Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

Thematic (Sector/Industry)

<ul><li>Coupang is perhaps the fastest growing E-commerce company in the world. </li><li>We highlight five special sauces of what makes Coupang great. </li></ul><ol><li>Ultra customer-centric, fast delivery system (vertically integrated)</li><li>Focus on repeat customers with low(est) prices </li><li>"Best-in-class" mobile app for E-commerce</li><li>Huge cash war chest with $US1 billion investment from Softbank, your ultimate "Godfather" venture capitalist.</li><li>Economies of Scale - Bargaining power with vendors</li></ol><ul><li>Despite its great progress, Coupang has its share of problems including recent decline in average monthly visitors, which we explain. </li><li>If you are interested in E-commerce, logistics, and retail sectors in Korea, Coupang is a must know company. </li></ul>

Coupang is perhaps the fastest growing E-commerce company in the world. We highlight five special sauces of what makes Coupang great. Ultra customer-centric, fast delivery system (vertically integrated)Focus on repeat customers with low(est) prices "Best-in-class" mobile app for E-commerceHuge cash war chest with $US1 billion investment from Softbank, your ultimate "Godfather" venture capitalist.Economies of Scale - Bargaining power with vendorsDespite its great progress, Coupang has its share of problems including recent decline in average monthly visitors, which we explain. If you are interested in E-commerce, logistics, and retail sectors in Korea, Coupang is a must know company. 

Coupang: Fastest Growing E-Commerce Company in the World

Event-Driven

It was reported after the market close today that <a href="https://finance.naver.com/item/news_read.nhn?article_id=0004593532&amp;office_id=008&amp;code=003920&amp;page=&amp;sm=title_entity_id.basic" target="_blank" rel="noopener">Hahn &amp; Co</a> (a large private equity firm in Korea) has acquired the controlling stake of <a href="https://www.smartkarma.com/entities/namyang-dairy-products-co" target="_blank" data-smartkarma-citation="entities:16249:1" rel="noopener">Namyang Dairy Products Co (003920 KS) </a>from the founder and related parties. Hahn &amp; Co paid 310.7 billion won for a 52.63% (0.379 million shares) of Namyang Dairy, which currently has a market cap of 316 billion won. Prior to the sale, Namyang Dairy Chairman Hong Won-Sik had a 51.68% stake in the company. <div class="content-highlight">
Over the next 2-3 years, we believe Namyang Dairy Products' shares could rise nearly 100%+ from current levels, which would suggest market cap of 632 billion won or 878,000 won. This represents a P/B multiple of 0.7x, which is at the high end of the P/B multiple for the company in the past four years. 
With Hahn &amp; Co getting rid of the bad corporate governance problems and infusing the company with better professional managers, we believe Namyang Dairy Products could be an excellent turn-around story and the valuation multiples could rise to the historical high levels. 
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It was reported after the market close today that Hahn &amp; Co (a large private equity firm in Korea) has acquired the controlling stake of Namyang Dairy Products Co (003920 KS) from the founder and related parties. Hahn &amp; Co paid 310.7 billion won for a 52.63% (0.379 million shares) of Namyang Dairy, which currently has a market cap of 316 billion won. Prior to the sale, Namyang Dairy Chairman Hong Won-Sik had a 51.68% stake in the company. 
Over the next 2-3 years, we believe Namyang Dairy Products' shares could rise nearly 100%+ from current levels, which would suggest market cap of 632 billion won or 878,000 won. This represents a P/B multiple of 0.7x, which is at the high end of the P/B multiple for the company in the past four years. 
With Hahn &amp; Co getting rid of the bad corporate governance problems and infusing the company with better professional managers, we believe Namyang Dairy Products could be an excellent turn-around story and the valuation multiples could rise to the historical high levels. 


Korea Small Cap Gem #9: Namyang Dairy Products - Chairman Sells & Minority Shareholders Cheer

Asian Insight Provider - Actionable ideas, CrossASEAN Research

Henry Soediarko

Asian Insight Provider - Actionable ideas

CrossASEAN Research

At CrossASEAN Research we strive to produce unbiased and differentiated on the ground insights on companies across South East Asia. Our Research is produced for the most part after face to face meetings and conversations with company management to dig deep into the long term vision and strategy of the companies we cover. We seek to deliver investable and actionable themes on sectors and markets across SE Asia, often in collaboration with other Insight Providers across the region, pooling the vast experience of the analysts within the Smartkarma Ecosystem. We also offer bespoke work and tailor made trips for our clients. 

Insights across South East Asia

Equity Bottom-Up

<a href="https://www.smartkarma.com/entities/health-and-happiness-h-h-int" target="_blank" data-smartkarma-citation="entities:20582:1" rel="noopener">Health And Happiness (H&amp;H) (1112 HK)</a> subsidiary has agreed to purchase a stake in Else Nutrition, a plant-based alternative IMF made of almond, buckwheat, and tapioca. Else Nutrtion complements the existing product line in the company i.e. Biostime (children probiotics and infant milk formula), Swisse (adult nutrition and supplements), Healthy Times (organic food and formula for toddlers), Dodie (baby glass bottles and accessories), Good Gout (organic food for children), and Aurelia Probiotic Skincare.In this difficult times in China, HH is better than most of its peers in China and Asia. It has 38% higher ROIC, 82% higher in gross margin, 84% higher in net margin yet it is trading at 25% lower than its peers. Yet its share price has underperformed compared to <a href="https://www.smartkarma.com/entities/ausnutria-dairy-corp-ltd" target="_blank" data-smartkarma-citation="entities:13799:1" rel="noopener">Ausnutria Dairy Corp (1717 HK)</a> whose exposure to adult nutrition is very small.

