Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Nearly 25 years of experience in analyzing hundreds of companies, especially in Asia. Deep expertise in the following sectors:
- Technology (E-commerce, SaaS, Internet)
- Consumer 
- Special Situations/Deep Value Plays
- Holdcos/Stubs
- Asian Unicorns/Private Companies

Korea/Asia, Events, IPOs

Continuing Outperformance & Closing the Gaps of Preferred Vs Common Shares in Korea

SK Inc - SoTP Valuation Analysis and 3 Key Catalysts (SK E&S, SK Pharmteco, & SK Siltron)

SK Inc: Significant Gains of Nearly 1.1 Trillion Won in Londian Wason Holdings

SK Innovation - 5.5 Trillion Won in Higher Value in Past 3 Weeks

Korea M&A Spotlight: SK Innovation to Sell SK Lubricants & Expand Rechargeable Battery Business

SK Innovation Split Overview & Implications

Battle Lines Drawn As BABA Builds Out First/Last-Mile Capacity; But Who Will Fund 75+ Bn CNY CapEx?

Event-Driven

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<a href="https://www.smartkarma.com/entities/sk-innovation-co-ltd" target="_blank" data-smartkarma-citation="entities:1268:1" rel="noopener">SK Innovation (096770 KS)</a> confirmed today that it plans to <a href="https://www.reuters.com/business/energy/sk-innovation-expects-h2-refining-margins-gradually-improve-demand-rebounds-2021-08-03/" target="_blank" rel="noopener">split-off</a> its battery unit business. The company mentioned that it will separate out its battery and oil &amp; gas production businesses into individual units by October. These new companies would continue to be owned by SK Innovation. SK Innovation first mentioned in July that it is considering on splitting off its battery unit business and today's announcement is a confirmation of this initial  consideration.
On September 16th, there will be an EGM to finally approve the formation of two new corporations including SK Battery Co (tentative name) and SK E&amp;P Corp (tentative name) which are expected to be officially launched on October 1st. 
In our view, it appears that the market has mostly discounted the potential negative impact of the split-off the battery business which now has been confirmed. SK Innovation first hinted that it may split-off the battery business on July 1st. Since then, SK Innovation's share price has declined 17.6%. SK Innovation's market cap has declined by 4.8 trillion won in this period. It is fair to say that the market has overreacted to this potential split-off.
Now that the split-off has actually been announced, this could lead to reduced selling of SK Innovation as many investors see that the split-off could add long-term value for SK Battery and SK Innovation. 
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SK Innovation (096770 KS) confirmed today that it plans to split-off its battery unit business. The company mentioned that it will separate out its battery and oil &amp; gas production businesses into individual units by October. These new companies would continue to be owned by SK Innovation. SK Innovation first mentioned in July that it is considering on splitting off its battery unit business and today's announcement is a confirmation of this initial  consideration.
On September 16th, there will be an EGM to finally approve the formation of two new corporations including SK Battery Co (tentative name) and SK E&amp;P Corp (tentative name) which are expected to be officially launched on October 1st. 
In our view, it appears that the market has mostly discounted the potential negative impact of the split-off the battery business which now has been confirmed. SK Innovation first hinted that it may split-off the battery business on July 1st. Since then, SK Innovation's share price has declined 17.6%. SK Innovation's market cap has declined by 4.8 trillion won in this period. It is fair to say that the market has overreacted to this potential split-off.
Now that the split-off has actually been announced, this could lead to reduced selling of SK Innovation as many investors see that the split-off could add long-term value for SK Battery and SK Innovation. 


SK Innovation: To Split SK Battery & SK E&P Business Units