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.

Equity Capital Markets

The Financial Supervisory Service (FSS) revised the securities declaration form (the IPO prospectus) and the securities issuance performance report so that institutional investors' voluntary lockup commitments can be made known to the market in more detail.<h2>As-Is</h2>To induce long-term investment in IPO stocks, the FSS operates a system that preferentially allocates IPO stocks to institutional investors who have pledged to hold them for a certain period of time after listing.However, only the total voluntary lockup of all institutional investors is disclosed in the securities declaration form and the issuance performance report. As a result, it is impossible to check the status of institutional lockup obligations by institutional type.<h2>To-Be</h2>The details of participation in the bookbuilding for each lockup commitment period should be classified by the following 6 institutional investor types in the securities declaration form (including the correction report). Also, in the securities issuance report, the allocation details of institutional investors shall be described in detail in the same way.<ol>
<li>Public offering fund (publicly raised funds)</li>
<li>Brokerages</li>
<li>Pensions, funds managing proprietary assets, banks, and insurance companies</li>
<li>Local other: discretionary investment companies, savings banks, real estate trust companies, capital companies, and leasing companies</li>
<li>Foreign institutional investors (with transaction record): foreign institutional investors who have a business relationship with the underwriter or of whom the underwriter acquirer is aware of the identity</li>
<li>Foreign institutional investors (without transaction record)</li>
</ol>

The Financial Supervisory Service (FSS) revised the securities declaration form (the IPO prospectus) and the securities issuance performance report so that institutional investors' voluntary lockup commitments can be made known to the market in more detail.As-IsTo induce long-term investment in IPO stocks, the FSS operates a system that preferentially allocates IPO stocks to institutional investors who have pledged to hold them for a certain period of time after listing.However, only the total voluntary lockup of all institutional investors is disclosed in the securities declaration form and the issuance performance report. As a result, it is impossible to check the status of institutional lockup obligations by institutional type.To-BeThe details of participation in the bookbuilding for each lockup commitment period should be classified by the following 6 institutional investor types in the securities declaration form (including the correction report). Also, in the securities issuance report, the allocation details of institutional investors shall be described in detail in the same way.
Public offering fund (publicly raised funds)
Brokerages
Pensions, funds managing proprietary assets, banks, and insurance companies
Local other: discretionary investment companies, savings banks, real estate trust companies, capital companies, and leasing companies
Foreign institutional investors (with transaction record): foreign institutional investors who have a business relationship with the underwriter or of whom the underwriter acquirer is aware of the identity
Foreign institutional investors (without transaction record)


Korea IPO Lockup Allocation Disclosure Rule Change: Starting with SD Biosensor & Krafton

Event-Driven

Kakao merges with Kakao Commerce again. Kakao Commerce was spun off from Kakao three years ago. Kakao internally notified its employees of the merger with Kakao Commerce yesterday. Both companies plan to hold a board meeting next week (likely June 22) to approve the merger. They are reportedly discussing a plan to merge in the third quarter at the earliest.Kakao Commerce has been in charge of operating Kakao's shopping-related services, such as Kakao Talk Gift. However, Kakao Commerce recently boosted its operating operation by merging Kakao Makers, the next-generation ordering platform. Through this merger, Kakao plans to shift its main business from advertising to online commerce. In particular, this merger is intended to prevent a situation in which the local online commerce market leads to an oligopoly between Coupang and Naver.<hr><h2>Regulatory filing</h2>Kakao Corp said in a regulatory filing that nothing had been finalized yet. Therefore, it now has to provide a follow-up filing within a month or at the time of finalization. The local market generally considers this type of not-denying response in a regulatory filing an acknowledgment. So, it'd be safe to assume that this merger will proceed.<section class="figure"><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/213/011/original/Screen+Shot+2021-06-14+at+2.51.47+PM.png?1623696739" class="editor-image img-responsive" data-smartkarma-image-id="213011"></figure></section>

