Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

Equity Capital Markets

Lionheart Studio  / Equity Capital Markets

<ul>
<li>Our base case valuation of Lionheart Studio is a target price of 19,362 won per share, which is 46% lower than the low end of the IPO price range.</li>
<li>Our IPO valuation assumes a 7.2x EV/EBITDA (comps' average) using 2023 estimated EBITDA of 145 billion won for the company.</li>
<li>All in all, we believe there is a strong probability of Lionheart Studio being forced to lower its IPO price range in order to attract more investors. </li>
</ul>


Our base case valuation of Lionheart Studio is a target price of 19,362 won per share, which is 46% lower than the low end of the IPO price range.
Our IPO valuation assumes a 7.2x EV/EBITDA (comps' average) using 2023 estimated EBITDA of 145 billion won for the company.
All in all, we believe there is a strong probability of Lionheart Studio being forced to lower its IPO price range in order to attract more investors. 


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.

Event-Driven

<ul>
<li>For this March rebalancing, the screening base date is January 28, which is the last trading day of January. So, the 3-month rebalancing review period is now done.</li>
<li>Other than LG Energy (+₩146,2B), we should pay the most attention to AfreecaTV (+1.70x), Chunbo (+0.36x), Douzone Bizon (-4.82x), and SoulBrain (-0.99x).</li>
<li>In addition, large-cap stocks such as SKIET (+0.25x), Ecopro BM (+0.10x), LG Chem (-0.62x), and Posco Chemical (-0.30x) will likely draw much attention.</li>
</ul>


For this March rebalancing, the screening base date is January 28, which is the last trading day of January. So, the 3-month rebalancing review period is now done.
Other than LG Energy (+₩146,2B), we should pay the most attention to AfreecaTV (+1.70x), Chunbo (+0.36x), Douzone Bizon (-4.82x), and SoulBrain (-0.99x).
In addition, large-cap stocks such as SKIET (+0.25x), Ecopro BM (+0.10x), LG Chem (-0.62x), and Posco Chemical (-0.30x) will likely draw much attention.


KRX K-New Deal Index Screening Period Ended: Rebalancing Changes & Passive Impacts Update

Quantitative Analysis

<ul>
<li>In this insight, we provide a list of 34 metaverse related stocks that are yet to be included in the metaverse ETFs in Korea. </li>
<li>These companies have recently announced that they will expand into the metaverse related businesses.</li>
<li>The next metaverse ETFs rebalance in Korea is in December and we highlight a list of 10 companies mentioned in this report could get included in these metaverse ETFs.</li>
</ul>


In this insight, we provide a list of 34 metaverse related stocks that are yet to be included in the metaverse ETFs in Korea. 
These companies have recently announced that they will expand into the metaverse related businesses.
The next metaverse ETFs rebalance in Korea is in December and we highlight a list of 10 companies mentioned in this report could get included in these metaverse ETFs.


A List of Metaverse Related Stocks Which Could Be Included in the Next Metaverse ETFs Rebalance

<div class="content-highlight">
In this insight, we provide an update on the Krafton IPO, including its 2020 financials. It has been reported in the local media that the Krafton IPO could value the company at about <a href="https://www.gamesindustry.biz/articles/2021-01-19-ipo-plans-value-krafton-at-up-to-27bn" target="_blank" rel="noopener">20 trillion won</a> ($18 billion) to 30 trillion won ($27 billion). 
If Krafton is valued at about 30 trillion won, it would be close to the combined market caps of <a href="https://www.smartkarma.com/entities/ncsoft-corp" target="_blank" data-smartkarma-citation="entities:5169:1" rel="noopener">NCSOFT Corp (036570 KS)</a> and <a href="https://www.smartkarma.com/entities/netmarble-corporation" target="_blank" data-smartkarma-citation="entities:22839:1" rel="noopener">Netmarble Corporation (251270 KS) </a>which are 29.5 trillion won right now. The current<a href="http://www.ipo38.co.kr/forum/?code=259960" target="_blank" rel="noopener"> gray market value</a> of Krafton is 24.5 trillion won ($21.9 billion). 
</div>


In this insight, we provide an update on the Krafton IPO, including its 2020 financials. It has been reported in the local media that the Krafton IPO could value the company at about 20 trillion won ($18 billion) to 30 trillion won ($27 billion). 
If Krafton is valued at about 30 trillion won, it would be close to the combined market caps of NCSOFT Corp (036570 KS) and Netmarble Corporation (251270 KS) which are 29.5 trillion won right now. The current gray market value of Krafton is 24.5 trillion won ($21.9 billion). 


