In today’s briefing:
- Figuring Out the Right Entry Point to Go Outright Short on Korea Zinc
- Eoflow: European Court Dismisses Injunction Filed by Insulet
- Binggrae: Split into Two Companies and A Cancellation of 10% of Outstanding Shares
- MNC Solutions Pre-IPO Peer Comparison – Tiny Player Outgrowing Peers
- SK Biopharmaceuticals (326030 KS): Sequential Profit Decline in 3Q; Long-Term Growth Prospect Intact
Figuring Out the Right Entry Point to Go Outright Short on Korea Zinc
- The 5% voting gap between Choi and MBK leaves NPS and sideline minority players as key swing factors, with NPS’s stake potentially closing the gap for Choi.
- If NPS sold half its stake in the tenders, it’s down to 4%, not enough to close the gap, likely giving MBK the win and triggering a post-meeting price drop.
- The key to our outright short is NPS’s January 10 disclosure, with market chatter suggesting NPS has likely sold about half its holdings in the two tenders.
Eoflow: European Court Dismisses Injunction Filed by Insulet
- A European Court dismissed the injunction application filed by Insulet for overseas intellectual property rights infringement which would allow Eoflow to start selling its EoPatch products in Europe.
- Eoflow is trying to complete a rights offering in December 2024. The expected rights offering price is 4,235 won (27% lower than current price).
- Although results of the main lawsuit in the US remain undecided, with the UPC’s decision in favor of Eoflow, the legal sentiment on this case is in favor of Eoflow.
Binggrae: Split into Two Companies and A Cancellation of 10% of Outstanding Shares
- In the past week, Binggrae (005180 KS) announced that it plans to split into a holding company and an operating company in May 2025.
- As part of this company reorganization, Binggrae announced that it plans to cancel all of its treasury shares (1 million common shares, representing 10.2% of total common shares outstanding).
- We are positive on Binggrae due to cheap valuations (1.6x EV/EBITDA in 2025), steady growth in sales and profits, and 10% share cancellation.
MNC Solutions Pre-IPO Peer Comparison – Tiny Player Outgrowing Peers
- MNC Solution (MNC KS) is looking to raise US$200m in its upcoming Korea IPO.
- MNC Solutions (MNC) supplies high-precision control components for maritime and aviation weaponry, and travel devices for stabilization to the defense industry.
- In our previous note, we looked at the firm’s past performance. In this note, we undertake a peer comparison.
SK Biopharmaceuticals (326030 KS): Sequential Profit Decline in 3Q; Long-Term Growth Prospect Intact
- SK Biopharmaceuticals (326030 KS) announced 3Q24 result, with record high U.S. revenue and four consecutive quarters of profit. Slower U.S. growth and sequential decline in operating profit remained key negatives.
- Xcopri continued its rapid growth in the U.S. SKBP expects to achieve the higher end of 2024 U.S. sales guidance of $300–320M, indicating 4Q24 revenue of $91M, 9% QoQ.
- Through operating leverage, the company is on track to achieve first annual profit. We think the reaction to 3Q24 result is overdone, with limited downside expected.
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