In today’s briefing:
- Details of Block Deal Pre-Disclosure Rule Disclosed: Cancellation Risk from 30% Price Correction
- Insiders Buying and Selling Prior To Mandatory Block Deal Pre-Announcement Requirement in Korea
- India Car Sales Slow: Can Hyundai Keep Its No. 2 Spot Amidst Fierce Competition?
- KRX New Deal Index Rebalance Preview: Lots of Change; Shift Up Listing Adds to It
- Sanil Electric IPO – Stars Aligned with High Growth and Strong Sentiment
- Shift Up IPO Trading – Strong Demand for Quality Asset but It Has Slipped Out of the Top Games
Details of Block Deal Pre-Disclosure Rule Disclosed: Cancellation Risk from 30% Price Correction
- Today’s press release unveils details on new flow trading events in Korea’s local market from the second half of this year, highlighting two key points.
- Firstly, the disclosure rule starts with block deals from August 23rd. Secondly, a 30% or greater stock price correction on disclosure day may cancel the transaction plan.
- This highlights the need to consider cancellation risks in pre-disclosure positions and design setups with consideration for the potential for reverse flows as stock prices approach 30% corrections.
Insiders Buying and Selling Prior To Mandatory Block Deal Pre-Announcement Requirement in Korea
- In this insight, we discuss recent, active insiders buying and selling their shares prior to the mandatory block deal pre-announcement requirement starting 24 July in Korea.
- The three companies that announced insiders selling (July) are down on average 3% YTD. However, the three companies that announced insiders buying (July) are up on average 74% YTD.
- LS Cable has been consistently increasing its ownership of LS Marine Solution, up from 46% stake as of 27 May 2024 to 56.14% as of 8 July 2024.
India Car Sales Slow: Can Hyundai Keep Its No. 2 Spot Amidst Fierce Competition?
- Hyundai Motor India (HMIL) saw a market share loss in India Passenger Vehicles sales reported for June 2024 and 1QFY2025, impacted by intensified competition in the SUV segment.
- Mahindra & Mahindra, and Toyota Kirloskar India gained market share in 1QFY2025 led by upgraded model launches in the SUV segment, traditionally a strong category for HMIL.
- HMIL’s declining market share, if not reversed soon, could challenge optimistic growth projections and valuation multiples for its upcoming IPO.
KRX New Deal Index Rebalance Preview: Lots of Change; Shift Up Listing Adds to It
- The review period for the September rebalance ends 31 July, the changes will be announced in the first week of September and implemented at the close of trading 12 September.
- There are changes expected for each of the Secondary Battery, Bio, Internet, Game and BBIG indices. The Shift Up (462870 KS) listing should result in more changes.
- The largest flows will be in Posco Future M, Ecopro BM, SK Biopharmaceuticals, Alteogen, Douzone Bizon, SKC Co and Kakao Corp.
Sanil Electric IPO – Stars Aligned with High Growth and Strong Sentiment
- Sanil Electric (062040 KS) is looking to raise up to US$165m in its Korean IPO.
- Sanil Electric is a specialized company that manufactures and sells reactors, transformers, railway vehicle parts, and switchboards. As an industrial transformer manufacturer, the company mainly manufactures power and distribution transformers.
- In our previous notes, we talked about the company’s historical performance. In this note, we undertake a quick peer comparison and share our thoughts on valuation.
Shift Up IPO Trading – Strong Demand for Quality Asset but It Has Slipped Out of the Top Games
- Shift Up (462870 KS) raised around US$320m in its South Korean IPO, after pricing at the top.
- Shift Up is a South Korean games developer, which as released three games so far for the global markets.
- We have looked at the company’s performance and valuation in our earlier notes. In this note, we talk about the trading dynamics.
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