Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

Equity Capital Markets

<div class="content-highlight">
<p><strong>It was announced today that the <a href="https://www.sedaily.com/NewsView/22OZJ2OWW6" target="_blank" rel="noopener">Kakao Pay IPO</a> will get postponed to 4Q 2021. Kakao Pay will submit revised IPO prospectus filings towards end of September/early October 2021.</strong></p>
<p><strong>As a result of this delay in IPO for Kakao Pay, we believe that this could actually lead to a greater demand for the Kakao Bank IPO. </strong></p>
</div>


It was announced today that the Kakao Pay IPO will get postponed to 4Q 2021. Kakao Pay will submit revised IPO prospectus filings towards end of September/early October 2021.
As a result of this delay in IPO for Kakao Pay, we believe that this could actually lead to a greater demand for the Kakao Bank IPO. 


A Delay in Kakao Pay IPO Should Help Kakao Bank IPO Demand

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.

<p><a href="https://www.smartkarma.com/entities/paytm-mobile-solutions-pvt-ltd" target="_blank" data-smartkarma-citation="entities:26149:1" rel="noopener">Paytm (PAYTM IN)</a> plans to raise around US$2.2bn via a mix of selling primary and secondary shares in its India IPO. The company is backed by <a href="https://www.smartkarma.com/entities/ant-group-co-ltd" target="_blank" data-smartkarma-citation="entities:24240:1" rel="noopener">Ant Financial Services Group (6688 HK)</a> (<a href="https://www.smartkarma.com/entities/alibaba-group-holding-ltd" target="_blank" data-smartkarma-citation="entities:787:1" rel="noopener">Alibaba Group (BABA US)</a>), <a href="https://www.smartkarma.com/entities/softbank-group-corp" target="_blank" data-smartkarma-citation="entities:315:1" rel="noopener">Softbank Group (9984 JP)</a> and counts <a href="https://www.smartkarma.com/entities/berkshire-hathaway-inc-cl-a" target="_blank" data-smartkarma-citation="entities:1044:1" rel="noopener">Berkshire Hathaway Inc Cl A (BRK/A US)</a> among its investors.</p><p>Paytm offers payment services, commerce and cloud services, and financial services to 333m consumers and over 21m merchants, as of Mar 21. It offers consumers a wide selection of payment options on the Paytm app. It also offers merchants solutions that allow them to accept payments, acquire and retain consumers, improve their business operations and access financial services.</p><p>The company clocked payment gross merchant value (GMV) of INR4tn (US$50bn) in FY21 for 114m transacting users during the year. Its users undertook a total of 7.4bn transactions in 2020. Along with its payment infrastructure, PayTM also runs a payment bank, in which it owns a 49% stake. The payment bank had a deposit base of INR52bn across 64m payment bank accounts.</p><p>In this note we will talk about the positive aspects of the deal.</p>

Paytm (PAYTM IN) plans to raise around US$2.2bn via a mix of selling primary and secondary shares in its India IPO. The company is backed by Ant Financial Services Group (6688 HK) (Alibaba Group (BABA US)), Softbank Group (9984 JP) and counts Berkshire Hathaway Inc Cl A (BRK/A US) among its investors.Paytm offers payment services, commerce and cloud services, and financial services to 333m consumers and over 21m merchants, as of Mar 21. It offers consumers a wide selection of payment options on the Paytm app. It also offers merchants solutions that allow them to accept payments, acquire and retain consumers, improve their business operations and access financial services.The company clocked payment gross merchant value (GMV) of INR4tn (US$50bn) in FY21 for 114m transacting users during the year. Its users undertook a total of 7.4bn transactions in 2020. Along with its payment infrastructure, PayTM also runs a payment bank, in which it owns a 49% stake. The payment bank had a deposit base of INR52bn across 64m payment bank accounts.In this note we will talk about the positive aspects of the deal.

