Korea / Special Sits, Pairs, Index Rebalancing, Clepsydra Capital

Sanghyun Park

I investigate special situations, pairs, and index rebalancing trades in Korea.

Korea / Special Sits, Pairs, Index Rebalancing

Four Local Metaverse ETFs in Korea: Operation Details & Inclusion Candidates

Korea Sector Indexes with December Rebalancing: Passive Impact by Date

KODEX Battery ETF Rebalancing Cycle Changed to Quarterly: Preview for March Rebalancing

Big Hit Entertainment's WeVerse Is No Match for Naver and Kakao

Clepsydra Capital

Investigate special situations, pairs, and index rebalancing trades in Korea.

Equity Capital Markets

<h2>Offering terms</h2><p>Dear U, a fan messenger company invested by SM Entertainment and JPY Entertainment, will be listed on the KOSDAQ market in November. The total offering is 3.3 million, representing 17.92% of the current number of shares. The institutional allotment is 60% of the offering.</p><table class="table table-striped">
<colgroup>
<col width="100">
<col width="100">
</colgroup>
<tbody>
<tr><td colspan="2" rowspan="1" data-sheets-value='{"1":2,"2":"Offering size"}'>Offering size</td></tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Ticker"}'>Ticker</td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"DEAR U Co.,Ltd."}' data-sheets-numberformat='{"1":2,"2":"[$₩-412]#,##0","3":1}' data-sheets-formula="=R[0]C[-3]">DEAR U Co., Ltd.</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Bourse"}'>Bourse</td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"KOSPI"}'>KOSPI</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Pre-IPO SO"}'>Pre-IPO SO</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":18412769}' data-sheets-numberformat='{"1":2,"2":"#,##0","3":1}' data-sheets-formula="=R[1]C[-3]">18,412,769</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Offering"}'><strong>Offering</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":3300000}' data-sheets-numberformat='{"1":2,"2":"#,##0","3":1}' data-sheets-formula="=R[3]C[-3]"><strong>3,300,000</strong></td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"- % of SO"}'><strong>- % of SO</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0.1792234508563052}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}' data-sheets-formula="=Terms!R[5]C[-3]"><strong>17.92%</strong></td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"- Institutional allotment"}'>- Institutional allotment</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0.6}' data-sheets-numberformat='{"1":3,"2":"0%","3":1}' data-sheets-formula="=Terms!R[5]C[-3]">60%</td>
</tr>
<tr><td colspan="2" rowspan="1" data-sheets-value='{"1":2,"2":"Source: DART"}'>Source: DART</td></tr>
</tbody>
</table><p>It is a 100% primary offering, so the capital increase rate is 17.92%, and the share dilution is 15.20%.</p><table class="table table-striped">
<colgroup>
<col width="100">
<col width="100">
</colgroup>
<tbody>
<tr><td colspan="2" data-sheets-value='{"1":2,"2":"Split"}'>Split</td></tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Primary %"}'><strong>Primary %</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":1}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}' data-sheets-formula="=Terms!R[3]C[-3]"><strong>100.00%</strong></td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Post-IPO shares outstanding"}'>Post-IPO shares outstanding</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":21712769}' data-sheets-numberformat='{"1":2,"2":"#,##0","3":1}' data-sheets-formula="=R[-9]C[0]+Terms!R[2]C[-3]">21,712,769</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Capital increase rate"}'><strong>Capital increase rate</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0.1792234508563052}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}' data-sheets-formula="=Terms!R[4]C[-3]"><strong>17.92%</strong></td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Dilution"}'>Dilution</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0.15198430011390993}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}' data-sheets-formula="=Terms!R[4]C[-3]">15.20%</td>
</tr>
<tr><td colspan="2" data-sheets-value='{"1":2,"2":"Source: DART"}'>Source: DART</td></tr>
</tbody>
</table><p>The indicative price band is ₩18,000~₩24,000. So, based on this band, the IPO valuation is between ₩390B and ₩520B. The company plans to raise ₩79.2B based on the upper end of the price band.</p><table class="table table-striped">
<colgroup>
<col width="100">
<col width="100">
<col width="100">
</colgroup>
<tbody>
<tr>
<td data-sheets-value='{"1":2,"2":"Pricing"}'>Pricing</td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"Low"}'>Low</td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"High"}'>High</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Price"}'><strong>Price</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":18000}' data-sheets-numberformat='{"1":2,"2":"[$₩-412]#,##0","3":1}'><strong>₩18,000</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":24000}' data-sheets-numberformat='{"1":2,"2":"[$₩-412]#,##0","3":1}'><strong>₩24,000</strong></td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Base deal size"}'><strong>Base deal size</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":59.4}' data-sheets-numberformat='{"1":2,"2":"₩#,##0.0B"}' data-sheets-formula="=R[-1]C[0]*Terms!R8C2/1000000000"><strong>₩59.4B</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":79.2}' data-sheets-numberformat='{"1":2,"2":"₩#,##0.0B"}' data-sheets-formula="=R[-1]C[0]*Terms!R8C2/1000000000"><strong>₩79.2B</strong></td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":" - Institutional