In today’s briefing:
- Korea Capital Market Reform Package Just Unveiled: Korea Premium Narrative Holds
- Nota IPO Preview
- Daegu Department Store: Property Value Is 10x Mkt Cap + Controlling Shareholder Is Selling
- Myungin Pharmaceutical IPO Valuation Analysis
- Biologics Spinco Filing: Posts Far More Aggressive Post-Listing Share Swap Lock-Up Than Expected
Korea Capital Market Reform Package Just Unveiled: Korea Premium Narrative Holds
- M&A valuations won’t rely solely on market prices, carve-outs favor parent shareholders, and mandatory tender offers plus IPO cornerstones lead, with tender offers live H1 next year.
- Commercial Act tweaks have tackled governance, and the tax reform boosts dividends. Today’s markets reform package addresses the last missing piece: giving minority shareholders a fair shake in M&A scenarios.
- Details and timelines remain unclear, but the package sets a roadmap to improve Korea’s equity risk-return profile, supporting DM inclusion upside and maintaining the Korea Premium narrative.
Nota IPO Preview
- Nota is getting ready to complete its IPO on KOSDAQ in September. Nota specializes in lightweight and optimized artificial intelligence (AI) technology.
- The IPO price range is from 7,600 won to 9,100 won. At this price range, the company’s expected market cap is from 163 billion won to 196 billion won.
- Nota provides technology that enables the efficient operation of high-performance AI models even on resource-constrained edge devices, centered around its proprietary AI model optimization platform, NetsPresso®.
Daegu Department Store: Property Value Is 10x Mkt Cap + Controlling Shareholder Is Selling
- The controlling shareholder Koo Jeong-Mo and his affiliates will sell their 34.7% stake in Daegu Department Store through a public competitive bidding process.
- A recent valuation of the company’s real estate assets suggests a market valuation of nearly 700 billion won which is about 10x its market cap (72 billion won).
- Even if this real estate value is discounted by 50% that would represent nearly 350 billion won (386% higher than its market cap).
Myungin Pharmaceutical IPO Valuation Analysis
- Our base case valuation of Myungin Pharm is target price of 80,349 won per share, which is 39% higher than the high end of the IPO price range.
- Given solid upside, we have a Positive View of Myungin Pharm. Our target price is based on EV/EBITDA of 6.4x using our estimated EBITDA of 110.4 billion won in 2025.
- We believe Myungin Pharm should deserve a premium valuation multiple than its peers mainly due to higher sales growth, operating margin, and ROE but lower debt ratio.
Biologics Spinco Filing: Posts Far More Aggressive Post-Listing Share Swap Lock-Up Than Expected
- KRX’s prelim review forced Biologics into tough commitments: no share swaps or carve-out IPOs for three years, effectively blocking any Samsung C&T stake sell-down and overlapping-listing risks.
- FSS appears satisfied with Biologics’ aggressive commitments, but may push for more—most likely a lock-up from Samsung C&T preventing share sales in both parent and spinco for a set period.
- Trading setup remains short Samsung C&T; recent Life bill chatter is noise. Samsung governance reform is low-priority, and Biologics’ aggressive spinco lock-ups reinforce C&T as the near-term underperformer.
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