Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

Equity Bottom-Up

<ul>
<li>We believe that Jeju Air is in a sweet spot right now. Jeju Air is one of the major beneficiaries of the travel resurgence in Asia.</li>
<li>Jeju Air is a potential inclusion candidate in the KOSPI 200 index in 2023. There are 42 companies in KOSPI 200 which have lower market cap than Jeju Air. </li>
<li>Outbound travel from Korea recovered strongly with 6.6 million outbound tourists from South Korea in 2022, up 436% YoY. However, this is still 77% lower than the figure in 2019. </li>
</ul>


We believe that Jeju Air is in a sweet spot right now. Jeju Air is one of the major beneficiaries of the travel resurgence in Asia.
Jeju Air is a potential inclusion candidate in the KOSPI 200 index in 2023. There are 42 companies in KOSPI 200 which have lower market cap than Jeju Air. 
Outbound travel from Korea recovered strongly with 6.6 million outbound tourists from South Korea in 2022, up 436% YoY. However, this is still 77% lower than the figure in 2019. 


Jeju Air: A Big Beneficiary of Travel Resurgence in Asia + A Likely Inclusion in KOSPI 200 in 2023

Event-Driven

<div class="content-highlight">
<p><strong>On November 16th, Korean Air Lines stated that it will acquire Asiana Airlines for 1.8 trillion won ($1.6 billion) that would create the 10th biggest airline by fleets in the world. </strong>In this deal, the Korean Development Bank (KDB) will help Hanjin Group Chairman Cho Won-Tae &amp; related parties retain control of Hanjin Kal and the Korean Air.</p>
<p>However, things are not so simple as they initially look on paper. This is mainly because in 2021 and beyond, the global air travel industry may not return quickly to the pre-COVID-19 environment. The overall media coverage of this event has been positive. However, we believe that there could be a bigger risk that things may not turn out so rosy for the combined companies. <strong>Rather, there is an increasing likelihood that the combined Korean Air and Asiana Airlines may become another KEPCO (which is controlled by the Korean government).  </strong></p>
</div>


On November 16th, Korean Air Lines stated that it will acquire Asiana Airlines for 1.8 trillion won ($1.6 billion) that would create the 10th biggest airline by fleets in the world. In this deal, the Korean Development Bank (KDB) will help Hanjin Group Chairman Cho Won-Tae &amp; related parties retain control of Hanjin Kal and the Korean Air.
However, things are not so simple as they initially look on paper. This is mainly because in 2021 and beyond, the global air travel industry may not return quickly to the pre-COVID-19 environment. The overall media coverage of this event has been positive. However, we believe that there could be a bigger risk that things may not turn out so rosy for the combined companies. Rather, there is an increasing likelihood that the combined Korean Air and Asiana Airlines may become another KEPCO (which is controlled by the Korean government).  


Korean Air + Asiana Airlines - Is This Becoming Another KEPCO?