allotment"}'>- Institutional allotment</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":35.64}' data-sheets-numberformat='{"1":2,"2":"₩#,##0.0B"}' data-sheets-formula="=R[-1]C[0]*Terms!R7C5">₩35.6B</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":47.52}' data-sheets-numberformat='{"1":2,"2":"₩#,##0.0B"}' data-sheets-formula="=R[-1]C[0]*Terms!R7C5">₩47.5B</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Implied market cap"}'><strong>Implied market cap</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":390.829842}' data-sheets-numberformat='{"1":2,"2":"₩#,##0.0B"}' data-sheets-formula="=R[-3]C[0]*Terms!R13C5/1000000000"><strong>₩390.8B</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":521.106456}' data-sheets-numberformat='{"1":2,"2":"₩#,##0.0B"}' data-sheets-formula="=R[-3]C[0]*Terms!R13C5/1000000000"><strong>₩521.1B</strong></td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":" - Discount"}'>- Discount</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0.3414312893311869}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}' data-sheets-formula="=(27332-R[-4]C[0])/27332">34.14%</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0.12190838577491585}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}' data-sheets-formula="=(27332-R[-4]C[0])/27332">12.19%</td>
</tr>
<tr><td colspan="3" rowspan="1" data-sheets-value='{"1":2,"2":"Source: DART"}'>Source: DART</td></tr>
</tbody>
</table><p>The company selected four valuation peers: JYP Entertainment, Cube Entertainment, Kakao, and YG Plus.</p><p>They came up with an IPO valuation of ₩600B by multiplying a 1H21-based annualized net profit of ₩11.24B by the average PER of the four valuation peers (53.46x). The price per share arrived at ₩27,332, and they applied a discount rate of 12.19~34.14% to derive the price band.</p><table class="table table-striped">
<colgroup>
<col width="100">
<col width="100">
<col width="100">
<col width="100">
<col width="100">
</colgroup>
<tbody>
<tr>
<td data-sheets-value='{"1":2,"2":"PER valuation"}'>PER valuation</td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"JYP Entertainment Corp"}' data-sheets-formula='=googlefinance(R[1]C[0], "name")'>JYP Entertainment Corp</td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"Cube Entertainment Inc"}' data-sheets-formula='=googlefinance(R[1]C[0], "name")'>Cube Entertainment Inc</td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"Kakao Corp"}' data-sheets-formula='=googlefinance(R[1]C[0], "name")'>Kakao Corp</td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"YG Plus Inc"}' data-sheets-formula='=googlefinance(R[1]C[0], "name")'>YG Plus Inc</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Ticker"}'>Ticker</td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"035900"}' data-sheets-numberformat='{"1":2,"2":"#,##0","3":1}' data-sheets-formula='="035900"'>035900</td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"182360"}' data-sheets-numberformat='{"1":2,"2":"#,##0","3":1}' data-sheets-formula='="182360"'>182360</td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"035720"}' data-sheets-numberformat='{"1":2,"2":"#,##0","3":1}' data-sheets-formula='="035720"'>035720</td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"037270"}' data-sheets-numberformat='{"1":2,"2":"#,##0","3":1}' data-sheets-formula='="037270"'>037270</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Annualized net profit based on 1H21"}'>Annualized net profit based on 1H21</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":33.736403}' data-sheets-numberformat='{"1":2,"2":"₩#,##0.00B","3":1}'>₩33.74B</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":3.145899}' data-sheets-numberformat='{"1":2,"2":"₩#,##0.00B","3":1}'>₩3.15B</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":1072.392165}' data-sheets-numberformat='{"1":2,"2":"₩#,##0.00B","3":1}'>₩1,072.39B</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":7.080872}' data-sheets-numberformat='{"1":2,"2":"₩#,##0.00B","3":1}'>₩7.08B</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Shares outstanding"}'>Shares outstanding</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":35497492}' data-sheets-numberformat='{"1":2,"2":"#,##0","3":1}'>35,497,492</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":13804687}' data-sheets-numberformat='{"1":2,"2":"#,##0","3":1}'>13,804,687</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":444992180}' data-sheets-numberformat='{"1":2,"2":"#,##0","3":1}'>444,992,180</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":63429410}' data-sheets-numberformat='{"1":2,"2":"#,##0","3":1}'>63,429,410</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"EPS"}'>EPS</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":950.388354196967}' data-sheets-numberformat='{"1":4,"2":"[$₩]#,##0","3":1}' data-sheets-formula="=R[-2]C[0]*1000000000/R[-1]C[0]">₩950</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":227.88629687873402}' data-sheets-numberformat='{"1":4,"2":"[$₩]#,##0","3":1}' data-sheets-formula="=R[-2]C[0]*1000000000/R[-1]C[0]">₩228</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":2409.9123831794077}' data-sheets-numberformat='{"1":4,"2":"[$₩]#,##0","3":1}' data-sheets-formula="=R[-2]C[0]*1000000000/R[-1]C[0]">₩2,410</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":111.63389348884058}' data-sheets-numberformat='{"1":4,"2":"[$₩]#,##0","3":1}' data-sheets-formula="=R[-2]C[0]*1000000000/R[-1]C[0]">₩112</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Reference