Daily Brief South Korea: Lunit , Sanil Electric, SK Bioscience and more

In today’s briefing:

End of Mandatory Lock-Up Periods for 55 Companies in Korea in July 2024
Sanil Electric IPO: The Bull Case
SK Bioscience (302440 KS): Acquiring Majority Stake in IDT Biologika- A Step Toward ‘Globalization’

End of Mandatory Lock-Up Periods for 55 Companies in Korea in July 2024

We discuss the end of the mandatory lock-up periods for 55 stocks in Korea in July 2024, among which 6 are in KOSPI and 49 are in KOSDAQ.
These 55 stocks on average could be subject to further selling pressures in July and could underperform relative to the market.
The top three market cap stocks including those of which at least 1% of outstanding shares could be sold in July include Lunit, Mezzion Pharma, and DS Dansuk.

Sanil Electric (062040 KS), a Korean industrial transformer manufacturer, is seeking to raise up to US$165 million.
The IPO is a pure primary raise of 7.6 million shares at an IPO price range of KRW24,000-30,000. Book building will run from 9 to 15 July.
The bull case rests on US-led rapid revenue growth, high barriers to entry, good revenue visibility, improving margins, top-quartile margin performance and modest leverage.

SK Bioscience (302440 KS) secures 60% stake in IDT Biologika, a global CDMO company with state-of-the-art manufacturing facilities in Germany, for KRW339B ($244M). The valuation seems reasonable.
The transaction paves the way for SK bioscience to strengthen its global presence, notably in Europe and the U.S., and to diversify its business by expanding into bulk drug substances.
Based on the existing CDMO contracts, IDT Biologika’s outlook remains positive. SK bioscience aims to more than double its revenue and stabilize operating profit margins at 20%+.

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