IPOs and Catalysts/Events, Global Equity Research Ltd

Arun George

IPOs and Catalysts/Events

Uncompromised, Independent, Conflict-Free Research

Global Equity Research Ltd

Global Equity Research was started in 2017 by a group of experienced research professionals. It was founded on a passionate belief in the importance and the need for uncompromised, independent, conflict-free research. We aim to provide differentiated and actionable primary and bottom up fundamental research.

Equity Capital Markets

<ul>
<li>
<a href="https://www.smartkarma.com/entities/lg-cns-co-ltd" target="_blank" data-smartkarma-citation="entities:35945:1" rel="noopener">LG CNS (LGCNSZ KS)</a>, the IT service unit of <a href="https://www.smartkarma.com/entities/lg-corp" target="_blank" data-smartkarma-citation="entities:6653:1" rel="noopener">LG Corp (003550 KS)</a>, seeks to raise up to US$837 million through a primary/secondary offering.</li>
<li>In <a href="https://www.smartkarma.com/insights/lg-cns-ipo-the-bull-case" target="_blank" data-smartkarma-citation="insights:170085" rel="noopener">LG CNS IPO: The Bull Case</a>, we highlighted the key elements of the bull case. In this note, we outline the bear case.</li>
<li>The bear case rests on fading growth momentum, mid-tier revenue growth, weak non-AI growth, high contract assets, bottom-tier FCF margin and large share overhang. </li>
</ul>



LG CNS (LGCNSZ KS), the IT service unit of LG Corp (003550 KS), seeks to raise up to US$837 million through a primary/secondary offering.
In LG CNS IPO: The Bull Case, we highlighted the key elements of the bull case. In this note, we outline the bear case.
The bear case rests on fading growth momentum, mid-tier revenue growth, weak non-AI growth, high contract assets, bottom-tier FCF margin and large share overhang. 


<ul>
<li>
<a href="https://www.smartkarma.com/entities/lg-cns-co-ltd" target="_blank" data-smartkarma-citation="entities:35945:1" rel="noopener">LG CNS (LGCNSZ KS)</a>, the IT service unit of <a href="https://www.smartkarma.com/entities/lg-corp" target="_blank" data-smartkarma-citation="entities:6653:1" rel="noopener">LG Corp (003550 KS)</a>, seeks to raise up to US$837 million through a primary/secondary offering.   </li>
<li>In 2020, Macquarie Asset Management bought a 35% stake from LG Corp for KRW950 billion, beating <a href="https://www.smartkarma.com/entities/kkr-co-inc" target="_blank" rel="noopener">KKR &amp; Co (KKR US)</a>, the other shortlisted bidder.</li>
<li>The bull case rests on an attractive market, improving visibility, strong AI-led growth, below-peer average dependence on related parties, and top-tier profitability. </li>
</ul>



LG CNS (LGCNSZ KS), the IT service unit of LG Corp (003550 KS), seeks to raise up to US$837 million through a primary/secondary offering.   
In 2020, Macquarie Asset Management bought a 35% stake from LG Corp for KRW950 billion, beating KKR &amp; Co (KKR US), the other shortlisted bidder.
The bull case rests on an attractive market, improving visibility, strong AI-led growth, below-peer average dependence on related parties, and top-tier profitability. 


Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

Douglas Research Advisory

<ul>
<li>The long awaited IPO of LG CNS is finally getting ready to be completed in February 2025. The IPO price range is 53,700 won to 61,900 won.</li>
<li>Expected market cap is between 5.2 trillion won to 6.0 trillion won. At the high end of the IPO price range, the total IPO offering would involve 1.2 trillion won.</li>
<li>The bankers used three companies including Samsung Sds, Hyundai Autoever, and NTT Data Corp as comps. This is expected to be one of the largest IPOs in Korea in 2025</li>
</ul>


The long awaited IPO of LG CNS is finally getting ready to be completed in February 2025. The IPO price range is 53,700 won to 61,900 won.
Expected market cap is between 5.2 trillion won to 6.0 trillion won. At the high end of the IPO price range, the total IPO offering would involve 1.2 trillion won.
The bankers used three companies including Samsung Sds, Hyundai Autoever, and NTT Data Corp as comps. This is expected to be one of the largest IPOs in Korea in 2025


Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

<ul>
<li>An <a href="https://bunshun.jp/denshiban/articles/b10138" target="_blank" rel="noopener">article</a> in Japanese weekly magazine Bunshun this morning sent shares in<a href="https://www.smartkarma.com/entities/sbi-sumishin-net-bank-ltd" target="_blank" data-smartkarma-citation="entities:34572:1" rel="noopener">SBI Sumishin Net Bank (7163 JP)</a> limit up +17% with a headline that NTT Docomo was interested to buy.</li>
<li>Without access to the article, I can't go deep, but the base concept is that NTT Docomo is "worried" about KDDI (which has a bank, as does Softbank Corp)</li>
<li>It is not clear how serious it is, SBI Sumishin is super-expensive, and buying a bank isn't the same as buying a company. Hmmm...</li>
</ul>


