Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

Equity Capital Markets

SK IE Technology   / Equity Capital Markets

SK IET announced its IPO book building results today. The IPO price of SK IET has been determined at 105,000 won, which is at the high end of the IPO price range. There were 1,734 institutions that participated in this IPO survey and the demand was very strong at 1,883 to 1.Our base case valuation of SK IET is 143,413 won, which represents a 37% upside from the high end of the IPO price range of 105,000 won. Our high end valuation range of the company is 201,864 won, which represents a 92% upside from 105,000 won IPO price.Given the strong book building results, we believe that there is a high probability that the share price of SK IET reaches close to our high-end IPO valuation case (201,864 won per share or 14.4 trillion won market cap) in the first two days of trading post IPO. Nonetheless, we believe that over a 6-12 months view, we maintain our base case valuation of 143,413 won per share (10.2 trillion won market cap). In other words, we believe many institutional investors may be looking to take some partial profits in the first two days of trading at about 200,000 won level.

SK IET announced its IPO book building results today. The IPO price of SK IET has been determined at 105,000 won, which is at the high end of the IPO price range. There were 1,734 institutions that participated in this IPO survey and the demand was very strong at 1,883 to 1.Our base case valuation of SK IET is 143,413 won, which represents a 37% upside from the high end of the IPO price range of 105,000 won. Our high end valuation range of the company is 201,864 won, which represents a 92% upside from 105,000 won IPO price.Given the strong book building results, we believe that there is a high probability that the share price of SK IET reaches close to our high-end IPO valuation case (201,864 won per share or 14.4 trillion won market cap) in the first two days of trading post IPO. Nonetheless, we believe that over a 6-12 months view, we maintain our base case valuation of 143,413 won per share (10.2 trillion won market cap). In other words, we believe many institutional investors may be looking to take some partial profits in the first two days of trading at about 200,000 won level. 

SK IET: Trading Strategy Post IPO Pricing

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

Brian Freitas

Pan-Asia Index Rebalances/ Events/ Delta One

Event-Driven

The review period for 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> June review ends on 30 April. 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.There are currently 201 index constituents following the spin off of <a href="https://www.smartkarma.com/entities/daelim-industrial-co-ltd" target="_blank" data-smartkarma-citation="entities:18095:1" rel="noopener">DL Co Ltd (000210 KS)</a> and the inclusion of <a href="https://www.smartkarma.com/entities/dl-e-c-co-ltd" target="_blank" data-smartkarma-citation="entities:31375:1" rel="noopener">DL E&amp;C Co Ltd (375500 KS)</a> in the index. There will be 202 index constituents following the spin off of <a href="https://www.smartkarma.com/entities/lg-corp" target="_blank" data-smartkarma-citation="entities:6653:1" rel="noopener">LG Corp (003550 KS)</a> and the inclusion of LX Holdings in the index.We currently see 3 inclusions and 5 exclusions from the index. The potential inclusions are <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>, <a href="https://www.smartkarma.com/entities/hyosung-advanced-materials-corporation" target="_blank" data-smartkarma-citation="entities:27751:1" rel="noopener">Hyosung Advanced Materials (298050 KS)</a> and <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>, while the potential deletions are <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/binggrae-co-ltd" target="_blank" data-smartkarma-citation="entities:16424:1" rel="noopener">Binggrae Co Ltd (005180 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/samyang-corp" target="_blank" data-smartkarma-citation="entities:16321:1" rel="noopener">Samyang Corp (145990 KS)</a>. The expected Fast Entry of <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> could result in <a href="https://www.smartkarma.com/entities/spc-samlip" target="_blank" data-smartkarma-citation="entities:6007:1" rel="noopener">SPC Samlip (005610 KS)</a> being deleted from the index.The potential Fast Entry of <a href="https://www.smartkarma.com/entities/sk-ie-technology" target="_blank" data-smartkarma-citation="entities:29207:1" rel="noopener">SK IE Technology (SKIET KS)</a> could result in <a href="https://www.smartkarma.com/entities/aekyung-industrial-co-ltd" target="_blank" data-smartkarma-citation="entities:27129:1" rel="noopener">Aekyung Industrial Co Ltd (018250 KS)</a> being deleted from the index.<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> is a very close add - the next 5 trading days will decide if the stock is added to the index or not.Short selling in Korea is scheduled to resume on 3 May and there could be a fair amount of movement in the stocks ahead of the index review announcement and implementation date.