Korea / Special Situations, Clepsydra Capital

Sanghyun Park

Korea / Special Situations

Equity Capital Markets

<p>The ex-rights day of Jin Air's rights offering is tomorrow (September 15).</p><p>So, today is the last day to become eligible to get subscription rights.</p><table class="table table-striped">
<colgroup>
<col width="300">
<col width="600">
</colgroup>
<tbody>
<tr><td colspan="2" rowspan="1" data-sheets-value='{"1":2,"2":"Timetable"}'>Timetable</td></tr>
<tr>
<td data-sheets-value='{"1":2,"2":"BOD meeting"}'>BOD meeting</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":44048}' data-sheets-numberformat='{"1":5,"2":"mmmm\" \"d\", \"yyyy","3":1}'>August 5, 2020</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Preliminary pricing"}'>Preliminary pricing</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":44085}' data-sheets-numberformat='{"1":5,"2":"mmmm\" \"d\", \"yyyy","3":1}'>September 11, 2020</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Ex-rights date"}'>Ex-rights date</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":44089}' data-sheets-numberformat='{"1":5,"2":"mmmm\" \"d\", \"yyyy","3":1}'>September 15, 2020</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Record date"}'>Record date</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":44090}' data-sheets-numberformat='{"1":5,"2":"mmmm\" \"d\", \"yyyy","3":1}'>September 16, 2020</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Subscription rights trade beginning"}'>Subscription rights trade beginning</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":44112}' data-sheets-numberformat='{"1":5,"2":"mmmm\" \"d\", \"yyyy","3":1}'>October 8, 2020</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Subscription rights trade ending"}'>Subscription rights trade ending</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":44119}' data-sheets-numberformat='{"1":5,"2":"mmmm\" \"d\", \"yyyy","3":1}'>October 15, 2020</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Final pricing"}'>Final pricing</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":44125}' data-sheets-numberformat='{"1":5,"2":"mmmm\" \"d\", \"yyyy","3":1}'>October 21, 2020</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Stockholder subscription"}'>Stockholder subscription</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":44130}' data-sheets-numberformat='{"1":5,"2":"mmmm\" \"d\", \"yyyy","3":1}'>October 26, 2020</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Public subscription"}'>Public subscription</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":44133}' data-sheets-numberformat='{"1":5,"2":"mmmm\" \"d\", \"yyyy","3":1}'>October 29, 2020</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Payment"}'>Payment</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":44138}' data-sheets-numberformat='{"1":5,"2":"mmmm\" \"d\", \"yyyy","3":1}'>November 3, 2020</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Listing"}'>Listing</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":44151}' data-sheets-numberformat='{"1":5,"2":"mmmm\" \"d\", \"yyyy","3":1}'>November 16, 2020</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Record date for bonus shares"}'>Record date for bonus shares</td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"N/A"}'>N/A</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Listing - bonus shares"}'>Listing - bonus shares</td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"N/A"}'>N/A</td>
</tr>
<tr><td colspan="2" rowspan="1" data-sheets-value='{"1":2,"2":"Source: DART"}'><em>Source: DART</em></td></tr>
</tbody>
</table><p>We now have the ceiling price. The 1st round pricing got fixed at ₩7,000.</p><table class="table table-striped">
<colgroup>
<col width="300">
<col width="600">
</colgroup>
<tbody>
<tr><td colspan="2" rowspan="1" data-sheets-value='{"1":2,"2":"Pricing"}'>Pricing</td></tr>
<tr>
<td data-sheets-value='{"1":2,"2":"1st round"}'>1st round</td>
<td style="text-align: right;" data-sheets-formula='="RP × (1 - "&amp;(R[11]C[0]*100&amp;"%")&amp;") / [1 + ("&amp;(R[12]C[0]*100&amp;"%"&amp;" × "&amp;(R[11]C[0]*100&amp;"%"&amp;")]"))' data-sheets-value='{"1":2,"2":"RP × (1 - 20%) / [1 + (50% × 20%)]"}'>RP × (1 - 20%) / [1 + (50% × 20%)]</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":" - Reference price (RP)"}'>- Reference price (RP)</td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"Min [Close, Avg (Close, 1W VWAP, 1M VWAP)]"}'>Min [Close, Avg (Close, 1W VWAP, 1M VWAP)]</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":" - Reference date"}'>- Reference date</td>
<td style="text-align: right;" data-sheets-formula="=Terms!R[41]C[0]" data-sheets-numberformat='[null,5,"mmmm\" \"d\", \"yyyy",1]' data-sheets-value='{"1":3,"3":44085}'>September 11, 2020</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Ex-rights base price"}'>Ex-rights base price</td>
<td style="text-align: right;" data-sheets-formula='="[RP + (1st × "&amp;R[9]C[0]*100&amp;"%"&amp;")] / (1 + "&amp;R[9]C[0]*100&amp;"%"&amp;")"' data-sheets-value='{"1":2,"2":"[RP + (1st × 50%)] / (1 + 50%)"}'>[RP + (1st × 50%)] / (1 + 50%)</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":" - Reference price (RP)"}'>- Reference price (RP)</td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"Previous close"}'>Previous close</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":" - Reference date"}'>- Reference date</td>
<td style="text-align: right;" data-sheets-formula="=Terms!R[39]C[0]" data-sheets-numberformat='[null,5,"mmmm\" \"d\", \"yyyy",1]' data-sheets-value='{"1":3,"3":44089}'>September 15, 2020</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"2nd round"}'>2nd round</td>
<td style="text-align: right;" data-sheets-formula='="RP × (1 - "&amp;(R[5]C[0]*100&amp;"%")&amp;")"' data-sheets-value='{"1":2,"2":"RP × (1 - 20%)"}'>RP × (1 - 20%)</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":" - Reference price (RP)"}'>- Reference price (RP)</td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"Min [Close, Avg (Close, 1W VWAP)]"}'>Min [Close, Avg (Close, 1W VWAP)]</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":" - Reference date"}'>- Reference date</td>
<td style="text-align: right;" data-sheets-formula="=Terms!R[40]C[0]" data-sheets-numberformat='[null,5,"mmmm\" \"d\", \"yyyy",1]' data-sheets-value='{"1":3,"3":44125}'>October 21, 2020</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Final"}'>Final</td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"Max [Min (1st, 2nd), 3D VWAP × 60%]"}'>Max [Min (1st, 2nd), 3D VWAP × 60%]</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":" - Reference date"}'>- Reference date</td>
<td style="text-align: right;" data-sheets-formula="=Terms!R[38]C[0]" data-sheets-numberformat='[null,5,"mmmm\" \"d\", \"yyyy",1]' data-sheets-value='{"1":3,"3":44125}'>October 21, 2020</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Discount rate"}'>Discount rate</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0.2}'>20.00%</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Capital increase rate"}'>Capital increase rate</td>
<td style="text-align: right;" data-sheets-formula="=LEFT(Terms!R[11]C[0],6)*100/100" data-sheets-value='{"1":3,"3":0.5}'>50.00%</td>
</tr>
<tr><td colspan="2" rowspan="1" data-sheets-value='{"1":2,"2":"Source: DART"}'><em>Source: DART</em></td></tr>
</tbody>
</table><table class="table table-striped">
<colgroup>
<col width="300">
<col width="600">
</colgroup>
<tbody>
<tr><td colspan="2" rowspan="1" data-sheets-value='{"1":2,"2":"1st round pricing"}'>1st round pricing</td></tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Date"}'>Date</td>
<td style="text-align: right;" data-sheets-formula="=Terms!R[27]C[0]" data-sheets-value='{"1":3,"3":44085}'>September 11, 2020</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Close"}'>Close</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":9860}'>₩9,860</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"1W VWAP"}'>1W VWAP</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":9531.454901}'>₩9,531</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"1M VWAP"}'>1M VWAP</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":9478.988027}'>₩9,479</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":" - Average"}'>- Average</td>
<td style="text-align: right;" data-sheets-formula="=sum(R[-3]C[0]:R[-1]C[0])/3" data-sheets-value='{"1":3,"3":9623.480975999999}'>₩9,623</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Reference price"}'>Reference price</td>
<td style="text-align: right;" data-sheets-formula="=min(R[-4]C[0], R[-1]C[0])" data-sheets-value='{"1":3,"3":9623.480975999999}'>₩9,623</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"1st round price"}'>1st round price</td>
<td style="text-align: right;" data-sheets-formula="=ceiling.math((R[-1]C[0]*(1-R[-11]C[0]))/((1+(R[-10]C[0]*R[-11]C[0]))), 100)" data-sheets-value='{"1":3,"3":7000}'>₩7,000</td>
</tr>
<tr><td colspan="2" rowspan="1" data-sheets-value='{"1":2,"2":"Source: DART"}'><em>Source: DART</em></td></tr>
</tbody>
</table>

