In today’s briefing:
- SK Shieldus IPO: Offering Details, Valuation Issues, & Index Fast Entry
- SK Shieldus IPO – The Positives – Decent Growth, Diversifying Its Revenue Base
- Ecopro BM Rights Offering Worth 500 Billion Won
- Daemyung Energy: Lowers IPO Price Range by 40%
- ONE Store IPO: Offering Details & Valuation Issues
- SK Shieldus IPO – The Negatives – No Shield for Its Margin, in Multi-Year Decline
SK Shieldus IPO: Offering Details, Valuation Issues, & Index Fast Entry
- S1 Corp is more giant in sales and ranks first in the local on-site security market, so it is tough to understand why SK Shieldus should receive a higher valuation.
- If the growth story is sexier, the story may be different. Still, many investors will have doubts about whether SK Shieldus’ growth story is convincingly explained in the IPO prospectus.
- Even the lower end of the indicative price band is likely to be downwardly corrected in the post-IPO price-finding. Hence, I do not recommend an aggressive approach to this IPO.
SK Shieldus IPO – The Positives – Decent Growth, Diversifying Its Revenue Base
- SK Shieldus (SKS) aims to raise around US$800m via a mix of issuing primary and secondary shares in its Korea IPO.
- SKS is the security subsidiary of SK Square. It provides security services across four main categories: information security/Cybersecurity, convergence security, physical security, and Safety & Care.
- In this note, we will talk about the postive aspects of the deal.
Ecopro BM Rights Offering Worth 500 Billion Won
- After the market close today, Ecopro BM announced a rights offering worth 500 billion won as well as a bonus issue of three new shares for one existing share.
- The tentative rights offering price is 310,300 won, which is 27% lower than current price of 423,800 won.
- Ecopro BM’s valuations remain stretched with its shares trading at high multiples and we believe there could be some further weakness in its share price in the coming weeks.
Daemyung Energy: Lowers IPO Price Range by 40%
- Daemyung Energy is trying again for an IPO in Korea, after about three months delay.
- It has lowered the IPO price range by nearly 40% from (25,0000 won -29,000 won) to (15,000 won – 18,000 won).
- Our base case valuation of Daemyung Energy is target price of 28,784 won per share, which is 60% upside from the high end of the IPO price range,
ONE Store IPO: Offering Details & Valuation Issues
- It will be difficult to reach a valuation consensus in the short term, suggesting the likelihood of substantially higher price volatility after listing. The IPO valuation itself is quite excessive.
- There are not enough stories to instill growth expectations in investors. Expectations for regulatory benefits are uncertain. The inclusion to K-New Deal and WISE Media Contents are worth a look.
- In conclusion, I do not recommend an aggressive approach to this IPO. Similar to SK Shieldus, we even need to consider a post-listing entry.
SK Shieldus IPO – The Negatives – No Shield for Its Margin, in Multi-Year Decline
- SK Shieldus (SKS) aims to raise around US$800m via a mix of issuing primary and secondary shares in its Korea IPO.
- SKS is the security subsidiary of SK Square. It provides security services across four main categories: information security/Cybersecurity, convergence security, physical security, and Safety & Care.
- In this note, we will talk about the not so positive aspects of the deal.
Before it’s here, it’s on Smartkarma
