Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

Cross Asset Strategy

<ul>
<li>We discuss end of the mandatory lock-up periods for 52 stocks in Korea in February 2023, among which 3 are in KOSPI and 49 are in KOSDAQ.</li>
<li>These 52 stocks on average could be subject to further selling pressures in Febraury and could underperform relative to the market. </li>
<li>Among these 52 stocks, the top 5 market cap stocks include Rainbow Robotics, SillaJen, SOCAR, Sebitchem, and Yunsung F&amp;C.</li>
</ul>


We discuss end of the mandatory lock-up periods for 52 stocks in Korea in February 2023, among which 3 are in KOSPI and 49 are in KOSDAQ.
These 52 stocks on average could be subject to further selling pressures in Febraury and could underperform relative to the market. 
Among these 52 stocks, the top 5 market cap stocks include Rainbow Robotics, SillaJen, SOCAR, Sebitchem, and Yunsung F&amp;C.


End of Mandatory Lock-Up Periods for 52 Companies in Korea in February 2023

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.

Event-Driven

<ul>
<li>WCP has the largest gap between the exercise and current prices (-16%). And its retail allocation is also the largest (5.44% of SO). In addition, it is subject to short-selling.</li>
<li>The deadline is January 2nd. A large-scale option exercise will be unavoidable if the share price does not exceed ₩54,000 by that date.</li>
<li>It is very likely that WCP's share price will experience strong downward pressure for a week after January 2nd. We need to consider a position setup that actively utilizes this.</li>
</ul>


WCP has the largest gap between the exercise and current prices (-16%). And its retail allocation is also the largest (5.44% of SO). In addition, it is subject to short-selling.
The deadline is January 2nd. A large-scale option exercise will be unavoidable if the share price does not exceed ₩54,000 by that date.
It is very likely that WCP's share price will experience strong downward pressure for a week after January 2nd. We need to consider a position setup that actively utilizes this.


Recent IPOs Carrying Putback Option in Korea: Market's Attention Is on WCP

Equity Capital Markets

<ul>
<li>Our base case valuation of Yunsung F&amp;C is target price of 53,360 won per share, which is 0.7% higher than the low end of the IPO price range.</li>
<li>Given the lack of upside, we would avoid this IPO.</li>
<li>Yunsung F&amp;C is one of the leaders in Korea in producing mixers for rechargeable battery materials for customers including LG Energy Solution and SK On. </li>
</ul>


Our base case valuation of Yunsung F&amp;C is target price of 53,360 won per share, which is 0.7% higher than the low end of the IPO price range.
Given the lack of upside, we would avoid this IPO.
Yunsung F&amp;C is one of the leaders in Korea in producing mixers for rechargeable battery materials for customers including LG Energy Solution and SK On. 


<ul>
<li>Yunsung F&amp;C is a leading maker of materials mixing equipment that are used in the rechargeable battery production.</li>
<li>The IPO price range is from 53,000 won to 62,000 won and offering amount is from 106 billion won to 124 billion won. The book building starts on 26 October. </li>
<li>According to the bankers' valuation, the expected IPO market cap range is from 423 billion won to 495 billion won. </li>
</ul>


Yunsung F&amp;C is a leading maker of materials mixing equipment that are used in the rechargeable battery production.
The IPO price range is from 53,000 won to 62,000 won and offering amount is from 106 billion won to 124 billion won. The book building starts on 26 October. 
According to the bankers' valuation, the expected IPO market cap range is from 423 billion won to 495 billion won. 


South Korea

Sejin Heavy Industries Co. Ltd., operates a shipbuilding firm.  The Company manufactures ship components such as Deck House and Liquified Petroleum Gas (LPG) Tank.

Sejin Heavy Industries Co Ltd (075580 KS)

STX Engine Co., Ltd. develops and manufactures marine diesel engine and military engine.  The Company also manufactures electronic communication equipment.

TK Corp. manufactures and markets piping materials used in the petrochemical, and shipbuilding industries.  The Company's products include pipe reducers, elbow tee reducers, and steel flanges.  TK also produces fittings and valves for semiconductors.

Dawonsys Co., LTD. operates special power generating business such as Nuclear Fusion, Inductiral Electric and Plasma Power business. The Company also operates Inductive Heating and ESD Polyimide Film Business.

Nara KIC Inc provides insulation engineering services for oil refineries, petrochemical plants, and liquefied natural gas (LNG) providers.  The Company also operates metal hardfacing division supplying its products to the steel manufacturers and thermoelectric power plants.  In addition, KIC produces insulating equipment, such as fire heaters and foam glass.