share price"}'>Reference share price</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":40050}' data-sheets-numberformat='{"1":4,"2":"[$₩]#,##0","3":1}'>₩40,050</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":13116}' data-sheets-numberformat='{"1":4,"2":"[$₩]#,##0","3":1}'>₩13,116</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":122500}' data-sheets-numberformat='{"1":4,"2":"[$₩]#,##0","3":1}'>₩122,500</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":7070}' data-sheets-numberformat='{"1":4,"2":"[$₩]#,##0","3":1}'>₩7,070</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"PER"}'><strong>PER</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":42.140667889223394}' data-sheets-numberformat='{"1":2,"2":"#,##0.00x"}' data-sheets-formula="=R[-1]C[0]/R[-2]C[0]"><strong>42.14x</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":57.55501835627908}' data-sheets-numberformat='{"1":2,"2":"#,##0.00x"}' data-sheets-formula="=R[-1]C[0]/R[-2]C[0]"><strong>57.56x</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":50.831723532780565}' data-sheets-numberformat='{"1":2,"2":"#,##0.00x"}' data-sheets-formula="=R[-1]C[0]/R[-2]C[0]"><strong>50.83x</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":63.332020222933}' data-sheets-numberformat='{"1":2,"2":"#,##0.00x"}' data-sheets-formula="=R[-1]C[0]/R[-2]C[0]"><strong>63.33x</strong></td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Average PER"}'><strong>Average PER</strong></td>
<td colspan="4" rowspan="1" style="text-align: center;" data-sheets-value='{"1":3,"3":53.46485750030401}' data-sheets-numberformat='{"1":2,"2":"#,##0.00x"}' data-sheets-formula="=average(R[-1]C[0]:R[-1]C[3])"><strong>53.46x</strong></td>
</tr>
<tr><td colspan="5" rowspan="1" data-sheets-value='{"1":2,"2":"Source: DART"}'>Source: DART</td></tr>
</tbody>
</table><table class="table table-striped">
<colgroup>
<col width="100">
<col width="100">
</colgroup>
<tbody>
<tr><td colspan="2" rowspan="1" data-sheets-value='{"1":2,"2":"PER valuation"}'>PER valuation</td></tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Annualized net profit based on 1H21"}'><strong>Annualized net profit based on 1H21</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":11.244}' data-sheets-numberformat='{"1":2,"2":"₩#,##0.00B","3":1}'><strong>₩11.24B</strong></td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Shares outstanding"}'>Shares outstanding</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":21994260}' data-sheets-numberformat='{"1":2,"2":"#,##0","3":1}'>21,994,260</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"EPS"}'>EPS</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":511}' data-sheets-numberformat='{"1":4,"2":"[$₩]#,##0","3":1}'>₩511</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"PER"}'>PER</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":53.46485750030401}' data-sheets-numberformat='{"1":2,"2":"#,##0.00x"}' data-sheets-formula="=R[-7]C[0]">53.46x</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Price per share"}'><strong>Price per share</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":27332}' data-sheets-numberformat='{"1":4,"2":"[$₩]#,##0","3":1}'><strong>₩27,332</strong></td>
</tr>
<tr><td colspan="2" rowspan="1" data-sheets-value='{"1":2,"2":"Source: DART"}'>Source: DART</td></tr>
</tbody>
</table><p>The book opens on October 25, and the allotment will be unveiled on October 28. The subscription follows on November 1, followed by the payment on November 4. The listing date will be announced later.</p><table class="table table-striped">
<colgroup>
<col width="100">
<col width="100">
</colgroup>
<tbody>
<tr><td colspan="2" rowspan="1" data-sheets-value='{"1":2,"2":"Schedule"}'>Schedule</td></tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Book open"}'><strong>Book open</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":44494}' data-sheets-numberformat='{"1":5,"2":"yyyy\". \"mm\". \"dd","3":1}'><strong>2021. 10. 25</strong></td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Book close"}'><strong>Book close</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":44495}' data-sheets-numberformat='{"1":5,"2":"yyyy\". \"mm\". \"dd","3":1}'><strong>2021. 10. 26</strong></td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Allotment"}'>Allotment</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":44497}' data-sheets-numberformat='{"1":5,"2":"yyyy\". \"mm\". \"dd","3":1}'>2021. 10. 28</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Subscription"}'>Subscription</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":44501}' data-sheets-numberformat='{"1":5,"2":"yyyy\". \"mm\". \"dd","3":1}'>2021. 11. 01</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Payment"}'><strong>Payment</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":44504}' data-sheets-numberformat='{"1":5,"2":"yyyy\". \"mm\". \"dd","3":1}'><strong>2021. 11. 04</strong></td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Listing"}'>Listing</td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"TBA"}'>TBA</td>
</tr>
<tr><td colspan="2" rowspan="1" data-sheets-value='{"1":2,"2":"Source: DART"}'>Source: DART</td></tr>
</tbody>
</table>

