Korea / Special Sits, Pairs, Index Rebalancing, Clepsydra Capital

Sanghyun Park

Korea / Special Sits, Pairs, Index Rebalancing

Clepsydra Capital

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

Equity Capital Markets

<div><div><h2>Offering size</h2></div></div><div>
<p>HK inno.N offers 10.1M shares, which account for 43.75% of the pre-IPO total shares, of which 55-75% are allocated to institutions. It will be listed on KOSDAQ.</p>
<div class="content-highlight">
<p><strong>Who is HK inno.N?</strong></p>
<p>HK inno.N was a subsidiary of CJ Group, established in April 2014 through a physical spin-off of CJ CheilJedang's pharmaceutical business.</p>
<p>However, HK inno.N was acquired by Kolmar Korea on April 18, 2018, and <strong>the corporate name was changed from CJ Healthcare Co., Ltd. to HK Innoen Co., Ltd. in February 2020</strong>.</p>
</div>
<table class="table table-striped">
<colgroup>
<col width="200">
<col width="200">
</colgroup>
<tbody>
<tr><td colspan="2" rowspan="1" data-sheets-value='{"1":2,"2":"Offering size"}'>Offering size</td></tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Ticker"}' data-sheets-formula="=R[-44]C[0]">Ticker</td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"195940"}' data-sheets-numberformat='{"1":2,"2":"[$₩-412]#,##0","3":1}' data-sheets-formula="=R[-44]C[0]">195940</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Bourse"}' data-sheets-formula="=R[-44]C[0]">Bourse</td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"KOSDAQ"}' data-sheets-numberformat='{"1":2,"2":"[$₩-412]#,##0","3":1}' data-sheets-formula="=R[-44]C[0]">KOSDAQ</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Offering"}'><strong>Offering</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":10117000}' data-sheets-numberformat='{"1":2,"2":"#,##0","3":1}' data-sheets-formula="=R[-41]C[0]"><strong>10,117,000</strong></td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"- % of pre-IPO SO"}'><strong>- % of pre-IPO SO</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0.43752029050620755}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}' data-sheets-formula="=R[-39]C[0]"><strong>43.75%</strong></td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Institutional allotment"}'><strong>Institutional allotment</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"55.00~75.00%"}'><strong>55.00~75.00%</strong></td>
</tr>
<tr><td colspan="2" rowspan="1" data-sheets-value='{"1":2,"2":"Source: DART"}'>Source: DART</td></tr>
</tbody>
</table>
<div><h2>Split</h2></div>
<div>
<p>This IPO is a split offering with a primary of 57.14% and a secondary of 42.86%. As a result, this offering will see a capital increase rate of 25% with a shareholding dilution of 20%. This IPO is free of any additional options: cornerstone, clawback, or greenshoe.</p>
<table class="table table-striped">
<colgroup>
<col width="200">
<col width="200">
</colgroup>
<tbody>
<tr><td colspan="2" rowspan="1" data-sheets-value='{"1":2,"2":"Split"}'>Split</td></tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Primary %"}'><strong>Primary %</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0.571414450924187}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}' data-sheets-formula="=R[-41]C[0]"><strong>57.14%</strong></td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Secondary %"}'><strong>Secondary %</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0.428585549075813}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}' data-sheets-formula="=R[-40]C[0]"><strong>42.86%</strong></td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Capital increase rate"}'>Capital increase rate</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0.2500054165677954}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}' data-sheets-formula="=R[-38]C[0]">25.00%</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Dilution"}'>Dilution</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0.20000346658836743}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}' data-sheets-formula="=R[-38]C[0]">20.00%</td>
</tr>
<tr><td colspan="2" rowspan="1" data-sheets-value='{"1":2,"2":"Source: DART"}'>Source: DART</td></tr>
</tbody>
</table>
</div>
<div><div><h2>Schedule</h2></div></div>
<div>
<p>The book opens on July 13 (for overseas investors) and runs until July 26. The allotment will be on July 28 as the offering price is finalized. The subscription falls on July 29.</p>
<table class="table table-striped">
<colgroup>
<col width="200">
<col width="200">
</colgroup>
<tbody>
<tr><td colspan="2" rowspan="1" data-sheets-value='{"1":2,"2":"Schedule"}'>Schedule</td></tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Book open"}'><strong>Book open</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":44390}' data-sheets-numberformat='{"1":5,"2":"yyyy. m. d","3":1}'><strong>2021. 7. 13</strong></td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Book close"}'>Book close</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":44403}' data-sheets-numberformat='{"1":5,"2":"yyyy. m. d","3":1}'>2021. 7. 26</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Allotment"}'><strong>Allotment</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":44405}' data-sheets-numberformat='{"1":5,"2":"yyyy. m. d","3":1}'><strong>2021. 7. 28</strong></td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Subscription"}'><strong>Subscription</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":44406}' data-sheets-numberformat='{"1":5,"2":"yyyy. m. d","3":1}'><strong>2021. 7. 29</strong></td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Payment"}'>Payment</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":44411}' data-sheets-numberformat='{"1":5,"2":"yyyy. m. d","3":1}'>2021. 8. 3</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Listing"}'>Listing</td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"TBA"}'>TBA</td>
</tr>
<tr><td colspan="2" rowspan="1" data-sheets-value='{"1":2,"2":"Source: DART"}'>Source: DART</td></tr>
</tbody>
</table>
</div>
<div><h2>Pricing</h2></div>
<div>