Paytm (One 97) Pre-IPO - The Positives - Will Be One of India’s Largest IPOs

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

KRX BBIG IndexThe KRX BBIG K-New Deal Index contains 12 stocks, listed either on the KOSPI or KOSDAQ market, three leading companies in each of the four industries. Each of the four industries also has its own index containing 10 constituents. So, we have one mother index (BBIG) and four sub-indices representing each of the four industries.
Secondary Battery

Bio

Internet

Game
Rebalancing: The top-three largest full market cap stocks from the Secondary Battery, Bio, Internet, and Game are selected for rebalancing in March and September. It is biannually reconstituted. Rebalancing occurs on the trading day following the last trading day of the March and September delivery month for KOSPI 200 futures contracts.





Rebalancing schedule

Rebalancing cycle
Semi-annually


Rebalancing month
March and September


Implementation date
The trading day following the last trading day for KOSPI 200 futures contracts


Next implementation date
September 10, 2021


Rebalancing trading
At the close on September 9, 2021


Screening base date
The last trading day of the month preceding the date of regular rebalancing


Screening period
The three months preceding the screening base date

Source: KRX &amp; WISE Index

Index weight: The BBIG Index is an equal-weight index in which each index constituent is allocated the same weight (8.33%) at each rebalancing. As for the four sub-indices, the top-three largest full market cap stocks are given the weight of 75%, in which each stock is allocated the same weight of 25% at each rebalancing. In contrast, the remaining seven constituents are given the remaining weight of 25%, where their float-adjusted market cap weights them.







Index calculations
BBIG
Four sub-indices


Number of constituents
12
10


Index weight
Equal-weighted at 8.33%

Top 3 (by full market cap): Equal-weighted at 25% The remaining 7: float-adjusted market cap-weighted totaling 25%



Source: KRX &amp; WISE Index

The mother index and battery sub-index have an AUM that is not small considering the number of constituents. BBIG has an AUM of ₩520B as of today, and its battery is ₩760B. Bio is about ₩100B. However, Internet and Game do not have meaningful AUMs.








ETFs tracking BBIG indices
Index
Ticker
AUM


Mirae Asset TIGER KRX BBIG K-New Deal ETF
BBIG
364960
₩480.9B


Hana Financial Investment Hana KRX BBIG K-New Deal ETN 3
700003
₩10.5B


TIMEFOLIO TIMEFOLIO BBIG Active ETF
385710
₩26.9B


- Total
-
₩518.3B


Mirae Asset TIGER KRX Second Battery K-NewDeal ETF
Secondary Battery
364980
₩759.7B


Mirae Asset TIGER KRX BIO K-New Deal ETF
Bio
364970
₩97.6B


Mirae Asset TIGER KRX Internet K-New Deal ETF
Internet
365000
₩49.2B


Mirae Asset TIGER KRX Game K-New Deal ETF
Game
364990
₩35.7B

Source: KRX

The screening period is the three months preceding the screening base date. So, the screening period this time is June 1 to August 31. Below is the daily average market cap from June 1 to July 19 and the index weight as of July 19.








BBIG
Weight, as of July 19
Average daily full market cap (June 1~July 19)
30-day average daily trade value


Kakao Corp
12.34%
₩66,478.6B
₩846.3B


Kakao Games Corp
11.59%
₩4,805.8B
₩244.2B


Naver Corp
8.96%
₩65,954.1B
₩388.6B


Samsung Biologics Co Ltd
9.13%
₩56,359.3B
₩77.4B


Samsung SDI Co Ltd
8.15%
₩46,995.6B
₩216.7B


Netmarble Corp
8.18%
₩11,730.2B
₩52.7B


SK Biopharmaceuticals
7.70%
₩9,681.8B
₩55.4B


SK Innovation Co Ltd
7.38%
₩25,451.8B
₩256.9B


LG Chem Ltd
7.11%
₩58,759.0B
₩197.2B


Celltrion, Inc.
6.61%
₩33,438.9B
₩149.8B


Douzone Bizon Co Ltd
6.22%
₩2,600.1B
₩21.1B


NCSoft Corp
6.57%
₩18,199.9B
₩70.1B

Source: KRX &amp; TIGER ETF











Sub-indices
Weight, as of July 19
Average daily full market cap (June 1~July 19
Float-adjusted market cap
30-day average daily trade value

