Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

Douglas Research Advisory

Event-Driven

Korea Zinc Co., Ltd. specializes in non-ferrous metal smelting industry.  The Company manufactures zinc ingots, electrolytic gold, silver, lead, sulfuric acid, and copper.  Korea Zinc provides its products to domestic and overseas markets.

<ul>
<li>Ham Young-Il (Deputy Director at FSS) stated that there is a high possibility of an unfair trading practice with regards to Korea Zinc's yesterday announcement of a massive capital raise.</li>
<li>If the FSS puts a break on the capital raise, then there is less likely probability of a fierce proxy war between the two sides. </li>
<li>All in all, we expect continued high volatility on Korea Zinc's share price and we remain negative on its share price in the next several weeks. </li>
</ul>


Ham Young-Il (Deputy Director at FSS) stated that there is a high possibility of an unfair trading practice with regards to Korea Zinc's yesterday announcement of a massive capital raise.
If the FSS puts a break on the capital raise, then there is less likely probability of a fierce proxy war between the two sides. 
All in all, we expect continued high volatility on Korea Zinc's share price and we remain negative on its share price in the next several weeks. 


FSS Could Put a Break on the Massive Capital Raise by Korea Zinc This Year

HD Hyundai Marine Solution  / Event-Driven

HD Hyundai Marine Solution Co., Ltd. operates as a engineering service company. The Company provides maintenance and other related services. HD Hyundai Marine Solution also offers ecological friendly solution development, smart solution utilizing information and communications technology, and power plant services.

<ul>
<li>We discuss the end of the mandatory lock-up periods for 56 stocks in Korea in November 2024, among which six are in KOSPI and 50 are in KOSDAQ.</li>
<li>These 56 stocks on average could be subject to further selling pressures in November and could underperform relative to the market. </li>
<li>The top three market cap stocks including those of which at least 1% of outstanding shares could be sold in November are HD Hyundai Marine Solution, Asicland, and Daemyung Energy. </li>
</ul>


We discuss the end of the mandatory lock-up periods for 56 stocks in Korea in November 2024, among which six are in KOSPI and 50 are in KOSDAQ.
These 56 stocks on average could be subject to further selling pressures in November and could underperform relative to the market. 
The top three market cap stocks including those of which at least 1% of outstanding shares could be sold in November are HD Hyundai Marine Solution, Asicland, and Daemyung Energy. 


End of Mandatory Lock-Up Periods for 56 Companies in Korea in November 2024

<ul>
<li>Korea Zinc announced a massive rights offering worth 2.5 trillion won. The expected rights offering price is 670,000 won (57% lower than the closing price on 29 October).</li>
<li>The company plans to use 2.3 trillion won in debt repayment and 135 billion won for working capital as well as help to alleviate the risk of delisting. </li>
<li>This rights offering symbolizes a display of "Korea Discount" at its worst and likely to put continued negative pressure on Korea Zinc's share price in the coming weeks. </li>
</ul>


Korea Zinc announced a massive rights offering worth 2.5 trillion won. The expected rights offering price is 670,000 won (57% lower than the closing price on 29 October).
The company plans to use 2.3 trillion won in debt repayment and 135 billion won for working capital as well as help to alleviate the risk of delisting. 
This rights offering symbolizes a display of "Korea Discount" at its worst and likely to put continued negative pressure on Korea Zinc's share price in the coming weeks. 


Korea Zinc - Rights Offering of 2.5 Trillion Won Is a Display Of "Korea Discount" At Its Worst

Equity Bottom-Up

Vitzrocell Co., Ltd. manufactures and exports industrial and consumer speciality batteries, such as lithium and manganis batteris.

<ul>
<li>One of the key investment highlights of Vitzrocell is the solid growth in sales and profits driven by its lithium-based primary batteries to major industries such as military and energy. </li>
<li>Vitzrocell has generated excellent sales and net profit growth. The company's sales and net income increased at a CAGR of 55.6% and 45.5% respectively from 2021 to 2023.</li>
<li>Vitrocell is trading at EV/EBITDA of 4.9x and P/E of 10x in 2025 which are 19% and 25% lower than its historical valuation multiples from 2021 to 2024.</li>
</ul>


One of the key investment highlights of Vitzrocell is the solid growth in sales and profits driven by its lithium-based primary batteries to major industries such as military and energy. 
Vitzrocell has generated excellent sales and net profit growth. The company's sales and net income increased at a CAGR of 55.6% and 45.5% respectively from 2021 to 2023.
Vitrocell is trading at EV/EBITDA of 4.9x and P/E of 10x in 2025 which are 19% and 25% lower than its historical valuation multiples from 2021 to 2024.


Vitzrocell: Attractive Valuations and Potential Inclusion in KOSDAQ 150 Index

Jusung Engineering Co., Ltd. manufactures semiconductor, flat panel display, and solar cell production equipment.  The Company produces space divided CVD-ALD thin film machines for semiconductor manufacture; equipment for producing liquid crystal display panels; and equipment for manufacturing crystalline silicon and thin film silicon tandem solar cells.

<ul>
<li>Jusung Engineering announced that it has cancelled its equity spin-off and physical division split plans mainly due to a much larger than expected share purchase requests. </li>
<li>Jusung Engineering will now buyback 50 billion won worth of shares instead, representing 3.3% of its current market cap. </li>
<li>Now that the company has cancelled the equity spin-off and physical division split, this is likely to have a positive impact on Jusung Engineering.</li>
</ul>


Jusung Engineering announced that it has cancelled its equity spin-off and physical division split plans mainly due to a much larger than expected share purchase requests. 
Jusung Engineering will now buyback 50 billion won worth of shares instead, representing 3.3% of its current market cap. 
Now that the company has cancelled the equity spin-off and physical division split, this is likely to have a positive impact on Jusung Engineering.


Jusung Engineering: Cancels Spin-Off and Announces Share Buyback Worth 50 Billion Won