Head of Research, IPOs & Placements, Aequitas Research

Sumeet Singh

Head of Research, IPOs & Placements

IPOs and Placements coverage across Asia Pacific

Aequitas Research

We cover all listing across the Asia Pacific along with follow-up placements. As of Dec 2020, our team had covered 539 IPOs with a hit rate of 73.5% and 685 placements with a hit rate of 66.8%.

We combine fundamental bottom-up views with our proprietary quantitative framework to provide a holistic coverage across new listings and placements. Our coverage includes pre-IPO notes before the deal is launched, follow-up analysis once the deal is live and post-listing trading analysis as well.

Equity Capital Markets

HD Hyundai Heavy Industries  / Equity Capital Markets

<ul>
<li>Hyundai Heavy Industries (HHI) was listed on Korea Exchange on 17th September, 2021. Its six month IPO lock-up will expire on 17th March, 2022.</li>
<li>Hyundai Heavy Industries (HHI) is a South Korean shipbuilder. The company is majority owned by Korea Shipbuilding &amp; Offshore Engineering (009540 KS) after the latter’s spin-off in 2019.</li>
<li>In this note, we will talk about the upcoming lock-up expiry, along with recent updates.</li>
</ul>


Hyundai Heavy Industries (HHI) was listed on Korea Exchange on 17th September, 2021. Its six month IPO lock-up will expire on 17th March, 2022.
Hyundai Heavy Industries (HHI) is a South Korean shipbuilder. The company is majority owned by Korea Shipbuilding &amp; Offshore Engineering (009540 KS) after the latter’s spin-off in 2019.
In this note, we will talk about the upcoming lock-up expiry, along with recent updates.


Hyundai Heavy IPO Lock-Up - Last of the Insti Lock-Ups, Parent’s Shares Out of Lock-Up as Well

Event-Driven

HD Hyundai Heavy Industries  / Event-Driven

<ul>
<li>
<a href="https://www.smartkarma.com/entities/hyundai-heavy-industries-co-ltd" target="_blank" data-smartkarma-citation="entities:33808:1" rel="noopener">Hyundai Heavy Industries (329180 KS)</a> (HHI) was listed on Korea Exchange on 17th September, 2021. Its three month IPO lock-up will expire on 17th December, 2021. </li>
<li>HHI is a South Korean shipbuilder. The company is wholly owned by <a href="https://www.smartkarma.com/entities/korea-shipbuilding-offshore-engineering-co-ltd" target="_blank" data-smartkarma-citation="entities:10155:1" rel="noopener">Korea Shipbuilding &amp; Offshore Engineering (009540 KS)</a> after the latter’s spin-off in 2019. </li>
<li>Locked-Up investors are still sitting on about 58% return over the three-month period, we think there will be some selling.</li>
</ul>



Hyundai Heavy Industries (329180 KS) (HHI) was listed on Korea Exchange on 17th September, 2021. Its three month IPO lock-up will expire on 17th December, 2021. 
HHI is a South Korean shipbuilder. The company is wholly owned by Korea Shipbuilding &amp; Offshore Engineering (009540 KS) after the latter’s spin-off in 2019. 
Locked-Up investors are still sitting on about 58% return over the three-month period, we think there will be some selling.


Hyundai Heavy IPO Lock-Up Expiry - Most Number of Shares Unlocked at Three-Month Mark

Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

<ul>
<li>In the past week, Posco (005490 KS) announced that it will form a holding company structure through a physical spin-off (물적분할). </li>
<li>Many minority shareholders are opposing this move since they believe that this structure could result in the company eventually listing POSCO (steel company) and their stakes could be diluted.</li>
<li>Shareholders will finally vote on this new organizational structure on 28 January 2022. Many minority shareholders are opposing on this new deal. The final vote will likely remain very close. </li>
</ul>


In the past week, Posco (005490 KS) announced that it will form a holding company structure through a physical spin-off (물적분할). 
Many minority shareholders are opposing this move since they believe that this structure could result in the company eventually listing POSCO (steel company) and their stakes could be diluted.
Shareholders will finally vote on this new organizational structure on 28 January 2022. Many minority shareholders are opposing on this new deal. The final vote will likely remain very close. 


POSCO's Physical Spin-Off to Form POSCO Holdings: Opposed by Many Minority Shareholders

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.

<p>Hyundai Heavy Industries' 15-trading day review period ended last Thursday, and the KRX officially announced that it would add Hyundai Heavy to the following KRX indexes. </p><div class="content-highlight"><ul>
<li>KRX 100 (equal-weighted):  Studio Dragon (25345) will be deleted.</li>
<li>KRX Sector (Machinery &amp; Equipment). No delete</li>
<li>The effective date for both indexes is December 10.</li>
</ul></div><p>As for KOSPI 200 Fast Entry, KRX said that Hyundai Heavy Industries' KOSPI 200 Fast Entry is currently under review. Its decision will be included in the notice of the December regular rebalancing results.</p><section class="figure"><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/235/523/original/2.png?1634401666" class="editor-image img-responsive" data-smartkarma-image-id="235523"></figure></section><p>Below is the average daily market cap of the KOSPI large-cap ordinary stocks during the 15-trading day review period from September 17 to October 14. Hyundai Heavy Industries ranks in 42nd place, making it eligible to join KOSPI 200 through Fast Entry.</p><div class="content-highlight"><p><strong>The rule is straightforward. If Hyundai Heavy stays within the top 50 by the average daily market cap among the KOSPI ordinary stocks for 15 trading days from listing, it will join KOSPI 200 through Fast Entry. So, its Fast Entry should be seen as a done deal.</strong></p></div><section class="figure"><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/235/524/original/1.png?1634402056" class="editor-image img-responsive" data-smartkarma-image-id="235524"></figure></section>