The review period for the Korea Stock Exchange Kospi 200 Index (KOSPI2 INDEX) June review ends on 30 April. 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.There are currently 201 index constituents following the spin off of DL Co Ltd (000210 KS) and the inclusion of DL E&amp;C Co Ltd (375500 KS) in the index. There will be 202 index constituents following the spin off of LG Corp (003550 KS) and the inclusion of LX Holdings in the index.We currently see 3 inclusions and 5 exclusions from the index. The potential inclusions are Hyosung TNC Co Ltd (298020 KS), Hyosung Advanced Materials (298050 KS) and Dongwon Industries (006040 KS), while the potential deletions are Taeyoung Engineering &amp; Construction (009410 KS), Namsun Aluminum (008350 KS), Binggrae Co Ltd (005180 KS), Hanil Hyundai Cement (006390 KS) and Samyang Corp (145990 KS). The expected Fast Entry of SK Bioscience (302440 KS) could result in SPC Samlip (005610 KS) being deleted from the index.The potential Fast Entry of SK IE Technology (SKIET KS) could result in Aekyung Industrial Co Ltd (018250 KS) being deleted from the index.Taihan Electric Wire (001440 KS) is a very close add - the next 5 trading days will decide if the stock is added to the index or not.Short selling in Korea is scheduled to resume on 3 May and there could be a fair amount of movement in the stocks ahead of the index review announcement and implementation date.

KOSPI200 Index Rebalance Preview: Review Period Almost Complete; Short Selling Commences in a Week

It seems to be spin-off season in Korea.Three <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> constituents will be suspended from trading from 29 April - <a href="https://www.smartkarma.com/entities/lg-corp" target="_blank" data-smartkarma-citation="entities:6653:1" rel="noopener">LG Corp (003550 KS)</a>, <a href="https://www.smartkarma.com/entities/f-f-co-ltd" target="_blank" data-smartkarma-citation="entities:15983:1" rel="noopener">F&amp;F Co Ltd (007700 KS)</a> and <a href="https://www.smartkarma.com/entities/ecopro-co-ltd" target="_blank" data-smartkarma-citation="entities:19029:1" rel="noopener">Ecopro Co Ltd (086520 KS)</a> due to a spin-off of its businesses.<a href="https://www.smartkarma.com/entities/f-f-co-ltd" target="_blank" data-smartkarma-citation="entities:15983:1" rel="noopener">F&amp;F Co Ltd (007700 KS)</a> will resume trading on 21 May, <a href="https://www.smartkarma.com/entities/lg-corp" target="_blank" data-smartkarma-citation="entities:6653:1" rel="noopener">LG Corp (003550 KS)</a> will resume trading on 27 May, and <a href="https://www.smartkarma.com/entities/ecopro-co-ltd" target="_blank" data-smartkarma-citation="entities:19029:1" rel="noopener">Ecopro Co Ltd (086520 KS)</a> will resume trading on 28 May.<a href="https://www.smartkarma.com/entities/lg-corp" target="_blank" data-smartkarma-citation="entities:6653:1" rel="noopener">LG Corp (003550 KS)</a> will remain in 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 its spinoff will be added to the index, <a href="https://www.smartkarma.com/entities/f-f-co-ltd" target="_blank" data-smartkarma-citation="entities:15983:1" rel="noopener">F&amp;F Co Ltd (007700 KS)</a> will remain in 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> but the spinoff will not be added to the index, <a href="https://www.smartkarma.com/entities/ecopro-co-ltd" target="_blank" data-smartkarma-citation="entities:19029:1" rel="noopener">Ecopro Co Ltd (086520 KS)</a> will continue to be a <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> constituent though its spinoff will not be included in the index.In this Insight, we look at the index treatment, the impact of passive flow on the stocks, and the impact of the changes on 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">Korea Stock Exchange Kospi 200 Index (KOSPI2 INDEX)</a>.

