Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

Equity Capital Markets

<ul>
<li>In this report, we review our IPO investment research in 2021, including the performance of our calls.</li>
<li>We made 37 investment calls on IPOs this year, of which 28 had positive ratings on the IPOs and 9 had negative ratings.</li>
<li>The 28 stocks (positive ratings) were up 26.1% on average from their IPO prices. The 9 stocks (negative ratings) were up only 4.9% on average from their IPO prices.</li>
</ul>


In this report, we review our IPO investment research in 2021, including the performance of our calls.
We made 37 investment calls on IPOs this year, of which 28 had positive ratings on the IPOs and 9 had negative ratings.
The 28 stocks (positive ratings) were up 26.1% on average from their IPO prices. The 9 stocks (negative ratings) were up only 4.9% on average from their IPO prices.


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>KRX calculates floats fairly aggressively even in new IPOs. This was symbolically shown in the case of Kakao Pay, which received a 35% float rate.</li>
<li>So, we need a trading setup that raises the float rate prediction range in future KOSPI 200 Fast Entry cases.</li>
<li>Considering that rebalancing trading that occurs on the implementation day is now partially digested in regular trading hours, we need to consider getting out positions before the closing auction hours.</li>
</ul>


KRX calculates floats fairly aggressively even in new IPOs. This was symbolically shown in the case of Kakao Pay, which received a 35% float rate.
So, we need a trading setup that raises the float rate prediction range in future KOSPI 200 Fast Entry cases.
Considering that rebalancing trading that occurs on the implementation day is now partially digested in regular trading hours, we need to consider getting out positions before the closing auction hours.


KOSPI 200 New Entrants: KRX-Concluded Float Rates & Rebalancing Trading Pattern Today

<ul>
<li>After the market close today, KakaoBank (323410 KS)  announced a block deal worth 514 billion won involving 7.62 million shares.</li>
<li>The block deal sale accounts for 1.6% of outstanding shares. Netmarble Corporation (251270 KS) is selling its stake in KakaoBank.</li>
<li>We would not take the deal. Our valuation suggests an implied price of 56,144 won per share for KakaoBank, which is 17% below current price. </li>
</ul>


After the market close today, KakaoBank (323410 KS)  announced a block deal worth 514 billion won involving 7.62 million shares.
The block deal sale accounts for 1.6% of outstanding shares. Netmarble Corporation (251270 KS) is selling its stake in KakaoBank.
We would not take the deal. Our valuation suggests an implied price of 56,144 won per share for KakaoBank, which is 17% below current price. 


Kakao Bank - Announces a Block Deal Sale of 514 Billion Won

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.

<ul>
<li>Netmarble aims to raise up to US$415m via selling 1.5% stake in Kakao Bank.</li>
<li>This is not the first selldown by Netmarble and hence, it might be kind of expected as it comes after the three month lock-up expired last month.</li>
<li>In this note, we will talk about the deal dynamics and run the deal through our ECM framework.</li>
</ul>


Netmarble aims to raise up to US$415m via selling 1.5% stake in Kakao Bank.
This is not the first selldown by Netmarble and hence, it might be kind of expected as it comes after the three month lock-up expired last month.
In this note, we will talk about the deal dynamics and run the deal through our ECM framework.


Kakao Bank Placement - Not a Surprise but past Deal Didn’t Do Well

LG Energy Solution / Equity Capital Markets

<ul>
<li>LG Energy Solution is getting ready to complete its IPO in the Korean stock market on 27 January 2022. The IPO price is from 257,000 won to 300,000 won. </li>
<li>The IPO base deal size is from $9.3 billion to $10.8 billion. This is the biggest ever IPO in Korea. </li>
<li>The bankers used CATL and Samsung SDI as its comps. Using their annualized EBITDA in 2021, the average EV/EBITDA of its peers is 51.4x (2021E). </li>
</ul>


LG Energy Solution is getting ready to complete its IPO in the Korean stock market on 27 January 2022. The IPO price is from 257,000 won to 300,000 won. 
The IPO base deal size is from $9.3 billion to $10.8 billion. This is the biggest ever IPO in Korea. 
The bankers used CATL and Samsung SDI as its comps. Using their annualized EBITDA in 2021, the average EV/EBITDA of its peers is 51.4x (2021E). 


South Korea

KakaoBank Corp. operates bank businesses. The Company provides deposit money, withdraw money, credit cards, stock accounts, linked loans, and other services. KakaoBank conducts businesses in South Korea.

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KakaoBank (323410 KS)

Review of Our IPO Research in 2021

We review our IPO investment research in 2021. The 28 stocks (positive ratings) were up 26.1% (average) from IPO prices. The 9 stocks (negative...

Douglas Kim

KOSPI 200 New Entrants: KRX-Concluded Float Rates & Rebalancing Trading Pattern Today

Kakao Pay eventually received a 35% float rate, meaning that KRX has included all of Alipay's non-locked stake in the float.

Sanghyun Park

Kakao Bank - Announces a Block Deal Sale of 514 Billion Won

After the market close today, KakaoBank (323410 KS) announced a block deal worth 514 billion won involving 7.62 million shares.

Douglas Kim

Kakao Bank Placement - Not a Surprise but past Deal Didn’t Do Well

Netmarble aims to raise up to US$415m via selling 1.5% stake in Kakao Bank. In this note, we will talk about the deal dynamics and run the deal...

Sumeet Singh

LG Energy Solution IPO Preview

LG Energy Solution is getting ready to complete its IPO in the Korean stock market on 27 January 2022. This is the biggest ever IPO in Korea.

Douglas Kim

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