Daily Brief South Korea: Eoflow , LS Materials, Curexo Inc, SK Hynix and more

• The closing date of the Eoflow (294090 KS)/Medtronic Plc (MDT US) transaction has been extended from 25 October 2023 to 3 January 2024. All other terms are unchanged.
• The bull view is that despite the preliminary injunction and share suspension, Medtronic’s move underscores its commitment to the transaction on current terms.
• The bear view is that the extension was Medtronic’s best move as it retains option value should Insulet’s lawsuit start floundering in court and KRX reinstate trading in Eoflow shares. 

• On 25 October, Eoflow announced that the M&A of Eoflow by Medtronic has been postponed. 
• The closing date for Eoflow’s stock transfer agreement with Medtronic has now been changed to 3 January 2024. 
• Although we believe Medtronic will continue to pursue Eoflow, the M&A tender offer price could be lowered to about 26,000 won, which would be nearly 20% higher than current price.

• We must acknowledge that the acquisition contract has not been withdrawn, signifying that we have averted the worst-case scenario.
• During the shareholders’ meeting on November 15th, it is crucial for us to pay attention to whether personnel from Medtronic are included in the list of new board candidates.
• If that’s the case, we can infer that Medtronic intends to go through with this deal, regardless of the litigation issues in the United States.

• LS Materials is getting ready to complete its IPO in Korea in late November. The IPO price range is from 4,400 won to 5,500 won per share. 
• According to the bankers’ valuation, the expected market cap after the IPO is from 298 billion won to 372 billion won. 
• LS Materials is one of the largest players globally in the large-size ultracapacitors, which stabilize power supply and are used to replace and supplement primary batteries and lithium-ion batteries.

• Curexo Inc (060280 KS) has been showing sales growth for five consecutive quarters since Q1 2022, mainly driven by the medical robot business, which accounts for nearly 50% of sales.
• In 2Q23, Curexo’s medical business sold 29 units and recorded highest quarterly sales of KRW9,744M (up 173% YoY and 15% QoQ), driven by strong demand in domestic and Indian market.
• Curexo raised 2023 sales guidance to KRW74 billion from KRW70 billion. Medical business is expected to sell 100 units and register revenue of KRW35 billion in 2023.

Lucror Analytics Morning Views comprise our fundamental credit analysis, opinions and trade recommendations on high yield issuers in the region, based on key company-specific developments in the past 24 hours. Our Morning Views include a section with a brief market commentary, key market indicators and a macroeconomic and corporate event calendar.

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