In today’s briefing:
- Netmarble Debt Risk Victim: HYBE or NCsoft or Both?
- A Pair Trade Between LG Corp & LG Electronics
Netmarble Debt Risk Victim: HYBE or NCsoft or Both?
- Netmarble did a one-year rollover for the stock loan used for the SpinX acquisition. The maturity is again one year, and the principal amount is ₩1.5T.
- The HYBE stake is newly included as collateral at an estimated LTV ratio of 50% because the value of NCsoft’s stake further declined, and the LTV ratio was subsequently lowered.
- Applying the 140% loss cut ratio to HYBE and NCsoft will lead to a margin call when each stock declines 30% from the current price.
A Pair Trade Between LG Corp & LG Electronics
- In this insight, we discuss a pair trade between LG Corp (003550 KS) (go long) and LG Electronics (066570 KS) (go short).
- LG Electronics is likely to have continued weakening results, due to rising interest rates on the household disposable income in major countries.
- Our base case valuation analysis of LG Corp suggests an implied price of 93,905 won per share, representing 19% upside from current levels.
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