In today’s briefing:
- FSS Orders Doosan Group to Resubmit the Merger Plan – “Merger Plan Is Not Illegal, But Is It Fair?”
- Korea’s New IPO Bookbuilding & Lockup Results Disclosure Rule, Effective from August
- Clarifications Regarding the FSS’s Unexpected Revision Request for the Doosan Mergers
- Archimed Group Plans to Conduct a Second Tender Offer for Jeisys Medical
- Shinsung Tongsang: Tender Offer Fails and How to Take Away Customers From Uniqlo
- KOSPI Size Indices: Outperformance Slows on Momentum Stalls
- Hanwha Energy Acquires An Additional 5.2% of Hanwha Corp Through a Tender Offer
- Samsung Biologics (207940 KS): Strong 2Q24 Result; Annual Revenue to Surpass KRW4 Trillion
FSS Orders Doosan Group to Resubmit the Merger Plan – “Merger Plan Is Not Illegal, But Is It Fair?”
- On 24 July, the Financial Supervisory Service (FSS) ordered the Doosan Group to resubmit the merger plan.
- It is rare for FSS to reject companies’ merger reports but there has been an exception this time since this deal is egregiously negative to many minority investors.
- Doosan Group needs to resubmit a revised merger plan within next three months. Otherwise, the securities report involving the merger plan of the Doosan Group companies will be considered withdrawn.
Korea’s New IPO Bookbuilding & Lockup Results Disclosure Rule, Effective from August
- FSS’s leaked IPO guidelines include new, highly attention-grabbing additions: specifically, the disclosure of extra information from the bookbuilding and lockup results not mentioned in May.
- Institutions submitting prices outside the indicative band must be disclosed by KRX investor type. Additionally, average placed price information for lockup-pledged investors must be disclosed.
- FSS will distribute new IPO guidelines this week and apply them from next month. Major IPOs like K Bank must disclose more detailed bookbuilding and lockup results, impacting trading dynamics.
Clarifications Regarding the FSS’s Unexpected Revision Request for the Doosan Mergers
- The FSS requested Doosan Robotics to revise the prospectuses for both the Share Swap with Doosan Bobcat and Merger with Doosan Enerbility.
- Although the FSS’s wording seems aggressive, it does not request the cancellation. Authorities are displeased but lack political momentum to derail Doosan’s restructuring.
- The FSS asks Doosan to clarify merger synergies, warn of Robotics’ overvalued stock price and potential decline, and highlight the collaborative robot market’s growth risks.
Archimed Group Plans to Conduct a Second Tender Offer for Jeisys Medical
- In the first tender offer, 42.5 million shares of Jeisys Medical were purchased by Archimed Group. Post tender offer, Archimed now owns an 82.1% stake in Jeisys Medical.
- On 24 July, it was announced that Archimed will be conducting a second tender offer for Jeisys Medical. The second tender offer will be made for 17.2% of common shares.
- It could be difficult for Archimed to gain more than 95% stake at the end of the second tender offer. Rather, a third tender offer is likely in 2025.
Shinsung Tongsang: Tender Offer Fails and How to Take Away Customers From Uniqlo
- Shinsung Tongsang shares rose 10% to 2,510 won today after it was announced that the tender offer failed. Basically, the tender offer failed because the tender offer price was too low.
- Only 26% of the 31.664 million shares responded to the tender offer. Accordingly, the shareholding ratio of Chairman Yeom and his related parties increased from 77.98% to 83.88%.
- Top Ten has benefited from executing its strategy well (such as employing Lee Na-Young in advertisements to grab customers from Uniqlo). Overall, we remain positive on Shinsung Tongsang.
KOSPI Size Indices: Outperformance Slows on Momentum Stalls
- The review period for the September rebalance of the KOSPI Size Indices commenced on 1 June and will end on 31 August.
- We see 8 migrations from MidCap to LargeCap, 1 new addition to LargeCap, 11 stocks moving from SmallCap to MidCap and 3 new additions to MidCap.
- There are a few stocks that are expected to have passive flows from global and local index trackers over the next few months and that will add to the impact.
Hanwha Energy Acquires An Additional 5.2% of Hanwha Corp Through a Tender Offer
- After the market close on 24 July, Hanwha Corporation (000880 KS) announced that Hanwha Energy secured an additional 5.2% stake in Hanwha Corp through a tender offer.
- A total of 3.9 million shares have been applied for the tender offer as of 24 July (65% of targeted amount).
- We believe that the Hanwha Group is likely to grab more shares in Hanwha Corp through an additional tender offer sometime in the next 6-12 months.
Samsung Biologics (207940 KS): Strong 2Q24 Result; Annual Revenue to Surpass KRW4 Trillion
- In 2Q24, Samsung Biologics (207940 KS) reported 34% YoY revenue growth to KRW1,157B, driven by full utilization of Plants 1–3, ramp-up of Plant 4, milestone payment, and favorable Fx.
- The company expects annual revenue to exceed KRW4T mark this year, thereby setting a record for the Korean pharmaceutical and biotechnology sector.
- During 1H24, Samsung Biologics has secured order worth of KRW2.6T. Currently, the company is serving 16 out of the top 20 global pharmaceutical companies, up from 14 last year.
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