Welcron Kangwon Co., Ltd. is a industrial boiler supplier.  The Company that man ufactures industrial boilers that are used for power generating plant, chmicapro duct processing plant, and environmental energy plant.

STX Heavy Industries Co., Ltd. manufactures diesel engine components for ships. The Company's products include crank shafts, cylinder liners, turbo chargers, and cargo pumps.

Taewoong Co., Ltd. manufactures forged products required for heavy industry, such as shipbuilding, petrochemical plant use, and industrial machinery use. The Company's products include flanges, tube sheets, rings, shafts, and piston rods.

Hy-Lok Corporation develops, manufactures, and markets precision fittings and valves used in the petrochemical, semiconductor, and power generation industries.  The Company's products include needle valves, manifolds and gauge valves, filters, tube fittings, and pipe fittings.  In addition, Hy-Lok produces parts and components used in the plumbing market.

Motrex Co.,Ltd manufactures automobile electronic equipment. The Company produces and sells automotive parts, automotive audio, automotive navigation, remote control devices, and other products. Motrex markets its products worldwide.

Nak Sealing Technologies Corporation manufactures and markets oil seals and other rubber products.  The Company's products include O-rings, O-ring kits, bounded seals, boots, V seals, valve stem seals, O-ring cords, piston seals, polyurethane seals, and hydraulic seals.

Maruzen Co Ltd produces and sells commercial and household kitchen equipment. The Company provides complete design services, engineering work, and maintenance for commercial kitchen systems.  Major products include heating units such as gas ranges.  Maruzen wholesales cooling & cooking equipment as well.  The Company directly sells its products to major supermarkets.

Sotech Smarter Equipment Co., Ltd. develops, manufactures and sells potogravure printing machines and equipment. The Company's main products include potogravure printing machines, concave plastic machines, laminating machine, and  multi-purpose machines.

Hualing Xingma Automobile Co., Ltd. manufactures and markets trucks for special uses.  The Company's products include bulk cement delivery trucks, concrete mixing trucks, concrete pumping trucks, and other related automobile products.

Hualing Xingma Automobile (Group) (600375 CH)

Shanghai Yongli Belting Company Limited develops, produces and sells light duty conveyor belts. The Company's main products are Belts, conveyor accessories, chain plate and belt products processing tools.

Geron Company Limited designs, manufactures and sells Textile carding equipments. The company's main products are metallic card clothing, flat top card clothing, flexible card clothing, stationary flat card clothing, precarding plates, combing rollers, and integrated cylinders.

Suzhou Boamax Technologies Group Company Limited researches, develops, designs, produces and sells industrial grade Computer Numerical Control (CNC) sheet metal structural products using CNC sheet metal technology.

Wendt India Limited manufactures a variety of products for the Diamond Processing industry. The Company's products include Diamond/CBN Wheels, Diamond Segmented Saws, Mining Products & Tools and Diamond Dressing Tools. Wendt India also manufactures special aluminum alloy castings, reverse plated & infiltrated rolls and cobalt-free diamond scaife.

Hong Leong Asia Limited manufactures and fabricates precast concrete products, trades and distributes steel and cement products,  The Company also manufactures and distributes refrigerators and freezers, assembles air-conditioners and diesel engines as well as manufactures and sells metal drums and containers, plastic packaging related products, and container components.

Graham Corporation designs and builds vacuum and heat transfer equipment for process industries around the world. The Company markets to chemical, petrochemical, petroleum refining, and electric power generating industries, including cogeneration and geothermal plants. Graham's products include ejectors, liquid ring vacuum pumps, condensers, and heat exchangers.

Yunsung F&C Co., Ltd. wholesales and distributes mixing powder and liquid raw materials secondary battery manufacturing equipment. The Company wholesales and distributes pre mixers, storage containers, metal storage tanks, and other related products. Yunsung F&C also offers biopharmaceutical and food services.

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Yunsung F&C (372170 KS)

End of Mandatory Lock-Up Periods for 52 Companies in Korea in February 2023

We discuss end of the mandatory lock-up periods for 52 stocks in Korea in February 2023, among which 3 are in KOSPI and 49 are in KOSDAQ.

Douglas Kim

Recent IPOs Carrying Putback Option in Korea: Market's Attention Is on WCP

This post investigates the recent IPOs in Korea which carry putback options. In particular, it looks at WCP, which will likely experience a large...

Sanghyun Park

Yunsung F&C Valuation Analysis

Our base case valuation of Yunsung F&C is target price of 53,360 won per share, which is 0.7% higher than the low end of the IPO price range. Given...

Douglas Kim

Yunsung F&C IPO Preview

Yunsung F&C is a leading maker of materials mixing equipment that are used in the rechargeable battery production. The expected IPO market cap...

Douglas Kim

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