In today’s briefing:
- Hyundai Motor India IPO – RHP Updates, Valuation Getting Tricky
- Digging into Today’s Potential T’way Air Tender Offer Saga
- T’Way Air: Increasing Possibility of an M&A Fight Between Yearimdang and Daemyung Sono Group
- Sung Woo IPO Valuation Analysis
Hyundai Motor India IPO – RHP Updates, Valuation Getting Tricky
- Hyundai Motor (005387 KS) is looking to raise around US$3.3bn via listing its India unit, Hyundai Motor India. HMI is a wholly owned subsidiary of the Hyundai Motor Group.
- HMI primarily manufactures and sells four-wheeler passenger vehicles and parts. Currently its vehicle portfolio includes 13 passenger vehicle models across sedans, hatchbacks, SUVs and battery EVs.
- In our previous notes, we looked at the company’s past performance. In this note, we will talk about its RHP updates and valuations.
Digging into Today’s Potential T’way Air Tender Offer Saga
- It’s unclear if this will turn into a tender offer battle like Korea Zinc, and we need to assess both sides’ financial strength carefully.
- Today’s reports suggest Sono has more financial flexibility than T’way Holdings, but we should be cautious. T’way Air might also consider buying back shares with borrowed funds.
- T’way Air has fewer institutional investors and more available float than Korea Zinc, suggesting significant price swings and an attractive trading setup, as seen in today’s volume spike.
T’Way Air: Increasing Possibility of an M&A Fight Between Yearimdang and Daemyung Sono Group
- In the past several days, there have been an increased speculation in the local media about a potential M&A fight for T’Way Air between Yearimdang Publishing and Daemyung Sono Group.
- The difference in ownership of T’Way Air by Daemyung Sono Group and Yearimdang Group is only 3.2%, which could lead to an intensified management rights dispute.
- According to local sources, Daemyung Sono Group has recently contacted several law firms to review plans to potentially conduct a tender offer on T’Way Air.
Sung Woo IPO Valuation Analysis
- Our base case valuation of Sung Woo is target price of 27,981 won per share, which is within the IPO price range of 25,000 won to 29,000 won per share.
- Given the lack of upside relative to the IPO price range, we have a Negative view of this IPO.
- Our base case valuation of 27,981 won per share is based on a P/E of 16.9x based on net profit of 24.9 billion won in FY23.
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