Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

Equity Capital Markets

<ul>
<li>Nexteel reported disappointing IPO book building results from institutional investors. The IPO price has been confirmed at 11,500 won which is at the low end of the IPO valuation range.</li>
<li>A total of 700 institutions participated, with a demand ratio of 236 to 1. It is scheduled to be listed on the KOSPI exchange on 21 August. </li>
<li>Despite the weak IPO book building results, we maintain our positive view of the Nexteel IPO. Our base case valuation of Nexteel is implied market cap of 485.8 billion won.</li>
</ul>


Nexteel reported disappointing IPO book building results from institutional investors. The IPO price has been confirmed at 11,500 won which is at the low end of the IPO valuation range.
A total of 700 institutions participated, with a demand ratio of 236 to 1. It is scheduled to be listed on the KOSPI exchange on 21 August. 
Despite the weak IPO book building results, we maintain our positive view of the Nexteel IPO. Our base case valuation of Nexteel is implied market cap of 485.8 billion won.


Nexteel IPO Book Building Results Analysis

<ul>
<li>Our base case valuation of Nexteel is target price of 18,671 won per share, which represents 49% higher than the high end of the IPO price range of 12,500 won. </li>
<li>We estimate Nexteel to generate sales of 883.6 billion won (up 32.2% YoY) and operating profit of 257.4 billion won (up 42% YoY) in 2023.</li>
<li>Nexteel's main products include pipes used to extract oil and gas from oil wells. It also makes steel pipes for transporting oil &amp; steam, construction, shipbuilding, and machinery industries.</li>
</ul>


Our base case valuation of Nexteel is target price of 18,671 won per share, which represents 49% higher than the high end of the IPO price range of 12,500 won. 
We estimate Nexteel to generate sales of 883.6 billion won (up 32.2% YoY) and operating profit of 257.4 billion won (up 42% YoY) in 2023.
Nexteel's main products include pipes used to extract oil and gas from oil wells. It also makes steel pipes for transporting oil &amp; steam, construction, shipbuilding, and machinery industries.


<ul>
<li>Nexteel is getting ready to complete its IPO in Korea in August. Nexteel is a steel pipe manufacturing company. The IPO price range is from 11,500 won to 12,500 won. </li>
<li>The IPO offering size is from 80.5 billion won to 87.5 billion won. The expected market cap is from 299 billion won to 325 billion won.</li>
<li>Nexteel's sales increased at a CAGR of 76.4% from 2020 to 2022. The company's operating profit surged from 1.5 billion won in 2020 to 181.3 billion won in 2022. </li>
</ul>


Nexteel is getting ready to complete its IPO in Korea in August. Nexteel is a steel pipe manufacturing company. The IPO price range is from 11,500 won to 12,500 won. 
The IPO offering size is from 80.5 billion won to 87.5 billion won. The expected market cap is from 299 billion won to 325 billion won.
Nexteel's sales increased at a CAGR of 76.4% from 2020 to 2022. The company's operating profit surged from 1.5 billion won in 2020 to 181.3 billion won in 2022. 


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

Brian Freitas

Pan-Asia Index Rebalances/ Events/ Delta One

Periscope Analytics

Periscope Analytics focuses on event-driven trades across Asia Pacific and provides comprehensive, timely and systematic coverage of index changes to major Asia Pacific indices in a structured manner.

The analysis includes forecasted inclusions and exclusions to all major Asian indices that have significant amount of tracking assets, including estimates of passive buy/sell flow on the stocks. The service also provides commentary and impact of market consultations, ground rule changes, and other events (IPOs, spin-offs, M&A) that could lead to index changes and passive flow.

Periscope Analytics works with multi-strategy hedge funds, proprietary trading firms, stat arb trading groups and long-only investors that invest and trade in the Asia Pacific region with the data being used to trade index rebalances, avoid pre-positioning and passive flow, and to time entry into and exit from stocks.

Event-Driven Trades Across Asia Pacific

Event-Driven

<ul>
<li>The review period for the March rebalance of the KOSPI Size Indices ends 28 February. The results will be announced early March and implemented at the close on 9 March.</li>
<li>We see 5 migrations between MidCap and LargeCap, 8 migrations from SmallCap to MidCap, 3 new adds to MidCap, and 11 migrations from MidCap to SmallCap.</li>
<li>Stocks migrating from SmallCap to MidCap have outperformed stocks that are migrating between other categories.</li>
</ul>


The review period for the March rebalance of the KOSPI Size Indices ends 28 February. The results will be announced early March and implemented at the close on 9 March.
We see 5 migrations between MidCap and LargeCap, 8 migrations from SmallCap to MidCap, 3 new adds to MidCap, and 11 migrations from MidCap to SmallCap.
Stocks migrating from SmallCap to MidCap have outperformed stocks that are migrating between other categories.


KOSPI Size Indices - Potential Changes in March

South Korea

SeAH Steel Corporation operates as a steel products manufacturing company. The Company produces and sells carbon steel pipes, stainless steel pipes, titanium tubes, galvanized color steel sheets, and other products. SeAH Steel markets its products primarily throughout Korea with limited overseas.

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SeAH Steel Corp (306200 KS)

Nexteel IPO Book Building Results Analysis

Nexteel reported disappointing IPO book building results from institutional investors. The IPO price has been confirmed at 11,500 won which is at...

Douglas Kim

Nexteel IPO Valuation Analysis

Our base case valuation of Nexteel is target price of 18,671 won per share, which represents 49% higher than the high end of the IPO price range of...

Douglas Kim

Nexteel IPO Preview

Nexteel is getting ready to complete its IPO in August. Its sales increased at a CAGR of 76.4% from 2020 to 2022. Its operating profit surged from...

Douglas Kim

KOSPI Size Indices - Potential Changes in March

The review period for the March rebal of the KOSPI Size Indices ends on 28 February. We see quite a lot of potential migrations. Some stocks could...

Brian Freitas

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