An article in Japanese weekly magazine Bunshun this morning sent shares inSBI Sumishin Net Bank (7163 JP) limit up +17% with a headline that NTT Docomo was interested to buy.
Without access to the article, I can't go deep, but the base concept is that NTT Docomo is "worried" about KDDI (which has a bank, as does Softbank Corp)
It is not clear how serious it is, SBI Sumishin is super-expensive, and buying a bank isn't the same as buying a company. Hmmm...


NTT (9432 JP) And SBI Sumishin NetBank (7163 JP)? Maybe. Maybe Not. Seven Bank A Better Idea

Pan-Asia Index Rebalances/ Events/ Delta One, Periscope Analytics

Brian Freitas

Pan-Asia Index Rebalances/ Events/ Delta One

Periscope Analytics

Periscope Analytics focuses on event-driven trades across Asia Pacific and provides comprehensive, timely and systematic coverage of index changes to major Asia Pacific indices in a structured manner.

The analysis includes forecasted inclusions and exclusions to all major Asian indices that have significant amount of tracking assets, including estimates of passive buy/sell flow on the stocks. The service also provides commentary and impact of market consultations, ground rule changes, and other events (IPOs, spin-offs, M&A) that could lead to index changes and passive flow.

Periscope Analytics works with multi-strategy hedge funds, proprietary trading firms, stat arb trading groups and long-only investors that invest and trade in the Asia Pacific region with the data being used to trade index rebalances, avoid pre-positioning and passive flow, and to time entry into and exit from stocks.

Event-Driven Trades Across Asia Pacific

Index Rebalance

<ul>
<li>The review period for the <a href="https://www.smartkarma.com/entities/nikkei-225" target="_blank" data-smartkarma-citation="entities:22909:1" rel="noopener">Nikkei 225 (NKY INDEX)</a> September rebalance ended yesterday. There could be three changes at the rebalance with sector balance in focus for the additions.</li>
<li>
<a href="https://www.smartkarma.com/entities/fast-retailing-co-ltd" target="_blank" data-smartkarma-citation="entities:751:1" rel="noopener">Fast Retailing (9983 JP)</a>'s capping in the index has been confirmed and its index weight will drop by around 0.9% resulting in big selling at the close on 30 September. </li>
<li>Passive trackers will need to buy between 3.5-35x ADV (2.4%-24% of real float) on the inclusions and sell between 3.7-42.5x ADV on the deletions.</li>
</ul>


The review period for the Nikkei 225 (NKY INDEX) September rebalance ended yesterday. There could be three changes at the rebalance with sector balance in focus for the additions.

Fast Retailing (9983 JP)'s capping in the index has been confirmed and its index weight will drop by around 0.9% resulting in big selling at the close on 30 September. 
Passive trackers will need to buy between 3.5-35x ADV (2.4%-24% of real float) on the inclusions and sell between 3.7-42.5x ADV on the deletions.


Nikkei 225 Index Rebalance Preview (Sep 2024): Review Period Done; Fast Retailing Capping Confirmed

Japan

NTT Data Corporation mainly provides large scale system integration and networking system services. System integration involves data transmission system design, sales, leasing, and services.  Network System Services include internet related and linked computer networks, and data provision and management of data. The Company is a subsidiary of Nippon Telegraph & Telephone Corporation.

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NTT Data Corp (9613 JP)

LG CNS IPO: The Bear Case

The bear case rests on fading growth momentum, mid-tier revenue growth, weak non-AI growth, high contract assets, bottom-tier FCF margin and large...

Arun George

LG CNS IPO: The Bull Case

The bull case rests on an attractive market, improving visibility, strong AI-led growth, below-peer average dependence on related parties, and top...

Arun George

LG CNS IPO Preview

The long awaited IPO of LG CNS is finally getting ready to be completed in February 2025. The IPO price range is 53,700 won to 61,900 won.

Douglas Kim

NTT (9432 JP) And SBI Sumishin NetBank (7163 JP)? Maybe. Maybe Not. Seven Bank A Better Idea

A news weekly magazine Bunshun today had an article suggesting a bank executive thought NTT Docomo was on its way to buying SBI Sumishin Netbank....

Travis Lundy

Nikkei 225 Index Rebalance Preview (Sep 2024): Review Period Done; Fast Retailing Capping Confirmed

Review period ended yesterday. Fast Retailing's capping will result in a 0.9% drop in index weight. There could be 3 index changes with sector...

Brian Freitas

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