In today’s briefing:
- Long Short Setup Candidate: Posco Holdings & Celltrion with TIGER Top 10 Rebalancing
- KOSDAQ150 Index Rebalance Preview: Potential Adds Outperform Deletes by 50% in 4 Months, EXIT!
- Kakao Announces a Tender Offer of SM Entertainment at 150,000 Won Per Share
- Kakao’s Tender Offer to SM Ent Shareholders: Key Details of Disclosure Filed This Morning
- Coupang: Revenue & Profits Let Coupang Down, Valuation Is Still at a Significant Premium to Peers
- Samsung FN REIT: The First Major REIT IPO for Samsung Group
Long Short Setup Candidate: Posco Holdings & Celltrion with TIGER Top 10 Rebalancing
- Celltrion and Posco Holdings will switch places. Although there is still time until the screening period, the market capitalization gap between them has already widened significantly.
- Posco Holdings will likely welcome a passive inflow of 0.44x ADTV, whereas Celltrion is expected to face outflows of around 0.69x ADTV.
- Ecopro BM entered the Top 20 (preliminary screening table) with a YTD stock price increase of 130%, becoming the first KOSDAQ-listed company to do so.
KOSDAQ150 Index Rebalance Preview: Potential Adds Outperform Deletes by 50% in 4 Months, EXIT!
- Two thirds of the way through the review period for the June rebalance, we see 9 potential changes to the KOSDAQ 150 Index (KOSDQ150 INDEX).
- One-Way turnover is estimated at 3.5%. Impact on the expected deletions is a lot higher than the impact on the expected inclusions and shorts are building up on the deletes.
- Since the start of the review period, the potential inclusions have outperformed the potential deletions by nearly 50% and the KOSDAQ 150 Index (KOSDQ150 INDEX) by over 20%.
Kakao Announces a Tender Offer of SM Entertainment at 150,000 Won Per Share
- On 7 March, Kakao Corp (035720 KS) announced a tender offer of up to 35% of outstanding shares of SM Entertainment at 150,000 won per share.
- We believe that this will be a successful tender offer and the share price of SM Entertainment is likely to surge to near 150,000 won per share.
- The minority shareholders of SM Entertainment are cheering on as its share price appreciation will be nearly 96% from end of 2022 to the tender offer price of 150,000 won.
Kakao’s Tender Offer to SM Ent Shareholders: Key Details of Disclosure Filed This Morning
- Kakao and Kakao Entertainment each plan to purchase 4.167 million shares at ₩150,000 per share, totaling 8.33 million. This is a 14.5% premium to the last close.
- The tendering ending date is March 26th, Sunday, so the actual ending date is March 24th. Since Korea adopts the T+2 settlement system, stocks must be purchased by the 22nd.
- The price of SM may decline towards below the tender price relatively quickly as a large number of retail investors will likely bet on the prolonged proxy battle.
Coupang: Revenue & Profits Let Coupang Down, Valuation Is Still at a Significant Premium to Peers
- South Korea’s largest e-commerce company, Coupang (CPNG US) sank around 20% leading up to 4Q22 earnings. It dropped another 9% soon after the earnings report to around $14.0 per ADS.
- Meanwhile, the valuation remains expensive compared to regional peers as Coupang is trading at an 80% premium to the second most expensive e-commerce name in the region.
- If the share price breaks the trend line here, we think shares could go on to fall below the last year’s bottom of $8.98 per ADS.
Samsung FN REIT: The First Major REIT IPO for Samsung Group
- Samsung FN REIT is getting ready to complete its IPO in April 2023, which will be the first Samsung Group related REIT that will become public.
- The core real estate properties of Samsung FN REIT will include the ‘Daechi Tower’ and ‘S1 Building’ which have excellent locations in Seoul.
- We expect a huge demand for this IPO of Samsung FN REIT and we have a Positive view of this IPO.
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