In today’s briefing:
- Lotte Chemical Offering: Schedule Clarifications & Trading Considerations
- How Should We Play with Kakao Pay’s MSCI Inclusion Event?
- Align Partners’ Corporate Activism on Korean Banks: A Media Presentation and Q&A Session
- TEMC: Reduces IPO Price & Bookbuilding Results
Lotte Chemical Offering: Schedule Clarifications & Trading Considerations
- The subscription starts on January 19, so the pricing is January 16, three trading days earlier. The shorting restriction runs until January 16, which means the 16th is inclusive.
- There was no arb spread opening during the last four trading days of the subscription rights trade period. Nonetheless, this event had some impact on Lotte Chemical’s futures trading.
- Considering this, the trade that can be considered at this point would be unhedged shorting. We target potential inflow to adjust the second issuing price downwardly and post-listing overhangs.
How Should We Play with Kakao Pay’s MSCI Inclusion Event?
- Kakao Pay is the only possibility to be included in the February MSCI IR. It comfortably beats both the full market cap and float market cap hurdles.
- It can be assumed that the full-fledged emergence of local institutional flows targeting MSCI inclusion contributed to some extent to Kakao Pay’s outperformance early this year.
- More extreme reverse flow trading could emerge. In other words, there is a possibility that the share price will turn into a sell-off even before the MSCI announcement.
Align Partners’ Corporate Activism on Korean Banks: A Media Presentation and Q&A Session
- Align Partners Capital Management (APCM) held a media presentation and a Q&A session with both the investors community and the media today.
- Align Partners’ corporate activism of the Korean banks has been one of the biggest stories in the Korean stock market this year.
- The Korean banks are likely to outperform the market in 1H23. Nonetheless, if there are further signs of housing price declines in Korea, this outperformance may not continue in 2H23.
TEMC: Reduces IPO Price & Bookbuilding Results
- TEMC announced its IPO price of 28,000 won, which was lower than the IPO price range of 32,000 won to 38,000 won.
- There were 560 institutions that participated in the IPO bookbuilding survey and the demand ratio was 31.3 to 1.
- Our base valuation is 38,363 won per share, representing a 37% upside to the IPO price of 28,000 won. The reduced IPO price has made the IPO more attractive.
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