Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

Equity Bottom-Up

<ul>
<li>One of the emerging trends in the Korean equity markets in the past several weeks has been the shift out of high beta, high P/E stocks to deep value stocks.</li>
<li>In this insight, we will discuss about the top 10 stocks in Korea with highest net cash as percentage of market cap. </li>
<li>These 10 stocks are up on average 2.9% YTD, outperforming KOSPI which is down 5.9% in the same period.</li>
</ul>


One of the emerging trends in the Korean equity markets in the past several weeks has been the shift out of high beta, high P/E stocks to deep value stocks.
In this insight, we will discuss about the top 10 stocks in Korea with highest net cash as percentage of market cap. 
These 10 stocks are up on average 2.9% YTD, outperforming KOSPI which is down 5.9% in the same period.


Top 10 Stocks in Korea With Highest Net Cash as Percentage of Market Cap

Asia Pac IPO & Placement Research, China biotech, Aequitas Research

Ke Yan, CFA, FRM

Asia Pac IPO & Placement Research, China biotech

IPOs and Placements coverage across Asia Pacific

Aequitas Research

We cover all listing across the Asia Pacific along with follow-up placements. As of Dec 2020, our team had covered 539 IPOs with a hit rate of 73.5% and 685 placements with a hit rate of 66.8%.

We combine fundamental bottom-up views with our proprietary quantitative framework to provide a holistic coverage across new listings and placements. Our coverage includes pre-IPO notes before the deal is launched, follow-up analysis once the deal is live and post-listing trading analysis as well.

Quantitative Analysis

<ul>
<li>We analyzed the changes in short interest of KRX stocks as of Nov 15th which has an aggregated short interest worth USD4.1bn.</li>
<li>We tabulate league table for top short by value and short as multiple of ADT, as well as weekly increases &amp; decreases in short value, short as multiple of ADT.</li>
<li>We highlight short interest changes in Korzinc, Posco, Alteogen, Doosan Enerbility .</li>
</ul>


We analyzed the changes in short interest of KRX stocks as of Nov 15th which has an aggregated short interest worth USD4.1bn.
We tabulate league table for top short by value and short as multiple of ADT, as well as weekly increases &amp; decreases in short value, short as multiple of ADT.
We highlight short interest changes in Korzinc, Posco, Alteogen, Doosan Enerbility .


KRX Short Interest Weekly (Nov 15th): Korzinc, Posco, Alteogen, Doosan Enerbility

Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

<ul>
<li>
<strong><a href="https://www.smartkarma.com/entities/iljin-holdings-co-ltd" target="_blank" data-smartkarma-citation="entities:11265:1" rel="noopener">Iljin Holdings (015860 KS)</a></strong>'s implied stub is around levels just prior to the onset of Covid, despite strong subsequent deconsolidated earnings. 50.1%-held <strong><a href="https://www.smartkarma.com/entities/iljin-diamond-co-ltd" target="_blank" data-smartkarma-citation="entities:10185:1" rel="noopener">Iljin Diamond (081000 KS)</a></strong> is itself heavily discounted. </li>
<li>Preceding my comments on Iljin are the current setup/unwind tables for Asia-Pacific Holdcos. </li>
<li>These relationships trade with a minimum liquidity of US$1mn, and a % market capitalisation &gt;20%.</li>
</ul>



Iljin Holdings (015860 KS)'s implied stub is around levels just prior to the onset of Covid, despite strong subsequent deconsolidated earnings. 50.1%-held Iljin Diamond (081000 KS) is itself heavily discounted. 
Preceding my comments on Iljin are the current setup/unwind tables for Asia-Pacific Holdcos. 
These relationships trade with a minimum liquidity of US$1mn, and a % market capitalisation &gt;20%.


StubWorld: Iljin Holdings - Discounts On Discounts

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

Sanghyun Park

Korea / Special Sits, Pairs, Index Rebalancing

Clepsydra Capital

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

<ul>
<li>Iljin HySolus and Hyundai Heavy Industries will release the ESOP volumes, 0.82% and 3.93% of SO, on September 1st and 17th. They have risen 2.3% and 145.8% from the listings.</li>
<li>Despite the small profit, it seems more probable that the Iljin HySolus ESOP will attempt to dispose of its shares immediately after the release, potentially leading to another price correction.</li>
<li>On the other hand, I would seek a hedge for the HHI ESOP lockup release. I would look at KSOE as a hedge for my short position on HHI.</li>
</ul>


Iljin HySolus and Hyundai Heavy Industries will release the ESOP volumes, 0.82% and 3.93% of SO, on September 1st and 17th. They have risen 2.3% and 145.8% from the listings.
Despite the small profit, it seems more probable that the Iljin HySolus ESOP will attempt to dispose of its shares immediately after the release, potentially leading to another price correction.
On the other hand, I would seek a hedge for the HHI ESOP lockup release. I would look at KSOE as a hedge for my short position on HHI.