Health And Happiness (H&amp;H) (1112 HK) subsidiary has agreed to purchase a stake in Else Nutrition, a plant-based alternative IMF made of almond, buckwheat, and tapioca. Else Nutrtion complements the existing product line in the company i.e. Biostime (children probiotics and infant milk formula), Swisse (adult nutrition and supplements), Healthy Times (organic food and formula for toddlers), Dodie (baby glass bottles and accessories), Good Gout (organic food for children), and Aurelia Probiotic Skincare.In this difficult times in China, HH is better than most of its peers in China and Asia. It has 38% higher ROIC, 82% higher in gross margin, 84% higher in net margin yet it is trading at 25% lower than its peers. Yet its share price has underperformed compared to Ausnutria Dairy Corp (1717 HK) whose exposure to adult nutrition is very small. 

Health & Happiness (1112): No Soy Please and Still Cheap

Korea / Special Situations, Clepsydra Capital

Sanghyun Park

Korea / Special Situations

We have a very unusual (but very interesting) rights offering in Korea. This time, Korea's oldest and largest wind power developer/operator called <a href="https://www.smartkarma.com/entities/18617" target="_blank" data-smartkarma-citation="entities:18617:1">Unison Co Ltd (018000 KS)</a> announced a ₩41.9bil rights offering late in the afternoon on Dec 14 (yesterday) after the market closed.<div class="content-highlight">Who is Unison?Unison, founded in 1984, is Korea’s oldest and largest wind power development/operation company. Unison has completed the development of Korea’s first large-scale commercial wind farm in Gangwon-province and Gyeongsangnam-province, and it has been operating them successfully.</div>

We have a very unusual (but very interesting) rights offering in Korea. This time, Korea's oldest and largest wind power developer/operator called Unison Co Ltd (018000 KS) announced a ₩41.9bil rights offering late in the afternoon on Dec 14 (yesterday) after the market closed.Who is Unison?Unison, founded in 1984, is Korea’s oldest and largest wind power development/operation company. Unison has completed the development of Korea’s first large-scale commercial wind farm in Gangwon-province and Gyeongsangnam-province, and it has been operating them successfully.

Unison Rights Offering Review - Very Unusual Event

Interesting news came out for <a href="https://www.smartkarma.com/entities/991" target="_blank" data-smartkarma-citation="entities:991:1">Celltrion Inc (068270 KS)</a>. Celltrion's retail investors are now demanding a KOSPI move from KOSDAQ. Nearly 10,000 retail investors are demanding a KOSPI move and asking Celltrion to hold an EGM for this. Celltrion is saying that it will review the demand.<div class="content-highlight">Here is the news article about this (source: Chosun Biz)<a href="http://biz.chosun.com/site/data/html_dir/2017/08/08/2017080801568.html" target="_blank">http://biz.chosun.com/site/data/html_dir/2017/08/08/2017080801568.html</a></div>Celltrion's retail investors are saying that the company has suffered greatly from short trading in the past several years. They are saying KOSPI move will reduce short trading volume on Celltrion as more passive money will come to it, thereby improving its valuation.

Interesting news came out for Celltrion Inc (068270 KS). Celltrion's retail investors are now demanding a KOSPI move from KOSDAQ. Nearly 10,000 retail investors are demanding a KOSPI move and asking Celltrion to hold an EGM for this. Celltrion is saying that it will review the demand.Here is the news article about this (source: Chosun Biz)http://biz.chosun.com/site/data/html_dir/2017/08/08/2017080801568.htmlCelltrion's retail investors are saying that the company has suffered greatly from short trading in the past several years. They are saying KOSPI move will reduce short trading volume on Celltrion as more passive money will come to it, thereby improving its valuation.

NPS' Passive Investing May Come to an End - Impact on Celltrion's KOSPI Move

South Korea

Maeil Holdings Co., Ltd. manufactures dairy products.  The Company produces baby formulas, dry powdered milk, milk, yogurt, fruit juices, and other lactic acid beverages.

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Maeil Holdings Co., Ltd. (005990 KS)

Coupang: Fastest Growing E-Commerce Company in the World

Coupang is perhaps the fastest growing E-commerce company in the world. We highlight five special sauces of what makes Coupang great. Ultra...

Douglas Kim

Korea Small Cap Gem #9: Namyang Dairy Products - Chairman Sells & Minority Shareholders Cheer

Chairman Hong sold the controlling stake of Namyang Dairy to Hahn & Co. Over the next 2-3 years, we believe Namyang Dairy Products' shares could...

Douglas Kim

Health & Happiness (1112): No Soy Please and Still Cheap

Health And Happiness (H&H) (1112 HK) subsidiary has agreed to purchase a stake in Else Nutrition, a plant-based alternative IMF made of almond,...

Henry Soediarko

Unison Rights Offering Review - Very Unusual Event

We have a very unusual (but very interesting) rights offering in Korea. This time, Korea's oldest and largest wind power developer/operator...

Sanghyun Park

NPS' Passive Investing May Come to an End - Impact on Celltrion's KOSPI Move

Interesting news came out for Celltrion Inc (068270 KS). Celltrion's retail investors are now demanding a KOSPI move from KOSDAQ. Nearly 10,000...

Sanghyun Park

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