Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

Douglas Research Advisory

Event-Driven

<ul>
<li>On 4 November, Wins Co Ltd (136540 KS) announced a tender offer of 1,364,416 shares (10% of outstanding shares) at a tender offer price of 16,000 won per share.</li>
<li>The tender offer period will last from 5 to 24 November. Once the tender offer buyback is completed, the company also plans to cancel the shares. </li>
<li>The company is deeply undervalued with cheap valuation multiples. It has P/E of 7.2x and EV/EBITDA of 1.1x based on 2023 financials. </li>
</ul>


On 4 November, Wins Co Ltd (136540 KS) announced a tender offer of 1,364,416 shares (10% of outstanding shares) at a tender offer price of 16,000 won per share.
The tender offer period will last from 5 to 24 November. Once the tender offer buyback is completed, the company also plans to cancel the shares. 
The company is deeply undervalued with cheap valuation multiples. It has P/E of 7.2x and EV/EBITDA of 1.1x based on 2023 financials. 


Wins Co: Tender Offer Buyback and Cancellation of 10% of Outstanding Shares

Equity Bottom-Up

<ul>
<li>Wins Co. is engaged in the business of developing and supplying information security solutions and developing software related to network security to protect networks from cyber threats and viruses. </li>
<li>The company has a consistent growth in sales and profits. It also has a strong balance sheet. At the end of 2023, it had a debt ratio of 15.4%. </li>
<li>Wins Co is trading at EV/EBITDA of 1.7x, P/E of 7.8x, and P/B of 0.9x in 2024 which are 75%, 26%, and 25% lower than the historical valuation multiples.</li>
</ul>


Wins Co. is engaged in the business of developing and supplying information security solutions and developing software related to network security to protect networks from cyber threats and viruses. 
The company has a consistent growth in sales and profits. It also has a strong balance sheet. At the end of 2023, it had a debt ratio of 15.4%. 
Wins Co is trading at EV/EBITDA of 1.7x, P/E of 7.8x, and P/B of 0.9x in 2024 which are 75%, 26%, and 25% lower than the historical valuation multiples.


<ul>
<li>In this insight, we review the major tender offers of Korean companies in 2024. The tender offers have mostly been profitable for the investors in these targeted companies.</li>
<li>What is also impressive is that even after the 1st day of trading (post tender offer announcement), there have been extra alpha for the following week and month.</li>
<li>The number of tender offers in Korea increased from 6 in 2020 to 12 in 2021, 7 in 2022, 18 in 2023, and 28 in 2024.</li>
</ul>


In this insight, we review the major tender offers of Korean companies in 2024. The tender offers have mostly been profitable for the investors in these targeted companies.
What is also impressive is that even after the 1st day of trading (post tender offer announcement), there have been extra alpha for the following week and month.
The number of tender offers in Korea increased from 6 in 2020 to 12 in 2021, 7 in 2022, 18 in 2023, and 28 in 2024.


A Review of Tender Offers in Korea in 2024

<ul>
<li>Hyundai G.F. Holdings announced that it is making a tender offer of a 15% stake its affiliate Ezwelfare (090850 KS) (Hyundai Ezwel Co).</li>
<li>The tender offer involves 3,561,954 shares of Hyundai Ezwel, at the tender offer price of 7,000 won per share (15.7% higher than the closing price on 9 November).</li>
<li>On Monday (11 November), Hyundai Ezwel's share price could reach about 1-3% below the tender offer price (about 6,800 won to 6,930 won) in the first few minutes of trading. </li>
</ul>


Hyundai G.F. Holdings announced that it is making a tender offer of a 15% stake its affiliate Ezwelfare (090850 KS) (Hyundai Ezwel Co).
The tender offer involves 3,561,954 shares of Hyundai Ezwel, at the tender offer price of 7,000 won per share (15.7% higher than the closing price on 9 November).
On Monday (11 November), Hyundai Ezwel's share price could reach about 1-3% below the tender offer price (about 6,800 won to 6,930 won) in the first few minutes of trading. 


Hyundai GF Holdings: A Tender Offer of 15% Stake in Hyundai Ezwel

<ul>
<li>On 7 November, it was reported that E&amp;I Holdings (company's largest shareholder) plans to conduct a tender offer of 18,937,913 common shares of Koentec, representing 37.88% of its outstanding shares.</li>
<li>E&amp;I Holdings plans to purchase all the shares of Koentec and delist the company.</li>
<li>There have been three small cap tender offers in Korea in the past week which suggests more smaller Korean companies trying to unlock higher value through the tender offer strategy.</li>
</ul>


On 7 November, it was reported that E&amp;I Holdings (company's largest shareholder) plans to conduct a tender offer of 18,937,913 common shares of Koentec, representing 37.88% of its outstanding shares.
E&amp;I Holdings plans to purchase all the shares of Koentec and delist the company.
There have been three small cap tender offers in Korea in the past week which suggests more smaller Korean companies trying to unlock higher value through the tender offer strategy.


South Korea

Wins Co Ltd. provides security network services. The Company provides various security solutions to protect networks from cyber threats and viruses.

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Wins Co Ltd (136540 KS)

Wins Co: Tender Offer Buyback and Cancellation of 10% of Outstanding Shares

Wins Co announced a tender offer of 1,364,416 shares (10% of outstanding shares) at a tender offer price of 16,000 won per share. The company is...

Douglas Kim

Korea Small Cap Gem #27: Wins Co.

Wins Co is the 27th company in our Korea Small Cap Gems series. We are positive on this stock due to its attractive financials and cheap...

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A Review of Tender Offers in Korea in 2024

In this insight, we review the major tender offers of Korean companies in 2024. The tender offers have mostly been profitable for the investors in...

Douglas Kim

Hyundai GF Holdings: A Tender Offer of 15% Stake in Hyundai Ezwel

Hyundai G.F. Holdings announced that it is making a tender offer of a 15% stake its affiliate Ezwelfare (090850 KS) (Hyundai Ezwel Co).

Douglas Kim

Koentec: Tender Offer and Delisting

On 7 November, it was reported that E&I Holdings (company's largest shareholder) plans to conduct a tender offer of 18,937,913 common shares of...

Douglas Kim

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