IPOs and Catalysts/Events, Global Equity Research Ltd

Arun George

IPOs and Catalysts/Events

Uncompromised, Independent, Conflict-Free Research

Global Equity Research Ltd

Global Equity Research was started in 2017 by a group of experienced research professionals. It was founded on a passionate belief in the importance and the need for uncompromised, independent, conflict-free research. We aim to provide differentiated and actionable primary and bottom up fundamental research.

Equity Capital Markets

<ul>
<li>
<a href="https://www.smartkarma.com/entities/wcp-co-ltd" target="_blank" data-smartkarma-citation="entities:36076:1" rel="noopener">WCP (WCP KS)</a>, a lithium-ion batteries separator company, has released an updated prospectus for its IPO of KRW900 billion (US$692 million).  </li>
<li>The updated prospectus discloses 1H22 results and a marginal increase in the syndicate’s intrinsic value. Revenue growth and margin improved in 1Q22. </li>
<li>The IPO price range of KRW80,000-100,000 remains unchanged. While the fundamentals are sound, the IPO price range remains unattractive.</li>
</ul>



WCP (WCP KS), a lithium-ion batteries separator company, has released an updated prospectus for its IPO of KRW900 billion (US$692 million).  
The updated prospectus discloses 1H22 results and a marginal increase in the syndicate’s intrinsic value. Revenue growth and margin improved in 1Q22. 
The IPO price range of KRW80,000-100,000 remains unchanged. While the fundamentals are sound, the IPO price range remains unattractive.


WCP IPO: Updated Prospectus, Solid 1H22, Unchanged and Unattractive Price Range

Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

Event-Driven

<ul>
<li>On 12 August, POSCO Holdings announced that it will cancel treasury shares worth 3% of outstanding shares involving 2.6 million shares worth 672 billion won.</li>
<li>The cancellation of treasury shares is a shareholder friendly policy that will improve the company's ROE and P/E ratios. The treasury shares cancellation will be completed on 22 August 2022. </li>
<li>The combination of treasury shares cancellation and high dividend yield is likely to lead to higher probability of POSCO Holdings outperforming KOSPI on a total returns basis this year.</li>
</ul>


On 12 August, POSCO Holdings announced that it will cancel treasury shares worth 3% of outstanding shares involving 2.6 million shares worth 672 billion won.
The cancellation of treasury shares is a shareholder friendly policy that will improve the company's ROE and P/E ratios. The treasury shares cancellation will be completed on 22 August 2022. 
The combination of treasury shares cancellation and high dividend yield is likely to lead to higher probability of POSCO Holdings outperforming KOSPI on a total returns basis this year.


POSCO Holdings: Treasury Shares Cancellation Worth 3% of Outstanding Shares

Korea / Special Situations, Clepsydra Capital

Sanghyun Park

Korea / Special Situations

Korea / Special Sits, Pairs, Index Rebalancing

Clepsydra Capital

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

Thematic (Sector/Industry)

<ul>
<li>Money is again pouring into local rechargeable battery-themed ETFs. The AUMs of the major battery ETFs have increased by 20-35% over the past month.</li>
<li>The passive flow added in the past month to x ADTV was significant. The increase in the ETF AUM must have acted as a factor that aggravated the sector rally.</li>
<li>The current rally will closely correlate with AUM's growth pace. A 10% increase in AUM introduces a passive flow, on average, equivalent to 0.3-0.4x ADTV.</li>
</ul>


Money is again pouring into local rechargeable battery-themed ETFs. The AUMs of the major battery ETFs have increased by 20-35% over the past month.
The passive flow added in the past month to x ADTV was significant. The increase in the ETF AUM must have acted as a factor that aggravated the sector rally.
The current rally will closely correlate with AUM's growth pace. A 10% increase in AUM introduces a passive flow, on average, equivalent to 0.3-0.4x ADTV.


