Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

Event-Driven

<ul>
<li>More than 20 trillion won (US$16 billion) worth of deals are up for M&amp;As in 2023.</li>
<li>However, due to high interest rates and differences on valuations among buyers and sellers, the M&amp;A market in Korea is likely to continue to be weak in 2023.</li>
<li>In this insight, we discuss 24 companies that are up for M&amp;As this year in Korea, including Hanon Systems, SK Shieldus, and K Car.</li>
</ul>


More than 20 trillion won (US$16 billion) worth of deals are up for M&amp;As in 2023.
However, due to high interest rates and differences on valuations among buyers and sellers, the M&amp;A market in Korea is likely to continue to be weak in 2023.
In this insight, we discuss 24 companies that are up for M&amp;As this year in Korea, including Hanon Systems, SK Shieldus, and K Car.


Korea M&A Outlook in 2023: What's for Sale?

Equity Capital Markets

<ul>
<li>JEIO, a manufacturer of carbon nanotubes for rechargeable batteries, has lowered its IPO price range and offering amount in order to list on the KOSDAQ market.</li>
<li>The company lowered the IPO price range to 10,000 won to 13,000 won from 15,000 won to 18,000 won range previously.</li>
<li>Our base case valuation of JEIO is target price of 11,268 won per share, which is 2% lower than the mid-point of the IPO price range.</li>
</ul>


JEIO, a manufacturer of carbon nanotubes for rechargeable batteries, has lowered its IPO price range and offering amount in order to list on the KOSDAQ market.
The company lowered the IPO price range to 10,000 won to 13,000 won from 15,000 won to 18,000 won range previously.
Our base case valuation of JEIO is target price of 11,268 won per share, which is 2% lower than the mid-point of the IPO price range.


Korea / Special Sits, Pairs, Index Rebalancing, Clepsydra Capital

Sanghyun Park

Korea / Special Sits, Pairs, Index Rebalancing

Clepsydra Capital

Investigate special situations, pairs, and index rebalancing trades in Korea.

<ul>
<li>The key to this rebalancing is the inclusion of WCP, which satisfies the requirements of minimum listing period and secondary battery sales amount.</li>
<li>As a hedge for the LONG WCP position, we can use Soulbrain and Solus Advanced, whose passive outflow is relatively high among those of a similar size to WCP.</li>
<li>Among large caps, we should pay attention to L&amp;F, Posco Chemical, and Iljin Materials. However, we should be cautious about approaching them as an active trading target.</li>
</ul>


The key to this rebalancing is the inclusion of WCP, which satisfies the requirements of minimum listing period and secondary battery sales amount.
As a hedge for the LONG WCP position, we can use Soulbrain and Solus Advanced, whose passive outflow is relatively high among those of a similar size to WCP.
Among large caps, we should pay attention to L&amp;F, Posco Chemical, and Iljin Materials. However, we should be cautious about approaching them as an active trading target.


TIGER (WISE) Secondary Battery ETF Rebalancing in January: Names to Watch

<ul>
<li>To MID migrants: <a href="https://www.smartkarma.com/entities/amorepacific-group" target="_blank" data-smartkarma-citation="entities:12179:1" rel="noopener">Amorepacific Group (002790 KS)</a>, <a href="https://www.smartkarma.com/entities/e-mart-inc" target="_blank" data-smartkarma-citation="entities:6993:1" rel="noopener">E Mart (139480 KS)</a>, <a href="https://www.smartkarma.com/entities/iljin-materials-co-ltd" target="_blank" data-smartkarma-citation="entities:7709:1" rel="noopener">Iljin Materials (020150 KS)</a>, <a href="https://www.smartkarma.com/entities/hanjin-kal-corp" target="_blank" data-smartkarma-citation="entities:19086:1" rel="noopener">Hanjin KAL (180640 KS)</a>, <a href="https://www.smartkarma.com/entities/oci-co-ltd" target="_blank" data-smartkarma-citation="entities:1904:1" rel="noopener">OCI (010060 KS)</a>, <a href="https://www.smartkarma.com/entities/lx-semicon-co-ltd" target="_blank" data-smartkarma-citation="entities:20670:1" rel="noopener">LX Semicon (108320 KS)</a>, and <a href="https://www.smartkarma.com/entities/socar-inc" target="_blank" data-smartkarma-citation="entities:29693:1" rel="noopener">SOCAR (403550 KS)</a>
</li>
<li>To LARGE migrants: <a href="https://www.smartkarma.com/entities/hyundai-rotem-company" target="_blank" data-smartkarma-citation="entities:1554:1" rel="noopener">Hyundai Rotem (064350 KS)</a>, <a href="https://www.smartkarma.com/entities/hotel-shilla-co-ltd" target="_blank" data-smartkarma-citation="entities:107:1" rel="noopener">Hotel Shilla (008770 KS)</a>, <a href="https://www.smartkarma.com/entities/gs-retail-co-ltd" target="_blank" data-smartkarma-citation="entities:3867:1" rel="noopener">GS Retail (007070 KS)</a>, <a href="https://www.smartkarma.com/entities/cs-wind-corp" target="_blank" data-smartkarma-citation="entities:4883:1" rel="noopener">CS Wind (112610 KS)</a>, and <a href="https://www.smartkarma.com/entities/posco-international-corporation" target="_blank" data-smartkarma-citation="entities:5954:1" rel="noopener">Posco International (047050 KS)</a> </li>
<li>This time, the degree of predictability is high as the MC gap widened from an early point. So, we should consider building our position in phases from early next month.</li>
</ul>