It seems to be spin-off season in Korea.Three Korea Stock Exchange Kospi 200 Index (KOSPI2 INDEX) and KOSDAQ 150 Index (KOSDQ150 INDEX) constituents will be suspended from trading from 29 April - LG Corp (003550 KS), F&amp;F Co Ltd (007700 KS) and Ecopro Co Ltd (086520 KS) due to a spin-off of its businesses.F&amp;F Co Ltd (007700 KS) will resume trading on 21 May, LG Corp (003550 KS) will resume trading on 27 May, and Ecopro Co Ltd (086520 KS) will resume trading on 28 May.LG Corp (003550 KS) will remain in the Korea Stock Exchange Kospi 200 Index (KOSPI2 INDEX) and its spinoff will be added to the index, F&amp;F Co Ltd (007700 KS) will remain in the Korea Stock Exchange Kospi 200 Index (KOSPI2 INDEX) but the spinoff will not be added to the index, Ecopro Co Ltd (086520 KS) will continue to be a KOSDAQ 150 Index (KOSDQ150 INDEX) constituent though its spinoff will not be included in the index.In this Insight, we look at the index treatment, the impact of passive flow on the stocks, and the impact of the changes on the June rebalance of the Korea Stock Exchange Kospi 200 Index (KOSPI2 INDEX). 

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.