Kakao merges with Kakao Commerce again. Kakao Commerce was spun off from Kakao three years ago. Kakao internally notified its employees of the merger with Kakao Commerce yesterday. Both companies plan to hold a board meeting next week (likely June 22) to approve the merger. They are reportedly discussing a plan to merge in the third quarter at the earliest.Kakao Commerce has been in charge of operating Kakao's shopping-related services, such as Kakao Talk Gift. However, Kakao Commerce recently boosted its operating operation by merging Kakao Makers, the next-generation ordering platform. Through this merger, Kakao plans to shift its main business from advertising to online commerce. In particular, this merger is intended to prevent a situation in which the local online commerce market leads to an oligopoly between Coupang and Naver.Regulatory filingKakao Corp said in a regulatory filing that nothing had been finalized yet. Therefore, it now has to provide a follow-up filing within a month or at the time of finalization. The local market generally considers this type of not-denying response in a regulatory filing an acknowledgment. So, it'd be safe to assume that this merger will proceed.

Kakao's Timely Trick to Defend Its Inflated Share Price: Merger with Kakao Commerce

Kakao Japan, a subsidiary of <a href="https://www.smartkarma.com/entities/kakao-corp" target="_blank" data-smartkarma-citation="entities:15002:1" rel="noopener">Kakao Corp (035720 KS)</a>, appears to be accelerating its IPO process.The local news outlet, Seoul Economic Daily, exclusively reports that Kakao Japan has sent a request for a proposal (RFP) to the local brokerages in Japan to recruit additional bankers for an IPO. So far, it has chosen Nomura as a lead underwriter.An unnamed Kakao official said that Kakao Japan is seeking additional underwriters as it now anticipates a larger offering size amid the rapid growth of Piccoma (ピッコマ).<div class="content-highlight">Piccoma (ピッコマ) is a Japanese manga subscription service that is available on smartphones, tablets, and personal computers developed and released by Kakao Japan.</div>But as for the timing of an IPO, this Kakao official didn't give any specific detail.<div class="content-highlight"><a href="https://signalm.sedaily.com/NewsView/22NHS3OKO9/GX1102" target="_blank" rel="noopener">Here is the link to the news report by Seoul Economic Daily</a></div>

Kakao Japan, a subsidiary of Kakao Corp (035720 KS), appears to be accelerating its IPO process.The local news outlet, Seoul Economic Daily, exclusively reports that Kakao Japan has sent a request for a proposal (RFP) to the local brokerages in Japan to recruit additional bankers for an IPO. So far, it has chosen Nomura as a lead underwriter.An unnamed Kakao official said that Kakao Japan is seeking additional underwriters as it now anticipates a larger offering size amid the rapid growth of Piccoma (ピッコマ).Piccoma (ピッコマ) is a Japanese manga subscription service that is available on smartphones, tablets, and personal computers developed and released by Kakao Japan.But as for the timing of an IPO, this Kakao official didn't give any specific detail.Here is the link to the news report by Seoul Economic Daily

Kakao Japan ¥1T IPO: Latest Update on Progress

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.

<a href="https://www.smartkarma.com/entities/coupang" target="_blank" data-smartkarma-citation="entities:28425:1" rel="noopener">Coupang (CPNG US)</a> , the largest product e-commerce player in Korea, aims to raise around US$3bn in its US listing via a mix of selling primary and secondary shares. As per media reports, the company has earlier obtained investments from Sequoia, Softbank, Blackrock and Fidelity.Coupang offers its 14.8m customers a wide range of owned-inventory selection. In addition, on its marketplace it also offers millions of SKUs sourced from over 200,000 merchants. Apart from normal e-commerce operation, it also provides its customers with: grocery offering, Rocket Fresh; logistics food delivery offering, Coupang Eats; and digital financial services, Coupang Pay.In this insight, we'll talk about the positive aspects of the deal.

Coupang (CPNG US) , the largest product e-commerce player in Korea, aims to raise around US$3bn in its US listing via a mix of selling primary and secondary shares. As per media reports, the company has earlier obtained investments from Sequoia, Softbank, Blackrock and Fidelity.Coupang offers its 14.8m customers a wide range of owned-inventory selection. In addition, on its marketplace it also offers millions of SKUs sourced from over 200,000 merchants. Apart from normal e-commerce operation, it also provides its customers with: grocery offering, Rocket Fresh; logistics food delivery offering, Coupang Eats; and digital financial services, Coupang Pay.In this insight, we'll talk about the positive aspects of the deal.