<p>HK inno.N used EV/EBITDA. The corporate value was determined after selecting three local pharmaceutical companies: 1. Yuhan, 2. Chong Kun Dang Pharmaceutical, and 3. Daewoong Pharmaceutical. The respective EV/EBITDA multiples are 25.93x for Yuhan, 10.30x for Chong Kun Dang, and 26.8x for Daewoong Pharm.</p>
<table class="table table-striped">
<colgroup>
<col width="200">
<col width="150">
<col width="150">
<col width="150">
</colgroup>
<tbody>
<tr>
<td data-sheets-value='{"1":2,"2":"Valuation peers: EV/EBITDA"}'>Valuation peers: EV/EBITDA</td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"Yuhan Corp"}' data-sheets-formula='=googlefinance(R[1]C[0], "name")'>Yuhan Corp</td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"Chong Kun Dang Pharmaceutical Corp"}' data-sheets-formula='=googlefinance(R[1]C[0], "name")'>Chong Kun Dang Pharmaceutical Corp</td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"Daewoong Pharmaceutical Co., Ltd."}' data-sheets-formula='=googlefinance(R[1]C[0], "name")'>Daewoong Pharmaceutical Co., Ltd.</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Ticker"}'>Ticker</td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"000100"}' data-sheets-formula='="000100"'>000100</td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"185750"}' data-sheets-formula='="185750"'>185750</td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"069620"}' data-sheets-formula='="069620"'>069620</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Shares outstanding"}'>Shares outstanding</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":69972959}' data-sheets-numberformat='{"1":2,"2":"#,##0"}'>69,972,959</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":11426099}' data-sheets-numberformat='{"1":2,"2":"#,##0"}'>11,426,099</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":11586575}' data-sheets-numberformat='{"1":2,"2":"#,##0"}'>11,586,575</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Reference share price: MIN[1W Avg, 1M Avg, 1D Close] at June 22, 2021"}'>Reference share price: MIN[1W Avg, 1M Avg, 1D Close] on June 22, 2021</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":63300}' data-sheets-numberformat='[null,4,"[$₩]#,##0",1]'>₩63,300</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":130841}' data-sheets-numberformat='[null,4,"[$₩]#,##0",1]'>₩130,841</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":154000}' data-sheets-numberformat='[null,4,"[$₩]#,##0",1]'>₩154,000</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Reference market cap"}'>Reference market cap</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":4429.2883047}' data-sheets-numberformat='[null,2,"$#,##0.0B",1]' data-sheets-formula="=R[-1]C[0]*R[-2]C[0]/1000000000">$4,429.3B</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":1495.002219259}' data-sheets-numberformat='[null,2,"$#,##0.0B",1]' data-sheets-formula="=R[-1]C[0]*R[-2]C[0]/1000000000">$1,495.0B</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":1784.33255}' data-sheets-numberformat='[null,2,"$#,##0.0B",1]' data-sheets-formula="=R[-1]C[0]*R[-2]C[0]/1000000000">$1,784.3B</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Preferred share market cap"}'>Preferred share market cap</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":71.683}' data-sheets-numberformat='[null,2,"$#,##0.0B",1]'>$71.7B</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0}' data-sheets-numberformat='[null,2,"$#,##0.0B",1]'>$0.0B</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0}' data-sheets-numberformat='[null,2,"$#,##0.0B",1]'>$0.0B</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Net debt"}'>Net debt</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":-440.398}' data-sheets-numberformat='[null,2,"$#,##0.0B",1]'>-$440.4B</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":-7.554}' data-sheets-numberformat='[null,2,"$#,##0.0B",1]'>-$7.6B</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":225.79}' data-sheets-numberformat='[null,2,"$#,##0.0B",1]'>$225.8B</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Enterprise value (EV)"}'>Enterprise value (EV)</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":4060.5733046999994}' data-sheets-numberformat='[null,2,"$#,##0.0B",1]' data-sheets-formula="=R[-3]C[0]+R[-2]C[0]+R[-1]C[0]">$4,060.6B</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":1487.4482192589999}' data-sheets-numberformat='[null,2,"$#,##0.0B",1]' data-sheets-formula="=R[-3]C[0]+R[-2]C[0]+R[-1]C[0]">$1,487.4B</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":2010.12255}' data-sheets-numberformat='[null,2,"$#,##0.0B",1]' data-sheets-formula="=R[-3]C[0]+R[-2]C[0]+R[-1]C[0]">$2,010.1B</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"EBITDA: 2Q20~1Q21"}'>EBITDA: 2Q20~1Q21</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":156.583}' data-sheets-numberformat='[null,2,"$#,##0.0B",1]'>$156.6B</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":144.368}' data-sheets-numberformat='[null,2,"$#,##0.0B",1]'>$144.4B</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":75.002}' data-sheets-numberformat='[null,2,"$#,##0.0B",1]'>$75.0B</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"EV/EBITDA"}'><strong>EV/EBITDA</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":25.93240201490583}' data-sheets-numberformat='[null,2,"0.00x"]' data-sheets-formula="=R[-2]C[0]/R[-1]C[0]"><strong>25.93x</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":10.303171196241548}' data-sheets-numberformat='[null,2,"0.00x"]' data-sheets-formula="=R[-2]C[0]/R[-1]C[0]"><strong>10.30x</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":26.800919308818433}' data-sheets-numberformat='[null,2,"0.00x"]' data-sheets-formula="=R[-2]C[0]/R[-1]C[0]"><strong>26.80x</strong></td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Average EV/EBITDA"}'><strong>Average EV/EBITDA</strong></td>
<td colspan="3" rowspan="1" style="text-align: center;" data-sheets-value='{"1":3,"3":21.012164173321935}' data-sheets-numberformat='[null,2,"0.00x"]' data-sheets-formula="=average(R[-1]C[0]:R[-1]C[2])"><strong>21.01x</strong></td>
</tr>
