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.

Equity Capital Markets

Simone Acc Collection  / Equity Capital Markets

<div><p><a href="https://www.smartkarma.com/entities/simone-accessories-collection-ltd" target="_blank" data-smartkarma-citation="entities:34120:1" rel="noopener">Simone Accessories Collection (381920 KS)</a> is looking to raise up to US$341m in its upcoming South Korea IPO by selling a mix of primary and secondary shares.  </p></div><div>
<p>Simone is a leather accessories manufacturer with a focus on handbags and small leather goods (SLG). The company mainly produces handbags for major American masstige and luxury brands like Michael Kors, Tory Burch and Coach. The company is the leader in the luxury handbag industry with 10% and 30% of global and US market share, respectively, according to Bain’s estimates. It has a long relationship with major masstige and luxury handbag brands and a strong competitive edge over competitors.</p>
<p>In this note, we look at the company’s fundamentals, operating metrics, and share our thoughts on the deal.</p>
<p>Our previous coverage of the IPO:</p>
<ul><li dir="ltr" aria-level="1"><p><a href="https://www.smartkarma.com/insights/simone-pre-ipo-a-leader-in-the-industry-but-recovery-will-be-slow-and-blackstone-s-stake-weighs" target="_blank" data-smartkarma-citation="insights:57806" rel="noopener">Simone Pre-IPO - A Leader in the Industry but Recovery Will Be Slow and Blackstone’s Stake Weighs</a> </p></li></ul>
</div>

Simone Accessories Collection (381920 KS) is looking to raise up to US$341m in its upcoming South Korea IPO by selling a mix of primary and secondary shares.  
Simone is a leather accessories manufacturer with a focus on handbags and small leather goods (SLG). The company mainly produces handbags for major American masstige and luxury brands like Michael Kors, Tory Burch and Coach. The company is the leader in the luxury handbag industry with 10% and 30% of global and US market share, respectively, according to Bain’s estimates. It has a long relationship with major masstige and luxury handbag brands and a strong competitive edge over competitors.
In this note, we look at the company’s fundamentals, operating metrics, and share our thoughts on the deal.
Our previous coverage of the IPO:
Simone Pre-IPO - A Leader in the Industry but Recovery Will Be Slow and Blackstone’s Stake Weighs 


Simone IPO - Peer Comparison and an Uncompelling Valuation

Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

<p><a href="https://www.kedglobal.com/newsView/ked202102260006" target="_blank" rel="noopener">Simone Acc. Collection</a> is one of the most well known luxury handbag makers in Korea. Established in 1987, Simone is one of the first ODM players in Asia to have tapped into the luxury handbag manufacturing market. In 1987, the founder and chairman Park Eun-Kwan approached Donna Karan New York (DKNY) to win supply rights.</p><p>The company manufactures and sells luxury handbags and small leather goods (SLG)  mainly on ODM/OEM basis. The company has manufacturing operations in Vietnam, Cambodia, and Indonesia, trying to capitalize on lower labor costs and more attractive tariff rates.</p><p><strong>Simone Acc Collection is getting ready to complete its IPO in Korea in October. </strong>The IPO price range is from 39,200 won to 47,900 won. The IPO base deal size is from US$283 million to US$346 million.</p><ul>
<li>According to the bankers' valuation, the expected market cap is from 1.3 trillion won to 1.6 trillion won.</li>
<li>The book building for the institutional investors starts on 24 September. The lead bankers for this deal include Samsung Securities and Mirae Asset Securities. </li>
<li>This is the second attempt for Simone to complete its IPO. The company previously tried to complete its IPO in 2018 but it failed due to weak business performance. </li>
</ul><p><strong>Major shareholders</strong> - Chairman Park Eun-Kwan is the controlling shareholder with a 37.2% stake in the company. His wife Oh In-Shil has a 24% stake in the company. Other insiders and related parties own 8.8%. Blackstone has a 30% stake in the company. </p><table class="table table-striped">
<colgroup>
<col>
<col>
</colgroup>
<tbody>
<tr><td colspan="2"><div>Deal Specifics of Simone Acc Collection Co IPO</div></td></tr>
<tr>
<td>Lead underwriters of the IPO: </td>
<td style="width: 270pt;">Samsung Securities, Mirae Asset Securities, Korea Investment &amp; Securities</td>
</tr>
<tr>
<td>Expected IPO price per share: </td>
<td style="width: 270pt;">39,200 won (low)/47,900 won (high)</td>
</tr>
<tr>
<td>Number of Shares for IPO:</td>
<td style="width: 270pt;">8.37m shares (new shares)</td>
</tr>
<tr>
<td>IPO base deal size: </td>
<td style="width: 270pt;">US$283 mn (low);  US$346mn (high)</td>
</tr>
<tr>
<td>Expected common shares outstanding, fully diluted (post-IPO):  </td>
<td style="width: 270pt;">33.5m shares</td>
</tr>
<tr>
<td>Expected market cap after IPO:</td>
<td style="width: 270pt;">1,313 billion won (low)/1,605 billion won (high)</td>
</tr>
<tr>
<td>Book open: </td>
<td style="text-align: left; width: 270pt;">24-Sep-21</td>
</tr>
<tr>
<td>Book closed:</td>
<td style="text-align: left; width: 270pt;">27-Sep-21</td>
</tr>
<tr>
<td>Listing date: </td>
<td style="text-align: left; width: 270pt;">TBC</td>
</tr>
<tr>
<td>Source: Company data</td>
<td></td>
</tr>
</tbody>
</table>