Coupang Pre-IPO - The Positives - Fast Growth, Sticky Customers

Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

Equity Bottom-Up

We believe now is the time to go Underweight on Kakao Corp, which has been one of the best-performing stocks in KOSPI this year.There are two major reasons why we believe investors should Underweight Kakao Corp now. First, our SoTP valuation analysis suggests Kakao Corp shares are overvalued. Second, the fact that there are now two credible vaccines against COVID-19 including those developed by Moderna and Pfizer which suggests that COVID-19 could become more manageable and less deadly around the world in 2021. One of the key reasons why Kakao Corp's shares soared this year has been due to the continued concerns about COVID-19 and the company's strengths in digital, "non-contact" business areas including online games, fintech, and other digital services. COVID-19 has actually accelerated the numerous businesses of Kakao Corp and its affiliates and pushed up its share price this year. Our base case valuation of Kakao Corp suggests an implied value of 296,066 won per share, representing an 18.2% downside risk from current levels. The SoTP valuation is broken down into the company's investments in a) public companies, b) private companies, c) Kakao Corp's core business, d) net cash and e) holdco discount.

We believe now is the time to go Underweight on Kakao Corp, which has been one of the best-performing stocks in KOSPI this year.There are two major reasons why we believe investors should Underweight Kakao Corp now. First, our SoTP valuation analysis suggests Kakao Corp shares are overvalued. Second, the fact that there are now two credible vaccines against COVID-19 including those developed by Moderna and Pfizer which suggests that COVID-19 could become more manageable and less deadly around the world in 2021. One of the key reasons why Kakao Corp's shares soared this year has been due to the continued concerns about COVID-19 and the company's strengths in digital, "non-contact" business areas including online games, fintech, and other digital services. COVID-19 has actually accelerated the numerous businesses of Kakao Corp and its affiliates and pushed up its share price this year. Our base case valuation of Kakao Corp suggests an implied value of 296,066 won per share, representing an 18.2% downside risk from current levels. The SoTP valuation is broken down into the company's investments in a) public companies, b) private companies, c) Kakao Corp's core business, d) net cash and e) holdco discount. 

Kakao Corp SoTP Valuation - Time To Go Underweight

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.

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

Kakaopay (377300 KS)

Korea IPO Lockup Allocation Disclosure Rule Change: Starting with SD Biosensor & Krafton

The Financial Supervisory Service revised the IPO prospectus form and the securities issuance performance report so that institutional lockup data...

Sanghyun Park

Kakao Japan ¥1T IPO: Latest Update on Progress

This post provides an update on Kakao Japan's IPO progress, which reportedly aims at a target IPO valuation of 1 trillion yen.

Sanghyun Park

Coupang Pre-IPO - The Positives - Fast Growth, Sticky Customers

Coupang (CPNG US) , the largest product e-commerce player in Korea, aims to raise around US$3bn in its US listing via a mix of selling primary and...

Sumeet Singh

Kakao Corp SoTP Valuation - Time To Go Underweight

We believe now is the time to go Underweight on Kakao Corp. Our base case valuation suggests an implied value of 296,066 won per share,...

Douglas Kim

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

Korea IPO Lockup Allocation Disclosure Rule Change: Starting with SD Biosensor & Krafton

The Financial Supervisory Service revised the IPO prospectus form and the securities issuance performance report so that institutional lockup data...

Sanghyun Park

Kakao's Timely Trick to Defend Its Inflated Share Price: Merger with Kakao Commerce

This post looks at Kakao's timely attempt to support its inflate share price by merging with Kakao Commerce to get an even higher valuation premium.

Sanghyun Park

Kakao Japan ¥1T IPO: Latest Update on Progress

This post provides an update on Kakao Japan's IPO progress, which reportedly aims at a target IPO valuation of 1 trillion yen.

Sanghyun Park

Coupang Pre-IPO - The Positives - Fast Growth, Sticky Customers

Coupang (CPNG US) , the largest product e-commerce player in Korea, aims to raise around US$3bn in its US listing via a mix of selling primary and...

Sumeet Singh

Kakao Corp SoTP Valuation - Time To Go Underweight

We believe now is the time to go Underweight on Kakao Corp. Our base case valuation suggests an implied value of 296,066 won per share,...

Douglas Kim