<tr><td colspan="4" rowspan="1" data-sheets-value='{"1":2,"2":"Source: DART"}'>Source: DART</td></tr>
</tbody>
</table>
</div>
<div><div>The combined EV/EBITDA multiple of 21.01 times was applied to the EBITDA of ₩115.5B from the second quarter of last year to the first quarter of this year.</div></div>
<div><table class="table table-striped">
<colgroup>
<col width="200">
<col width="150">
<col width="150">
</colgroup>
<tbody>
<tr><td colspan="3" rowspan="1" data-sheets-value='{"1":2,"2":"HK inno.N: EV/EBITDA"}'>HK inno.N: EV/EBITDA</td></tr>
<tr>
<td data-sheets-value='{"1":2,"2":"EBITDA: 2Q20~1Q21"}'>EBITDA: 2Q20~1Q21</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":115.526}' data-sheets-numberformat='[null,2,"₩#,##0.0B",1]'>₩115.5B</td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"A"}'>A</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"EV/EBITDA"}'>EV/EBITDA</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":21.012164173321935}' data-sheets-numberformat='[null,2,"0.00x"]' data-sheets-formula="=R[-5]C[0]">21.01x</td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"B"}' data-sheets-numberformat='[null,2,"₩#,##0.0B",1]'>B</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Enterprise value (EV)"}'>Enterprise value (EV)</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":2427.194}' data-sheets-numberformat='[null,2,"₩#,##0.0B",1]'>₩2,427.2B</td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"C = A X B"}' data-sheets-numberformat='[null,2,"₩#,##0.0B",1]'>C = A X B</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Net debt"}'>Net debt</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":376.158}' data-sheets-numberformat='[null,2,"₩#,##0.0B",1]'>₩376.2B</td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"D"}' data-sheets-numberformat='[null,2,"₩#,##0.0B",1]'>D</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Market cap"}'><strong>Market cap</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":2051.036}' data-sheets-numberformat='[null,2,"₩#,##0.0B",1]' data-sheets-formula="=R[-2]C[0]-R[-1]C[0]"><strong>₩2,051.0B</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"E = C - D"}' data-sheets-numberformat='[null,2,"₩#,##0.0B",1]'><strong>E = C - D</strong></td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Post-IPO total shares"}'>Post-IPO total shares</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":28904499}' data-sheets-numberformat='[null,2,"#,##0",1]' data-sheets-formula="=Terms!R[-2]C[0]">28,904,499</td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"F"}' data-sheets-numberformat='[null,2,"₩#,##0.0B",1]'>F</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Price per share"}'><strong>Price per share</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":70959.05727340232}' data-sheets-numberformat='[null,2,"[$₩-412]#,##0",1]' data-sheets-formula="=R[-2]C[0]*1000000000/R[-1]C[0]"><strong>₩70,959</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"G = E / F"}' data-sheets-numberformat='[null,2,"₩#,##0.0B",1]'><strong>G = E / F</strong></td>
</tr>
<tr><td colspan="3" rowspan="1" data-sheets-value='{"1":2,"2":"Source: DART"}'>Source: DART</td></tr>
</tbody>
</table></div>
<div><p>The indicative price band is between ₩50,000 and ₩59,000. This is obtained by applying a discount rate of 16.85% to 29.54% to the market cap of ₩2,051.0B calculated through EV/EBITDA.</p></div>
<div><table class="table table-striped">
<colgroup>
<col width="200">
<col width="150">
<col width="150">
</colgroup>
<tbody>
<tr>
<td data-sheets-value='{"1":2,"2":"Indicative price band"}'>Indicative price band</td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"Low"}'>Low</td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"High"}'>High</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Price"}'><strong>Price</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":50000}' data-sheets-numberformat='[null,2,"[$₩-412]#,##0",1]'><strong>₩50,000</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":59000}' data-sheets-numberformat='[null,2,"[$₩-412]#,##0",1]'><strong>₩59,000</strong></td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Base deal size"}'>Base deal size</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":505.85}' data-sheets-numberformat='[null,2,"₩#,##0.0B",1]' data-sheets-formula="=R[-1]C[0]*Terms!R8C2/1000000000">₩505.9B</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":596.903}' data-sheets-numberformat='[null,2,"₩#,##0.0B",1]' data-sheets-formula="=R[-1]C[0]*Terms!R8C2/1000000000">₩596.9B</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":" - Institutional allotment"}'>- Institutional allotment</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":278.21750000000003}' data-sheets-numberformat='[null,2,"₩#,##0.0B",1]' data-sheets-formula="=R[-1]C[0]*Terms!R12C2">₩278.2B</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":328.29665000000006}' data-sheets-numberformat='[null,2,"₩#,##0.0B",1]' data-sheets-formula="=R[-1]C[0]*Terms!R12C2">₩328.3B</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Implied market cap"}'><strong>Implied market cap</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":1445.22495}' data-sheets-numberformat='[null,2,"₩#,##0.0B",1]' data-sheets-formula="=R[-3]C[0]*Terms!R18C2/1000000000"><strong>₩1,445.2B</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":1705.365441}' data-sheets-numberformat='[null,2,"₩#,##0.0B",1]' data-sheets-formula="=R[-3]C[0]*Terms!R18C2/1000000000"><strong>₩1,705.4B</strong></td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":" - Discount"}'><strong>- Discount</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0.2953683163045407}' data-sheets-numberformat='[null,3,"0.00%",1]' data-sheets-formula="=(R21C2-R[-4]C[0])/R21C2"><strong>29.54%</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0.16853461323935803}' data-sheets-numberformat='[null,3,"0.00%",1]' data-sheets-formula="=(R21C2-R[-4]C[0])/R21C2"><strong>16.85%</strong></td>
</tr>
<tr><td colspan="3" rowspan="1" data-sheets-value='{"1":2,"2":"Source: DART"}'>Source: DART</td></tr>
</tbody>
</table></div>
</div>

