Category

South Korea

Jun 11
0

Daily Brief South Korea: LG Energy Solution, Jeisys Medical and more

By | Daily Briefs, South Korea

In today’s briefing:

  • Mandatory Block Deal Pre-Announcement Requirement in Korea Starting 24 July: Impact on Block Deals
  • Tender Offer of Jeisys Medical by Archimed Group

Mandatory Block Deal Pre-Announcement Requirement in Korea Starting 24 July: Impact on Block Deals

By Douglas Kim

  • Starting 24 July, there will be a mandatory pre-announcement requirement for block deal sales in Korea. 
  • In other words, the major shareholders of the Korean companies need to report publicly prior to their actual sales of their stakes in these companies through block deal sales.
  • The potential block deal sales candidates could continue to underperform on average the companies that are selling these stocks in potential block deal sales in the next several weeks. 

Tender Offer of Jeisys Medical by Archimed Group

By Douglas Kim

  • On 10 June, it was announced that France’s Archimed Group is conducting a tender offer of 55.72 million shares of Jeisys Medical (287410 KS) (72% of outstanding shares). 
  • The tender offer period will run from 10 June to 22 July. The tender offer price is 13,000 won.
  • Archimed also signed a contract to purchase the entire stake (23.2%) held by Kang Don-Hwan (Chairman of Jeisys Medical) and (3.2%) held by a Director Myung-Hoon Lee.

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Jun 10
0

Daily Brief South Korea: Jeisys Medical and more

By | Daily Briefs, South Korea

In today’s briefing:

  • Breakdown of Archimed’s Massive Tender Offer for Jeisys Medical Shareholders

Breakdown of Archimed’s Massive Tender Offer for Jeisys Medical Shareholders

By Sanghyun Park

  • Archimed aims to acquire 72% of Jeisys Medical’s shares, totaling 55,724,838 shares. The tender offer runs from the 10th of this month to the 22nd of the following month.
  • If tendered shares fall short of the 18,013,879 minimum, Archimed refrains from purchases. If exceeded, Archimed buys all, eliminating allocation risk.
  • With over 70% substantial volume and a large portion held by local retail investors, surpassing the 26% threshold seems feasible.

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Jun 09
0

Daily Brief South Korea: SK Square and more

By | Daily Briefs, South Korea

In today’s briefing:

  • Potential Merger Dynamics Involving SK Inc, SK Square, & SK Hynix

Potential Merger Dynamics Involving SK Inc, SK Square, & SK Hynix

By Sanghyun Park

  • Regardless of the divorce proceedings, SK still urgently needs SK Inc’s stock price to rise for other reasons. That reason is to position SK Hynix directly under SK Inc.
  • SK Inc boosts stake in SK Square with SK Telecom shares, followed by a public tender offer to exchange SK Square shares for new SK Inc shares.
  • SK Inc’s involvement in the divorce lawsuit makes it a focus for traders seeking relative outperformance among the SK companies involved in this situation.

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Jun 08
0

Daily Brief South Korea: Yanolja and more

By | Daily Briefs, South Korea

In today’s briefing:

  • Initial Thoughts on the Yanolja IPO

Initial Thoughts on the Yanolja IPO

By Douglas Kim

  • Yanolja is getting ready to complete its IPO in the US in the next several months. Softbank invested about US$1.7 billion in Yanolja in 2021.
  • The valuation of Yanolja could be between US$7 billion to US$9 billion. The company could raise nearly US$400 million in this IPO. 
  • Overall, we are concerned about the valuations of Yanolja if indeed the bankers push ahead with the IPO at the valuation range of US$7 billion to US$9 billion.

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Jun 07
0

Daily Brief South Korea: Shift Up, Lock&Lock and more

By | Daily Briefs, South Korea

In today’s briefing:

  • What Did FSS Point Out to Shift Up? & What Impact Would It Have on Bookbuilding Sentiment?
  • Affinity Equity Partners Seeking Delisting of Lock & Lock Through Comprehensive Stock Exchange

What Did FSS Point Out to Shift Up? & What Impact Would It Have on Bookbuilding Sentiment?

By Sanghyun Park

  • FSS wants Nikke’s MAU data to address revenue concerns. They also seek April and May sales data for Stellar Blade to address valuation concerns despite its recent launch.
  • Shift Up updated the prospectus with Nikke’s increasing MAU data but didn’t include Stellar Blade sales data. FSS may request further revisions, possibly delaying the IPO again.
  • Nikke’s MAU has risen but plateaued versus the previous quarter, and uncertainty surrounds Stellar Blade’s April-May sales, potentially impacting IPO pricing.