Late last year, the Korea FSC introduced an equal allocation for retail in an IPO at 50% of the total retail offering, but still with another 50% through proportional allocation on deposits.SK Bioscience IPO proceeded under this rule, thus having a considerably lower retail subscription (335.1 to 1) than the previous big IPOs: HYBE (607. 0 to 1) and Kakao Games (323.0 to 1).<table class="table table-striped">
<colgroup>
<col width="100">
<col width="100">
<col width="100">
<col width="100">
<col width="100">
<col width="100">
<col width="100">
</colgroup>
<tbody>
<tr>
<td style="width: 197.5px;" data-sheets-value='{"1":2,"2":"Name"}'>Name</td>
<td style="text-align: right; width: 62.5px;" data-sheets-value='{"1":2,"2":"Ticker"}'>Ticker</td>
<td style="text-align: right; width: 71.6667px;" data-sheets-value='{"1":2,"2":"IPO date"}'>IPO date</td>
<td style="text-align: right; width: 64.1667px;" data-sheets-value='{"1":2,"2":"Offering price"}'>Offering price</td>
<td style="text-align: right; width: 64.1667px;" data-sheets-value='{"1":2,"2":"Offering size (₩B)"}'>Offering size (₩B)</td>
<td style="text-align: right; width: 65px;" data-sheets-value='{"1":2,"2":"Bookbuilding"}'>Book-building</td>
<td style="text-align: right; width: 74.1667px;" data-sheets-value='{"1":2,"2":"IPO retail subscription"}'>IPO retail subscription</td>
</tr>
<tr>
<td style="width: 197.5px;" data-sheets-value='{"1":2,"2":"SK Bioscience Co Ltd"}' data-sheets-formula='=googlefinance(R[0]C[1], "name")'>SK Bioscience Co Ltd</td>
<td style="text-align: right; width: 62.5px;" data-sheets-value='{"1":2,"2":"302440"}' data-sheets-formula='="302440"'>302440</td>
<td style="text-align: right; width: 71.6667px;" data-sheets-value='{"1":2,"2":"2021.03.18"}'>2021.03.18</td>
<td style="text-align: right; width: 64.1667px;" data-sheets-value='{"1":3,"3":65000}'>65,000</td>
<td style="text-align: right; width: 64.1667px;" data-sheets-value='{"1":3,"3":1491.8}' data-sheets-numberformat='{"1":2,"2":"#,##0.0","3":1}'>1,491.8</td>
<td style="text-align: right; width: 65px;" data-sheets-value='{"1":3,"3":1274.5}' data-sheets-numberformat='{"1":2,"2":"#,##0.00","3":1}'>1,274.50</td>
<td style="text-align: right; width: 74.1667px;" data-sheets-value='{"1":3,"3":335.36}' data-sheets-numberformat='{"1":2,"2":"#,##0.00","3":1}'>335.36</td>
</tr>
<tr>
<td style="width: 197.5px;" data-sheets-value='{"1":2,"2":"Hybe Co Ltd"}' data-sheets-formula='=googlefinance(R[0]C[1], "name")'>HYBE Co Ltd</td>
<td style="text-align: right; width: 62.5px;" data-sheets-value='{"1":2,"2":"352820"}' data-sheets-formula='="352820"'>352820</td>
<td style="text-align: right; width: 71.6667px;" data-sheets-value='{"1":2,"2":"2020.10.15"}'>2020.10.15</td>
<td style="text-align: right; width: 64.1667px;" data-sheets-value='{"1":3,"3":135000}'>135,000</td>
<td style="text-align: right; width: 64.1667px;" data-sheets-value='{"1":3,"3":962.6}' data-sheets-numberformat='{"1":2,"2":"#,##0.0","3":1}'>962.6</td>
<td style="text-align: right; width: 65px;" data-sheets-value='{"1":3,"3":1117}' data-sheets-numberformat='{"1":2,"2":"#,##0.00","3":1}'>1,117.00</td>
<td style="text-align: right; width: 74.1667px;" data-sheets-value='{"1":3,"3":607}' data-sheets-numberformat='{"1":2,"2":"#,##0.00","3":1}'>607.00</td>
</tr>
<tr>
<td style="width: 197.5px;" data-sheets-value='{"1":2,"2":"Kakao Games Corp"}' data-sheets-formula='=googlefinance(R[0]C[1], "name")'>Kakao Games Corp</td>
<td style="text-align: right; width: 62.5px;" data-sheets-value='{"1":2,"2":"293490"}' data-sheets-formula='="293490"'>293490</td>
<td style="text-align: right; width: 71.6667px;" data-sheets-value='{"1":2,"2":"2020.09.10"}'>2020.09.10</td>
<td style="text-align: right; width: 64.1667px;" data-sheets-value='{"1":3,"3":24000}'>24,000</td>
<td style="text-align: right; width: 64.1667px;" data-sheets-value='{"1":3,"3":384}' data-sheets-numberformat='{"1":2,"2":"#,##0.0","3":1}'>384.0</td>
<td style="text-align: right; width: 65px;" data-sheets-value='{"1":3,"3":1478.5}' data-sheets-numberformat='{"1":2,"2":"#,##0.00","3":1}'>1,478.50</td>
<td style="text-align: right; width: 74.1667px;" data-sheets-value='{"1":3,"3":1524.85}' data-sheets-numberformat='{"1":2,"2":"#,##0.00","3":1}'>1,524.85</td>
</tr>
<tr>
