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.

Equity Capital Markets

<ul>
<li>There must be a rationale for car sharing to receive a higher valuation than the traditional rental car business. For this, profit per vehicle must be provided, not sales.</li>
<li>Also, whether SOCAR can justify its valuation built on the relatively high valuation premiums granted to ccOS and FMS companies is still questionable.</li>
<li>Concerning fund flow, it is positive that SOCAR can aim for LG Energy's six-month lockup release. But it is unclear how much flow will be left for SOCAR after WCP.</li>
</ul>


There must be a rationale for car sharing to receive a higher valuation than the traditional rental car business. For this, profit per vehicle must be provided, not sales.
Also, whether SOCAR can justify its valuation built on the relatively high valuation premiums granted to ccOS and FMS companies is still questionable.
Concerning fund flow, it is positive that SOCAR can aim for LG Energy's six-month lockup release. But it is unclear how much flow will be left for SOCAR after WCP.


SOCAR Revised Prospectus: Critical Issues Still Not Addressed

Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

Cross Asset Strategy

<ul>
<li>In this insight, we discuss the recent buying and selling by the Korea National Pension Service (NPS) of Korean stocks.</li>
<li>Of the 176 Korean stocks in which NPS reported changes in ownerships in 2Q 2022, NPS increased its stakes in 115 companies and reduced stakes in 61 companies.</li>
<li>NPS mostly increased stakes in aerospace, defense, construction equipment, and energy sectors while reducing stakes in telecom and tourism related stocks.</li>
</ul>


In this insight, we discuss the recent buying and selling by the Korea National Pension Service (NPS) of Korean stocks.
Of the 176 Korean stocks in which NPS reported changes in ownerships in 2Q 2022, NPS increased its stakes in 115 companies and reduced stakes in 61 companies.
NPS mostly increased stakes in aerospace, defense, construction equipment, and energy sectors while reducing stakes in telecom and tourism related stocks.


NPS Sells SK Bioscience, Naver, & LG Electronics and Buys Kakao Bank, Lotte Corp, & Samyang Foods

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.

<ul>
<li>Aequitas Research puts out a weekly update on the deals that were covered by the team recently along with updates for upcoming IPOs.</li>
<li>Tianqi managed to pull off the largest HK IPO so far this year, a good listing could see a pickup in other large deals.</li>
<li>For placements, SK IE couldn't hold on to its deal price, while Ming Yang kicked off what might be a busy GDR season.</li>
</ul>


Aequitas Research puts out a weekly update on the deals that were covered by the team recently along with updates for upcoming IPOs.
Tianqi managed to pull off the largest HK IPO so far this year, a good listing could see a pickup in other large deals.
For placements, SK IE couldn't hold on to its deal price, while Ming Yang kicked off what might be a busy GDR season.


ECM Weekly (10th Jul 2022) -Tianqi, Thai Life, TPG, SK IE, Weilong, Emperador, Soosan, SoCar, Deewin

Event-Driven

<ul>
<li>In this insight, we provide an early look at the potential deletions and additions to KOSPI200 rebalance. </li>
<li>We provide the top 10 potential deletions including Cosmax Inc (192820 KS), Hyundai Home Shopping Network (057050 KS), and Samyang Holdings (000070 KS) to KOSPI200 (announcement in November 2022).</li>
<li>Our trading strategy for the KOSPI200 index would be to go short on a basket of the potential deletions and to go long on a basket of the potential additions.</li>
</ul>


In this insight, we provide an early look at the potential deletions and additions to KOSPI200 rebalance. 
We provide the top 10 potential deletions including Cosmax Inc (192820 KS), Hyundai Home Shopping Network (057050 KS), and Samyang Holdings (000070 KS) to KOSPI200 (announcement in November 2022).
Our trading strategy for the KOSPI200 index would be to go short on a basket of the potential deletions and to go long on a basket of the potential additions.


An Early Look at Potential Deletions and Additions to KOSPI200

<ul>
<li>In SOCAR's IPO, the early investors' post-listing flow direction draws the market's attention as much as the valuation issue.</li>
<li>Even this pricing level is high enough to infer that these VCs will be tempted to consider exiting after listing. A significant level of short-term overhang risk is inevitable.</li>
<li>Then, we need to factor in the Lotte factor, which will likely expand its stake after listing to secure management rights for Socar.</li>
</ul>


In SOCAR's IPO, the early investors' post-listing flow direction draws the market's attention as much as the valuation issue.
Even this pricing level is high enough to infer that these VCs will be tempted to consider exiting after listing. A significant level of short-term overhang risk is inevitable.
Then, we need to factor in the Lotte factor, which will likely expand its stake after listing to secure management rights for Socar.


SOCAR IPO Post-Listing Flow: VC-Triggered Overhang Vs. Lotte's Counter Move

South Korea

Lotte Rental Co.,Ltd. provides car rental services. The Company offers passenger car rental, commercial car rental, used vehicle rental, and other related services. Lotte Rental offers services worldwide.

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Lotte Rental (089860 KS)

SOCAR Revised Prospectus: Critical Issues Still Not Addressed

This post investigates SOCAR's revised prospectus, especially the additional information concerning the valuation peer group, and argues why the...

Sanghyun Park

NPS Sells SK Bioscience, Naver, & LG Electronics and Buys Kakao Bank, Lotte Corp, & Samyang Foods

NPS moves the Korean stock market more than any other investor. In this insight, we discuss the recent buying and selling by the Korea National...

Douglas Kim

ECM Weekly (10th Jul 2022) -Tianqi, Thai Life, TPG, SK IE, Weilong, Emperador, Soosan, SoCar, Deewin

Aequitas Research puts out a weekly update on the deals that were covered by the team recently along with updates for upcoming IPOs.

Sumeet Singh

An Early Look at Potential Deletions and Additions to KOSPI200

We provide an early look at the potential deletions and additions to KOSPI200 rebalance. We provide the top 10 potential deletions including...

Douglas Kim

SOCAR IPO Post-Listing Flow: VC-Triggered Overhang Vs. Lotte's Counter Move

This post investigates the most significant hidden issue of the SOCAR IPO: the post-listing flow dynamics between the VCs and Lotte Rental.

Sanghyun Park

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