In today’s briefing:
- Analyzing Proactive Flow Trading Targeting SK Telecom’s Passive Movements
- Lotte Non-Life Insurance: Who Will Buy?
- Seoul Guarantee Insurance IPO: The Bull Case
- Seoul Guarantee Insurance Pre-IPO – The Positives – Broad Coverage Across Guarantee Insurance
- SD Biosensor (137310 KS): No Change of Fate Is Seen in Near-Term; Visibility to Improve in 2024 Only
Analyzing Proactive Flow Trading Targeting SK Telecom’s Passive Movements
- As of last Friday, SKT has utilized 86.2 billion won out of the allotted 300 billion won for share buybacks, resulting in the acquisition of 1,810,242 shares.
- If there are indications of the foreign room potentially falling to a risky level, SKT will likely proceed with an aggressive buyback, targeting 20-30% of the daily trading volume.
- Another particularly intriguing observation is the absence of local retail flow directed towards SKT. This indicates there is still potential momentum for an upward price movement at this juncture.
Lotte Non-Life Insurance: Who Will Buy?
- It was reported in numerous local media that the sale process of Lotte Non Life Insurance Co (000400 KS) could start in October 2023.
- There are four companies including Shinhan Financial (055550 KS), Hana Financial (086790 KS), Woori Financial Group (316140 KS), and Kyobo Life Insurance that may be interested in acquiring Lotte Non-Life Insurance.
- Minority shareholders are not likely to benefit from this potential huge management M&A premium of Lotte Non-Life Insurance.
Seoul Guarantee Insurance IPO: The Bull Case
- Seoul Guarantee Insurance (031210 KS), a leading guarantee provider in Korea, is pre-marketing an IPO to raise up to KRW362 billion (US$272 million).
- The IPO price range is KRW39,500-51,800 per share. The bookbuilding will run from 13 to 19 October, with pricing on 25 October. The shares will be listed in November.
- The bull case rests on a leading market share, solid premium growth, the highest industry margins, a high solvency ratio and a high dividend payout.
Seoul Guarantee Insurance Pre-IPO – The Positives – Broad Coverage Across Guarantee Insurance
- Seoul Guarantee Insurance (031210 KS) is looking to raise around US$270m in its Korean IPO.
- Seoul Guarantee Insurance (SGI) is a guarantee insurance firm operating predominantly in Korea.
- In this note, we will talk about the positive aspects of the deal.
SD Biosensor (137310 KS): No Change of Fate Is Seen in Near-Term; Visibility to Improve in 2024 Only
- SD Biosensor (137310 KS) is reporting significant decline in revenue due to the fading demand of COVID-19 tests. 2Q23 revenue declined 80% YoY and 11% QoQ to KRW162.6B.
- SD Biosensor reported operating loss of KRW97.8B and KRW76.4B in 1Q23 and 2Q23, respectively, leading to 1H23 operating loss of KRW174.2B, compared with an operating profit of KRW348B in 1H22.
- SD Biosensor is on track to launch next-generation ultra-small continuous blood glucose meter (CGMS) in Korea in 2024. Thus far, Korea has approved four CGMS, including one locally-developed.
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