Simone Acc. Collection is one of the most well known luxury handbag makers in Korea. Established in 1987, Simone is one of the first ODM players in Asia to have tapped into the luxury handbag manufacturing market. In 1987, the founder and chairman Park Eun-Kwan approached Donna Karan New York (DKNY) to win supply rights.The company manufactures and sells luxury handbags and small leather goods (SLG)  mainly on ODM/OEM basis. The company has manufacturing operations in Vietnam, Cambodia, and Indonesia, trying to capitalize on lower labor costs and more attractive tariff rates.Simone Acc Collection is getting ready to complete its IPO in Korea in October. The IPO price range is from 39,200 won to 47,900 won. The IPO base deal size is from US$283 million to US$346 million.
According to the bankers' valuation, the expected market cap is from 1.3 trillion won to 1.6 trillion won.
The book building for the institutional investors starts on 24 September. The lead bankers for this deal include Samsung Securities and Mirae Asset Securities. 
This is the second attempt for Simone to complete its IPO. The company previously tried to complete its IPO in 2018 but it failed due to weak business performance. 
Major shareholders - Chairman Park Eun-Kwan is the controlling shareholder with a 37.2% stake in the company. His wife Oh In-Shil has a 24% stake in the company. Other insiders and related parties own 8.8%. Blackstone has a 30% stake in the company. 





Deal Specifics of Simone Acc Collection Co IPO

Lead underwriters of the IPO: 
Samsung Securities, Mirae Asset Securities, Korea Investment &amp; Securities


Expected IPO price per share: 
39,200 won (low)/47,900 won (high)


Number of Shares for IPO:
8.37m shares (new shares)


IPO base deal size: 
US$283 mn (low);  US$346mn (high)


Expected common shares outstanding, fully diluted (post-IPO):  
33.5m shares


Expected market cap after IPO:
1,313 billion won (low)/1,605 billion won (high)


