In today’s briefing:
- LG CNS IPO Valuation Analysis
- EQD | Kospi 200 (KOSPI2) – Identifying Option Opportunities Amid Political Turmoil
LG CNS IPO Valuation Analysis
- According to our valuation analysis, it suggests a base case implied market cap of 7.9 trillion won for LG CNS, representing target price of 81,095 won per share.
- Therefore, our base case valuation target price of 81,095 won is 31% higher than the high end of the IPO price range.
- We estimate LG CNS to generate sales of 5.99 trillion won (up 6.8% YoY) and net profit of 356.1 billion won (up 7.1% YoY) in 2024.
EQD | Kospi 200 (KOSPI2) – Identifying Option Opportunities Amid Political Turmoil
- The impact of South Korea’s political turmoil on the KOSPI 200 and implied volatility has been limited. Implied volatility has risen, and the skew steepened but not to extreme levels.
- The shape of the skew, in combination with the interplay between index and skew change, open up an opportunity for opportunistic option trades, in particular short otm calls and/or puts.
- KOSPI 200 (KOSPI2 INDEX) risk is probably skewed to the downside favoring short calls. Choice of strike and expiry is guided by quantitative analysis, option liquidity, and risk-return potential.
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