The ex-rights day of Jin Air's rights offering is tomorrow (September 15).So, today is the last day to become eligible to get subscription rights.





Timetable

BOD meeting
August 5, 2020


Preliminary pricing
September 11, 2020


Ex-rights date
September 15, 2020


Record date
September 16, 2020


Subscription rights trade beginning
October 8, 2020


Subscription rights trade ending
October 15, 2020


Final pricing
October 21, 2020


Stockholder subscription
October 26, 2020


Public subscription
October 29, 2020


Payment
November 3, 2020


Listing
November 16, 2020


Record date for bonus shares
N/A


Listing - bonus shares
N/A

Source: DART

We now have the ceiling price. The 1st round pricing got fixed at ₩7,000.





Pricing

1st round
RP × (1 - 20%) / [1 + (50% × 20%)]


- Reference price (RP)
Min [Close, Avg (Close, 1W VWAP, 1M VWAP)]


- Reference date
September 11, 2020


Ex-rights base price
[RP + (1st × 50%)] / (1 + 50%)


- Reference price (RP)
Previous close


- Reference date
September 15, 2020


2nd round
RP × (1 - 20%)


- Reference price (RP)
Min [Close, Avg (Close, 1W VWAP)]


- Reference date
October 21, 2020


Final
Max [Min (1st, 2nd), 3D VWAP × 60%]


- Reference date
October 21, 2020


Discount rate
20.00%


Capital increase rate
50.00%

Source: DART







1st round pricing

Date
September 11, 2020


Close
₩9,860


1W VWAP
₩9,531


1M VWAP
₩9,479


- Average
₩9,623


Reference price
₩9,623


1st round price
₩7,000

Source: DART



Jin Air Offer: Trade Situation on This Last Day Before Ex-Rights

Hanjin Transportation Co / Equity Capital Markets

<p>Hanjin Kal's other subsidiary, Hanjin T, also goes for an offering.</p><p>It offers 2.97M shares at a capital increase rate of 24.83%.</p><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/151/560/original/1.png?1597000642" class="editor-image img-responsive" data-smartkarma-image-id="151560"></figure><p>80% goes to the stockholders, so the per share allocation is 0.2.</p><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/151/561/original/2.png?1597000655" class="editor-image img-responsive" data-smartkarma-image-id="151561"></figure><p>This offering proceeds pretty much simultaneously with Jin Air's event, only three days apart between them.</p><p>September 16 will be the first round pricing, followed by the ex-rights two trading days later. The subscription rights will be trading on October 13~19.</p><p>We will have a final price on October 23, then followed by a subscription on October 28. Listing is November 18.</p><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/151/562/original/3.png?1597001581" class="editor-image img-responsive" data-smartkarma-image-id="151562"></figure><p>There is nothing unusual in pricing. This one also carries a usual 20% discount.</p><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/151/563/original/5.png?1597001591" class="editor-image img-responsive" data-smartkarma-image-id="151563"></figure>

