In today’s briefing:
- K Bank IPO Bookbuilding: To Price Lower than Low IPO Price Range or Even Potential Cancellation
- Connecting the Dots Between Kum Yang’s Rights Offer & Global Index November Review
- Korea Zinc’s 2.4% Treasury Shares – Devil Is In the Legal Loophole
- CK Solution IPO Preview
K Bank IPO Bookbuilding: To Price Lower than Low IPO Price Range or Even Potential Cancellation
- Chosun Business Daily mentioned that K Bank IPO book building results among institutional investors have been very poor so far.
- As a result, the bankers and K Bank are currently considering on potentially reducing the IPO price to about 8,500 won or even cancelling the IPO altogether.
- Our base case valuation of K Bank is target price of 9,151 won per share. Even if the IPO is priced at 8,500 won, we would pass on this IPO.
Connecting the Dots Between Kum Yang’s Rights Offer & Global Index November Review
- Personally, the key trading angle is Kum Yang’s exit, which could slash entry costs for the capital raise, with the review announcement dropping as stock rights trading starts.
- Along with the usual hit to the pricing from index trackers unloading for rebalancing, there’s a strong chance their sell orders might also include stock rights.
- From an entry cost perspective, this November review could trigger a sharp, short-term drop in costs due to stock rights dumping, similar to what we saw with CJ CGV.
Korea Zinc’s 2.4% Treasury Shares – Devil Is In the Legal Loophole
- Devil is in the legal loophole. Issuing treasury shares to employees as bonuses is an exception that is not bound by the condition of ‘6 months after treasury shares acquisition.
- It would be nearly impossible for Korea Zinc to sell 2.4% of its treasury stock to an external friendly force and transform it into a friendly stake by February 2025.
- Although MBK/Young Poong Alliance has the advantage right now in this M&A battle for Korea Zinc, it is by no means over.
CK Solution IPO Preview
- CK Solution is getting ready to complete its IPO in KOSPI in November. Its IPO price range is from 15,700 won to 18,000 won.
- The IPO offering amount ranges from 49.4 billion won to 56.6 billion won. The book building for the institutional investors lasts from 4 to 8 November.
- CK Solution specializes in dry room system for the rechargeable batteries manufacturing process. Rechargeable battery sector accounted for 92.9% of total sales in 1H 2024 followed by semiconductor (3.1%).
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