Book open: 
24-Sep-21


Book closed:
27-Sep-21


Listing date: 
TBC


Source: Company data





Simone Accessories Collection IPO Preview

Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

<p>Bernard Arnault, <a href="https://www.smartkarma.com/entities/lvmh-moet-hennessy-louis-vuitton-se-unsp-adr" target="_blank" data-smartkarma-citation="entities:28477:1" rel="noopener">LVMH Moet Hennessy Louis Vuitton SE-UNSP ADR (LVMUY US)</a>'s Chairman/CEO, must rue the day his company pitched an Offer for <a href="https://www.smartkarma.com/entities/tiffany-co" target="_blank" data-smartkarma-citation="entities:14729:1" rel="noopener">Tiffany &amp; Co (TIF US)</a>, a little under two months before COVID-19 first hit the news. </p>
<p>LVMH and Tiffany reached a definite agreement on the <a href="https://investor.tiffany.com/static-files/9a8842f4-4f7b-438f-a6c6-4d768c2d6546" target="_blank" rel="noopener">25 November 2019</a>, wherein LVMH would acquire Tiffany for $135/share (7.7% premium to last close) in a US$16.2bn transaction. Tiffany shareholders approved the merger on the <a href="https://investor.tiffany.com/node/22081/pdf" target="_blank" rel="noopener">4 February</a>.</p>
<p>The two parties had initially set August 24 as the first deadline for completing the transaction,  with the possibility of extending the deadline to November 24 at the latest (see <a href="https://www.sec.gov/Archives/edgar/data/98246/000119312519299997/d840067dex21.htm" target="_blank" rel="noopener">page 62</a> of the Merger Agreement lodged with the SEC) - one year from the initial agreement<a href="https://www.sec.gov/" target="_blank" rel="noopener">.</a> This "Outside Date" was extended to the 24 November after the merger failed to close on the 24 August.</p>
<p>In a very brief <a href="https://r.lvmh-static.com/uploads/2020/09/lvmh_press-release-9-september-2020.pdf" target="_blank" rel="noopener">press release</a> yesterday, LVMH said it will not be able to complete the Tiffany acquisition, in compliance with a directive from the French European and Foreign Affairs Minister to defer the merger. LVMH also said Tiffany had undergone a Material Adverse Affect (MAE).</p>
<p>In a strongly-worded, detailed response, Tiffany said it has no choice but to file a lawsuit to <a href="https://investor.tiffany.com/node/22406/pdf" target="_blank" rel="noopener">enforce the Merger</a>.</p>
<p>LVMH seeking non-compliance with its contractual obligation on account of a MAE, takes a leaf out of EQT's gameplay for <a href="https://www.smartkarma.com/entities/metlifecare-ltd" target="_blank" data-smartkarma-citation="entities:19219:1" rel="noopener">Metlifecare Ltd (MET NZ)</a>. And as in MET's case (<em><a href="https://skr.ma/8sLe8" target="_blank" rel="noopener">Metlifecare/EQT: The Retirement Solution</a></em>), LVMH may find itself having to reconsider a new Offer.</p>
<p>More comment below the fold.</p>

Bernard Arnault, LVMH Moet Hennessy Louis Vuitton SE-UNSP ADR (LVMUY US)'s Chairman/CEO, must rue the day his company pitched an Offer for Tiffany &amp; Co (TIF US), a little under two months before COVID-19 first hit the news. 
LVMH and Tiffany reached a definite agreement on the 25 November 2019, wherein LVMH would acquire Tiffany for $135/share (7.7% premium to last close) in a US$16.2bn transaction. Tiffany shareholders approved the merger on the 4 February.
The two parties had initially set August 24 as the first deadline for completing the transaction,  with the possibility of extending the deadline to November 24 at the latest (see page 62 of the Merger Agreement lodged with the SEC) - one year from the initial agreement. This "Outside Date" was extended to the 24 November after the merger failed to close on the 24 August.
In a very brief press release yesterday, LVMH said it will not be able to complete the Tiffany acquisition, in compliance with a directive from the French European and Foreign Affairs Minister to defer the merger. LVMH also said Tiffany had undergone a Material Adverse Affect (MAE).
In a strongly-worded, detailed response, Tiffany said it has no choice but to file a lawsuit to enforce the Merger.
LVMH seeking non-compliance with its contractual obligation on account of a MAE, takes a leaf out of EQT's gameplay for Metlifecare Ltd (MET NZ). And as in MET's case (Metlifecare/EQT: The Retirement Solution), LVMH may find itself having to reconsider a new Offer.
More comment below the fold.

LVMH/Tiffany: In The Rough. Acts of God and Legal Restraint

France

LVMH Moet Hennessy Louis Vuitton SE is a diversified luxury goods group. The Company produces and sells wine, cognac, perfumes, cosmetics, luggage, and watches and jewelry. LVMH Moet Hennessy Louis Vuitton serves customers in France.

LVMH Moet Hennessy Louis Vuitt (LVMUY US)

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LVMH Moet Hennessy Louis Vuitt (LVMUY US)

Simone IPO - Peer Comparison and an Uncompelling Valuation

Simone Accessories Collection (381920 KS) is looking to raise up to US$341m in its upcoming South Korea IPO by selling a mix of primary and...

Sumeet Singh

Simone Accessories Collection IPO Preview

Simone Acc Collection is getting ready to complete its IPO in Korea in October. The IPO price range is from 39,200 won to 47,900 won. The IPO base...

Douglas Kim

LVMH/Tiffany: In The Rough. Acts of God and Legal Restraint

Taking a leaf out of the EQT's gamplay for Metlifecare Ltd (MET NZ)

David Blennerhassett

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52-week Range

Market Cap (USDm)

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