Hanjin Kal's other subsidiary, Hanjin T, also goes for an offering.It offers 2.97M shares at a capital increase rate of 24.83%.80% goes to the stockholders, so the per share allocation is 0.2.This offering proceeds pretty much simultaneously with Jin Air's event, only three days apart between them.September 16 will be the first round pricing, followed by the ex-rights two trading days later. The subscription rights will be trading on October 13~19.We will have a final price on October 23, then followed by a subscription on October 28. Listing is November 18.There is nothing unusual in pricing. This one also carries a usual 20% discount.

Hanjin Trnspt Rights Offer: Trading Dynamics with Maj Shareholder's 150% Over-Subscription

<p>Jin Air announces a ₩109bil rights offer, 15M new shares with a 50% capital increase.</p><p>The market has well anticipated it, so no surprise here.</p><p>80% of the offering will go to the stockholders, and Shinhan will be working as a lead banker.</p><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/150/781/original/1.png?1596660223" class="editor-image img-responsive" data-smartkarma-image-id="150781"></figure><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/150/790/original/2.png?1596663570" class="editor-image img-responsive" data-smartkarma-image-id="150790"></figure><p>We will have preliminary pricing on September 11, then the <strong>ex-rights day</strong> two trading days later on <strong>September 15</strong>. We will be <strong>trading subscription rights</strong> on <strong>October 8~15</strong>.</p><p>Then the final pricing falls on October 21, three trading days before the subscription on October 26. The new shares will get listed on November 16.</p><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/150/792/original/3.png?1596663801" class="editor-image img-responsive" data-smartkarma-image-id="150792"></figure><p>Pricing? Nothing unusual here. This offering carries a usual 20% discount.</p><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/150/793/original/5.png?1596663816" class="editor-image img-responsive" data-smartkarma-image-id="150793"></figure>

Jin Air announces a ₩109bil rights offer, 15M new shares with a 50% capital increase.The market has well anticipated it, so no surprise here.80% of the offering will go to the stockholders, and Shinhan will be working as a lead banker.We will have preliminary pricing on September 11, then the ex-rights day two trading days later on September 15. We will be trading subscription rights on October 8~15.Then the final pricing falls on October 21, three trading days before the subscription on October 26. The new shares will get listed on November 16.Pricing? Nothing unusual here. This offering carries a usual 20% discount.

Jin Air Rights Offer: Terms & Trading Angle

South Korea

Jin Air Co.,Ltd. provides air transportation services. The Company offers passenger and freight air transportation services, aviation equipment maintenance, aircraft leasing services, and other services. Jin Air also provides ticket and hotel booking and consulting services.

Price Gauge
52-week Range	0.00 - 0.00
Market Cap (USDm)	0.00
P/E	0.00
Dividend (Yield)	0.00

Jin Air Co. Ltd (272450 KS)

Jeju Air: A Big Beneficiary of Travel Resurgence in Asia + A Likely Inclusion in KOSPI 200 in 2023

Jeju Air is in a sweet spot right now as it is one of the major beneficiaries of the travel resurgence in Asia. Jeju Air is also a potential...

Douglas Kim

Korean Air + Asiana Airlines - Is This Becoming Another KEPCO?

Perhaps the worst-case scenario is that the combined Korean Air + Asiana Airlines becomes another KEPCO, which would be culminated with KDB taking...

Douglas Kim

Jin Air Offer: Trade Situation on This Last Day Before Ex-Rights

???

Sanghyun Park

Hanjin Trnspt Rights Offer: Trading Dynamics with Maj Shareholder's 150% Over-Subscription

Hanjin Kal's other subsidiary, Hanjin T, also goes for an offering.It offers 2.97M shares at a capital increase rate of 24.83%.80% goes to the...

Sanghyun Park

Jin Air Rights Offer: Terms & Trading Angle

Jin Air announces a ₩109bil rights offer, 15M new shares with a 50% capital increase.The market has well anticipated it, so no surprise here.80% of...

Sanghyun Park

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52-week Range

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