To MID migrants: Amorepacific Group (002790 KS), E Mart (139480 KS), Iljin Materials (020150 KS), Hanjin KAL (180640 KS), OCI (010060 KS), LX Semicon (108320 KS), and SOCAR (403550 KS)

To LARGE migrants: Hyundai Rotem (064350 KS), Hotel Shilla (008770 KS), GS Retail (007070 KS), CS Wind (112610 KS), and Posco International (047050 KS) 
This time, the degree of predictability is high as the MC gap widened from an early point. So, we should consider building our position in phases from early next month.


KOSPI Size Index: Early Preview at One Fourth into Screening Period

<ul>
<li>Despite the WATCH list's confusion, LG Energy Solution replaced LG Chem. In addition, Solactive excluded Iljin Materials, evidently due to its float-adjusted market cap size.</li>
<li>There are some somewhat elusive additions. The most prominent example is Japan Steel Works, which replaced LG Chem in the updated WATCH list at the last minute.</li>
<li>There was confusion about LG Chem's deletion until the last minute, so, likely, the market has not sufficiently reflected this rebalancing factor in LG Energy/LG Chem's LONG/SHORT.</li>
</ul>


Despite the WATCH list's confusion, LG Energy Solution replaced LG Chem. In addition, Solactive excluded Iljin Materials, evidently due to its float-adjusted market cap size.
There are some somewhat elusive additions. The most prominent example is Japan Steel Works, which replaced LG Chem in the updated WATCH list at the last minute.
There was confusion about LG Chem's deletion until the last minute, so, likely, the market has not sufficiently reflected this rebalancing factor in LG Energy/LG Chem's LONG/SHORT.


Solactive Lithium Review Results Out: Key Takeaways

South Korea

Lotte Energy Materials Corporation manufactures and distributes electric foils. The Company produces printed circuit board and lithium ion secondary batteries elecfoil, electrolytic and epoxy copper foil, electrolytic capacitor aluminum foil, and other related products. Lotte Energy Materials also offers energy and glass and window construction services.

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Lotte Energy Materials (020150 KS)

Korea M&A Outlook in 2023: What's for Sale?

In this insight, we discuss 24 companies that are up for M&As this year in Korea, including Hanon Systems, SK Shieldus, and K Car.

Douglas Kim

JEIO Lowers IPO Price Range

JEIO, a manufacturer of carbon nanotubes for rechargeable batteries, has lowered its IPO price range by 33% at the low end.

Douglas Kim

TIGER (WISE) Secondary Battery ETF Rebalancing in January: Names to Watch

This post projects the rebalanced weights and resulting passive impacts in the upcoming TIGER (WISE) Secondary Battery ETF rebalancing.

Sanghyun Park

KOSPI Size Index: Early Preview at One Fourth into Screening Period

This post screens migrant candidates of the KOSPI Size Index Series, scheduled for rebalancing in March, as we are one-fourth into the screening...

Sanghyun Park

Solactive Lithium Review Results Out: Key Takeaways

This post details the review results of the Solactive Global Lithium Index and discusses key takeaways for trading setups.

Sanghyun Park

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