Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

Equity Capital Markets

<div class="content-highlight"><div>Over a 6-12 months view, we believe that SK Bioscience's market cap value could be about 11.5 trillion won or 149,000 won per share. At a market cap of 11.5 trillion won for SK Bioscience, this would suggest a P/S multiple of 11.5x (30% discount to the average P/S multiple of its comps in 2022) assuming annual revenue of 1 trillion won for the company. </div></div>Our base case value of 149,000 won per share would represent 129% higher than the high end IPO price of 65,000 won. Given such a high upside versus the IPO price, we have a POSITIVE view of this IPO.Remember, the key investment merits of SK Bioscience is that it is a company which has been picked by AstraZeneca and NovaVax to produce COVID-19 vaccines and there is a good chance that other major global biopharm companies may select SK Bioscience for additional COVID-19 vaccines production.

Over a 6-12 months view, we believe that SK Bioscience's market cap value could be about 11.5 trillion won or 149,000 won per share. At a market cap of 11.5 trillion won for SK Bioscience, this would suggest a P/S multiple of 11.5x (30% discount to the average P/S multiple of its comps in 2022) assuming annual revenue of 1 trillion won for the company. Our base case value of 149,000 won per share would represent 129% higher than the high end IPO price of 65,000 won. Given such a high upside versus the IPO price, we have a POSITIVE view of this IPO.Remember, the key investment merits of SK Bioscience is that it is a company which has been picked by AstraZeneca and NovaVax to produce COVID-19 vaccines and there is a good chance that other major global biopharm companies may select SK Bioscience for additional COVID-19 vaccines production.

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

Brian Freitas

Pan-Asia Index Rebalances/ Events/ Delta One

Event-Driven

The Korea Exchange (KRX) will announce the results of the June 2021 review 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">Korea Stock Exchange Kospi 200 Index (KOSPI2 INDEX)</a> in May with the changes becoming effective after the close of trading on 10 June.We currently see <a href="https://www.smartkarma.com/entities/taihan-electric-wire-co-ltd" target="_blank" data-smartkarma-citation="entities:11551:1" rel="noopener">Taihan Electric Wire (001440 KS)</a>, <a href="https://www.smartkarma.com/entities/dongwon-industries-co-ltd" target="_blank" data-smartkarma-citation="entities:1783:1" rel="noopener">Dongwon Industries (006040 KS)</a>, <a href="https://www.smartkarma.com/entities/hyosung-advanced-materials-c" target="_blank" data-smartkarma-citation="entities:27751:1" rel="noopener">Hyosung Advanced Materials C (298050 KS)</a> and <a href="https://www.smartkarma.com/entities/hyosung-tnc-co-ltd" target="_blank" data-smartkarma-citation="entities:27749:1" rel="noopener">Hyosung TNC Co Ltd (298020 KS)</a> as potential inclusions in the index, with <a href="https://www.smartkarma.com/entities/taeyoung-engineering-construction-co-ltd" target="_blank" data-smartkarma-citation="entities:18740:1" rel="noopener">Taeyoung Engineering &amp; Construction (009410 KS)</a>, <a href="https://www.smartkarma.com/entities/namsun-aluminum-co-ltd" target="_blank" data-smartkarma-citation="entities:17514:1" rel="noopener">Namsun Aluminum (008350 KS)</a>, <a href="https://www.smartkarma.com/entities/hanil-hyundai-cement-co-ltd" target="_blank" data-smartkarma-citation="entities:14406:1" rel="noopener">Hanil Hyundai Cement (006390 KS)</a> and <a href="https://www.smartkarma.com/entities/binggrae-co-ltd" target="_blank" data-smartkarma-citation="entities:16424:1" rel="noopener">Binggrae Co Ltd (005180 KS)</a> as the corresponding exclusions.<a href="https://www.smartkarma.com/entities/sk-bioscience-co-ltd" target="_blank" data-smartkarma-citation="entities:31484:1" rel="noopener">SK Bioscience (302440 KS)</a> is expected to list on the <a href="https://www.smartkarma.com/entities/korea-stock-exchange-kospi-index" target="_blank" data-smartkarma-citation="entities:22911:1" rel="noopener">Korea Stock Exchange Kospi Index (KOSPI INDEX)</a> market in March and there is a possibility that the stock gets Fast Entry into the index. That could see <a href="https://www.smartkarma.com/entities/sebang-global-battery-co-ltd" target="_blank" data-smartkarma-citation="entities:9618:1" rel="noopener">Sebang Global Battery (004490 KS)</a> being deleted from the index.<a href="https://www.smartkarma.com/entities/krafton-inc" target="_blank" data-smartkarma-citation="entities:28956:1" rel="noopener"> Krafton Inc (1486402D KS)</a> is another possible Fast Entry into the index though there are few details available on when the stock is expected to list.The short sell ban in Korea has been extended to 2 May. Stocks that are constituents 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">Korea Stock Exchange Kospi 200 Index (KOSPI2 INDEX)</a> and <a href="https://www.smartkarma.com/entities/kosdaq-150-index" target="_blank" data-smartkarma-citation="entities:31077:1" rel="noopener">KOSDAQ 150 Index (KOSDQ150 INDEX)</a> can be short sold from 3 May. The commencement of short selling on these stocks prior to the announcement of the June review changes could result in the expected inclusions outperforming the expected exclusions and opening up other interesting trading strategies.