Offering size
HK inno.N offers 10.1M shares, which account for 43.75% of the pre-IPO total shares, of which 55-75% are allocated to institutions. It will be listed on KOSDAQ.

Who is HK inno.N?
HK inno.N was a subsidiary of CJ Group, established in April 2014 through a physical spin-off of CJ CheilJedang's pharmaceutical business.
However, HK inno.N was acquired by Kolmar Korea on April 18, 2018, and the corporate name was changed from CJ Healthcare Co., Ltd. to HK Innoen Co., Ltd. in February 2020.







Offering size

Ticker
195940


Bourse
KOSDAQ


Offering
10,117,000


- % of pre-IPO SO
43.75%


Institutional allotment
55.00~75.00%

Source: DART


Split

This IPO is a split offering with a primary of 57.14% and a secondary of 42.86%. As a result, this offering will see a capital increase rate of 25% with a shareholding dilution of 20%. This IPO is free of any additional options: cornerstone, clawback, or greenshoe.






Split

Primary %
57.14%


Secondary %
42.86%


Capital increase rate
25.00%


Dilution
20.00%

Source: DART



Schedule

The book opens on July 13 (for overseas investors) and runs until July 26. The allotment will be on July 28 as the offering price is finalized. The subscription falls on July 29.






Schedule

Book open
2021. 7. 13


Book close
2021. 7. 26


Allotment
2021. 7. 28


Subscription
2021. 7. 29


Payment
2021. 8. 3


Listing
TBA

Source: DART



Pricing

HK inno.N used EV/EBITDA. The corporate value was determined after selecting three local pharmaceutical companies: 1. Yuhan, 2. Chong Kun Dang Pharmaceutical, and 3. Daewoong Pharmaceutical. The respective EV/EBITDA multiples are 25.93x for Yuhan, 10.30x for Chong Kun Dang, and 26.8x for Daewoong Pharm.