An Update on the Krafton IPO - The Largest Game Company in Korea

Equity Bottom-Up

Although NCsoft's stock price  has performed well in the past year, we believe the stock is well poised to outperform the market again this year. NCsoft, similar to many other leading global game companies, have benefited from COVID-19 as millions of people in Korea and around the world have been forced to various forms of lockdown and spend more time at home.Currently, millions of people in countries such as are starting to take new vaccines for COVID-19. However, there are new mutated COVID-19 strains that have found to be 50%+ more contagious than the existing COVID-19 virus. These events suggest that the first half of 2021 will continue to be quite restrictive in major governments around the world including South Korea and U.K. continuing to impose various kinds of lockdowns and social distancing measures which mean that people in these countries will continue to spend a lot of time at home. This would continue to benefit leading global game companies such as NCsoft. We believe NCsoft has numerous, notable investment merits.<ul>
<li>First, it has an outstanding line-up of new games in different geographies around the world in 2021.</li>
<li>Second, its ROE is improving materially.</li>
<li>Third, NCsoft's stock price is trading at a discount to historical valuations and there could be further valuation multiples re-rating on this stock in the coming months.</li>
<li>Fourth, China has started to approve new Korean games again.</li>
<li>Fifth, NCsoft and CJ ENM have agreed to form a new JV to roll out new digital contents aimed at the global market.</li>
</ul>

Although NCsoft's stock price  has performed well in the past year, we believe the stock is well poised to outperform the market again this year. NCsoft, similar to many other leading global game companies, have benefited from COVID-19 as millions of people in Korea and around the world have been forced to various forms of lockdown and spend more time at home.Currently, millions of people in countries such as are starting to take new vaccines for COVID-19. However, there are new mutated COVID-19 strains that have found to be 50%+ more contagious than the existing COVID-19 virus. These events suggest that the first half of 2021 will continue to be quite restrictive in major governments around the world including South Korea and U.K. continuing to impose various kinds of lockdowns and social distancing measures which mean that people in these countries will continue to spend a lot of time at home. This would continue to benefit leading global game companies such as NCsoft. We believe NCsoft has numerous, notable investment merits.
First, it has an outstanding line-up of new games in different geographies around the world in 2021.
Second, its ROE is improving materially.
Third, NCsoft's stock price is trading at a discount to historical valuations and there could be further valuation multiples re-rating on this stock in the coming months.
Fourth, China has started to approve new Korean games again.
Fifth, NCsoft and CJ ENM have agreed to form a new JV to roll out new digital contents aimed at the global market.


NCsoft: Key Catalysts and Valuation Sensitivity Analysis

South Korea

Com2uS Corporation develops and markets game software based on digital convergence contents for internet mobile application.  The Company provides its products to domestic and overseas markets such as Asia, Europe, and North America.

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

Com2us Corp (078340 KS)

Lionheart Studio IPO Valuation Analysis

Our base case valuation of Lionheart Studio is a target price of 19,362 won per share, which is 46% lower than the low end of the IPO price range.

Douglas Kim

KRX K-New Deal Index Screening Period Ended: Rebalancing Changes & Passive Impacts Update

The KRX K-New Deal Index's screening period ended last Friday. This post updates the screening results and passive impacts.

Sanghyun Park

An Update on the Krafton IPO - The Largest Game Company in Korea

In this insight, we provide an update on the Krafton IPO. It has been reported in the local media that the Krafton could be valued at about 20...

Douglas Kim

NCsoft: Key Catalysts and Valuation Sensitivity Analysis

We believe NCsoft has numerous, notable investment merits, including an outstanding line-up of new games in different geographies around the world...

Douglas Kim

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

Lionheart Studio IPO Valuation Analysis

Our base case valuation of Lionheart Studio is a target price of 19,362 won per share, which is 46% lower than the low end of the IPO price range.

Douglas Kim

KRX K-New Deal Index Screening Period Ended: Rebalancing Changes & Passive Impacts Update

The KRX K-New Deal Index's screening period ended last Friday. This post updates the screening results and passive impacts.

Sanghyun Park

A List of Metaverse Related Stocks Which Could Be Included in the Next Metaverse ETFs Rebalance

In this insight, we provide 34 metaverse related stocks that are yet to be included in the metaverse ETFs in Korea and 10 stocks which could get...

Douglas Kim

An Update on the Krafton IPO - The Largest Game Company in Korea

In this insight, we provide an update on the Krafton IPO. It has been reported in the local media that the Krafton could be valued at about 20...

Douglas Kim

NCsoft: Key Catalysts and Valuation Sensitivity Analysis

We believe NCsoft has numerous, notable investment merits, including an outstanding line-up of new games in different geographies around the world...

Douglas Kim