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

Krafton Bookbuilding: A Quick Recap of Last Day Craziness

Krafton IPO: Bookbuilding Results & Index Fast Entry

Krafton Bookbuilding: Subscription/Lockup Data & Resulting Implications

Krafton's Index Play: KOSPI 200, MSCI Std, FTSE AW, FnGuide Top 10, & KRX BBIG

Krafton's China Risk for Tencent Relationship Amid DiDi Chuxing Scandal: Key Talking Points

Krafton Listing Date Confirmed as August 10th: Rebalancing Trading Timeline

Clepsydra Capital

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

Equity Capital Markets

<p>Krafton will close the bookbuilding today, which started on the 14th. Two days later, it will finalize and announce the offering price on the 29th.</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":"Schedule"}'>Krafton IPO schedule</td></tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Book close"}'><strong>Book close</strong></td>
<td data-sheets-value='{"1":3,"3":44404}' data-sheets-numberformat='{"1":5,"2":"yyyy. m. d","3":1}'><strong>2021. 7. 27</strong></td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Allotment"}'><strong>Allotment</strong></td>
<td data-sheets-value='{"1":3,"3":44406}' data-sheets-numberformat='{"1":5,"2":"yyyy. m. d","3":1}'><strong>2021. 7. 29</strong></td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Subscription"}'>Subscription</td>
<td data-sheets-value='{"1":3,"3":44410}' data-sheets-numberformat='{"1":5,"2":"yyyy. m. d","3":1}'>2021. 8. 2</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Payment"}'>Payment</td>
<td data-sheets-value='{"1":3,"3":44413}' data-sheets-numberformat='{"1":5,"2":"yyyy. m. d","3":1}'>2021. 8. 5</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Listing"}'>Listing</td>
<td data-sheets-value='{"1":3,"3":44418}' data-sheets-numberformat='{"1":5,"2":"yyyy. m. d","3":1}'>2021. 8. 10</td>
</tr>
<tr><td colspan="2" data-sheets-value='{"1":2,"2":"Source: DART"}'>Source: DART</td></tr>
</tbody>
</table><h2>Online press conference on the 26th</h2><p>Krafton held an online press conference yesterday, where the CFO extensively commented on the bookbuilding atmosphere.</p><section class="figure"><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/220/637/original/1.jpeg?1627355163" class="editor-image img-responsive" data-smartkarma-image-id="220637"></figure></section><div class="content-caption">(Courtesy News 1)</div><p>First of all, the CFO said that the response was particularly enthusiastic from overseas institutional investors. He said that they include a number of long-term funds.</p><p><strong>This is a direct quote from Bae Dong-geun, CFO of Krafton. He said,</strong></p><blockquote><p>It is difficult to give a clear answer because the institutional bookbuilding has not been completed yet, but at this point (one day left until the bookbuilding deadline), I can confidently say that it was a success.</p></blockquote><p><strong>He further revealed that overseas institutions participated more aggressively in the subscription than local institutional investors, and this somewhat surprising trend was clearly seen in the actual pricing.</strong></p><h2>What the bankers are saying</h2><p>Then, below are the actual results of bookbuilding being leaked by the bankers.</p><p><strong>The bankers are also saying that the institutional mood confirmed during the two weeks of bookbuilding is obviously hotter than initially expected.</strong></p><div class="content-highlight"><p><strong>For example, on the first day of bookbuilding alone, overseas institutional investors applied for a quantity that was 20 to 30 times more than the allocated quantity at a price higher than the upper end of the indicative price band (₩498,000)</strong></p></div><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"}'>Indicative price band</td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"Low, adjusted"}'>Lower end</td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"High, adjusted"}'>Upper end</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Price"}'>Price</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":400000}'>₩400,000</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":498000}'><strong>₩498,000</strong></td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Base deal size"}'>Base deal size</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":3461.692}' data-sheets-formula="=R[-1]C[0]*Terms!R8C3/1000000000">₩3,461.7B</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":4309.80654}' data-sheets-formula="=R[-1]C[0]*Terms!R8C3/1000000000"><strong>₩4,309.8B</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":1903.9306000000001}' data-sheets-formula="=R[-1]C[0]*R4C6">₩1,903.9B</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":2370.3935969999998}' data-sheets-formula="=R[-1]C[0]*R4C6"><strong>₩2,370.4B</strong></td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Implied market cap"}'>Implied market cap</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":19559.228}' data-sheets-formula="=R[-3]C[0]*48898070/1000000000">₩19,559.2B</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":24351.23886}' data-sheets-formula="=R[-3]C[0]*48898070/1000000000"><strong>₩24,351.2B</strong></td>
</tr>
<tr><td colspan="3">Source: DART</td></tr>
</tbody>
</table><p>Of course, this news also reached the ears of domestic institutions.</p><p><strong>The pricing for local institutional investors started on the 20th. And it is being said (or leaked by the bankers) that local institutions are placing orders using all available funds as their competitive sentiment must have been triggered by the aggressive participation of foreign institutions.</strong></p>

Krafton will close the bookbuilding today, which started on the 14th. Two days later, it will finalize and announce the offering price on the 29th.





Krafton IPO schedule

Book close
2021. 7. 27


Allotment
2021. 7. 29


Subscription
2021. 8. 2


Payment
2021. 8. 5


Listing
2021. 8. 10

Source: DART

Online press conference on the 26thKrafton held an online press conference yesterday, where the CFO extensively commented on the bookbuilding atmosphere.(Courtesy News 1)First of all, the CFO said that the response was particularly enthusiastic from overseas institutional investors. He said that they include a number of long-term funds.This is a direct quote from Bae Dong-geun, CFO of Krafton. He said,It is difficult to give a clear answer because the institutional bookbuilding has not been completed yet, but at this point (one day left until the bookbuilding deadline), I can confidently say that it was a success.He further revealed that overseas institutions participated more aggressively in the subscription than local institutional investors, and this somewhat surprising trend was clearly seen in the actual pricing.What the bankers are sayingThen, below are the actual results of bookbuilding being leaked by the bankers.The bankers are also saying that the institutional mood confirmed during the two weeks of bookbuilding is obviously hotter than initially expected.For example, on the first day of bookbuilding alone, overseas institutional investors applied for a quantity that was 20 to 30 times more than the allocated quantity at a price higher than the upper end of the indicative price band (₩498,000)







Indicative price band
Lower end
Upper end


Price
₩400,000
₩498,000


Base deal size
₩3,461.7B
₩4,309.8B


- Institutional allotment
₩1,903.9B
₩2,370.4B


Implied market cap
₩19,559.2B
₩24,351.2B

Source: DART

Of course, this news also reached the ears of domestic institutions.The pricing for local institutional investors started on the 20th. And it is being said (or leaked by the bankers) that local institutions are placing orders using all available funds as their competitive sentiment must have been triggered by the aggressive participation of foreign institutions.

Krafton Bookbuilding Last Day: Institutional Mood So Far