Affinity Equity Partners Seeking Delisting of Lock & Lock Through Comprehensive Stock Exchange

By Douglas Kim

  • On 5 June, Affinity Equity Partners (AEP) announced that it is seeking a delisting of Lock&Lock (115390 KS) shares through a comprehensive stock exchange. 
  • It has been reported that the second tender offer failed. Only 1.5% of the outstanding shares participated in the second tender offer, falling short of the 9.5% participation required.
  • Affinity plans to transfer the shares of Lock&Lock held by an overseas corporation to a domestic corporation (investment-in-kind) and then go through a comprehensive stock exchange procedure.

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Jun 06
0

Daily Brief South Korea: Shift Up, Hyundai Motor, Webtoon Entertainment and more

By | Daily Briefs, South Korea

In today’s briefing:

  • Shift Up Delays the IPO and Stellar Blade Tops Number One Game in the US in April
  • Value-Up Tax Support Revealed by End of June: Local Market Eyes Corporate Tax Cut Beneficiaries
  • Webtoon Entertainment Pre-IPO – The Positives – Just Turned Profitable
  • Webtoon Entertainment Pre-IPO – The Negatives – Korea Revenue Declined, JP Acquisition to the Rescue

Shift Up Delays the IPO and Stellar Blade Tops Number One Game in the US in April

By Douglas Kim

  • On 5 June, Shift Up announced that it will be postponing its IPO to July. The original book building period for the institutional investors was from 3 to 13 June.  
  • The final book building date has been postponed to 27 June. The subsequent public offering subscription for general investors was also postponed to 2 to 3 July.
  • A major investment positive of Shift Up is enormous initial success of Stellar Blade which was the best selling game in the U.S. and numerous other countries in April 2024.

Value-Up Tax Support Revealed by End of June: Local Market Eyes Corporate Tax Cut Beneficiaries

By Sanghyun Park

  • A high-ranking official from the local financial regulatory authority has confirmed to several local media outlets that the tax benefits for the value-up program will be unveiled this month.
  • Corporate tax cuts and separate taxation on dividend income will be included. The short-term impact at the time of the announcement will likely be more significant for corporate tax cuts.
  • Local market is focused on screening large companies within the KOSPI 200 that have substantial pre-tax profits in anticipation of the corporate tax cut momentum to be announced this month.

Webtoon Entertainment Pre-IPO – The Positives – Just Turned Profitable

By Ethan Aw

  • Webtoon Entertainment (WBTN US) is looking to raise up to US$500m in its US IPO.
  • Webtoon Entertainment is a global storytelling platform where a community of creators and users discover, create and share new content. 
  • In this note, we talk about the positive aspects of the deal.

Webtoon Entertainment Pre-IPO – The Negatives – Korea Revenue Declined, JP Acquisition to the Rescue

By Ethan Aw

  • Webtoon Entertainment (WBTN US) is looking to raise up to US$500m in its US IPO.
  • Webtoon Entertainment is a global storytelling platform where a community of creators and users discover, create and share new content.
  • In this note, we talk about the not-so-positive aspects of the deal.

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Jun 05
0

Daily Brief South Korea: GS Retail and more

By | Daily Briefs, South Korea

In today’s briefing:

  • GS Retail: Equity Spin Off of Parnas Hotel and Freshmeat Subsidiaries

GS Retail: Equity Spin Off of Parnas Hotel and Freshmeat Subsidiaries

By Douglas Kim

  • On 3 June, GS Retail (007070 KS) announced that it will spin off Parnas Hotel and Freshmeat subsidiaries to simplify its business structure and enhance shareholder value.
  • The company plans to create a new entity tentatively called Parnas Holdings which will include Parnas hotel and Freshmeat (a meat processing company). 
  • We have a positive view of GS Retail’s decision to conduct this equity spin off which simplifies the business structures and it could raise the valuation multiples of GS Retail. 

