In today’s briefing:
- Krafton Placement – Stock Has Been Doing Well, Momentum Remains Strong
- Krafton: Block Deal Sale of About 270 Billion Won
- Mr. Choi Goes to Washington
- A Nasty Power Struggle Between ADOR CEO and HYBE
- EQD | KOSPI 200 WEEKLY Bounce: Rally or Not?
Krafton Placement – Stock Has Been Doing Well, Momentum Remains Strong
- SK Square is looking to raise around US$198m via selling 2.1% of Krafton (259960 KS).
- The stock has been doing well over the past few months and its earnings and price momentum remain strong.
- In this note, we will run the deal through our ECM framework and talk about the recent updates.
Krafton: Block Deal Sale of About 270 Billion Won
- After the market close on 22 April, it was reported that SK Square plans to sell 2.2% stake in Krafton in a block deal sale worth about 270 billion won.
- The estimated block deal sales price range is from 243,000 won to 251,000 won, representing a 3.1% to 6.2% discount to the closing price of 259,000 won on 22 April.
- We would take the deal. The company’s valuations remain attractive and it has been successful in expanding its sales and profits.
Mr. Choi Goes to Washington
- The Deputy Prime Minister Choi Sang Mok reaffirmed the Corporate Value Up program, pushing up the major value driven/low PBR stocks in Korea today.
- Deputy Prime Minister Choi emphasized that as part of Corporate Value Up program, corporate tax benefits to companies that have made efforts to strengthen shareholder return policy will be provided.
- The Korean government also plans to revise the law to separate taxation on the dividend income of shareholders of companies that expand dividends.
A Nasty Power Struggle Between ADOR CEO and HYBE
- A nasty power struggle between ADOR CEO Min Hee-Jin and HYBE has erupted which is likely to continue to negatively impact HYBE’s share price in the next several months.
- ADOR CEO Min Hee-Jin owns an 18% stake in ADOR which was founded in 2021. HYBE owns the controlling 80% stake in ADOR.
- Given the nasty fight between ADOR and HYBE, it is likely that the two companies (including ADOR’s CEO Min Hee-Jin) are likely to part their ways.
EQD | KOSPI 200 WEEKLY Bounce: Rally or Not?
- The KOSPI 200 INDEX has closed down for 3 consecutive weeks (CC=-3), it is WEEKLY oversold.
- If the index rallies this week, it could reach >362 (Q2 resistance) and that could be enough to end the bounce.
- Our hypothesis is that the index will pull back again, after the bounce, next week (if this week ends with a positive WEEKLY close).
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