In today’s briefing:
- StubWorld: Ecopro’s Spike Makes No Sense
- Manyo Factory IPO Valuation Analysis
- Solus Advanced Materials: Key Catalysts to Continue Its Outperformance in 2023
StubWorld: Ecopro’s Spike Makes No Sense
- Ecopro (086520 KS) is up an eye-watering 590% in the past three months, primarily on Ecopro BM (247540 KS)‘s outperformance, together with sentiment towards soon-to-be-listed 52.8% held Ecopro Materials.
- Preceding my comments on Ecopro are the weekly setup/unwind tables for Asia-Pacific Holdcos.
- These relationships trade with a minimum liquidity of US$1mn, and a % market capitalisation >20%.
Manyo Factory IPO Valuation Analysis
- Our base case valuation of Manyo Factory is target price of 29,555 won per share, which represents 111% higher than the high end of the IPO price range.
- We estimate the company to generate sales of 147.7 billion won in 2023 (up 45.1% YoY) and its operating margins to improve from 24.1% in 2022 to 24.7% in 2023.
- We believe a 20% premium valuation multiple to the comps is appropriate due to its higher sales growth rate, higher operating margins, and higher ROE than the comps.
Solus Advanced Materials: Key Catalysts to Continue Its Outperformance in 2023
- We believe the following three catalysts will likely drive share price of Solus Advanced Materials’ continued outperformance relative to the market this year.
- They include the sale of Solus Biotech, improved control of its operating costs, and rapid increase in capacity for copper foil.
- The company has already secured strong order backlog from customers including LG Energy Solution, Tesla Motors, and SK On.
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