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/lg-cns-co-ltd" target="_blank" data-smartkarma-citation="entities:35945:1" rel="noopener">LG CNS (LGCNSZ KS)</a> priced its IPO at KRW61,900 per share to raise gross proceeds of US$820 million. The shares will start trading on 5 February.</li>
<li>We previously discussed the IPO in <a href="https://www.smartkarma.com/insights/lg-cns-ipo-the-bull-case" target="_blank" data-smartkarma-citation="insights:170085" rel="noopener">LG CNS IPO: The Bull Case</a>, <a href="https://www.smartkarma.com/insights/lg-cns-ipo-the-bear-case" target="_blank" data-smartkarma-citation="insights:171361" rel="noopener">LG CNS IPO: The Bear Case</a> and <a href="https://www.smartkarma.com/insights/lg-cns-ipo-valuation-insights" target="_blank" data-smartkarma-citation="insights:171569" rel="noopener">LG CNS IPO: Valuation Insights</a>.</li>
<li>Since the prospectus's release, the peers have marginally re-rated. The valuation remains undemanding at the IPO price, and bullish grey market prices suggest a strong debut.</li>
</ul>



LG CNS (LGCNSZ KS) priced its IPO at KRW61,900 per share to raise gross proceeds of US$820 million. The shares will start trading on 5 February.
We previously discussed the IPO in LG CNS IPO: The Bull Case, LG CNS IPO: The Bear Case and LG CNS IPO: Valuation Insights.
Since the prospectus's release, the peers have marginally re-rated. The valuation remains undemanding at the IPO price, and bullish grey market prices suggest a strong debut.


Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

Douglas Research Advisory

Equity Bottom-Up

<ul>
<li>DeepSeek has been the biggest story in the global markets in the past couple of weeks.</li>
<li>In this insight, we discuss how the rise of DeepSeek could impact the share prices of the major AI related companies in Korea including SK Hynix (000660 KS). </li>
<li>The top five Korean companies that could be negatively impacted by the rise of DeepSeek include SK Hynix, Hanmi Semiconductor, SK Square, HD Hyundai Electric, and LS Electric. </li>
</ul>


DeepSeek has been the biggest story in the global markets in the past couple of weeks.
In this insight, we discuss how the rise of DeepSeek could impact the share prices of the major AI related companies in Korea including SK Hynix (000660 KS). 
The top five Korean companies that could be negatively impacted by the rise of DeepSeek include SK Hynix, Hanmi Semiconductor, SK Square, HD Hyundai Electric, and LS Electric. 


Rise of DeepSeek - Impact on SK Hynix and Other Major Korean Stocks

<ul>
<li>LG CNS reported a successful IPO book building results analysis. The IPO price has been finalized at 61,900 won per share (high end of the IPO price range).</li>
<li>The demand ratio from the institutional investors was 114 to 1. At the IPO price of 61,900 won, the expected market cap will be 6 trillion won. </li>
<li>According to our valuation analysis, it suggests a base case target price of 76,383 won per share, which represents a 23% upside from the IPO price of 61,900 won.</li>
</ul>


LG CNS reported a successful IPO book building results analysis. The IPO price has been finalized at 61,900 won per share (high end of the IPO price range).
The demand ratio from the institutional investors was 114 to 1. At the IPO price of 61,900 won, the expected market cap will be 6 trillion won. 
According to our valuation analysis, it suggests a base case target price of 76,383 won per share, which represents a 23% upside from the IPO price of 61,900 won.


LG CNS IPO Book Building Results Analysis

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

Event-Driven

<ul>
<li>
<a href="https://www.smartkarma.com/entities/lg-cns-co-ltd" target="_blank" data-smartkarma-citation="entities:35945:1" rel="noopener">LG CNS (LGCNSZ KS)</a> is looking to raise up to KRW 1,199bn (US$830m), valuing the company at KRW 6 trillion (US$4.15bn) at the top end of the IPO price range.</li>
<li>As a member of the IT sector, inclusion in the <a href="https://www.smartkarma.com/entities/korea-stock-exchange-kospi-200" target="_blank" data-smartkarma-citation="entities:26021:1" rel="noopener">KOSPI200 Index</a> will only take place via Fast Entry (near impossible) or as a large-scale company.</li>
<li>Inclusion in global indices could commence in September 2025 and will be easier if the identity of the pre-IPO minority shareholders is disclosed or if the strategic investors sell.</li>
</ul>



LG CNS (LGCNSZ KS) is looking to raise up to KRW 1,199bn (US$830m), valuing the company at KRW 6 trillion (US$4.15bn) at the top end of the IPO price range.
As a member of the IT sector, inclusion in the KOSPI200 Index will only take place via Fast Entry (near impossible) or as a large-scale company.
Inclusion in global indices could commence in September 2025 and will be easier if the identity of the pre-IPO minority shareholders is disclosed or if the strategic investors sell.


LG CNS IPO: Limited Float Pushes Back Passive Buying

<ul>
<li>According to our updated valuation analysis of LG CNS, it suggests a base case implied market cap of 7.4 trillion won, representing target price of 76,383 won per share. </li>
<li>Our base case valuation target price of 76,383 won is 23% higher than the high end of the IPO price range. </li>
<li>We lowered our target price by 6%, mainly due to greater political risks arising from the recent cancelled martial law and ongoing impeachment of President Yoon.</li>
</ul>


According to our updated valuation analysis of LG CNS, it suggests a base case implied market cap of 7.4 trillion won, representing target price of 76,383 won per share. 
Our base case valuation target price of 76,383 won is 23% higher than the high end of the IPO price range. 
We lowered our target price by 6%, mainly due to greater political risks arising from the recent cancelled martial law and ongoing impeachment of President Yoon.


South Korea

Samsung SDS Co., Ltd. provides information technology services, such as consulting and technical services. The Company also offers outsourcing services including application outsourcing, IT infrastructure outsourcing, and cloud computing.

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Samsung SDS (018260 KS)

LG CNS IPO: Trading Debut

Since the prospectus's release, the peers have marginally re-rated. The valuation remains undemanding at the IPO price, and bullish grey market...

Arun George

Rise of DeepSeek - Impact on SK Hynix and Other Major Korean Stocks

The top five Korean companies that could be negatively impacted by the rise of DeepSeek include SK Hynix, Hanmi Semiconductor, SK Square, HD...

Douglas Kim

LG CNS IPO Book Building Results Analysis

LG CNS reported a successful IPO book building results analysis. The IPO price has been finalized at 61,900 won per share (high end of the IPO...

Douglas Kim

LG CNS IPO: Limited Float Pushes Back Passive Buying

The subscription period runs from 21-22 January. Shares will reportedly be offered at KRW 61900, the top end of the IPO range. Demand was said to...

Brian Freitas

LG CNS: Updated IPO Valuation Analysis

LG CNS completed its IPO book building for the institutional investors. The demand from the institutional investors was high enough that the IPO...

Douglas Kim

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