Offering termsDear U, a fan messenger company invested by SM Entertainment and JPY Entertainment, will be listed on the KOSDAQ market in November. The total offering is 3.3 million, representing 17.92% of the current number of shares. The institutional allotment is 60% of the offering.





Offering size

Ticker
DEAR U Co., Ltd.


Bourse
KOSPI


Pre-IPO SO
18,412,769


Offering
3,300,000


- % of SO
17.92%


- Institutional allotment
60%

Source: DART

It is a 100% primary offering, so the capital increase rate is 17.92%, and the share dilution is 15.20%.





Split

Primary %
100.00%


Post-IPO shares outstanding
21,712,769


Capital increase rate
17.92%


Dilution
15.20%

Source: DART

The indicative price band is ₩18,000~₩24,000. So, based on this band, the IPO valuation is between ₩390B and ₩520B. The company plans to raise ₩79.2B based on the upper end of the price band.







Pricing
Low
High


Price
₩18,000
₩24,000


Base deal size
₩59.4B
₩79.2B


- Institutional allotment
₩35.6B
₩47.5B


Implied market cap
₩390.8B
₩521.1B


- Discount
34.14%
12.19%

Source: DART

The company selected four valuation peers: JYP Entertainment, Cube Entertainment, Kakao, and YG Plus.They came up with an IPO valuation of ₩600B by multiplying a 1H21-based annualized net profit of ₩11.24B by the average PER of the four valuation peers (53.46x). The price per share arrived at ₩27,332, and they applied a discount rate of 12.19~34.14% to derive the price band.









PER valuation
JYP Entertainment Corp
Cube Entertainment Inc
Kakao Corp
YG Plus Inc


Ticker
035900
182360
035720
037270


Annualized net profit based on 1H21
₩33.74B
₩3.15B
₩1,072.39B
₩7.08B


Shares outstanding
35,497,492
13,804,687
444,992,180
63,429,410


EPS
₩950
₩228
₩2,410
₩112


Reference share price
₩40,050
₩13,116
₩122,500
₩7,070


PER
42.14x
57.56x
50.83x
63.33x


Average PER
53.46x

Source: DART







PER valuation

Annualized net profit based on 1H21
₩11.24B


Shares outstanding
21,994,260


EPS
₩511


PER
53.46x


Price per share
₩27,332

Source: DART

The book opens on October 25, and the allotment will be unveiled on October 28. The subscription follows on November 1, followed by the payment on November 4. The listing date will be announced later.





Schedule

Book open
2021. 10. 25


Book close
2021. 10. 26


Allotment
2021. 10. 28


Subscription
2021. 11. 01


Payment
2021. 11. 04


Listing
TBA

Source: DART



Dear U Offering Terms, Feat. Put-Back Options at 90% of the Offering Price

DearU

Dear U Offering Terms, Feat. Put-Back Options at 90% of the Offering Price