The Korea Exchange (KRX) will announce the results of the June 2021 review of the Korea Stock Exchange Kospi 200 Index (KOSPI2 INDEX) in May with the changes becoming effective after the close of trading on 10 June.We currently see Taihan Electric Wire (001440 KS), Dongwon Industries (006040 KS), Hyosung Advanced Materials C (298050 KS) and Hyosung TNC Co Ltd (298020 KS) as potential inclusions in the index, with Taeyoung Engineering &amp; Construction (009410 KS), Namsun Aluminum (008350 KS), Hanil Hyundai Cement (006390 KS) and Binggrae Co Ltd (005180 KS) as the corresponding exclusions.SK Bioscience (302440 KS) is expected to list on the Korea Stock Exchange Kospi Index (KOSPI INDEX) market in March and there is a possibility that the stock gets Fast Entry into the index. That could see Sebang Global Battery (004490 KS) being deleted from the index. Krafton Inc (1486402D KS) is another possible Fast Entry into the index though there are few details available on when the stock is expected to list.The short sell ban in Korea has been extended to 2 May. Stocks that are constituents of the Korea Stock Exchange Kospi 200 Index (KOSPI2 INDEX) and KOSDAQ 150 Index (KOSDQ150 INDEX) can be short sold from 3 May. The commencement of short selling on these stocks prior to the announcement of the June review changes could result in the expected inclusions outperforming the expected exclusions and opening up other interesting trading strategies.

