Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

Douglas Research Advisory

Equity Capital Markets

<ul>
<li>Our base case valuation is based on a P/E of 21.9x (40% premium to the comps) our estimated net profit of 58.9 billion won in 2025. </li>
<li>We believe d'Alba Global should trade at a premium valuation to the comps due to higher sales and operating profit growth, higher ROE and operating margins than the comps. </li>
<li>Our base case valuation of d'Alba Global target price of 101,609 won per share, which represents 53% higher than the high end of the IPO valuation range. </li>
</ul>


Our base case valuation is based on a P/E of 21.9x (40% premium to the comps) our estimated net profit of 58.9 billion won in 2025. 
We believe d'Alba Global should trade at a premium valuation to the comps due to higher sales and operating profit growth, higher ROE and operating margins than the comps. 
Our base case valuation of d'Alba Global target price of 101,609 won per share, which represents 53% higher than the high end of the IPO valuation range. 


<ul>
<li>D'Alba Global is getting ready to complete its IPO in KOSPI in May 2025. IPO price range is from 54,500 won to 66,300 won per share. </li>
<li>According to the bankers' valuation, the expected market cap of the company will be 692 billion won to 842 billion won post IPO. </li>
<li>D'Alba Global has one of the best growth rates for sales and operating profits among Korean cosmetic companies in the past four years.</li>
</ul>


D'Alba Global is getting ready to complete its IPO in KOSPI in May 2025. IPO price range is from 54,500 won to 66,300 won per share. 
According to the bankers' valuation, the expected market cap of the company will be 692 billion won to 842 billion won post IPO. 
D'Alba Global has one of the best growth rates for sales and operating profits among Korean cosmetic companies in the past four years.


Equity Bottom-Up

<ul>
<li>One of the big thematic events on the Korean stock market has been the expectation that China could lift ban on Korean popular culture (Hallyu) as early as May 2025. </li>
<li>China's President Xi recently stated <em>"Cultural exchanges are a valuable part of our bilateral relations [between China and Korea]. We should avoid any problems occurring in handling such matters.” </em>
</li>
<li>We provide a list of 40 stocks in Korea that could most benefit from the end of lifting ban of Korean popular culture. </li>
</ul>


One of the big thematic events on the Korean stock market has been the expectation that China could lift ban on Korean popular culture (Hallyu) as early as May 2025. 
China's President Xi recently stated "Cultural exchanges are a valuable part of our bilateral relations [between China and Korea]. We should avoid any problems occurring in handling such matters.” 

We provide a list of 40 stocks in Korea that could most benefit from the end of lifting ban of Korean popular culture. 


China Could Lift Ban on Korean Popular Culture (Hallyu) As Early As May 2025

Event-Driven

<ul>
<li>In this insight, we review the major equity indices in Korea in 2024 including KOSPI 200 and Korea Value Up Index. </li>
<li>Some alpha generating performances continue in terms of adding stocks to be included in the KOSPI 200 and reducing stocks that could be excluded.</li>
<li>Korea Value Up Index has been heavily promoted by the Korean Exchange this year. Korea Exchange plans to make special changes to the Korea Value-Up Index constituents on 20 December. </li>
</ul>


In this insight, we review the major equity indices in Korea in 2024 including KOSPI 200 and Korea Value Up Index. 
Some alpha generating performances continue in terms of adding stocks to be included in the KOSPI 200 and reducing stocks that could be excluded.
Korea Value Up Index has been heavily promoted by the Korean Exchange this year. Korea Exchange plans to make special changes to the Korea Value-Up Index constituents on 20 December. 


A Review of Major Equity Indices in Korea in 2024

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

Index Rebalance

Hyosung Heavy Industries Corp / Index Rebalance

<ul>
<li>There will be 4 additions and 5 deletions for the <a href="https://www.smartkarma.com/entities/korea-stock-exchange-kospi-200" target="_blank" data-smartkarma-citation="entities:26021:1" rel="noopener">Korea Stock Exchange KOSPI 200 (KOSPI2 INDEX)</a> at the next rebalance to be implemented at the close on 12 December.</li>
<li>The 4 adds are exactly in line with our forecast but a couple of the deletions are surprises. Those two names were close deletes though.</li>
<li>The are some large shorts on a few deletes and there could be covering over the next few weeks as borrows are recalled and as the stocks drop.</li>
</ul>


There will be 4 additions and 5 deletions for the Korea Stock Exchange KOSPI 200 (KOSPI2 INDEX) at the next rebalance to be implemented at the close on 12 December.
The 4 adds are exactly in line with our forecast but a couple of the deletions are surprises. Those two names were close deletes though.
The are some large shorts on a few deletes and there could be covering over the next few weeks as borrows are recalled and as the stocks drop.


KOSPI200 Index Rebalance: Adds in Line; Couple of Deletes Are Surprises

South Korea

APR Corporation of Korea operates cosmetics businesses. The Company develops and produces facial mask, lotion, elite fluid, and other products. APR also develops and manufactures beauty devices.

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APR (278470 KS)

D'Alba Global IPO Valuation Analysis

Our base case valuation of d'Alba Global target price of 101,609 won per share, which represents 53% higher than the high end of the IPO valuation...

Douglas Kim

D'Alba Global IPO Preview

D'Alba Global is getting ready to complete its IPO in May 2025. D'Alba Global has one of the best growth rates for sales and operating profits...

Douglas Kim

China Could Lift Ban on Korean Popular Culture (Hallyu) As Early As May 2025

One of the big thematic events that have impacted the Korean stock market this week has been the expectation that China could lift ban on Korean...

Douglas Kim

A Review of Major Equity Indices in Korea in 2024

We review the major equity indices in Korea in 2024 including KOSPI 200 and Korea Value Up Index. KRX plans to make special changes to the Korea...

Douglas Kim

KOSPI200 Index Rebalance: Adds in Line; Couple of Deletes Are Surprises

The KOSPI200 December rebalance will be implemented at the close today. Since announcement, the adds are up 4.3% on average while the deletes are...

Brian Freitas

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