Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

Event-Driven

<ul>
<li>Uni President Enterprises and President Chain Store Corp (an affiliate of Uni-President Group) have agreed to acquire a controlling 60% stake ownership of Carrefour Taiwan from Carrefour SA (CA FP).</li>
<li>We believe the acquisition of the additional 49.5% stake in Carrefour Taiwan is likely to have a positive impact on Uni President Enterprises (1216 TT).</li>
<li>Uni President Enterprises is trading at P/S multiple of 0.77x so the acquisition multiple of 0.6x would be slightly lower than Uni President Enterprises' current valuation multiple. </li>
</ul>


Uni President Enterprises and President Chain Store Corp (an affiliate of Uni-President Group) have agreed to acquire a controlling 60% stake ownership of Carrefour Taiwan from Carrefour SA (CA FP).
We believe the acquisition of the additional 49.5% stake in Carrefour Taiwan is likely to have a positive impact on Uni President Enterprises (1216 TT).
Uni President Enterprises is trading at P/S multiple of 0.77x so the acquisition multiple of 0.6x would be slightly lower than Uni President Enterprises' current valuation multiple. 


Uni President Enterprises: Positive Catalyst from Additional Stake Purchase of Carrefour Taiwan

Private Capital Markets

<ul>
<li>
SSG.com is getting ready for an IPO in 2H 2022/1H 2023. Local media have mentioned that SSG.com is targeting a valuation of 10 trillion won for the company.</li>
<li>We believe SSG.com would need to cut the valuation by at least 50% (5 trillion won) in order to complete its IPO. </li>
<li>We believe valuation levels of 11st would need to come down significantly in the 2 trillion won to 3 trillion won range in order for an IPO to be completed. </li>
</ul>



SSG.com is getting ready for an IPO in 2H 2022/1H 2023. Local media have mentioned that SSG.com is targeting a valuation of 10 trillion won for the company.
We believe SSG.com would need to cut the valuation by at least 50% (5 trillion won) in order to complete its IPO. 
We believe valuation levels of 11st would need to come down significantly in the 2 trillion won to 3 trillion won range in order for an IPO to be completed. 


SSG.Com & 11st: Need to Drastically Cut Their Valuations to Complete Their IPOs in 2022/2023

Equity Bottom-Up

<ul>
<li>E Mart Inc (139480 KS) is a very interesting turnaround story in Korea with a visible improvement in profit margins. </li>
<li>The end of the social distancing measures will likely lead to a gradual increase of the consumers back to the Emart stores.</li>
<li>Emart is currently trading at attractive valuation multiples of EV/EBITDA of 5.3x and P/B of 0.3x, using 2022 consensus estimates, which are about 19% discount to the historical average. </li>
</ul>


E Mart Inc (139480 KS) is a very interesting turnaround story in Korea with a visible improvement in profit margins. 
The end of the social distancing measures will likely lead to a gradual increase of the consumers back to the Emart stores.
Emart is currently trading at attractive valuation multiples of EV/EBITDA of 5.3x and P/B of 0.3x, using 2022 consensus estimates, which are about 19% discount to the historical average. 


Emart: A Turnaround Story With Improvement in Profit Margins

Korea / Special Sits, Pairs, Index Rebalancing, Clepsydra Capital

Sanghyun Park

Korea / Special Sits, Pairs, Index Rebalancing

Clepsydra Capital

Investigate special situations, pairs, and index rebalancing trades in Korea.

<ul>
<li>I screened those local buybacks in Korea with a market cap of +₩300B. I further selected those whose buyback volume exceeds 0.5% of SO and buyback completion is below 50%.</li>
<li>I then narrowed them down to those whose buybacks will likely be completed within 30 trading days with a daily buyback x ADTV of 0.15x or higher.</li>
<li>As a result, I obtained nine names: Hwasung Industrial, SK Chemicals, Meritz Securities, Huons Global, Daishin Securities, E-Mart, Meritz Financial Group, Meritz Fire, &amp; Hwaseung Industries
</li>
</ul>


I screened those local buybacks in Korea with a market cap of +₩300B. I further selected those whose buyback volume exceeds 0.5% of SO and buyback completion is below 50%.
I then narrowed them down to those whose buybacks will likely be completed within 30 trading days with a daily buyback x ADTV of 0.15x or higher.
As a result, I obtained nine names: Hwasung Industrial, SK Chemicals, Meritz Securities, Huons Global, Daishin Securities, E-Mart, Meritz Financial Group, Meritz Fire, &amp; Hwaseung Industries



KOSPI/KOSDAQ Buybacks in Progress: Those with High Daily Flow Screened

Cross Asset Strategy

<ul>
<li>On 6 March, the Financial Services Commission (FSC) and the Korea Exchange (KRX) jointly announced revisions and guidelines to spin-offs and double listings in Korea.</li>
<li>The new guidelines of the FSC and KRX regarding the spin-offs/double listings is positive and a step in the right direction to improve the corporate governance of companies in Korea.</li>
<li>On the other hand, one of the consequences of these changes could be that the parent companies may take more time to complete IPOs of their promising affiliates.</li>
</ul>


On 6 March, the Financial Services Commission (FSC) and the Korea Exchange (KRX) jointly announced revisions and guidelines to spin-offs and double listings in Korea.
The new guidelines of the FSC and KRX regarding the spin-offs/double listings is positive and a step in the right direction to improve the corporate governance of companies in Korea.
On the other hand, one of the consequences of these changes could be that the parent companies may take more time to complete IPOs of their promising affiliates.


FSC and KRX Jointly Announce Revisions to Spinoffs and Double Listings in Korea

South Korea

E-MART Inc. operates E-Mart discount stores. The Company retails food, clothing, household goods, electronics, and other items through several branch stores.

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E Mart Inc (139480 KS)

Uni President Enterprises: Positive Catalyst from Additional Stake Purchase of Carrefour Taiwan

We believe the acquisition of the additional 49.5% stake in Carrefour Taiwan is likely to have a positive impact on Uni President Enterprises (1216...

Douglas Kim

SSG.Com & 11st: Need to Drastically Cut Their Valuations to Complete Their IPOs in 2022/2023

SSG.com and 11st are getting ready to complete their IPOs in 2H 2022/2023. Both companies would need to significantly reduce their valuation...

Douglas Kim

Emart: A Turnaround Story With Improvement in Profit Margins

E Mart is a turnaround story with a visible improvement in profit margins. The end of the social distancing measures will likely lead to a gradual...

Douglas Kim

KOSPI/KOSDAQ Buybacks in Progress: Those with High Daily Flow Screened

This post details share buybacks in progress among the KOSPI/KOSDAQ stocks and screens those with a high daily flow (+0.15x ADTV).

Sanghyun Park

FSC and KRX Jointly Announce Revisions to Spinoffs and Double Listings in Korea

The new guidelines of the FSC and KRX regarding the spin-offs/double listings is positive and a step in the right direction to improve the...

Douglas Kim

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