In today’s briefing:
- KT&G Announces a Share Buyback Worth 350 Billion Won
- A Pair Trade Between Nongshim Co & Nongshim Holdings (Youlchon Chem Is Breaking Out)
- Bionote Pre-IPO Peer Comp – Larger Segment Leads in Margins, but Trend Could Be Reversing
- Launching Single-Stock ETFs in Korea: Market Flow Impact Analysis
KT&G Announces a Share Buyback Worth 350 Billion Won
- On 3 November, KT&G announced that it will buy back 350 billion won worth of common shares (3.7 million shares).
- KT&G has mentioned that it could increase its DPS by at least 200 won in 2022. Assuming DPS of 5,000 won in 2022 would suggest a dividend yield of 5.3%.
- KT&G had another solid results in 3Q 2022 slightly beating the consensus sales and operating profit estimates.
A Pair Trade Between Nongshim Co & Nongshim Holdings (Youlchon Chem Is Breaking Out)
- In this insight, we discuss a pair trade of Nongshim Holdings (072710 KS) (go long) and Nongshim Co Ltd (004370 KS) (go short).
- We believe the price gap between these two stocks have widened too much in the past six months and this gap is likely to decrease again.
- Nongshim Holdings’ stake in Youlchon Chem has been rising rapidly in the past six months which should also act as a positive catalyst on Nongshim Holdings.
Bionote Pre-IPO Peer Comp – Larger Segment Leads in Margins, but Trend Could Be Reversing
- Bionote (377740 KS) is looking to raise approximately US$200m in its Korean IPO. The IPO would consist of both a primary and secondary selldown.
- Bionote is an integrated producer of diagnostics test products and biocontent products. Based on its unique recombinant antigen and antibody manufacturing technology, the firm researches and develops diagnostic reagent products.
- In this note, we look at peers and undertake a peer comparison.
Launching Single-Stock ETFs in Korea: Market Flow Impact Analysis
- The target market size that will be affected by the Default Option is estimated to be ₩92T. Up to 30% of them (₩30T) can flow into single-stock ETFs.
- Competing against TDFs, half of this ₩30T is a conservative estimate for single-stock ETFs. Then, up to 40% of the ₩15T becomes the flow size entering the local stock market.
- KODEX’s Samsung Electronics single-stock ETF may dominate the market. In this case, at least ₩3-4T can flow into Samsung Electronics Ord.
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