Battery

LG Chem Ltd
21.89%
₩58,759.0B
₩38,763.3B
₩197.2B


Samsung SDI Co Ltd
25.07%
₩46,995.6B
₩34,335.0B
₩216.7B


SK Innovation Co Ltd
22.75%
₩25,451.8B
₩14,161.4B
₩256.9B


Posco Chemical Co Ltd
8.25%
₩9,112.5B
₩3,413.5B
₩63.8B


SKC Co Ltd
6.00%
₩5,640.2B
₩3,014.7B
₩57.0B


Ecopro BM Co Ltd
5.13%
₩4,604.0B
₩3,037.2B
₩71.4B


Iljin Materials Co Ltd
2.93%
₩3,269.7B
₩1,518.1B
₩24.5B


L&amp;F Co., Ltd.
3.52%
₩2,639.3B
₩1,564.8B
₩75.3B


SoulBrain Co Ltd
2.49%
₩2,539.3B
₩1,358.8B
₩10.2B


Chunbo Co Ltd
1.87%
₩1,929.2B
₩799.1B
₩30.8B

Bio

Samsung Biologics Co Ltd
29.94%
₩56,359.3B
₩13,954.6B
₩77.4B


Celltrion, Inc.
21.64%
₩37,030.6B
₩28,069.2B
₩149.8B


Celltrion HealthCare Co Ltd
10.06%
₩18,089.2B
₩10,956.6B
₩91.0B


SK Biopharmaceuticals Co Ltd
25.20%
₩9,681.8B
₩3,291.8B
₩55.4B


Celltrion Pharm Inc
2.35%
₩5,629.5B
₩2,512.4B
₩76.2B


Hanmi Science Co Ltd
1.56%
₩5,073.4B
₩1,610.3B
₩34.6B


Yuhan Corp
3.00%
₩4,454.7B
₩3,331.2B
₩14.6B


Shinpoong Pharmaceutical Co Ltd
2.07%
₩3,919.5B
₩2,390.5B
₩395.7B


Green Cross Corp
1.61%
₩3,808.6B
₩1,754.3B
₩23.1B


Seegene Inc
2.53%
₩3,927.5B
₩2,664.4B
₩289.6B

Internet

Kakao Corp
34.95%
₩66,478.6B
₩48,502.8B
₩846.3B


Naver Corp
25.47%
₩65,954.1B
₩53,106.2B
₩388.6B


Douzone Bizon Co Ltd
17.72%
₩2,600.1B
₩1,613.4B
₩21.1B


KMW Co Ltd
6.08%
₩2,144.3B
₩1,353.5B
₩13.0B


NHN KCP Corp
3.21%
₩1,365.8B
₩730.7B
₩9.5B


AfreecaTV Co Ltd
4.68%
₩1,294.1B
₩891.0B
₩16.8B


Ace Technologies Corp.
2.45%
₩786.2B
₩600.2B
₩11.5B


Seojin System Co Ltd
2.31%
₩811.4B
₩544.8B
₩11.1B


Ahnlab Inc
1.77%
₩703.2B
₩409.1B
₩7.2B


Rsupport Co Ltd
1.34%
₩497.3B
₩261.1B
₩29.1B

Game

NCSoft Corp
18.73%
₩18,199.9B
₩7,753.2B
₩70.1B


Netmarble Corp
23.34%
₩11,730.2B
₩3,657.5B
₩52.7B


PearlAbyss Corp
9.46%
₩4,587.3B
₩3,755.6B
₩45.2B


Kakao Games Corp
33.10%
₩4,805.8B
₩2,047.3B
₩244.2B


Com2uS Corp
3.91%
₩1,627.3B
₩1,022.8B
₩19.8B


NHN Corp
3.08%
₩1,552.2B
₩708.1B
₩9.6B


Doubleu Games Co Ltd
2.06%
₩1,160.4B
₩567.4B
₩7.6B


Webzen Inc
2.48%
₩1,094.4B
₩641.6B
₩9.5B


Wemade Co Ltd
2.00%
₩949.2B
₩505.4B
₩16.0B


Neptune Co
1.76%
₩815.4B
₩420.4B
₩6.5B

Source: KRX &amp; TIGER ETF



KRX BBIG Rebalancing Complete Preview: SK Bioscience, SK IE Tech, Krafton, Kakao Games, & Kakao Pay

