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 September rebalance of the KRX New Deal indices started on 1 May and will run till 29 July. Implementation is on 8 September.</li>
<li>
<a href="https://www.smartkarma.com/entities/intellian-technologies-inc" target="_blank" data-smartkarma-citation="entities:34895:1" rel="noopener">Intellian Technologies (189300 KS)</a> and <a href="https://www.smartkarma.com/entities/seojin-system-co-ltd" target="_blank" data-smartkarma-citation="entities:24032:1" rel="noopener">Seojin System Co, Ltd. (178320 KS)</a> could replace <a href="https://www.smartkarma.com/entities/danal-co-ltd" target="_blank" data-smartkarma-citation="entities:19682:1" rel="noopener">Danal Co Ltd (064260 KS)</a> and <a href="https://www.smartkarma.com/entities/kcp-co-ltd" target="_blank" data-smartkarma-citation="entities:16045:1" rel="noopener">Kcp Co Ltd (060250 KS)</a> in the Internet Index.</li>
<li>
<a href="https://www.smartkarma.com/entities/nexon-games-co-ltd" target="_blank" data-smartkarma-citation="entities:35967:1" rel="noopener">Nexon Games (225570 KS)</a> could replace <a href="https://www.smartkarma.com/entities/devsisters-co-ltd" target="_blank" data-smartkarma-citation="entities:14096:1" rel="noopener">Devsisters (194480 KS)</a> in the Game Index, and <a href="https://www.smartkarma.com/entities/kmw-co-ltd" target="_blank" data-smartkarma-citation="entities:2834:1" rel="noopener">KMW Co Ltd (032500 KS)</a> could replace <a href="https://www.smartkarma.com/entities/afreecatv-co-ltd" target="_blank" data-smartkarma-citation="entities:20163:1" rel="noopener">AfreecaTV (067160 KS)</a> in the BBIG Index.</li>
</ul>


The review period for the September rebalance of the KRX New Deal indices started on 1 May and will run till 29 July. Implementation is on 8 September.

Intellian Technologies (189300 KS) and Seojin System Co, Ltd. (178320 KS) could replace Danal Co Ltd (064260 KS) and Kcp Co Ltd (060250 KS) in the Internet Index.

Nexon Games (225570 KS) could replace Devsisters (194480 KS) in the Game Index, and KMW Co Ltd (032500 KS) could replace AfreecaTV (067160 KS) in the BBIG Index.


KRX New Deal Index Rebalance Preview: KMW Into BBIG to Drive Flows

Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

Equity Capital Markets

<ul>
<li>Numerous local Korean media outlets reported today after the market close that SK Shieldus is likely to lower the IPO price by about 19% to 25,000 won.</li>
<li>Our revised base case valuation of SK Shieldus is target price of 36,948 won per share, representing 48% upside from the estimated IPO price of 25,000 won.</li>
<li>We maintain our same earnings estimates for SK Shieldus. We slightly lowered the valuation multiples mainly due to lower valuations of the comps and weaker market sentiment on IPOs. </li>
</ul>


Numerous local Korean media outlets reported today after the market close that SK Shieldus is likely to lower the IPO price by about 19% to 25,000 won.
Our revised base case valuation of SK Shieldus is target price of 36,948 won per share, representing 48% upside from the estimated IPO price of 25,000 won.
We maintain our same earnings estimates for SK Shieldus. We slightly lowered the valuation multiples mainly due to lower valuations of the comps and weaker market sentiment on IPOs. 


SK Shieldus: Likely to Lower IPO Price by 19% Post Bookbuilding Results

Korea / Special Situations, Clepsydra Capital

Sanghyun Park

Korea / Special Situations

Korea / Special Sits, Pairs, Index Rebalancing

Clepsydra Capital

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

<ul>
<li>Suppose we grouped S1 and Taiwan Secom with the Physical/Integrated Security weighting and then applied the Cybersecurity weighing to Ahnlab and CyberOne. <strong>We would have 11.40x, substantially lower than 14.85x</strong>.</li>
<li>SK Shieldus' sales were ₩1.55T, an increase of ₩0.22T (16.8%) from the previous year. But<strong> 65% of last year's sales increase was derived from the internal deals with SK Group</strong>.</li>
<li>How the company and the bankers will respond to those mentioned above two controversial aspects will be the most crucial point in determining the success or failure of this IPO.</li>
</ul>


Suppose we grouped S1 and Taiwan Secom with the Physical/Integrated Security weighting and then applied the Cybersecurity weighing to Ahnlab and CyberOne. We would have 11.40x, substantially lower than 14.85x.
SK Shieldus' sales were ₩1.55T, an increase of ₩0.22T (16.8%) from the previous year. But 65% of last year's sales increase was derived from the internal deals with SK Group.
How the company and the bankers will respond to those mentioned above two controversial aspects will be the most crucial point in determining the success or failure of this IPO.