Hyundai Heavy Industries' 15-trading day review period ended last Thursday, and the KRX officially announced that it would add Hyundai Heavy to the following KRX indexes. 
KRX 100 (equal-weighted):  Studio Dragon (25345) will be deleted.
KRX Sector (Machinery &amp; Equipment). No delete
The effective date for both indexes is December 10.
As for KOSPI 200 Fast Entry, KRX said that Hyundai Heavy Industries' KOSPI 200 Fast Entry is currently under review. Its decision will be included in the notice of the December regular rebalancing results.Below is the average daily market cap of the KOSPI large-cap ordinary stocks during the 15-trading day review period from September 17 to October 14. Hyundai Heavy Industries ranks in 42nd place, making it eligible to join KOSPI 200 through Fast Entry.The rule is straightforward. If Hyundai Heavy stays within the top 50 by the average daily market cap among the KOSPI ordinary stocks for 15 trading days from listing, it will join KOSPI 200 through Fast Entry. So, its Fast Entry should be seen as a done deal.

KRX Made It Clear that Hyundai Heavy KOSPI 200 Fast Entry Inclusion Would Be December 10

<p>Hyundai Heavy Industries is up 14% on the previous trading day and today. Over the past five days, the share price has risen close to 19%.</p>
<section class="figure">
<figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/232/778/original/2.png?1632968483" class="editor-image img-responsive" data-smartkarma-image-id="232778"></figure>
</section>
<div class="content-caption">(Source: Google Finance)</div>
<p>It seems that the leading cause is a mixture of passive trading for KOSPI 200 inclusion and also the trading aimed at this expectation.</p>
<p>In fact, among the top net buying stocks by local pension funds (National Pension Service accounts for about 80%) over the past month, Hyundai Heavy Industries ranks second only after Krafton. Local pension funds have recorded more than 150 billion won in net purchases in the past six trading days since Hyundai Heavy Industries went public.</p>
<section class="figure">
<figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/232/779/original/1.png?1632968640" class="editor-image img-responsive" data-smartkarma-image-id="232779"></figure>
</section>
<div class="content-caption">(Source: KRX)</div>
<p>The market seems to be interpreting the purchase of Hyundai Heavy Industries by local pension funds as a preemptive response to the KOSPI 200 inclusion. Hyundai Heavy Industries' current market cap is ₩10.25T, ranking 41st among KOSPI common stocks. The KOSPI 200 Fast Entry is almost certain given the difference in market cap of about ₩2T from the 50th place.</p>

Hyundai Heavy Industries is up 14% on the previous trading day and today. Over the past five days, the share price has risen close to 19%.



(Source: Google Finance)
It seems that the leading cause is a mixture of passive trading for KOSPI 200 inclusion and also the trading aimed at this expectation.
In fact, among the top net buying stocks by local pension funds (National Pension Service accounts for about 80%) over the past month, Hyundai Heavy Industries ranks second only after Krafton. Local pension funds have recorded more than 150 billion won in net purchases in the past six trading days since Hyundai Heavy Industries went public.



(Source: KRX)
The market seems to be interpreting the purchase of Hyundai Heavy Industries by local pension funds as a preemptive response to the KOSPI 200 inclusion. Hyundai Heavy Industries' current market cap is ₩10.25T, ranking 41st among KOSPI common stocks. The KOSPI 200 Fast Entry is almost certain given the difference in market cap of about ₩2T from the 50th place.

Hyundai Heavy Industries: Passive Impact Timing Confusion

South Korea

HD Korea Shipbuilding & Offshore Engineering Co., Ltd. operates as a shipbuilding and offshore company. The Company provides industrial plant engineering, special and naval shipbuilding, marine engine and machinery, industrial machinery and energy services. HD Korea Shipbuilding & Offshore Engineering markets its products worldwide.

HD Korea Shipbuilding & Offshore Engineering (009540 KS)

HD Korea Shipbuilding & Offshore Engineering

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HD Korea Shipbuilding & Offshore Engineering (009540 KS)

Hyundai Heavy IPO Lock-Up - Last of the Insti Lock-Ups, Parent’s Shares Out of Lock-Up as Well

Hyundai Heavy Industries (HHI) was listed on Korea Exchange on 17th September, 2021. Its six month IPO lock-up will expire on 17th March, 2022.

Sumeet Singh

Hyundai Heavy IPO Lock-Up Expiry - Most Number of Shares Unlocked at Three-Month Mark

Hyundai Heavy Industries (329180 KS) was listed on Korea Exchange on 17th September, 2021. Its three month IPO lock-up will expire on 17th...

Sumeet Singh

POSCO's Physical Spin-Off to Form POSCO Holdings: Opposed by Many Minority Shareholders

Overall, we believe that POSCO's shares could be negatively pressured by this decision on the company to form a physical spin-off of the company.

Douglas Kim

KRX Made It Clear that Hyundai Heavy KOSPI 200 Fast Entry Inclusion Would Be December 10

The KRX made it clear in its official disclosure that the effective date of the Hyundai Heavy Industries' KOSPI 200 Fast Entry would be December 10.

Sanghyun Park

Hyundai Heavy Industries: Passive Impact Timing Confusion

This post discusses the passive impact timing confusion for Hyundai Heavy Industries, which might have been a reason behind the recent price surge.

Sanghyun Park

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