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

Sunic System IPO Part 1 - IPO Prospectus Summary

Summary of LG Display's July 25 Investment Announcement

Equity Capital Markets

Yas Co Ltd/Korea / Equity Capital Markets

<a href="https://www.smartkarma.com/entities/24259" target="_blank" data-smartkarma-citation="entities:24259:1">Sunic System Ltd. (SUNICSZ KS)</a> didn't do well in its recent IPO bookbuilding. Surely, Sunic's poor performance isn't helping <a href="https://www.smartkarma.com/entities/25488" target="_blank" data-smartkarma-citation="entities:25488:1">YAS Co Ltd/Korea (255440 KS)</a> in terms of investment sentiments. But at the same time, we have to draw a line between these two. Of course, both are key equipment makers for LGD's OLED, but YAS is clearly an indispensable/irreplaceable one while Sunic is still fighting for its place against the powerful competitor named 'Canon Tokki'.Now, what is the market mainly discussing in regard to YAS IPO? The following two things are the major talking points at this point.<ul><li><a href="https://www.smartkarma.com/entities/7145" target="_blank" data-smartkarma-citation="entities:7145:1">LG Display Co Ltd (034220 KS)</a> is virtually the sole client (responsible for 98% of the total sales).</li><li>Vapor deposition equipment for large-sized OLED panels (the so-called W-OLED) is virtually the only product that matters.</li></ul>Being dependent on only one client is usually not a good thing. But we also have to note the fact that LGD is virtually the only one that is currently making 'commercially-acceptable' OLED TV panels as it has single-handedly created the W-OLED market. YAS has been partnering with LGD during this whole time. My point is that YAS being heavily dependent on LGD shouldn't really be viewed as a negative. Rather, this should be viewed as a huge value as the company is occupying an extremely advantageous position in this nascent OLED TV panel market. In fact, the OLED TV market finally seems to be taking off. I'm not only talking about Korea. If you are in Japan, you will know how hot these new pricy OLED TVs are now among Japanese consumers.Almost all of Japan's major TV makers are jumping on the OLED TV bandwagon. Of course, most of these Japanese TV makers are using LGD's W-OLED based large-sized OLED panels. In addition, some other panel makers also start jumping on the bandwagon. <a href="https://www.smartkarma.com/entities/391" target="_blank" data-smartkarma-citation="entities:391:1">Sharp Corp (6753 JP)</a> recently announced that it would focus on large-sized OLED panels. Does this mean more competition? Of course, there will be more competition. But LGD is saying that it is happy to see more and more panels makers enter the TV OLED panel market. LGD knows that it is more important to expand the market itself. The important point is the bigger the market becomes, the more business opportunities there are for component/equipment suppliers such as YAS.

Sunic System Ltd. (SUNICSZ KS) didn't do well in its recent IPO bookbuilding. Surely, Sunic's poor performance isn't helping YAS Co Ltd/Korea (255440 KS) in terms of investment sentiments. But at the same time, we have to draw a line between these two. Of course, both are key equipment makers for LGD's OLED, but YAS is clearly an indispensable/irreplaceable one while Sunic is still fighting for its place against the powerful competitor named 'Canon Tokki'.Now, what is the market mainly discussing in regard to YAS IPO? The following two things are the major talking points at this point.LG Display Co Ltd (034220 KS) is virtually the sole client (responsible for 98% of the total sales).Vapor deposition equipment for large-sized OLED panels (the so-called W-OLED) is virtually the only product that matters.Being dependent on only one client is usually not a good thing. But we also have to note the fact that LGD is virtually the only one that is currently making 'commercially-acceptable' OLED TV panels as it has single-handedly created the W-OLED market. YAS has been partnering with LGD during this whole time. My point is that YAS being heavily dependent on LGD shouldn't really be viewed as a negative. Rather, this should be viewed as a huge value as the company is occupying an extremely advantageous position in this nascent OLED TV panel market. In fact, the OLED TV market finally seems to be taking off. I'm not only talking about Korea. If you are in Japan, you will know how hot these new pricy OLED TVs are now among Japanese consumers.Almost all of Japan's major TV makers are jumping on the OLED TV bandwagon. Of course, most of these Japanese TV makers are using LGD's W-OLED based large-sized OLED panels. In addition, some other panel makers also start jumping on the bandwagon. Sharp Corp (6753 JP) recently announced that it would focus on large-sized OLED panels. Does this mean more competition? Of course, there will be more competition. But LGD is saying that it is happy to see more and more panels makers enter the TV OLED panel market. LGD knows that it is more important to expand the market itself. The important point is the bigger the market becomes, the more business opportunities there are for component/equipment suppliers such as YAS.

YAS IPO Part 2 - Key Considerations for Bookbuilding