In today’s briefing:
- Samhyun IPO Valuation Analysis
- GOL – Ramifications of GOL’s Chapter 11 Filing
Samhyun IPO Valuation Analysis
- Our base case valuation of Samhyun is target price of 28,106 won, which is 25% higher than the mid-point of the IPO price range (22,500 won).
- Given the moderate upside, we have a Positive view of Samhyun IPO. Our base case valuation is based on P/E of 34.6x net profit of 8.6 billion won in 2023.
- Samhyun developed one of the world’s first CVVD (Continuously Variable Valve Duration) technology for automobile engines, which improves fuel efficiency by controlling the engine’s valve opening time.
GOL – Ramifications of GOL’s Chapter 11 Filing
- GOL recently filed for CH11 bankruptcy protection as it was due to run out of readily available cash in mid-February. We assess the ramifications.
- We highlight that GOL may need to reduce aircraft ownership/financing costs by a third to achieve PBT margins of 5%+; difficult in a strong aircraft leasing market.
- We see the risk GOL loses scale. However, long-term, an increasingly competitive GOL is good for its parent Abra Group, and sister company Avianca.
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