Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

Douglas Research Advisory

Equity Capital Markets

<ul>
<li>The long awaited IPO of LG CNS is finally getting ready to be completed in February 2025. The IPO price range is 53,700 won to 61,900 won.</li>
<li>Expected market cap is between 5.2 trillion won to 6.0 trillion won. At the high end of the IPO price range, the total IPO offering would involve 1.2 trillion won.</li>
<li>The bankers used three companies including Samsung Sds, Hyundai Autoever, and NTT Data Corp as comps. This is expected to be one of the largest IPOs in Korea in 2025</li>
</ul>


The long awaited IPO of LG CNS is finally getting ready to be completed in February 2025. The IPO price range is 53,700 won to 61,900 won.
Expected market cap is between 5.2 trillion won to 6.0 trillion won. At the high end of the IPO price range, the total IPO offering would involve 1.2 trillion won.
The bankers used three companies including Samsung Sds, Hyundai Autoever, and NTT Data Corp as comps. This is expected to be one of the largest IPOs in Korea in 2025


Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

<ul>
<li>An <a href="https://bunshun.jp/denshiban/articles/b10138" target="_blank" rel="noopener">article</a> in Japanese weekly magazine <em>Bunshun </em>this morning sent shares in<a href="https://www.smartkarma.com/entities/sbi-sumishin-net-bank-ltd" target="_blank" data-smartkarma-citation="entities:34572:1" rel="noopener">SBI Sumishin Net Bank (7163 JP)</a> limit up +17% with a headline that NTT Docomo was interested to buy.</li>
<li>Without access to the article, I can't go deep, but the base concept is that NTT Docomo is "worried" about KDDI (which has a bank, as does Softbank Corp)</li>
<li>It is not clear how serious it is, SBI Sumishin is super-expensive, and buying a bank isn't the same as buying a company. Hmmm...</li>
</ul>


An article in Japanese weekly magazine Bunshun this morning sent shares inSBI Sumishin Net Bank (7163 JP) limit up +17% with a headline that NTT Docomo was interested to buy.
Without access to the article, I can't go deep, but the base concept is that NTT Docomo is "worried" about KDDI (which has a bank, as does Softbank Corp)
It is not clear how serious it is, SBI Sumishin is super-expensive, and buying a bank isn't the same as buying a company. Hmmm...


NTT (9432 JP) And SBI Sumishin NetBank (7163 JP)? Maybe. Maybe Not. Seven Bank A Better Idea

Technical Analyst, Vermilion Research

Joe Jasper

Technical Analyst

Technical and Quantitative Research

Vermilion Research

Vermilion’s objective is to deliver timely, actionable, and unique technical research to professional investors through the application of our various technical indicators.

Our research strategists seek to highlight securities which we believe are at major inflection points, based on our various technical and quantitative indicators, and offer asymmetric risk/return profiles. Our unique research methodology, centered on relative strength, enables our strategists to deliver superior investment recommendations.

Our process begins by organizing the universe of actively traded stocks into discrete sectors, then into industry groups. We then apply our technical and quantitative tools to identify developing price trends. Once attractive trends are identified within a selected sector or group, we screen for individual stocks which we believe offer the best risk/reward profile. We provide a historical perspective that often reveals, through our long-term charts, how price patterns often repeat themselves over time.

Technical Analysis

<ul>
<li>Our outlook remains bullish on global equities (MSCI ACWI) with ACWI-US and the S&amp;P 500 holding above their respective bases at $117 and 5650-5670.</li>
<li>We've discussed since mid-October how we would use any pre-election pullback in the MSCI ACWI or the SPX (U.S. remains our only country overweight) as an opportunity to add exposure</li>
<li>And we continue to see a high probability of significant upside going into year-end and the early part of 2025.</li>
</ul>


Our outlook remains bullish on global equities (MSCI ACWI) with ACWI-US and the S&amp;P 500 holding above their respective bases at $117 and 5650-5670.
We've discussed since mid-October how we would use any pre-election pullback in the MSCI ACWI or the SPX (U.S. remains our only country overweight) as an opportunity to add exposure
And we continue to see a high probability of significant upside going into year-end and the early part of 2025.


Buy the Pullback in MSCI ACWI and S&P 500; Buys in Uranium, Transports, Services, Technology, More

Pan-Asia Index Rebalances/ Events/ Delta One, Periscope Analytics

Brian Freitas

Pan-Asia Index Rebalances/ Events/ Delta One

Periscope Analytics

Periscope Analytics focuses on event-driven trades across Asia Pacific and provides comprehensive, timely and systematic coverage of index changes to major Asia Pacific indices in a structured manner.

The analysis includes forecasted inclusions and exclusions to all major Asian indices that have significant amount of tracking assets, including estimates of passive buy/sell flow on the stocks. The service also provides commentary and impact of market consultations, ground rule changes, and other events (IPOs, spin-offs, M&A) that could lead to index changes and passive flow.