KOSPI200 Index Rebalance Preview: Increasing Number of Potential Changes

<div class="content-highlight">
SK Bioscience is getting ready to complete its IPO in Korea in March. SK Bioscience will be the biggest IPO in Korea so far this year in 2021. The IPO price range is from 49,000 won to 65,000 won. The IPO deal base size ranges from US$1.0 billion to US$1.3 billion. The expected market cap after the IPO ranges from 3.8 trillion won to 5.0 trillion won, according to the bankers's valuation. The book building for the institutional investors starts on 4 March 2021. The lead bankers on this IPO include NH Investment &amp; Securities, Korea Investment &amp; Securities, and Mirae Asset Daewoo Securities. 
Institutional investors will be allocated about 55% of the deal and retail 25%, and the rest will go to an employee stock ownership plan. There is a voluntary lock-up of 15 days to six months for investors. SK Bioscience is currently 98% owned by <a href="https://www.smartkarma.com/entities/sk-chemicals-co-ltd-new" target="_blank" data-smartkarma-citation="entities:26190:1" rel="noopener">Sk Chemicals Co Ltd/New (285130 KS) </a>and the latter company is 33.5% owned by <a href="https://www.smartkarma.com/entities/sk-discovery-co-ltd" target="_blank" data-smartkarma-citation="entities:5181:1" rel="noopener">Sk Discovery (006120 KS)</a>. 
SK Bioscience was spun off from <a href="https://www.smartkarma.com/entities/sk-chemicals-co-ltd-new" target="_blank" data-smartkarma-citation="entities:26190:1" rel="noopener">Sk Chemicals Co Ltd/New (285130 KS)</a> in July 2018. SK Biosciene specializes in making vaccines. SK Bioscience is backed by Bill Gates. In June 2020, Bill Gates mentioned that SK Bioscience may be capable of producing 200 million COVID-19 vaccine kits by June 2021. The Bill &amp; Melinda Gates foundation <a href="https://www.skchemicals.com/prcenter/new_view.do" target="_blank" rel="noopener">gave</a> $3.6 million in May to SK Bioscience to accelerate the development of Covid-19 vaccines. 
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SK Bioscience is getting ready to complete its IPO in Korea in March. SK Bioscience will be the biggest IPO in Korea so far this year in 2021. The IPO price range is from 49,000 won to 65,000 won. The IPO deal base size ranges from US$1.0 billion to US$1.3 billion. The expected market cap after the IPO ranges from 3.8 trillion won to 5.0 trillion won, according to the bankers's valuation. The book building for the institutional investors starts on 4 March 2021. The lead bankers on this IPO include NH Investment &amp; Securities, Korea Investment &amp; Securities, and Mirae Asset Daewoo Securities. 
Institutional investors will be allocated about 55% of the deal and retail 25%, and the rest will go to an employee stock ownership plan. There is a voluntary lock-up of 15 days to six months for investors. SK Bioscience is currently 98% owned by Sk Chemicals Co Ltd/New (285130 KS) and the latter company is 33.5% owned by Sk Discovery (006120 KS). 
SK Bioscience was spun off from Sk Chemicals Co Ltd/New (285130 KS) in July 2018. SK Biosciene specializes in making vaccines. SK Bioscience is backed by Bill Gates. In June 2020, Bill Gates mentioned that SK Bioscience may be capable of producing 200 million COVID-19 vaccine kits by June 2021. The Bill &amp; Melinda Gates foundation gave $3.6 million in May to SK Bioscience to accelerate the development of Covid-19 vaccines. 


SK Bioscience IPO Preview - Biggest IPO in Korea in 1Q 2021

Thematic (Sector/Industry)

<ul>
<li>In this insight, I discuss how the song Rich Men North of Richmond, return of mask mandates, and new COVID variant are all intertwined. </li>
<li>
"Rich Men North of Richmond" is a song about the excessive control of the government and the pressures of life. </li>
<li>I discuss the intricacies of how these three stories are intertwined and how the certain sectors of the stock market could be impacted from the potential changes in government policies.</li>
</ul>


In this insight, I discuss how the song Rich Men North of Richmond, return of mask mandates, and new COVID variant are all intertwined. 

"Rich Men North of Richmond" is a song about the excessive control of the government and the pressures of life. 
I discuss the intricacies of how these three stories are intertwined and how the certain sectors of the stock market could be impacted from the potential changes in government policies.


Rich Men North of Richmond, Return of Mask Mandates, and New COVID Variants

South Korea

SK Bioscience Co.,Ltd. operates biopharmaceutical businesses. The Company produces vaccines, sky cellflu prefilled syringes, sky cellflu quadrivalent prefilled syringes, varicella drugs, and other related products. SK Bioscience markets its products throughout South Korea.

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SK Bioscience (302440 KS)

SK Bioscience IPO - Valuation Analysis

We believe that SK Bioscience's market cap value could be about 11.5 trillion won or 149,000 won per share which would represent 129% higher than...

Douglas Kim

KOSPI200 Index Rebalance Preview: Increasing Number of Potential Changes

We see 4 potential changes to the KOSPI200 index at the June review (up from 1 change in Nov). With the short sell ban expiring on 2 May for...

Brian Freitas

SK Bioscience IPO Preview - Biggest IPO in Korea in 1Q 2021

SK Bioscience is getting ready to complete its IPO in Korea in March. SK Bioscience will be the biggest IPO in Korea so far this year in 2021. The...

Douglas Kim

Rich Men North of Richmond, Return of Mask Mandates, and New COVID Variants

In this insight, I discuss how the song Rich Men North of Richmond, return of mask mandates, and new COVID variant are all intertwined.

Douglas Kim

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