Asia Pac IPO & Placement Research, China biotech, Aequitas Research

Ke Yan, CFA, FRM

Asia Pac IPO & Placement Research, China biotech

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.

Quantitative Analysis

<ul>
<li>We analyzed the changes in short interest of KRX Stocks as of Nov 10th which has an aggregated short interest worth USD12.0bn.</li>
<li>We tabulate league table for top short by value and short as multiple of ADT, as well as weekly increases &amp; decreases in short value, short as multiple of ADT.</li>
<li>We highlight short interest changes in Medytox, Lg Energy Solution, Kakao, Krafton, Amorepacific.</li>
</ul>


We analyzed the changes in short interest of KRX Stocks as of Nov 10th which has an aggregated short interest worth USD12.0bn.
We tabulate league table for top short by value and short as multiple of ADT, as well as weekly increases &amp; decreases in short value, short as multiple of ADT.
We highlight short interest changes in Medytox, Lg Energy Solution, Kakao, Krafton, Amorepacific.


KRX Short Interest Weekly (Nov 10th): Short Covers for LG Energy, Kakao, Krafton, Amorepacific

Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

Equity Bottom-Up

<ul>
<li>There is a high likelihood of the Indian authorities fully approving the BGMI game after three months of trial. Plus, it has a solid pipeline of new games under development. </li>
<li>Krafton is improving its shareholder return policy. In addition, the consensus is likely to raise the company's earnings estimates post its excellent results in 1Q 2023. </li>
<li>We maintain our Positive view of Krafton and its shares are likely to continue to outperform the market this year. </li>
</ul>


There is a high likelihood of the Indian authorities fully approving the BGMI game after three months of trial. Plus, it has a solid pipeline of new games under development. 
Krafton is improving its shareholder return policy. In addition, the consensus is likely to raise the company's earnings estimates post its excellent results in 1Q 2023. 
We maintain our Positive view of Krafton and its shares are likely to continue to outperform the market this year. 


Krafton: India & Improving Shareholder Return Policy Likely to Lead to Further Outperformance

Japan/Asia Long-Short, LightStream Research

Mio Kato

Japan/Asia Long-Short

Long-Short Analysis on Japan, Asia and the World

LightStream Research

LightStream conducts quantitatively rigorous and data-driven analysis with a focus on Japan and Asia.

We consistently cover the Tech, Consumer and Industrial sectors, and provide ECM and Events coverage more broadly.

We supplement traditional qualitative insights from company relationships with a robust quantitative foundation that examines as much historical data as is available.
We further refine the accuracy of our insights and calls through the use of alternative data to flesh out current trends, and through a valuation framework that emphasises non-superficial peer group selection and a proper attempt to understand the metrics and changes that have driven security valuations in the past.

Equity Capital Markets

<p>We previously discussed our thoughts on Krafton’s valuation in <a href="https://www.smartkarma.com/insights/krafton-ipo-valuation" target="_blank" rel="noopener">Krafton IPO - Valuation | Smartkarma</a>. Since then, Krafton has lowered its asking range from KRW458,00-557,000 to KRW400,000-498,000 while reducing the number of new share offered from 7,030,000 to 5,624,000. They didn’t reduce the number of existing shares offered though, no. Somewhat fitting perhaps for a company that is over-reliant on a game whose battlefield you enter by parachute. They should colour the parachutes golden if they manage to pull this off.</p>

We previously discussed our thoughts on Krafton’s valuation in Krafton IPO - Valuation | Smartkarma. Since then, Krafton has lowered its asking range from KRW458,00-557,000 to KRW400,000-498,000 while reducing the number of new share offered from 7,030,000 to 5,624,000. They didn’t reduce the number of existing shares offered though, no. Somewhat fitting perhaps for a company that is over-reliant on a game whose battlefield you enter by parachute. They should colour the parachutes golden if they manage to pull this off.

<p>Krafton’s IPO looks extremely richly priced. The peer group selection by bankers is in our opinion highly dubious neglecting to account for Krafton’s current one trick pony status. We are happy to correct this error for them by including mobile gaming one tricks such as Mixi and Gungho below. You’re welcome bankers!</p>

Krafton’s IPO looks extremely richly priced. The peer group selection by bankers is in our opinion highly dubious neglecting to account for Krafton’s current one trick pony status. We are happy to correct this error for them by including mobile gaming one tricks such as Mixi and Gungho below. You’re welcome bankers!

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>One noteworthy aspect is SK Square's strategic move towards gradually shifting its investment portfolio from platform businesses to companies within the semiconductor supply chain.</li>
<li>Given SK's aim to acquire a 1-2% stake as an anchor investor in ARM, selling the Krafton stake is necessary to secure sufficient funds for the potential ARM investment.</li>
<li>We may consider positioning to capitalize on SK Square's potential block deal for its Krafton stake, aligning with the schedule for selecting anchor investors in August for the ARM listing.</li>
</ul>


One noteworthy aspect is SK Square's strategic move towards gradually shifting its investment portfolio from platform businesses to companies within the semiconductor supply chain.
Given SK's aim to acquire a 1-2% stake as an anchor investor in ARM, selling the Krafton stake is necessary to secure sufficient funds for the potential ARM investment.
We may consider positioning to capitalize on SK Square's potential block deal for its Krafton stake, aligning with the schedule for selecting anchor investors in August for the ARM listing.


Seizing Shorting Opportunities on Krafton as ARM Seeks Anchor Investors

South Korea

Krafton, Inc. operates as a game development company. The Company develops console games, mobile games, computer games, and other related products. Krafton markets its products throughout South Korea.

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Krafton (259960 KS)

KRX Short Interest Weekly (Nov 10th): Short Covers for LG Energy, Kakao, Krafton, Amorepacific

We analyzed KRX short interest report for the past week and highlight short interest changes in Medytox, Lg Energy Solution, Kakao, Krafton,...

Ke Yan, CFA, FRM

Krafton: India & Improving Shareholder Return Policy Likely to Lead to Further Outperformance

Krafton's share price is up 11% today after better than expected results in 3Q 2023. It had sales of 450 billion won (up 3.8% YoY) and operating...

Douglas Kim

Krafton IPO – This Should Be Pulled

In case you are looking for ideas that are bearish China but perhaps not directly in the firing line if positioning gets too stretched to the...

Mio Kato

Krafton IPO - Valuation

Breaking new lows. Still structurally challenged. Still liked by the sell side. Do read the last three bullet points and note that sell side target...

Mio Kato

Seizing Shorting Opportunities on Krafton as ARM Seeks Anchor Investors

This post examines shorting situation to capitalize on SK Square's potential block deal for its Krafton stake, aligning with the schedule for...

Sanghyun Park

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