ESOP Lockup Releases: Iljin HySolus & Hyundai Heavy Industries

Equity Capital Markets

<p>Iljin Hysolus is getting ready to complete its IPO in Korea in August. Iljin Hysolus is a company specializing in eco-friendly hydrogen fuel storage solutions of the Iljin Group. The company is offering 10.89 million shares, of which 7.26 million is for new shares and 3.63 million is for the old shares. </p><p>The IPO price range is from 30,300 won to 37,300 won. The IPO base deal size is from $289 million to $356 million. According to the bankers' valuation, the expected market cap of the company is from 1.1 trillion won to 1.35 trillion won. The book building for the institutional investors starts on August 8th. Mirae Asset Securities and Samsung Securites are the lead bankers on this deal. </p><table class="table table-striped">
<colgroup>
<col>
<col>
</colgroup>
<tbody>
<tr>
<td style="width: 240pt;"><div><strong>Deal Specifics of the Iljin Hysolus IPO:</strong></div></td>
<td style="width: 238pt;"> </td>
</tr>
<tr>
<td>Lead underwriters of the IPO: </td>
<td style="width: 238pt;">Mirae Asset Securities, Samsung Securities</td>
</tr>
<tr>
<td><strong>Expected IPO price per share: </strong></td>
<td style="width: 238pt;"><strong>30,300 won (low)/37,300 won (high)</strong></td>
</tr>
<tr>
<td>Number of Shares for IPO:</td>
<td style="width: 238pt;">10.89m shares (7.26m new shares and 3.63m old shares)</td>
</tr>
<tr>
<td>IPO base deal size: </td>
<td style="width: 238pt;">US$289 mn (low);  US$356 mn (high)</td>
</tr>
<tr>
<td>Expected common shares outstanding, fully diluted (post-IPO):  </td>
<td style="width: 238pt;">36.31m shares</td>
</tr>
<tr>
<td><strong>Expected market cap after IPO:</strong></td>
<td style="width: 238pt;"><strong>1,100 billion won (low)/1,354 billion won (high)</strong></td>
</tr>
<tr>
<td>Book open: </td>
<td style="text-align: left; width: 238pt;">8-Aug-21</td>
</tr>
<tr>
<td>Book closed:</td>
<td style="text-align: left; width: 238pt;">9-Aug-21</td>
</tr>
<tr>
<td>Listing date: </td>
<td style="text-align: left; width: 238pt;">TBD</td>
</tr>
<tr>
<td>Source: Company data</td>
<td style="width: 238pt;"> </td>
</tr>
</tbody>
</table>

Iljin Hysolus is getting ready to complete its IPO in Korea in August. Iljin Hysolus is a company specializing in eco-friendly hydrogen fuel storage solutions of the Iljin Group. The company is offering 10.89 million shares, of which 7.26 million is for new shares and 3.63 million is for the old shares. The IPO price range is from 30,300 won to 37,300 won. The IPO base deal size is from $289 million to $356 million. According to the bankers' valuation, the expected market cap of the company is from 1.1 trillion won to 1.35 trillion won. The book building for the institutional investors starts on August 8th. Mirae Asset Securities and Samsung Securites are the lead bankers on this deal. 






Deal Specifics of the Iljin Hysolus IPO:
 


Lead underwriters of the IPO: 
Mirae Asset Securities, Samsung Securities


Expected IPO price per share: 
30,300 won (low)/37,300 won (high)


Number of Shares for IPO:
10.89m shares (7.26m new shares and 3.63m old shares)


IPO base deal size: 
US$289 mn (low);  US$356 mn (high)


Expected common shares outstanding, fully diluted (post-IPO):  
36.31m shares


Expected market cap after IPO:
1,100 billion won (low)/1,354 billion won (high)


Book open: 
8-Aug-21


Book closed:
9-Aug-21


Listing date: 
TBD


Source: Company data
 




South Korea

Iljin Diamond Co., Ltd. processes industrial diamonds used in cutting tool.

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