In today’s briefing:
- Clarifying KRX’s Confusing Heads-Up Designation System for KOSPI 200/KOSDAQ 150 Review
- LionHeart Studio Pre-IPO – The Negatives – Appears to Be Well past Its Peak, Founder Cashed In $700m
- MSCI Korea November SAIR: Potential Deletes Continue to Slide
- MSCI Korea: Potential Inclusions & Exclusions in November 2022 Highlighted by Locals
- Lock & Lock – Announces Dividends Worth 25% of Market Cap
- LionHeart Studio IPO – Peer Comparison – Youngest and Most Untested
Clarifying KRX’s Confusing Heads-Up Designation System for KOSPI 200/KOSDAQ 150 Review
- The KRX gives three heads-up types: WARNING (illegal trading), ADMINISTRATIVE (insolvency), & ATTENTION (inappropriate accounting). Those losing eligibility are ADMINISTRATIVE (KOSPI 200) and ADMINISTRATIVE + ATTENTION (KOSDAQ 150).
- Those designated as WARNING keep the eligibility for KOSPI 200/KOSDAQ 150 unless delisting is decided. We can find these heads-up designations on the KRX website, which is available in English.
- Osstem is currently an ATTENTION issue, so ineligible at this point. Knotus was designated as a WARNING issue in June and underwent a trade suspension. Nevertheless, it maintains eligibility.
LionHeart Studio Pre-IPO – The Negatives – Appears to Be Well past Its Peak, Founder Cashed In $700m
- 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 not-so-positive aspects of the deal.
MSCI Korea November SAIR: Potential Deletes Continue to Slide
- With a week to the start of the review period, we forecast one inclusion and a lot more deletions for the MSCI Korea Index at the November SAIR.
- The impact from passive fund trading is pretty large on the potential and close deletes while the impact is a lot more muted on the sole potential add.
- There will be pre-positioning on most of the names already and part of that shows up in sharply higher short interest on a few stocks.
MSCI Korea: Potential Inclusions & Exclusions in November 2022 Highlighted by Locals
- We discuss the potential inclusions and exclusions in the next MSCI Korea Index rebalance announcement (10 November) that are being highlighted by the locals.
- The potential inclusion candidates in the MSCI Korea Index emphasized by the locals in November 2022 include Hyundai Mipo Dockyard (010620 KS) and Hanwha Aerospace (012450 KS).
- Potential exclusion candidates include Seegene Inc (096530 KS), Meritz Financial Group (138040 KS), and Green Cross (006280 KS).
Lock & Lock – Announces Dividends Worth 25% of Market Cap
- After the market close today, Lock&Lock announced that it will pay out dividends per share of 1,653 won worth 83 billion won, representing 25% of the company’s market cap.
- The shareholders date of record that could receive the dividends is as of 30 September 2022.
- Although the high dividend payment should benefit the existing shareholders, we are not sure on the company’s ability to continue to maintain high dividend payout ratio.
LionHeart Studio IPO – Peer Comparison – Youngest and Most Untested
- 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.
- We spoke about the company’s past performance in our previous note. In this note, we’ll undertake a peer comparison.
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