In today’s briefing:
- MSCI Korea May SAIR Screening Status: 2 Certain Adds, 3 Delete Candidates, & 1 Tricky
- SK Shieldus IPO Valuation Analysis
- SK Shieldus IPO: Valuation Insights
- Jasa Marga (JSMR): Traffic Is Back, on the Ground Sources.
MSCI Korea May SAIR Screening Status: 2 Certain Adds, 3 Delete Candidates, & 1 Tricky
- Although this is a semi-annual IR, the number of additions won’t be large. At this point, only Hyundai Heavy Industries (329180 KS) and KT Corp (030200 KS) are screened.
- None of the exclusion candidates are below the lower buffer at this point. So, those with the lowest market caps during the review period will be excluded from the Index.
- Based on the current share prices, the following three existing constituents have the smallest market cap: Green Cross (006280 KS), Alteogen Inc (196170 KS), and SK Chemicals Co (285130 KS).
SK Shieldus IPO Valuation Analysis
- Our valuation of SK Shieldus suggests target price of 44,892 won, which is 29% higher than the mid-point of the IPO price range of 34,900 won.
- We would subscribe to this IPO as the company has strong business moat, especially for the physical security business and its convergence security/cybersecurity businesses are enjoying excellent customer demand.
- Although we have a positive view of SK Shieldus, there will be some investors that stay away from this IPO due to its high debt levels and rising interest rates.
SK Shieldus IPO: Valuation Insights
- SK Shieldus (ABFHIZ KS) is a leading South Korean security provider. It is pre-marketing a KRX IPO to raise up to US$0.9 billion.
- In SK Shieldus IPO Initiation: Track and Shield, we noted that SK shieldus has attractive fundamentals with healthy growth and margins. The leverage is manageable due to good cash generation.
- In this note, we look at the syndicate’s valuation methodology and present our valuation methodology. Our valuation analysis suggests that the IPO price range is attractive.
Jasa Marga (JSMR): Traffic Is Back, on the Ground Sources.
- Indonesia’s reopening has happened for some time but Jasa Marga (Persero) (JSMR IJ) share price has not moved much.
- On-The-Ground sources told that the traffic is back, especially in Jakarta where Jasa Marga has the most toll roads.
- Pre-COVID it was trading at 2-3x PBR and now it’s only 1.35x PBR, premium to Bluebird but has a bigger market capitalization that makes JSMR more investable.
Before it’s here, it’s on Smartkarma