Valuation peers: EV/EBITDA
Yuhan Corp
Chong Kun Dang Pharmaceutical Corp
Daewoong Pharmaceutical Co., Ltd.


Ticker
000100
185750
069620


Shares outstanding
69,972,959
11,426,099
11,586,575


Reference share price: MIN[1W Avg, 1M Avg, 1D Close] on June 22, 2021
₩63,300
₩130,841
₩154,000


Reference market cap
$4,429.3B
$1,495.0B
$1,784.3B


Preferred share market cap
$71.7B
$0.0B
$0.0B


Net debt
-$440.4B
-$7.6B
$225.8B


Enterprise value (EV)
$4,060.6B
$1,487.4B
$2,010.1B


EBITDA: 2Q20~1Q21
$156.6B
$144.4B
$75.0B


EV/EBITDA
25.93x
10.30x
26.80x


Average EV/EBITDA
21.01x

Source: DART



The combined EV/EBITDA multiple of 21.01 times was applied to the EBITDA of ₩115.5B from the second quarter of last year to the first quarter of this year.







HK inno.N: EV/EBITDA

EBITDA: 2Q20~1Q21
₩115.5B
A


EV/EBITDA
21.01x
B


Enterprise value (EV)
₩2,427.2B
C = A X B


Net debt
₩376.2B
D


Market cap
₩2,051.0B
E = C - D


Post-IPO total shares
28,904,499
F


Price per share
₩70,959
G = E / F

Source: DART


The indicative price band is between ₩50,000 and ₩59,000. This is obtained by applying a discount rate of 16.85% to 29.54% to the market cap of ₩2,051.0B calculated through EV/EBITDA.








Indicative price band
Low
High


Price
₩50,000
₩59,000


Base deal size
₩505.9B
₩596.9B


- Institutional allotment
₩278.2B
₩328.3B


Implied market cap
₩1,445.2B
₩1,705.4B


- Discount
29.54%
16.85%

Source: DART




HK Inno.N (Formerly CJ Healthcare) IPO: Offering Detail & Valuation Issues

Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

<div class="content-highlight"><p><strong>Our base case valuation of HK Inno.N is EV of 2.6 trillion won and implied market cap of 2.2 trillion won (75,534 won per share). This is based on 24x EV/EBIT using our 2022 EBIT estimate of 108.8 billion won.</strong> Our base case valuation of 75,534 won per share represents a 28% upside from the high end of the IPO price range of 59,000 won. Given the solid upside, we have a Positive Rating of the HK Inno.N IPO. </p></div><p>HK inno.N mainly provides prescription drugs and H&amp;B (health &amp; beauty) products. About 86% of its sales were derived from the prescription drug segment and the remaining 14% from the Health Beauty &amp; Beverage (HB &amp; B) segment in 2020.</p>

Our base case valuation of HK Inno.N is EV of 2.6 trillion won and implied market cap of 2.2 trillion won (75,534 won per share). This is based on 24x EV/EBIT using our 2022 EBIT estimate of 108.8 billion won. Our base case valuation of 75,534 won per share represents a 28% upside from the high end of the IPO price range of 59,000 won. Given the solid upside, we have a Positive Rating of the HK Inno.N IPO. HK inno.N mainly provides prescription drugs and H&amp;B (health &amp; beauty) products. About 86% of its sales were derived from the prescription drug segment and the remaining 14% from the Health Beauty &amp; Beverage (HB &amp; B) segment in 2020.

