In today’s briefing:
- SK Square: Updated NAV Analysis Amid Potential Sale of 11st to Alibaba
- A Proactive Long Short Basket Setup Targeting KOSPI Size Index’s Next Rebal
- LG Corp: Updated NAV Analysis & Outperformance Likely Driven by Value Investors
- KRX Plans to Introduce Float Market Cap & Extreme Price Increases to KOSPI 200 Screening
SK Square: Updated NAV Analysis Amid Potential Sale of 11st to Alibaba
- In this insight, we provide an updated valuation analysis of SK Square (402340 KS) amid a potential sale of 11st to Alibaba (ADR) (BABA US).
- Our NAV analysis of SK Square suggests NAV of 9.2 trillion won or NAV per share of 65,069 won, representing a 55% upside from current levels.
- If SK Square is able to sell its stake in 11st to Alibaba, the capital inflow from the sale could be used to raise dividends and complete more share buybacks.
A Proactive Long Short Basket Setup Targeting KOSPI Size Index’s Next Rebal
- We need to focus on the top 2 candidates among the Mid→Large candidates in the screening table mentioned above and the bottom 4 candidates among the Large→Mid candidates.
- Since they are relatively far from the borderline, there is a significant likelihood that their classification will change. So, flow trading timing on these candidates could be brought forward.
- Monitoring Doosan Robotics’s market cap potentially nearing ₩3T and keeping an eye on the listing date of Ecopro Materials, we should make changes to the Mid→Large candidates from early December.
LG Corp: Updated NAV Analysis & Outperformance Likely Driven by Value Investors
- Our NAV analysis of LG Corp suggests an implied market cap of 16.9 trillion won or 107,217 won per share which is 28.4% higher than current share price.
- We believe that LG Corp could announce another share buybacks representing 2-3% of outstanding shares in the next 6-12 months.
- Another reason that could result in LG Corp’s shares outperforming other major LG related shares is due to the value investors increasing capital allocation to higher dividend paying LG Corp.
KRX Plans to Introduce Float Market Cap & Extreme Price Increases to KOSPI 200 Screening
- In addition to full market cap and trading value, float-adjusted market cap will be added as a quantitative screening tool.
- Regarding extreme price increases, KRX plans to utilize the deviation between the average daily market capitalizations for two, three, and six months leading up to the screening base date.
- We should consider designing trading setups that target stocks with relatively low free-float rates and high price volatility in recent months.
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