In today’s briefing:
- Green Cross (006280 KS): Turns Profitable in Q2; All Eyes on the Maiden US Approval of Blood Product
- Addressing Misconceptions: Lotte Tour’s Short-Selling Entry Point
Green Cross (006280 KS): Turns Profitable in Q2; All Eyes on the Maiden US Approval of Blood Product
- Green Cross (006280 KS) reported decent Q2 performance, with revenue and operating profit increasing 2% and 81%, YoY, respectively. Vaccine and blood products business remained the major growth drivers.
- The company has re-submitted marketing application for GC5107, a blood derivative product to the FDA, which has accepted it with a target action date of January 13, 2024.
- If approved, the company aims to enter the U.S. market in 2H24. Supply shortage amid increasing demand makes the U.S. an attractive market for the company’s blood products.
Addressing Misconceptions: Lotte Tour’s Short-Selling Entry Point
- Lotte Tour has emerged as a prominent short-selling target in the Korean market, and there are efforts to use an ₩80B convertible bond (CB) to exploit its dilution/overhang risk.
- Linden Capital and LMR, upon obtaining the CB, promptly borrowed 4.6M shares from Donghwa for short selling. Thus, the CB conversion incentive remains largely unaffected by stock price changes.
- We should avoid synchronizing our entry point with CB conversion. Instead, we should target the likely rights issuance in the latter half of the year, anticipated in the market.
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