<p>HK Inno.N ("Inno.N") is getting ready for an IPO in the Korean stock market. The IPO price range is from 50,000 won to 59,000 won. The company is offering 10.1 million shares in this IPO including 5.8 million new shares and 4.3 million old shares. The IPO deal size is from $447 million to $527 million.</p><p>According to the bankers' valuation, the expected market cap after the IPOs is from 1.4 trillion won ($1.2 billion) to 1.7 trillion won ($1.5 billion). The book building for the institutional investors starts on 22 July 2021. Korea Investment &amp; Securites and Samsung Securities are the lead underwriters of this IPO. </p><p><a href="https://www.smartkarma.com/entities/korea-kolmar-co-ltd" target="_blank" data-smartkarma-citation="entities:7985:1" rel="noopener">Korea Kolmar (161890 KS)</a> is the controlling shareholder of <a href="https://www.hkn24.com/news/articleView.html?idxno=319760" target="_blank" rel="noopener">HK Inno.N</a> with a 52.7% stake in the company. </p><p>HK Inno.N IPO will be on KOSDAQ. At the high end of the IPO price range, this would be valued at 1.7 trillion won. Currently, there are 23 stocks that have more than 1.7 trillion won in market cap on KOSDAQ. </p><table class="table table-striped">
<colgroup>
<col>
<col>
</colgroup>
<tbody>
<tr>
<td style="width: 248pt;"><div><strong>Deal Specifics of the HK Inno.N IPO:</strong></div></td>
<td style="width: 310pt;"> </td>
</tr>
<tr>
<td>Lead underwriters of the IPO: </td>
<td style="width: 310pt;">Korea Investment &amp; Securities, Samsung Securities</td>
</tr>
<tr>
<td>Expected IPO price per share: </td>
<td style="width: 310pt;">50,000 won (low)/59,000 won (high)</td>
</tr>
<tr>
<td>Number of Shares for IPO:</td>
<td style="width: 310pt;">10.1m shares (5.8m new shares and 4.3m old shares)</td>
</tr>
<tr>
<td>IPO base deal size: </td>
<td style="width: 310pt;">US$447 mn (low);  US$527 mn (high)</td>
</tr>
<tr>
<td>Expected common shares outstanding, fully diluted (post-IPO):  </td>
<td style="width: 310pt;">28.9m shares</td>
</tr>
<tr>
<td>Expected market cap after IPO:</td>
<td style="width: 310pt;">1,445 billion won (low)/1,705 billion won (high)</td>
</tr>
<tr>
<td>Book open: </td>
<td style="text-align: left; width: 310pt;">22-Jul-21</td>
</tr>
<tr>
<td>Book closed:</td>
<td style="text-align: left; width: 310pt;">26-Jul-21</td>
</tr>
<tr>
<td>Listing date: </td>
<td style="text-align: left; width: 310pt;">TBC</td>
</tr>
<tr>
<td>Source: Company data</td>
<td style="width: 310pt;"> </td>
</tr>
</tbody>
</table>

HK Inno.N ("Inno.N") is getting ready for an IPO in the Korean stock market. The IPO price range is from 50,000 won to 59,000 won. The company is offering 10.1 million shares in this IPO including 5.8 million new shares and 4.3 million old shares. The IPO deal size is from $447 million to $527 million.According to the bankers' valuation, the expected market cap after the IPOs is from 1.4 trillion won ($1.2 billion) to 1.7 trillion won ($1.5 billion). The book building for the institutional investors starts on 22 July 2021. Korea Investment &amp; Securites and Samsung Securities are the lead underwriters of this IPO. Korea Kolmar (161890 KS) is the controlling shareholder of HK Inno.N with a 52.7% stake in the company. HK Inno.N IPO will be on KOSDAQ. At the high end of the IPO price range, this would be valued at 1.7 trillion won. Currently, there are 23 stocks that have more than 1.7 trillion won in market cap on KOSDAQ. 






Deal Specifics of the HK Inno.N IPO:
 


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


Expected IPO price per share: 
50,000 won (low)/59,000 won (high)


Number of Shares for IPO:
10.1m shares (5.8m new shares and 4.3m old shares)


IPO base deal size: 
US$447 mn (low);  US$527 mn (high)


Expected common shares outstanding, fully diluted (post-IPO):  
28.9m shares


Expected market cap after IPO:
1,445 billion won (low)/1,705 billion won (high)


Book open: 
22-Jul-21


Book closed:
26-Jul-21


Listing date: 
TBC


Source: Company data
 




Event-Driven

<p>In this insight, we discuss the top 50 most shorted stocks in KOSPI and KOSDAQ, respectively in terms of Short Sale Volume/Free Float Volume, respectively. The KRX provides updated short sale data in terms of short sale volume amount/market cap. However, it does not provide the data in terms of free float basis which is probably a better figure to use when analyzing the short sale data. </p><p>We divided the tables for the KOSPI and KOSDAQ short sale volume into two parts. </p><ul>
<li>First, the 50 stocks are ranked in order of the short sale volume/free float volume ratio.</li>
<li>Second, because many institutional investors deal with larger market cap companies, we included only those companies with more than 1 trillion won in market cap. We also included data on the changes in the foreign ownership YTD. </li>
</ul>

In this insight, we discuss the top 50 most shorted stocks in KOSPI and KOSDAQ, respectively in terms of Short Sale Volume/Free Float Volume, respectively. The KRX provides updated short sale data in terms of short sale volume amount/market cap. However, it does not provide the data in terms of free float basis which is probably a better figure to use when analyzing the short sale data. We divided the tables for the KOSPI and KOSDAQ short sale volume into two parts. 
First, the 50 stocks are ranked in order of the short sale volume/free float volume ratio.
Second, because many institutional investors deal with larger market cap companies, we included only those companies with more than 1 trillion won in market cap. We also included data on the changes in the foreign ownership YTD. 