<td style="width: 197.5px;" data-sheets-value='{"1":2,"2":"SK Biopharmaceuticals Co Ltd"}' data-sheets-formula='=googlefinance(R[0]C[1], "name")'>SK Biopharmaceuticals Co Ltd</td>
<td style="text-align: right; width: 62.5px;" data-sheets-value='{"1":2,"2":"326030"}' data-sheets-formula='="326030"'>326030</td>
<td style="text-align: right; width: 71.6667px;" data-sheets-value='{"1":2,"2":"2020.07.02"}'>2020.07.02</td>
<td style="text-align: right; width: 64.1667px;" data-sheets-value='{"1":3,"3":49000}'>49,000</td>
<td style="text-align: right; width: 64.1667px;" data-sheets-value='{"1":3,"3":959.3}' data-sheets-numberformat='{"1":2,"2":"#,##0.0","3":1}'>959.3</td>
<td style="text-align: right; width: 65px;" data-sheets-value='{"1":3,"3":835}' data-sheets-numberformat='{"1":2,"2":"#,##0.00","3":1}'>835.00</td>
<td style="text-align: right; width: 74.1667px;" data-sheets-value='{"1":3,"3":323.02}' data-sheets-numberformat='{"1":2,"2":"#,##0.00","3":1}'>323.02</td>
</tr>
<tr><td colspan="7" rowspan="1" style="width: 724.167px;" data-sheets-value='{"1":2,"2":"Source: DART"}'>Source: DART</td></tr>
</tbody>
</table>Now, Korean regulators introduce further restrictions to ban multiple applications on the same name in an IPO. It has long been a common practice by local retail in retail-heavy IPOs. The Korea FSC had put out the legislative notice on the Capital Act amendment until April 20. The enactment is one month from the legislative notice.So, the effective date should be May 20.But due to the local brokerages' system preparation, the ban will likely be in place from late June.Which one would be the first unlucky one to face the ban?SK IE Technology seems fine. But those IPOs coming in July will likely be subject to the ban.<table class="table table-striped">
<colgroup>
<col width="100">
<col width="100">
<col width="100">
</colgroup>
<tbody>
<tr>
<td data-sheets-value='{"1":2,"2":"IPOs"}'>Upcoming IPOs in Korea</td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"OTC valuation (₩B)"}'>OTC valuation (₩B)</td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"Tentative IPO schedule"}'>Tentative IPO schedule</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"SK IE Technology"}'>SK IE Technology</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":7487.7}' data-sheets-numberformat='{"1":2,"2":"#,##0.0","3":1}'>7,487.7</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":44317}' data-sheets-numberformat='{"1":5,"2":"mmmm yyyy","3":1}'>May 2021</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"SD Biosensor"}'>SD Biosensor</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":8500}' data-sheets-numberformat='{"1":2,"2":"#,##0.0","3":1}'>8,500.0</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":44378}' data-sheets-numberformat='{"1":5,"2":"mmmm yyyy","3":1}'>July 2021</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Iljin Composite Materials"}'>Iljin Composite Materials</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":1600}' data-sheets-numberformat='{"1":2,"2":"#,##0.0","3":1}'>1,600.0</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":44378}' data-sheets-numberformat='{"1":5,"2":"mmmm yyyy","3":1}'>July 2021</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Kakao Bank"}'>Kakao Bank</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":34000}' data-sheets-numberformat='{"1":2,"2":"#,##0.0","3":1}'>34,000.0</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":44378}' data-sheets-numberformat='{"1":5,"2":"mmmm yyyy","3":1}'>July 2021</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Krafton"}'>Krafton</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":22000}' data-sheets-numberformat='{"1":2,"2":"#,##0.0","3":1}'>22,000.0</td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"3Q 2021"}'>3Q 2021</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Hyundai Engineering"}'>Hyundai Engineering</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":8300}' data-sheets-numberformat='{"1":2,"2":"#,##0.0","3":1}'>8,300.0</td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"4Q 2021"}'>4Q 2021</td>
</tr>
<tr><td colspan="3" rowspan="1" data-sheets-value='{"1":2,"2":"Source: eDaily &amp; 38.communications"}'>Source: eDaily &amp; 38.communications</td></tr>
</tbody>
</table>

