd. and Tecmo Ltd. The Company develops and distributes video game software for personal computers and home video game consoles. The Company also operates other media business such as marketing of books and CDs and amusement facility operation.

NSD CO., LTD is an independent computer software development company. The Company's products include operating systems, business software for financial industry, and process control systems.  NSD also provides computer services including managing computer systems and data entry. The Company also sells computers and its peripheral equipment.

Justsystems Corporation develops and sells computer application software. The Company's products include Ichitaro, a Japanese language word processing program.  Justsystems also develops network software.

Xero Limited offers an online accounting system.  The software features bank transaction importing, a cashbook, a general ledger, invoicing, accounts receivable, accounts payable, financial reporting, and management of expense claims.

Aspen Technology, Inc. provides software solutions. The Company offers asset optimization software that optimizes asset design, operations, and maintenance in complex, industrial environments to enable organizations to meet their business goals for sustainability and profitability. Aspen Technology serves customers worldwide.

Paycom Software Inc provides cloud-based HCM software solution delivered as Software-as-a-Service.  The Company provides functionality and data analytics that businesses need to manage the complete employment life cycle from recruitment to retirement.

Check Point Software Technologies Ltd. develops, markets and supports a range of software and hardware products and services for information technology (IT) security and offers its customers a network and gateway security solutions, data and endpoint security solutions and management solutions.

SS&C Technologies Holdings, Inc. develops and markets computer software for financial services providers.  The software enables trading and modeling, portfolio management and reporting, accounting, performance measurement, reconciliation, reporting, processing, and clearing.

Manhattan Associates, Inc. provides information technology solutions for distribution centers.  The solutions are designed to enable the efficient movement of goods through the supply chain.  The Company's solutions optimize the receipt, storage, and distribution of inventory, as well as manage equipment and personnel within a distribution center.

HubSpot, Inc. provides a cloud-based marketing and sales software platform. The Company offers integrated applications that helps in lead generation and social marketing.

Oracle Financial Services Software Ltd. provides comprehensive information technology solutions to the financial services industry worldwide. The Company provides transaction processing and accounting software for banks, investment managers and mutual funds. Oracle Financial also provides internet delivery of financial services as well as business intelligence and analytical applications.

PTC Inc. develops and delivers technology solutions, comprised of software and services. The Company's technology is primarily used by discrete manufacturers to design, operate and maintain complex products. PTC's technology is also used to connect products to the Internet for purposes of capturing and analyzing information from them.

Tyler Technologies, Inc. provides end-to-end information management solutions and services for local governments. The Company's client base includes local government offices throughout the United States, Canada, Puerto Rico, and the United Kingdom.

Nexon Co., Ltd. mainly develops and services, online games for PC and mobile devices. The company also offers consulting services related to online-games. Nexon operates in Japan.

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Nexon (3659 JP)

Saudi Arabia Gaming: Plans to Invest $38 Billion in Global Game Industry

Saudi Arabia's Savvy Games Group has a grand ambition to invest in the global gaming industry. It recently announced that it will invest US$37.8...

Douglas Kim

Nexon (3659) | The Best Pipeline Ever

Nexon is a key beneficiary of metaverse monetization. We believe the game company has the best pipeline in its history and is set to see rising FCF...

Mark Chadwick

Shift Up Corp - A Rising Unicorn in the Korean Game Industry

Shift Up is a game developer in Korea. It is expected to launch Goddess of Victory: Nikke mobile game and Eve console game on PS5 sometime in late...

Douglas Kim

Nexon Q2 In-Line, New Buyback Plan Too Small To Matter Near-Term

Nexon (3659) earnings are up strongly this year, some improvement, some weak yen. The company announced a new buyback plan for the next 3yrs but it...

Travis Lundy

What We Should Know About the Nexon Inheritance Tax Dilemmas

This post summarizes the inheritance tax situation of the Nexon heirs, which is developing quite interestingly, as they have virtually no assets to...

Sanghyun Park

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