Top 50 Most Shorted Stocks in KOSPI & KOSDAQ (Short Sale Vol/Free Float Vol)

Enzychem Lifesciences Corp / Equity Capital Markets

<p><a href="https://www.smartkarma.com/entities/26185" target="_blank" data-smartkarma-citation="entities:26185:1">Enzychem Lifesciences Corp (183490 KS)</a> submitted the revised version of IPO book on Jan 22.</p><div class="content-highlight"><p><em>Here is the link of this new IPO book.</em></p><p><em><a href="https://dart.fss.or.kr/dsaf001/main.do?rcpNo=20180122000172" target="_blank">https://dart.fss.or.kr/dsaf001/main.do?rcpNo=20180122000172</a></em></p></div><p>The indicative price band is adjusted to reflect the current price on KONEX. As a result, we now have a ₩45,000 - ₩70,000 range (previously ₩27,000 - ₩37,000). At the lower end ₩45,000, the company will raise a total of ₩34.65bil (previously ₩20.79bil) from this IPO, which means the company's total value will amount to ₩355.3bil (previously ₩213.1bil).</p><table class="table table-striped"><tbody><tr><td colspan="2" style="width: 732px;">IPO summary</td></tr><tr><td style="width: 301.80706787109375px;">Company name</td><td style="width: 430.19293212890625px;"><a href="https://www.smartkarma.com/entities/26185" target="_blank" data-smartkarma-citation="entities:26185:1">Enzychem Lifesciences Corp (183490 KS)</a></td></tr><tr><td style="width: 301.80706787109375px;">Foundation</td><td style="width: 430.19293212890625px;"><p>July 20, 1999</p><p>- Got listed in KONEX on Sep 25, 2013</p></td></tr><tr><td style="width: 301.80706787109375px;">CEO</td><td style="width: 430.19293212890625px;">Son Ki-young</td></tr><tr><td style="width: 301.80706787109375px;">HQ address</td><td style="width: 430.19293212890625px;"><p>F15 Trust Tower 60, Mabang-ro, Seocho-gu, Seoul, Korea</p></td></tr><tr><td style="width: 301.80706787109375px;">Corporate homepage</td><td style="width: 430.19293212890625px;"><p><a href="https://www.smartkarma.com/messages/www.enzychem.com" target="_blank">www.enzychem.com</a></p></td></tr><tr><td style="width: 301.80706787109375px;">Industry / specialty</td><td style="width: 430.19293212890625px;">It manufactures active pharmaceutical ingredients, pharmaceutical intermediates, and cosmetic ingredients. It also also produces functional health foods and finished drug products.</td></tr><tr><td style="width: 301.80706787109375px;">Total number of share offerings</td><td style="width: 430.19293212890625px;"><p>770,000 shares</p><p>(100% new rights offering)</p></td></tr><tr><td colspan="2" style="width: 301.80706787109375px;"><hr></td></tr><tr><td style="width: 301.80706787109375px;"><em><strong>Indicative price band</strong></em></td><td style="width: 430.19293212890625px;"><em><strong>₩45,000 - ₩70,000 (previously ₩27,000 - ₩37,000)</strong></em></td></tr><tr><td style="width: 301.80706787109375px;"><em><strong>Total amount to be raised (at ₩45,000)</strong></em></td><td style="width: 430.19293212890625px;"><em><strong>₩34,650,000,000 (previously ₩20,790,000,000)</strong></em></td></tr><tr><td style="width: 301.80706787109375px;"><em><strong>Target valuation (at ₩45,000)</strong></em></td><td style="width: 430.19293212890625px;"><em><strong>₩355.3bil (previously ₩213.1bil)</strong></em></td></tr><tr><td colspan="2" style="width: 301.80706787109375px;"><hr></td></tr><tr><td style="width: 301.80706787109375px;">Bookrunners</td><td style="width: 430.19293212890625px;"><p>KIS</p></td></tr><tr><td style="width: 301.80706787109375px;">Bourse</td><td style="width: 430.19293212890625px;">KOSDAQ</td></tr><tr><td colspan="2" style="width: 732px;"><em>Source: DART</em></td></tr></tbody></table><div><p>We will have a new bookbuilding on Feb 5-6, and the IPO price will be finalized on Feb 7. Subscription will take place on Feb 8-9. Settlement will be Feb 13.</p><table class="table table-striped"><tbody><tr><td colspan="2" style="width: 734px;">Event schedule</td></tr><tr><td style="width: 302.9347839355469px;"><em><strong>Bookbuilding</strong></em></td><td style="text-align: left; width: 431.065px;"><em><strong>Feb 5-6</strong></em></td></tr><tr><td style="width: 302.9347839355469px;"><em><strong>IPO price determination</strong></em></td><td style="text-align: left; width: 431.065px;"><em><strong>Feb 7</strong></em></td></tr><tr><td style="width: 302.9347839355469px;"><em><strong>Subscription</strong></em></td><td style="text-align: left; width: 431.065px;"><em><strong>Feb 8-9</strong></em></td></tr><tr><td style="width: 302.9347839355469px;">Allocation/settlement (payment)</td><td style="text-align: left; width: 431.065px;">Feb 13</td></tr><tr><td colspan="2" style="width: 734px;"><em>Source: DART</em></td></tr></tbody></table><hr><div class="content-highlight"><p><em>→ Why do we have another bookbuilding with a new price band? I already explained this in detail in my previous insight. Please refer to the below insight for this.</em></p><p><em><a href="https://www.smartkarma.com/insights/enzychem-lifesciences-ipo-rescheduling-summary" target="_blank" data-smartkarma-citation="insights:16951">Enzychem Lifesciences IPO Rescheduling Summary</a></em></p></div></div>