Late last year, the Korea FSC introduced an equal allocation for retail in an IPO at 50% of the total retail offering, but still with another 50% through proportional allocation on deposits.SK Bioscience IPO proceeded under this rule, thus having a considerably lower retail subscription (335.1 to 1) than the previous big IPOs: HYBE (607. 0 to 1) and Kakao Games (323.0 to 1).











Name
Ticker
IPO date
Offering price
Offering size (₩B)
Book-building
IPO retail subscription


SK Bioscience Co Ltd
302440
2021.03.18
65,000
1,491.8
1,274.50
335.36


HYBE Co Ltd
352820
2020.10.15
135,000
962.6
1,117.00
607.00


Kakao Games Corp
293490
2020.09.10
24,000
384.0
1,478.50
1,524.85


SK Biopharmaceuticals Co Ltd
326030
2020.07.02
49,000
959.3
835.00
323.02

Source: DART

Now, Korean regulators introduce further restrictions to ban multiple applications on the same name in an IPO. It has long been a common practice by local retail in retail-heavy IPOs. The Korea FSC had put out the legislative notice on the Capital Act amendment until April 20. The enactment is one month from the legislative notice.So, the effective date should be May 20.But due to the local brokerages' system preparation, the ban will likely be in place from late June.Which one would be the first unlucky one to face the ban?SK IE Technology seems fine. But those IPOs coming in July will likely be subject to the ban.







Upcoming IPOs in Korea
OTC valuation (₩B)
Tentative IPO schedule


SK IE Technology
7,487.7
May 2021


SD Biosensor
8,500.0
July 2021


Iljin Composite Materials
1,600.0
July 2021


Kakao Bank
34,000.0
July 2021


Krafton
22,000.0
3Q 2021


Hyundai Engineering
8,300.0
4Q 2021

Source: eDaily &amp; 38.communications



Banning Multiple Applications for Subscriptions in IPO: Impacts on Early-Phase Profit-Taking Window

SK IET book opens tomorrow.This post has the checklist for the BB to help formulating BB strategies.1. Pricing discountsThe IPO book EV/EBITDA multiple is 48.12x. The MTM EV/EBITDA rises to 54.03x.










EV/EBITDA, IPO book (₩B)
Yunnan Energy New Material Co Ltd
Ecopro BM Co Ltd
Iljin Materials Co Ltd
Posco Chemical Co Ltd
Chunbo Co Ltd


Ticker
SHE:002812
247540
020150
003670
278280


Ref MC
16,579.1
3,298.3
2,881.9
8,959.2
1,576.0


Interest-bearing debt
1,027.8
197.0
49.8
841.4
26.0


Cash &amp; cash equivalents
645.7
59.2
150.8
121.7
62.9


Net borrowings
382.1
137.8
-101.0
719.7
-36.9


Non-controlling int
85.7
23.7
251.1
22.9
0.0


EV
17,046.8
3,459.8
3,032.1
9,701.9
1,539.1


OP
228.8
54.8
51.0
60.3
30.1


D&amp;A
97.7
36.9
34.2
64.4
11.2


EBITDA
326.5
91.6
85.3
124.7
41.3


EV/EBITDA (x)
52.20
37.80
35.60
77.80
37.20


Average (x)
48.12

Source: DART












EV/EBITDA, MTM (₩B)
Yunnan Energy New Material Co Ltd
Ecopro BM Co Ltd
Iljin Materials Co Ltd
Posco Chemical Co Ltd
Chunbo Co Ltd


Ticker
SHE:002812
247540
020150
003670
278280


Current MC
17,156.1
3,796.8
3,550.5
10,307.0
1,730.0


Interest-bearing debt
1,027.8
197.0
49.8
841.4
26.0


Cash &amp; cash equivalents
645.7
59.2
150.8
121.7
62.9


Net borrowings
382.1
137.8
-101.0
719.7
-36.9


Non-controlling int
85.7
23.7
251.1
22.9
0.0


EV
17,623.8
3,958.4
3,700.7
11,049.7
1,693.1


OP
228.8
54.8
51.0
60.3
30.1


D&amp;A
97.7
36.9
34.2
64.4
11.2


EBITDA
326.5
91.6
85.3
124.7
41.3


EV/EBITDA (x)
53.97
43.19
43.40
88.63
40.97


Average (x)
54.03

Source: DART, KRX, &amp; Bloomberg

At MTM, the discount range moves up from 19.59~40.27% to 28.52~46.90%.







Discount (₩B)
Lower
Upper


Price (₩)
₩78,000
₩105,000


Base deal size
1,668.4
2,246.0


- Institutional allotment
917.6
1,235.3


Implied MC
5,561.2
7,486.2


EV/EBITDA, IPO book
9,310.4
9,310.4


- Discount
40.27%
19.59%


EV/EBITDA, MTM
10,472.6
10,472.6


- Discount
46.90%
28.52%

Source: DART

At MTM PER, the range falls to 13.78~35.95%, if excluding POSCO Chemical, whose 348.45x PER should make it an outlier.