Investigating a Surge in AUM of Local Battery ETFs & Ongoing Sector Rally

<ul>
<li>
<a href="https://www.smartkarma.com/entities/wcp-co-ltd" target="_blank" data-smartkarma-citation="entities:36076:1" rel="noopener">WCP (WCP KS)</a>, a lithium-ion batteries separator company, has pushed back its KRW900 billion (US$692 million) KRX IPO timeline from August to mid-September.</li>
<li>We previously discussed the IPO In <a href="https://www.smartkarma.com/insights/wcp-ipo-hooked-on-lithium" target="_blank" data-smartkarma-citation="insights:72863" rel="noopener">WCP IPO: Hooked on Lithium</a> and <a href="https://www.smartkarma.com/insights/wcp-ipo-valuation-insights" target="_blank" data-smartkarma-citation="insights:73042" rel="noopener">WCP IPO: Valuation Insights</a>. </li>
<li>In this note, we benchmark WCP vs its peers in terms of historical and forecasted financials along with multiples. Our valuation analysis suggests that the IPO price range remains unattractive.</li>
</ul>



WCP (WCP KS), a lithium-ion batteries separator company, has pushed back its KRW900 billion (US$692 million) KRX IPO timeline from August to mid-September.
We previously discussed the IPO In WCP IPO: Hooked on Lithium and WCP IPO: Valuation Insights. 
In this note, we benchmark WCP vs its peers in terms of historical and forecasted financials along with multiples. Our valuation analysis suggests that the IPO price range remains unattractive.


WCP IPO: Kicking the Can Down the Road Through a Revised IPO Timetable

<ul>
<li>
<a href="https://www.smartkarma.com/entities/wcp-co-ltd" target="_blank" data-smartkarma-citation="entities:36076:1" rel="noopener">WCP (WCP KS)</a>, a lithium-ion batteries separator company, is planning to launch a KRW900 billion (US$692 million) IPO in August.</li>
<li>In <a href="https://www.smartkarma.com/insights/wcp-ipo-hooked-on-lithium" target="_blank" data-smartkarma-citation="insights:72863" rel="noopener">WCP IPO: Hooked on Lithium</a> we noted that WCP has attractive fundamentals due to the favourable demand/supply balance, technology, strong revenue growth and improving margins. </li>
<li>In this note, we look at the syndicate's valuation methodology. Our valuation analysis suggests that the IPO price range is unattractive and we would pass on the IPO.</li>
</ul>



WCP (WCP KS), a lithium-ion batteries separator company, is planning to launch a KRW900 billion (US$692 million) IPO in August.
In WCP IPO: Hooked on Lithium we noted that WCP has attractive fundamentals due to the favourable demand/supply balance, technology, strong revenue growth and improving margins. 
In this note, we look at the syndicate's valuation methodology. Our valuation analysis suggests that the IPO price range is unattractive and we would pass on the IPO.


South Korea

Posco Future M Co., Ltd. manufactures and distributes energy materials. The Company produces battery materials, advanced chemical materials, basic industrial materials, and other related products. Posco Future M also produces lime chemical and refractory products.

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Posco Future M (003670 KS)

WCP IPO: Updated Prospectus, Solid 1H22, Unchanged and Unattractive Price Range

The updated prospectus discloses 1H22 results but an unchanged IPO price range of KRW80,000-100,000. While the fundamentals are sound, the IPO...

Arun George

POSCO Holdings: Treasury Shares Cancellation Worth 3% of Outstanding Shares

On 12 August, POSCO Holdings announced that it will cancel treasury shares worth 3% of outstanding shares involving 2.6 million shares worth 672...

Douglas Kim

Investigating a Surge in AUM of Local Battery ETFs & Ongoing Sector Rally

This post investigates a recent surge in AUM of Korea's local secondary battery ETFs and how it may correlate with the ongoing sector rally.

Sanghyun Park

WCP IPO: Kicking the Can Down the Road Through a Revised IPO Timetable

We benchmark WCP vs its peers in terms of historical and forecasted financials along with multiples. Our valuation analysis suggests that the IPO...

Arun George

WCP IPO: Valuation Insights

WCP aims to launch a KRW900 billion (US$692 million) IPO in August. Our valuation analysis suggests that the IPO price range is unattractive and we...

Arun George

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