Enzychem Lifesciences Corp (183490 KS) submitted the revised version of IPO book on Jan 22.Here is the link of this new IPO book.https://dart.fss.or.kr/dsaf001/main.do?rcpNo=20180122000172The indicative price band is adjusted to reflect the current price on KONEX. As a result, we now have a ₩45,000 - ₩70,000 range (previously ₩27,000 - ₩37,000). At the lower end ₩45,000, the company will raise a total of ₩34.65bil (previously ₩20.79bil) from this IPO, which means the company's total value will amount to ₩355.3bil (previously ₩213.1bil).IPO summaryCompany nameEnzychem Lifesciences Corp (183490 KS)FoundationJuly 20, 1999- Got listed in KONEX on Sep 25, 2013CEOSon Ki-youngHQ addressF15 Trust Tower 60, Mabang-ro, Seocho-gu, Seoul, KoreaCorporate homepagewww.enzychem.comIndustry / specialtyIt manufactures active pharmaceutical ingredients, pharmaceutical intermediates, and cosmetic ingredients. It also also produces functional health foods and finished drug products.Total number of share offerings770,000 shares(100% new rights offering)Indicative price band₩45,000 - ₩70,000 (previously ₩27,000 - ₩37,000)Total amount to be raised (at ₩45,000)₩34,650,000,000 (previously ₩20,790,000,000)Target valuation (at ₩45,000)₩355.3bil (previously ₩213.1bil)BookrunnersKISBourseKOSDAQSource: DARTWe will have a new bookbuilding on Feb 5-6, and the IPO price will be finalized on Feb 7. Subscription will take place on Feb 8-9. Settlement will be Feb 13.Event scheduleBookbuildingFeb 5-6IPO price determinationFeb 7SubscriptionFeb 8-9Allocation/settlement (payment)Feb 13Source: DART→ Why do we have another bookbuilding with a new price band? I already explained this in detail in my previous insight. Please refer to the below insight for this.Enzychem Lifesciences IPO Rescheduling Summary

Enzychem Lifesciences New IPO Book Summary

South Korea

Yuhan Corporation manufactures and markets various pharmaceutical products on its own and through joint ventures with other global pharmaceutical companies. The Company also produces personal care products, dietary supplements, and veterinary medicines.

Price Gauge
52-week Range	0.00 - 0.00
Market Cap (USDm)	0.00
P/E	0.00
Dividend (Yield)	0.00

Yuhan Corp (000100 KS)

HK Inno.N (Formerly CJ Healthcare) IPO: Offering Detail & Valuation Issues

This post contains information on HK inno.N's initial public offering and summarizes the local street's general view on the valuation.

Sanghyun Park

HK Inno.N IPO Valuation Analysis

Our base case valuation of HK Inno.N is 75,534 won per share, which represents a 28% upside from the high end of the IPO price range. We have a...

Douglas Kim

HK Inno.N IPO Preview

HK Inno.N is getting ready for an IPO in the Korean stock market. The IPO price range is from 50,000 won to 59,000 won. The IPO deal size is from...

Douglas Kim

Top 50 Most Shorted Stocks in KOSPI & KOSDAQ (Short Sale Vol/Free Float Vol)

In this insight, we discuss the top 50 most shorted stocks in KOSPI and KOSDAQ, respectively in terms of Short Sale Volume/Free Float Volume,...

Douglas Kim

Enzychem Lifesciences New IPO Book Summary

Enzychem Lifesciences Corp (183490 KS) submitted the revised version of IPO book on Jan 22. Here is the link of this new IPO...

Sanghyun Park

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)