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Jun 04
0

Daily Brief South Korea: Webtoon Entertainment, SK Inc, Korea Gas, Kakaopay and more

By | Daily Briefs, South Korea

In today’s briefing:

  • Webtoon Entertainment IPO Preview
  • Impact on SK Inc Post Record Divorce Ruling for SK Group Chairman Chey Tae-Won
  • Korea Gas Corp: Drill Baby Drill
  • Kakao Pay Lockup Expiry – US$1bn Overhang from Alipay

Webtoon Entertainment IPO Preview

By Douglas Kim

  • Webtoon Entertainment is getting ready to complete its IPO on the NASDAQ exchange in 2H 2024. Webtoon Entertainment is a subsidiary of Naver Corp (035420 KS).
  • Webtoon is seeking to raise as much of US$500 million at a valuation of US$3 billion to US$4 billion.
  • Webtoon Entertainment is one of the largest Korean company related IPOs in 2024. 

Impact on SK Inc Post Record Divorce Ruling for SK Group Chairman Chey Tae-Won

By Douglas Kim

  • We discuss the outlook for the likely impact on SK Inc post record divorce ruling for the SK Group Chairman Chey Tae-Won and his estranged wife Roh So-Young. 
  • Last week, a South Korean appellate court ordered Chairman Chey to pay 1.38 trillion won to Roh. Chey is appealing this case and the Supreme Court’s ruling is still pending. 
  • It is in the best interest of SK Inc to raise the overall value of the company since the payment of the divorce is mostly based in cash.

Korea Gas Corp: Drill Baby Drill

By Douglas Kim

  • On 3 June, the shares of Korea Gas jumped limit up 30% to 38,700 won on huge volume (13.4 million), which was 37x higher than the previous day volume traded. 
  • This was driven by the announcement of the South Korean President Yoon giving the approval to conduct exploratory drilling for potentially vast oil and gas prospects near Pohang. 
  • The Korean government announced that there is a “very high” possibility the area contains as much as 14 billion barrels of oil and gas.

Kakao Pay Lockup Expiry – US$1bn Overhang from Alipay

By Sumeet Singh

  • Alipay will come out of its placement linked lockup for its remaining stake in Kakaopay (377300 KS) today.
  • Alipay (i.e. Alibaba Group (9988 HK)) had earlier sold some of its stake in Jun 2022 and Mar 2024. It still has over US$1bn worth of shares left to sell.
  • In this note, we talk about the deal dynamics and run the deal through our ECM framework.

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Jun 03
0

Daily Brief South Korea: Hanwha Ocean and more

By | Daily Briefs, South Korea

In today’s briefing:

  • Hanwha Ocean’s June 22 Release of a 1.68% Stake Grabs Local Market Attention

Hanwha Ocean’s June 22 Release of a 1.68% Stake Grabs Local Market Attention

By Sanghyun Park

  • The June 22 lock-up release, involving a 1.68% stake by Eximbank, is drawing attention, with concerns these shares might hit the market immediately, impacting prices significantly.
  • Eximbank is likely to sell its shares quickly post-lock-up, fueling speculation and potential market reactions, as their focus is on financial stability, not long-term holdings.
  • The 1.68% block deal could significantly impact Hanwha Ocean’s price, similar to last year’s 6.4% drop after a smaller block deal announcement by the Korean Financial Services Commission.

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Jun 01
0

Daily Brief South Korea: Hanwha Ocean , Korea Stock Exchange KOSPI 200 and more

By | Daily Briefs, South Korea

In today’s briefing:

  • End of Mandatory Lock-Up Periods for 45 Companies in Korea in June 2024
  • Hot Topic Among Local Institutions in Recent Days: Utilizing COE in Value-Up Investing

End of Mandatory Lock-Up Periods for 45 Companies in Korea in June 2024

By Douglas Kim

  • We discuss the end of the mandatory lock-up periods for 45 stocks in Korea in June 2024, among which 5 are in KOSPI and 40 are in KOSDAQ.
  • These 45 stocks on average could be subject to further selling pressures in June and could underperform relative to the market.
  • The top three market cap stocks including those of which at least 1% of outstanding shares could be sold in June include Hanwha Ocean, LS Materials, and Komico. 

Hot Topic Among Local Institutions in Recent Days: Utilizing COE in Value-Up Investing

By Sanghyun Park

  • Local institutional investors were disappointed Kiwoom omitted COE from their value-up disclosure. They seek clearer plans to address low-yield assets and reduce COE.
  • Rapidly rising interest in COE among local institutional investors is now shaping the screening criteria for the Korea Exchange’s value-up index, possibly using COE as a primary factor for inclusion.
  • Competition likely centers on selecting and weighting stocks, including those beyond KOSPI 200. Key metric: COE linked with ROE.

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