Korea / Special Situations, Clepsydra Capital

Sanghyun Park

Korea / Special Situations

Event-Driven

<p>KDB's press release came out WRT <a href="https://www.smartkarma.com/entities/1896" target="_blank" data-smartkarma-citation="entities:1896:1">Asiana Airlines (020560 KS)</a> liquidity crisis shortly after the market closed yesterday. KDB clearly said that Kumho Asiana Group's self-rescue plans aren't acceptable. KDB made it clear that there will be only two ways here: massive rights offer and asset selloff.</p>

KDB's press release came out WRT Asiana Airlines (020560 KS) liquidity crisis shortly after the market closed yesterday. KDB clearly said that Kumho Asiana Group's self-rescue plans aren't acceptable. KDB made it clear that there will be only two ways here: massive rights offer and asset selloff.

Asiana Airlines Bailout: KDB Demands a Massive Rights Offer

Equity Capital Markets

Air Busan Co Ltd / Equity Capital Markets

<ul>
<li>
<a href="https://www.smartkarma.com/entities/27804" target="_blank" data-smartkarma-citation="entities:27804:1">Air Busan Co Ltd (298690 KS)</a> offers a total 5,207,000 shares. Shares are preliminarily priced at ₩3,600~4,000. This puts the company value at ₩187~208bil. Bookbuilding will be Dec 13~14.</li>
<li>Average peer LTM PER is 9.23x at today's prices. Air Busan 3Q18 NPM is 35%p less than peer average. At a 35% discount to average PER, price should be settled at ₩4,077. This is a 1.89% discount to high end and a 11.70% discount to low end.</li>
<li>FY19E consensus wise, peer average is 7.03x. Air Busan is expected to improve OP by ₩20bil and NP by ₩17.5bil next year. This gives a ₩4,635 per share, 13.70% off high end and 22.33% off low end. Valuation should be seen '<em>attractive</em>'.</li>
<li>I'd take this deal. But a potential yield should be limited. This is a LCC business, not a fancy growth story stock. I would price it at a mid level (₩3,800) with an aim of getting a 6~7% short-term gain. I'd avoid long-term holding. LCC business is too volatile.</li>
</ul>



Air Busan Co Ltd (298690 KS) offers a total 5,207,000 shares. Shares are preliminarily priced at ₩3,600~4,000. This puts the company value at ₩187~208bil. Bookbuilding will be Dec 13~14.
Average peer LTM PER is 9.23x at today's prices. Air Busan 3Q18 NPM is 35%p less than peer average. At a 35% discount to average PER, price should be settled at ₩4,077. This is a 1.89% discount to high end and a 11.70% discount to low end.
FY19E consensus wise, peer average is 7.03x. Air Busan is expected to improve OP by ₩20bil and NP by ₩17.5bil next year. This gives a ₩4,635 per share, 13.70% off high end and 22.33% off low end. Valuation should be seen 'attractive'.
I'd take this deal. But a potential yield should be limited. This is a LCC business, not a fancy growth story stock. I would price it at a mid level (₩3,800) with an aim of getting a 6~7% short-term gain. I'd avoid long-term holding. LCC business is too volatile.


Busan Air IPO Pricing: Bet on Mid Level for 6~7% Short-Term Gain Target

South Korea

Air Busan Co., Ltd. operates as an airline company. The Company offers international and domestic flight, hotel, and car booking services. Air busan also provides reissuance of ticket, baggage, airport, and in flight services. Air busan offers services worldwide.

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Air Busan Co Ltd (298690 KS)

Asiana Airlines Bailout: KDB Demands a Massive Rights Offer

KDB's press release came out WRT Asiana Airlines (020560 KS) liquidity crisis shortly after the market closed yesterday. KDB clearly said that...

Sanghyun Park

Busan Air IPO Pricing: Bet on Mid Level for 6~7% Short-Term Gain Target

Air Busan Co Ltd (298690 KS) offers a total 5,207,000 shares. Shares are preliminarily priced at ₩3,600~4,000. This puts the company value...

Sanghyun Park

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