In today’s briefing:
- Lion Heart Studio Pre-IPO – The Positives – Got One Hit
- KOSPI200 Index Rebalance Preview: Few Changes, Big Impact
- South Korean Banks Screener; KB Financial Is Our Core Pick
- K Car Lockup – Small Stock with a Big Lockup – Money Recouped, Any Price Is a Good Price to Sell
- SAMG Entertainment IPO Preview
Lion Heart Studio Pre-IPO – The Positives – Got One Hit
- Lionheart Studio (426630 KS), a game development studio based in South Korea, aims to raise around US$420m via its South Korean IPO.
- The company is majority owned by Kakao Games Corp (293490 KS), which after having recently hiked its stake, owned 54.94% of the company prior to listing.
- In this note, we will talk about the positive aspects of the deal.
KOSPI200 Index Rebalance Preview: Few Changes, Big Impact
- 90% of the way through the review period of the Kospi 200 Index December rebalance, we see two potential changes to the index. There is another potential inclusion failing liquidity.
- This rebalance is expected to have the lowest turnover as compared to any of the Kospi 200 Index rebalances over the last few years. Partly lower markets, partly no IPOs.
- That said, passive trackers are estimated to need to trade over 10 days of ADV on one of the potential adds and both potential deletes.
South Korean Banks Screener; KB Financial Is Our Core Pick
- Six of the seven South Korean banks screen favourably on valuation versus returns metrics to June 2022; we like KB Financial, whilst Woori Financial is a wait and see story
- KB has undemanding valuations, and one of the lowest PEG ratios; it delivers steady pre-provision returns, has sound core capital ratio of close to 13% and healthy credit quality ratios
- Woori Financial and potentially KakaoBank are two names to review post 3Q22 results, with Woori and KakaoBank having seen their 2Q22 cost of risk rise sharply; we seek positive catalysts
K Car Lockup – Small Stock with a Big Lockup – Money Recouped, Any Price Is a Good Price to Sell
- K Car completed its IPO in South Korea in Oct 21. It raised around US$300m after having downsized the offering and cut the asking price to below the IPO range.
- K Car is a used car marketplace and dealership operating in South Korea.
- In this note, we will talk about the recent updates and the upcoming lockup expiry.
SAMG Entertainment IPO Preview
- SAMG Entertainment is getting ready for an IPO on the KOSDAQ market. SAMG Entertainment is a leading children animation and digital contents focused entertainment company targeting young children.
- The IPO offering amount is from 37.8 billion won to 46.7 billion won. The book building for the institutional investors starts on 1 November.
- The company operates 42 Youtube channels including 15 domestic channels and 27 overseas channels. The total number of subscribers for these 42 Youtube channels exceeds 39 million.
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