<p>In a regulatory filing on July 16 (later today), the Financial Supervisory Service said that it had requested Kakao Pay to revise its IPO prospectus. As a result, the IPO prospectus submitted by Kakao Pay earlier this month has been suspended.</p><section class="figure"><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/218/913/original/Screen+Shot+2021-07-16+at+10.12.05+AM.png?1626444842" class="editor-image img-responsive" data-smartkarma-image-id="218913"></figure></section><p>Kakao Pay must submit a revised report within three months, and if it is not submitted, it is considered a withdrawal of the public offering.</p><section class="figure"><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/218/914/original/Screen+Shot+2021-07-16+at+10.20.56+AM.png?1626445364" class="editor-image img-responsive" data-smartkarma-image-id="218914"></figure><div class="content-highlight"><p><a href="http://dart.fss.or.kr/dsaf001/main.do?rcpNo=20210716100004" target="_blank" rel="noopener">Here is the link to the regulatory filing. (DART)</a></p></div></section>

In a regulatory filing on July 16 (later today), the Financial Supervisory Service said that it had requested Kakao Pay to revise its IPO prospectus. As a result, the IPO prospectus submitted by Kakao Pay earlier this month has been suspended.Kakao Pay must submit a revised report within three months, and if it is not submitted, it is considered a withdrawal of the public offering.Here is the link to the regulatory filing. (DART)

Kakao Pay to Revise Offering Price: Reasons & Schedule Impacts on Kakao Bank & Krafton

<div class="content-highlight">
<p>On 16 July, FSS (Financial Supervisory Service) requested <a href="https://www.sedaily.com/NewsView/22OXPDP6O5" target="_blank" rel="noopener">Kakao Pay</a> to revise the IPO prospectus filings and postpone the IPO process. The book building for Kakao Pay was originally supposed to start on 29 July. Now, this will get postponed. </p>
<p>One of the key reasons why FSS has decided to postpone the Kakao Pay IPO is likely because of the numerous complaints from institutional investors that the IPO price range (especially high end) is too high. As a result, FSS requested the correction and supplementation of the IPO filing submitted by Kakao Pay. </p>
</div>


On 16 July, FSS (Financial Supervisory Service) requested Kakao Pay to revise the IPO prospectus filings and postpone the IPO process. The book building for Kakao Pay was originally supposed to start on 29 July. Now, this will get postponed. 
One of the key reasons why FSS has decided to postpone the Kakao Pay IPO is likely because of the numerous complaints from institutional investors that the IPO price range (especially high end) is too high. As a result, FSS requested the correction and supplementation of the IPO filing submitted by Kakao Pay. 


FSS Requests Kakao Pay to Revise IPO Filings & Postpone IPO Process

South Korea

Kakao Pay Corp. operates financial businesses. The Company provides online payment, currency encryption, and other services. Kakao Pay conducts businesses in South Korea.

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Kakaopay (377300 KS)

A Delay in Kakao Pay IPO Should Help Kakao Bank IPO Demand

It was announced today that the Kakao Pay IPO will get postponed to 4Q 2021.As a result, we believe that this could actually lead to a greater...

Douglas Kim

Paytm (One 97) Pre-IPO - The Positives - Will Be One of India’s Largest IPOs

Paytm plans to raise around US$2.2bn in its India IPO. The company is backed by Ant Fin, Softbank (9984 JP) and counts Berkshire Hathaway among its...

Sumeet Singh

KRX BBIG Rebalancing Complete Preview: SK Bioscience, SK IE Tech, Krafton, Kakao Games, & Kakao Pay

This post is a complete preview of the KRX BBIG rebalancing, featuring SK Bioscience, SK IE Technology, Kakao Games, Krafton, Kakao Pay, SD...

Sanghyun Park

Kakao Pay to Revise Offering Price: Reasons & Schedule Impacts on Kakao Bank & Krafton

In a regulatory filing on July 16, the Financial Supervisory Service said that it had requested Kakao Pay to revise its IPO prospectus.

Sanghyun Park

FSS Requests Kakao Pay to Revise IPO Filings & Postpone IPO Process

On 16 July, FSS requested Kakao Pay to revise the IPO prospectus filings and postpone the IPO process. It is likely that the IPO price range of...

Douglas Kim

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