Periscope Analytics works with multi-strategy hedge funds, proprietary trading firms, stat arb trading groups and long-only investors that invest and trade in the Asia Pacific region with the data being used to trade index rebalances, avoid pre-positioning and passive flow, and to time entry into and exit from stocks.

Event-Driven Trades Across Asia Pacific

Index Rebalance

<ul>
<li>The review period for the <a href="https://www.smartkarma.com/entities/nikkei-225" target="_blank" data-smartkarma-citation="entities:22909:1" rel="noopener">Nikkei 225 (NKY INDEX)</a> September rebalance ended yesterday. There could be three changes at the rebalance with sector balance in focus for the additions.</li>
<li>
<a href="https://www.smartkarma.com/entities/fast-retailing-co-ltd" target="_blank" data-smartkarma-citation="entities:751:1" rel="noopener">Fast Retailing (9983 JP)</a>'s capping in the index has been confirmed and its index weight will drop by around 0.9% resulting in big selling at the close on 30 September. </li>
<li>Passive trackers will need to buy between 3.5-35x ADV (2.4%-24% of real float) on the inclusions and sell between 3.7-42.5x ADV on the deletions.</li>
</ul>


The review period for the Nikkei 225 (NKY INDEX) September rebalance ended yesterday. There could be three changes at the rebalance with sector balance in focus for the additions.

Fast Retailing (9983 JP)'s capping in the index has been confirmed and its index weight will drop by around 0.9% resulting in big selling at the close on 30 September. 
Passive trackers will need to buy between 3.5-35x ADV (2.4%-24% of real float) on the inclusions and sell between 3.7-42.5x ADV on the deletions.


Nikkei 225 Index Rebalance Preview (Sep 2024): Review Period Done; Fast Retailing Capping Confirmed

Equity Bottom-Up

<ul>
<li>Telecom companies are traditionally "easy" to value. They have assets, debt, depreciation, earnings, cashflow. Lots of people like to use EV/EBITDA to measure.</li>
<li>In comparing Japan's telcos, I believe when <a href="https://www.smartkarma.com/entities/softbank-corp" target="_blank" data-smartkarma-citation="entities:27445:1" rel="noopener">Softbank Corp (9434 JP)</a> is in the mix, one has to use forward PERs. EV/EBITDA is too fraught with complications.</li>
<li>Softbank is currently at its most expensive multiple since listing on a Price to Forward Earnings basis, and relative to its major Peers. And KDDI has a big buyback now.</li>
</ul>


Telecom companies are traditionally "easy" to value. They have assets, debt, depreciation, earnings, cashflow. Lots of people like to use EV/EBITDA to measure.
In comparing Japan's telcos, I believe when Softbank Corp (9434 JP) is in the mix, one has to use forward PERs. EV/EBITDA is too fraught with complications.
Softbank is currently at its most expensive multiple since listing on a Price to Forward Earnings basis, and relative to its major Peers. And KDDI has a big buyback now.


Softbank Corp (9434) - Accounting for the Accounting Is Complicated Redux - So Be Bearish

Japan

NTT Data Corporation mainly provides large scale system integration and networking system services. System integration involves data transmission system design, sales, leasing, and services.  Network System Services include internet related and linked computer networks, and data provision and management of data. The Company is a subsidiary of Nippon Telegraph & Telephone Corporation.

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NTT Data Corp (9613 JP)

LG CNS IPO Preview

The long awaited IPO of LG CNS is finally getting ready to be completed in February 2025. The IPO price range is 53,700 won to 61,900 won.

Douglas Kim

NTT (9432 JP) And SBI Sumishin NetBank (7163 JP)? Maybe. Maybe Not. Seven Bank A Better Idea

A news weekly magazine Bunshun today had an article suggesting a bank executive thought NTT Docomo was on its way to buying SBI Sumishin Netbank....

Travis Lundy

Buy the Pullback in MSCI ACWI and S&P 500; Buys in Uranium, Transports, Services, Technology, More

Buy the Pullback in MSCI $ACWI and $SPX; Still bullish on global equities with $ACWI and the SPX holding above their respective bases at $117 and...

Vermilion Research

Nikkei 225 Index Rebalance Preview (Sep 2024): Review Period Done; Fast Retailing Capping Confirmed

Review period ended yesterday. Fast Retailing's capping will result in a 0.9% drop in index weight. There could be 3 index changes with sector...

Brian Freitas

Softbank Corp (9434) - Accounting for the Accounting Is Complicated Redux - So Be Bearish

Accounting for all the adjustments needed in EV (and EBITDA) in constructing a fair value for Softbank Corp means one should use forward PER. In...

Travis Lundy

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