Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

Equity Capital Markets

<ul>
<li>After the market close today, Seoul Economic Daily reported that Socar is likely to delay its IPO to later on. </li>
<li>Although Socar has not formally announced that it will delay the IPO, we believe that there is a high probability that the IPO will be postponed. </li>
<li>The overall sentiment on the Socar IPO appears to be negative by many institutional investors, unless the company reduces the IPO price range substantially. </li>
</ul>


After the market close today, Seoul Economic Daily reported that Socar is likely to delay its IPO to later on. 
Although Socar has not formally announced that it will delay the IPO, we believe that there is a high probability that the IPO will be postponed. 
The overall sentiment on the Socar IPO appears to be negative by many institutional investors, unless the company reduces the IPO price range substantially. 


<ul>
<li>Our base case valuation of WCP is EV of 2.4 trillion won, implied market cap of 3.0 trillion won and target price of 87,805 won per share. </li>
<li>Given the lack of upside relative to the IPO price range (80,000 won to 100,000 won), we would PASS on this IPO deal.</li>
<li>We forecast the company to generate revenue of 229.1 billion won (up 23.5% YoY) in 2022. We estimate operating margin of 14.8% in 2022, lower than 21.8% in 2021.</li>
</ul>


Our base case valuation of WCP is EV of 2.4 trillion won, implied market cap of 3.0 trillion won and target price of 87,805 won per share. 
Given the lack of upside relative to the IPO price range (80,000 won to 100,000 won), we would PASS on this IPO deal.
We forecast the company to generate revenue of 229.1 billion won (up 23.5% YoY) in 2022. We estimate operating margin of 14.8% in 2022, lower than 21.8% in 2021.


<ul>
<li>WCP is getting ready for an IPO in Korea in August. This is expected to be one of the largest IPOs in Korea post LG Energy Solution (373220 KS).</li>
<li>The IPO price range is from 80,000 won to 100,000 won. The IPO base deal size is from $560 million to $700 million.</li>
<li>WCP is a leading maker of separators which are key materials used in EV batteries.</li>
</ul>


WCP is getting ready for an IPO in Korea in August. This is expected to be one of the largest IPOs in Korea post LG Energy Solution (373220 KS).
The IPO price range is from 80,000 won to 100,000 won. The IPO base deal size is from $560 million to $700 million.
WCP is a leading maker of separators which are key materials used in EV batteries.


Event-Driven

<ul>
<li>Although LG Chem may not sell additional stake in LGES this year, over the next 2-3 years, there is a high probability of LG Chem selling some stake in LGES.</li>
<li>On 27 July 2022, 86% stake of LG Energy Solution could be sold, of which 81.8% is owned by LG Chem and the remaining 4.2% is owned by institutional investors/others.</li>
<li>LGES's market share in the global rechargeable battery usage declined significantly from May 2021 to May 2022, due to recent EV disruption at Tesla's Shanghai plant and rise of BYD.</li>
</ul>


Although LG Chem may not sell additional stake in LGES this year, over the next 2-3 years, there is a high probability of LG Chem selling some stake in LGES.
On 27 July 2022, 86% stake of LG Energy Solution could be sold, of which 81.8% is owned by LG Chem and the remaining 4.2% is owned by institutional investors/others.
LGES's market share in the global rechargeable battery usage declined significantly from May 2021 to May 2022, due to recent EV disruption at Tesla's Shanghai plant and rise of BYD.


LG Energy Solution: Potential Sellers Post Lock-Up End, Mkt Share Losses, & LG Chem's Capital Needs

<ul>
<li>Premier Partners private equity firm plans to sell a total of 3.46 million shares (4.84% stake) of SK IE Technology (361610 KS) in a block deal sale.</li>
<li>Premier Partners is trying to dump its shares right after a dead cat bounce in SK IET's share price rise on 5 July.  </li>
<li>Despite the large block deal discount range, we remain negative on the SK IE Technology shares and we would avoid this block deal. Valuations remain expensive.</li>
</ul>


Premier Partners private equity firm plans to sell a total of 3.46 million shares (4.84% stake) of SK IE Technology (361610 KS) in a block deal sale.
Premier Partners is trying to dump its shares right after a dead cat bounce in SK IET's share price rise on 5 July.  
Despite the large block deal discount range, we remain negative on the SK IE Technology shares and we would avoid this block deal. Valuations remain expensive.


Block Deal Sale of SK IE Technology by Premier Partners: Trying to Dump Shares on a Dead Cat Bounce

South Korea

LG Energy Solution produces and sells batteries. The Company manufactures and sells automobile batteries, small batteries, energy storage system batteries, and other products. LG Energy Solution markets its products worldwide.

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LG Energy Solution (373220 KS)

SOCAR IPO Likely to Be Delayed

Although Socar has not formally announced that it will delay the IPO, we believe that there is a high probability that the IPO will be postponed.

Douglas Kim

WCP IPO Valuation Analysis

Our base case valuation of WCP is target price of 87,805 won per share. Given the lack of upside relative to the IPO price range (80,000 won to...

Douglas Kim

WCP IPO Preview

WCP is getting ready for an IPO in Korea in August. This is expected to be one of the largest IPOs in Korea in 2022. WCP is a leading maker of...

Douglas Kim

Block Deal Sale of SK IE Technology by Premier Partners: Trying to Dump Shares on a Dead Cat Bounce

Premier Partners private equity firm plans to sell a total of 3.46 million shares (4.84% stake) of SK IET in a block deal sale. We remain negative...

Douglas Kim

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

SOCAR IPO Likely to Be Delayed

Although Socar has not formally announced that it will delay the IPO, we believe that there is a high probability that the IPO will be postponed.

Douglas Kim

WCP IPO Valuation Analysis

Our base case valuation of WCP is target price of 87,805 won per share. Given the lack of upside relative to the IPO price range (80,000 won to...

Douglas Kim

WCP IPO Preview

WCP is getting ready for an IPO in Korea in August. This is expected to be one of the largest IPOs in Korea in 2022. WCP is a leading maker of...

Douglas Kim

LG Energy Solution: Potential Sellers Post Lock-Up End, Mkt Share Losses, & LG Chem's Capital Needs

We have a Negative View of LG Energy Solution due to concerns about selling post end of lock-up period, market share losses for EV batteries, and...

Douglas Kim

Block Deal Sale of SK IE Technology by Premier Partners: Trying to Dump Shares on a Dead Cat Bounce

Premier Partners private equity firm plans to sell a total of 3.46 million shares (4.84% stake) of SK IET in a block deal sale. We remain negative...

Douglas Kim