Discount (₩B)
Lower
Upper


Price (₩)
₩78,000
₩105,000


Base deal size
1,668.4
2,246.0


- Institutional allotment
917.6
1,235.3


Implied MC
5,561.2
7,486.2


PER, MTM
8,682.8
8,682.8


- Discount
35.95%
13.78%

Source: DART








PER, MTM valuation (₩B)



SO
71,297,592


Earnings
88.2


EPS
₩1,521


PER (x)
80.07


MC
8,682.8


Price per share
₩121,782

Source: DART












PER, MTM (₩B)
Yunnan Energy New Material Co Ltd
Ecopro BM Co Ltd
Iljin Materials Co Ltd
Posco Chemical Co Ltd
Chunbo Co Ltd


Ticker
SHE:002812
247540
020150
003670
278280


Current MC
17,156.5
3,796.8
3,550.5
10,307.0
1,730.0


SO
887,721,966
21,035,166
46,110,835
60,988,220
10,000,000


Price per share
₩19,326
₩180,500
₩77,000
₩169,000
₩173,000


Earnings
191.7
42.7
44.2
29.6
27.4


EPS
₩216
₩2,065
₩959
₩485
₩2,742


PER (x)
89.47
87.41
80.29
348.45
63.09


Average (x) (excl. POSCO Chem)
80.07

Source: DART, KRX, &amp; Bloomberg

Compared with the more direct peers (Asahi Kasei and Toray Industries), SK IET's indicative price band is at a 21.71~63.85% premium (PER) and a whopping 239.89~357.54% premium (EV/EBITDA).The Asahi Kasei/Toray multiple raised a valuation concern earlier. But the current sentiment doesn't seem to be taking it critically. The market seems to be paying more attention to the aspect that they aren't a pure-play company as their LiBS portion is less than 30% of the total revenue.







Discount (₩B)
Lower
Upper


Price (₩)
₩78,000
₩105,000


Base deal size
1,668.4
2,246.0


- Institutional allotment
917.6
1,235.3


Implied MC
5,561.2
7,486.2


EV/EBITDA, Asahi Kasei/Toray
1,636.2
1,636.2


- Discount
-239.89%
-357.54%


PER, Asahi Kasei/Toray
4,569.1
4,569.1


- Discount
-21.71%
-63.85%

Source: DART









Valuation (₩B)
EV/EBITDA, Asahi Kasei/Toray
PER, Asahi Kasei/Toray


Multiple
EV/EBITDA
PER


SO
71,297,592
71,297,592


EBITDA
196.6
-


EV/EBITDA (x)
9.08
-


EV
1,784.9
-


Interest-bearing debt
515.8
-


Cash &amp; cash equivalents
367.1
-


Net borrowings
148.7
-


Earnings
-
88.2


EPS
-
₩1,521


PER (x)
-
42.13


MC
1,636.2
4,569.1


Price per share
₩22,949
₩64,084

Source: DART









EV/EBITDA, Asahi Kasei/Toray (₩B)
Asahi Kasei
Toray Industries


Ticker
TYO:3407
TYO:3402


Current MC
17,491.1
11,317.8


EV
22,738.4
20,063.3


EV/EBITDA (x)
7.46
10.70


Average (x)
9.08

Source: DART, KRX, &amp; Bloomberg









PER, Asahi Kasei/Toray (₩B)
Asahi Kasei
Toray Industries


Ticker
TYO:3407
TYO:3402


Current MC
17,491.1
11,317.8


Earnings
823.9
179.5


PER (x)
21.23
63.04


Average (x)
42.13

Source: DART, KRX, &amp; Bloomberg

The 5-yr average pricing discount band of the KOSPI IPOs is 19.00~31.80%.Even the MTM PER isn't awfully skewed from the 5-yr average. 









