SGX Market Strategist, Equity & Fixed Income, Singapore Exchange Ltd (SGX)

Geoff Howie

SGX Market Strategist, Equity & Fixed Income

Asia’s leading multi-asset exchange

Singapore Exchange Ltd (SGX)

Singapore Exchange is Asia’s leading and trusted market infrastructure, facilitating the exchange of capital and ideas to create value for people, businesses and economies. As a multi-asset exchange operating equity, fixed income and derivatives markets to the highest regulatory standards, SGX is a vertically integrated business that provides listing, trading, clearing, settlement, depository and data services.

With about 40% of listed companies and over 80% of listed bonds originating outside of Singapore as well as established linkages across the region and in Europe, SGX is Asia’s most international and connected exchange. Offering a full suite of derivatives products across Asian equity indices, commodities and currencies, SGX is the world’s most liquid international market for the benchmark equity indices of China, India, Japan and ASEAN.

As Asia’s pioneering central counterparty, SGX is globally recognised for its risk management and clearing capabilities, and was one of the first globally to adopt the Principles for Financial Market Infrastructure.

Headquartered in AAA-rated Singapore, SGX has over 800 employees including offices in Beijing, Chicago, Hong Kong, London, New York, Mumbai, San Francisco, Shanghai and Tokyo.

Equity Bottom-Up

Hyundai Engineering & Construction / Equity Bottom-Up

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.

Equity Capital Markets

LG Energy Solution / Equity Capital Markets

<ul>
<li>As for the themed indexes, a lot of confusion arises from inclusion timing and whether to replace LG Chem with LG Energy OR include both LG Energy and LG Chem.</li>
<li>TIGER and KODEX will likely implement it <strong>right after February 9</strong>, seven trading days after listing.</li>
<li>The possibility that LG Chem and LG Energy will both remain in these themed indexes is near zero. <strong>LG Energy will replace LG Chem</strong>.</li>
</ul>


As for the themed indexes, a lot of confusion arises from inclusion timing and whether to replace LG Chem with LG Energy OR include both LG Energy and LG Chem.
TIGER and KODEX will likely implement it right after February 9, seven trading days after listing.
The possibility that LG Chem and LG Energy will both remain in these themed indexes is near zero. LG Energy will replace LG Chem.


LG Energy Themed ETFs Methodology Changes: Latest Situation Update

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.

<ul>
<li>
<a href="https://www.smartkarma.com/entities/lg-energy-solution" target="_blank" data-smartkarma-citation="entities:33464:1" rel="noopener">LG Energy Solution (LGENERGY KS)</a> has launched its IPO to raise US$9.2-10.8 billion at the price range of KRW257,000-300,000 per share.</li>
<li>In <a href="https://www.smartkarma.com/insights/lg-energy-solution-ipo-initiation-amp-my-ride" target="_blank" data-smartkarma-citation="insights:62402" rel="noopener">LG Energy Solution IPO Initiation: Amp My Ride</a>, we stated that LGES has attractive fundamentals with a strong backlog, healthy revenue growth and improving margins.</li>
<li>Our base-case DCF value is KRW321,594 per share, 15% above the mid-point of the IPO price range. Our DCF sensitivity analysis shows that the IPO price remains attractive. </li>
</ul>



LG Energy Solution (LGENERGY KS) has launched its IPO to raise US$9.2-10.8 billion at the price range of KRW257,000-300,000 per share.
In LG Energy Solution IPO Initiation: Amp My Ride, we stated that LGES has attractive fundamentals with a strong backlog, healthy revenue growth and improving margins.
Our base-case DCF value is KRW321,594 per share, 15% above the mid-point of the IPO price range. Our DCF sensitivity analysis shows that the IPO price remains attractive. 


LG Energy Solution IPO: DCF Scenario Analysis

Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

<ul>
<li>Why has LG Chem's share price fallen so much in the past two months and why is this falling trend likely to be near its end? </li>
<li>With the IPO bookbuilding of LG Energy Solution only a week away, many investors are placing a greater positive emphasis on the potential value of LG Energy Solution.</li>
<li>Our base case NAV analysis of LG Chem is 744,246 won, which is 20.4% higher than the current price. We assume 424,093 won for LG Energy Solution target price. </li>
</ul>


Why has LG Chem's share price fallen so much in the past two months and why is this falling trend likely to be near its end? 
With the IPO bookbuilding of LG Energy Solution only a week away, many investors are placing a greater positive emphasis on the potential value of LG Energy Solution.
Our base case NAV analysis of LG Chem is 744,246 won, which is 20.4% higher than the current price. We assume 424,093 won for LG Energy Solution target price. 


NAV Analysis of LG Chem Suggests Excessive Selling Overdone

<ul>
<li>Given the AUM of the Global X Lithium Battery ETF (ticker: LIT), the potential passive impact on LG Energy and LG Chem should be worthy of our careful attention.</li>
<li>If LIT revises its methodology, the timing to include LG Energy is expected to be the April rebalancing.</li>
<li>LG Energy will have a 2-3% index weight, welcoming a passive inflow of ₩130-200B (0.2-0.3% of SO). In contrast, ₩232.1B from LIT will likely escape LG Chem, 0.5% of SO.</li>
</ul>


Given the AUM of the Global X Lithium Battery ETF (ticker: LIT), the potential passive impact on LG Energy and LG Chem should be worthy of our careful attention.
If LIT revises its methodology, the timing to include LG Energy is expected to be the April rebalancing.
LG Energy will have a 2-3% index weight, welcoming a passive inflow of ₩130-200B (0.2-0.3% of SO). In contrast, ₩232.1B from LIT will likely escape LG Chem, 0.5% of SO.


LG Energy Passive Flow from Overseas ETFs: Global X Lithium & Battery (LIT)

South Korea

LG Chem Ltd. is a chemical manufacturer. The Company's products include petrochemicals, plastic resins, and engineering plastics. LG Chem also produces industrial and electronic materials.

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LG Chem (051915 KS)

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LG Energy Solution IPO: DCF Scenario Analysis

Our base-case DCF value is KRW321,594 per share, 15% above the mid-point of the IPO price range. Our DCF sensitivity analysis shows that the IPO...

Arun George

NAV Analysis of LG Chem Suggests Excessive Selling Overdone

We believe LG Chem's share price has fallen too excessively in the past two months. Our base case NAV analysis of LG Chem is 744,246 won, which is...

Douglas Kim

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There is another factor worth noting from the perspective of LG Energy's post-listing passive flow. This is LG Chem/LG Energy swapping in the...

Sanghyun Park

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