SK Shieldus Controversies: Excessive Valuations & Suspicious Surge in Internal Sales

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.

<ul>
<li>
<a href="https://www.smartkarma.com/entities/sk-shieldus-co-ltd" target="_blank" data-smartkarma-citation="entities:35799:1" rel="noopener">SK Shieldus (ABFHIZ KS)</a> is a leading South Korean security provider. It is seeking a KRX IPO to raise up to US$0.9 billion. </li>
<li>The primary change in the updated prospectus is the syndicate's valuation methodology which results in a 10% lower value per share. The IPO price range of KRW31,000-38,800 is unchanged.</li>
<li>Sentiment on IPOs remains poor. For investors willing to look at IPOs, our valuation analysis suggests that the IPO price range remains reasonable.  </li>
</ul>



SK Shieldus (ABFHIZ KS) is a leading South Korean security provider. It is seeking a KRX IPO to raise up to US$0.9 billion. 
The primary change in the updated prospectus is the syndicate's valuation methodology which results in a 10% lower value per share. The IPO price range of KRW31,000-38,800 is unchanged.
Sentiment on IPOs remains poor. For investors willing to look at IPOs, our valuation analysis suggests that the IPO price range remains reasonable.  


SK Shieldus IPO: The Syndicate's Revised Methodology

<ul>
<li>After the market close today, SK Shieldus revised its IPO filing, especially for the valuation comps. However, it maintained the same IPO price range of 31,000 won to 38,800 won.</li>
<li>Bankers included two new comps (Taiwan Secom and Cyberone). Bankers excluded ADT Inc, Alarm.com, and Qualys as comps.</li>
<li>Our valuation of SK Shieldus suggests market cap of 4.1 trillion won or target price of 44,892 won (28.6% higher than the mid-point of the IPO price range). </li>
</ul>


After the market close today, SK Shieldus revised its IPO filing, especially for the valuation comps. However, it maintained the same IPO price range of 31,000 won to 38,800 won.
Bankers included two new comps (Taiwan Secom and Cyberone). Bankers excluded ADT Inc, Alarm.com, and Qualys as comps.
Our valuation of SK Shieldus suggests market cap of 4.1 trillion won or target price of 44,892 won (28.6% higher than the mid-point of the IPO price range). 


SK Shieldus IPO: Revises IPO Filing But Maintains Same Price Range

South Korea

S1 Corporation provides security systems services.  The Company installs, maintains, and sells a variety of security systems used in households, businesses, financial institutions, and automobiles.  S1 also provides guarding services, systems integration services, structural safety diagnosis services.

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S 1 Corporation (012750 KS)

KRX New Deal Index Rebalance Preview: KMW Into BBIG to Drive Flows

We see 2 changes for the Internet Index and 1 for the Game Index. More importantly, KMW couple replace AfreecaTV in the BBIG Index and that will...

Brian Freitas

SK Shieldus: Likely to Lower IPO Price by 19% Post Bookbuilding Results

Our revised base case valuation of SK Shieldus is target price of 36,948 won per share, representing 48% upside from the estimated IPO price of...

Douglas Kim

SK Shieldus Controversies: Excessive Valuations & Suspicious Surge in Internal Sales

This post investigates two controversial aspects found in SK Shieldus' revised IPO prospectus as the bookbuilding is currently in progress.

Sanghyun Park

SK Shieldus IPO: The Syndicate's Revised Methodology

The primary change in the updated prospectus is the syndicate's valuation methodology which results in a 10% lower value per share. The unchanged...

Arun George

SK Shieldus IPO: Revises IPO Filing But Maintains Same Price Range

After the market close today, SK Shieldus revised its IPO filing, especially for the valuation comps. However, it maintained the same IPO price...

Douglas Kim

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