Name
Ticker
IPO date
Lower
Upper


JS Corp
194370
2016-02-04
47.40%
36.40%


Daelim C&amp;S
-
2016-03-30
28.00%
15.10%


Haitai Confectionery and Foods Co Ltd
101530
2016-05-11
28.10%
11.80%


Yong Pyong Resort Corp
070960
2016-05-27
26.30%
16.20%


Haesung DS Co Ltd
195870
2016-06-24
27.60%
9.50%


Korea Asset In Trust Co Ltd
123890
2016-07-13
23.90%
13.80%


Dual Co Ltd
016740
2016-07-29
25.50%
10.60%


LS Cable &amp; System Asia Ltd
229640
2016-09-22
18.70%
6.50%


Hwaseung Enterprise Co Ltd
241590
2016-10-04
21.00%
10.70%


JW Life Science Corp
234080
2016-10-27
21.20%
5.20%


Samsung Biologics Co Ltd
207940
2016-11-10
32.20%
18.40%


Doosan Bobcat Inc
241560
2016-11-18
48.10%
40.90%


Hands Corporation Ltd
143210
2016-12-02
21.10%
7.90%


Hojeon Ltd
111110
2017-02-02
29.00%
17.20%


Dentium Co Ltd
145720
2017-03-15
39.10%
32.30%


Orange Life Ins
-
2017-05-11
22.20%
1.30%


Netmarble Corp
251270
2017-05-12
39.00%
20.90%


Tapex Inc
055490
2017-10-31
27.20%
17.80%


Samyang Packaging Corp
272550
2017-11-29
28.20%
17.20%


Jin Air Co Ltd
272450
2017-12-08
20.00%
5.10%


Dongyang Piston Co Ltd
092780
2017-12-08
34.60%
16.30%


Aekyung Industrial Co Ltd
018250
2018-03-22
31.50%
19.80%


Lotte Data Communication Co
286940
2018-07-27
27.20%
13.10%


T'way Air Co Ltd
091810
2018-08-01
31.10%
21.20%


Woojin I&amp;S Co Ltd
010400
2018-09-14
29.70%
20.30%


Hana Pharm Co Ltd
293480
2018-10-02
28.20%
17.90%


Asiana IDT Inc
267850
2018-11-23
45.50%
32.00%


Air Busan Co Ltd
298690
2018-12-27
38.40%
31.50%


DreamTech Co Ltd
192650
2019-03-14
36.30%
24.70%


Hyundai Autoever Corp
307950
2019-03-28
33.10%
26.40%


Zinus Inc
013890
2019-10-30
27.80%
18.80%


Xi S&amp;D Inc
317400
2019-11-06
31.50%
15.20%


Hanwha Systems Co Ltd
272210
2019-11-13
35.70%
26.50%


Hyundai Energy Solutions Co Ltd
322000
2019-11-19
33.30%
22.10%


CENTRAL MOTEK Co Ltd
308170
2019-11-25
31.70%
18.00%


SK Biopharmaceuticals Co Ltd
326030
2020-07-02
39.80%
18.00%


Big Hit Entertainment Co Ltd
352820
2020-10-15
34.40%
15.70%


Kyochon F&amp;B Co Ltd
339770
2020-11-12
31.20%
20.10%


A Plus Asset Advisor Co Ltd
244920
2020-11-20
45.10%
35.70%


Myoung Shin Industrial Co Ltd
009900
2020-12-07
27.60%
14.30%


SoluM Co Ltd
248070
2021-02-02
35.30%
26.80%


Prestige Biopharma Ltd
950210
2021-02-05
42.90%
26.90%


SK Bioscience Co Ltd
302440
2021-03-18
40.40%
21.00%


Average

-
31.80%
19.00%

Source: DART



SK IET BB: Pricing Discounts, Major Shareholder Selling, & K200 Entry

South Korea

SK IE Technology Co., Ltd operates as a material solution provider. The Company provides information material solutions, electronic materials solutions, and other products. SK IE Technology conducts businesses across worldwide.

Price Gauge
52-week Range	0.00 - 0.00
Market Cap (USDm)	0.00
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