In today’s briefing:
- Naver: Under Pressure from the Japanese Government To Sell Its Stake in LINE
- HD Hyundai Marine Solution (443060 KS): Nearing KOSPI200 Index Inclusion in June
- Innospace IPO Preview
- ICTK IPO Book Building Results Analysis
- Local Institutional Flows Towards Overweighting Samsung SDS in Samsung Group Context
Naver: Under Pressure from the Japanese Government To Sell Its Stake in LINE
- On 8 May, it was mentioned in numerous local media that Naver is under pressure from the Japanese government to sell its stake in LINE.
- One of the reasons behind Japanese government’s efforts to force Naver to sell its stake in LINE is due a major data breach incident in November 2023.
- Based on our current understanding of this situation, the most likely scenario is for Naver to sell about 20-30% stake in A Holdings (the controlling shareholder of LINE) to SoftBank.
HD Hyundai Marine Solution (443060 KS): Nearing KOSPI200 Index Inclusion in June
- After a 96.5% gain on listing day, HD Hyundai Marine Solution (443060 KS) is very close to levels needed for Korea Stock Exchange KOSPI 200 (KOSPI2 INDEX) inclusion in June.
- HD Hyundai Marine Solution needs to outperform the 50th ranked stock in the KOSPI2 INDEX by 11.4% on average over the next 15 trading days to be added to the index.
- Retail investors sold 25% of their allocation on listing day while foreign investors sold 22% of their IPO allocation with local institutions mopping up the shares.
Innospace IPO Preview
- Innospace is getting ready to complete its IPO in June 2024. According to bankers’ valuation, the implied market cap of Innospace is from 347 billion won to 434 billion won.
- Innospace engages in the satellite launch vehicle production and launch service business.
- The company estimates its sales to increase from 0.2 billion won in 2023 to 2.0 billion won in 2024, 47.8 billion won in 2025, and 97.2 billion won in 2026.
ICTK IPO Book Building Results Analysis
- ICTK reported excellent book building results. ICTK’s IPO price has been determined at 20,000 won, which is 25% higher than the high end of the IPO price range.
- ICTK is a security company specializing in Internet of Things (IoT) based on physical copy prevention technology called PUF which is a cutting-edge technology during the chip manufacturing process.
- Our base case valuation is implied market cap of 376.8 billion won or target price of 28,694 won, which is 43% higher than the IPO price (20,000 won).
Local Institutional Flows Towards Overweighting Samsung SDS in Samsung Group Context
- Local institutions, notably pension funds, are increasingly investing in Samsung SDS, coinciding with the company’s more active investor engagement. This has sparked speculation about Samsung’s strategic motives.
- Timing-Wise, as AI infra demands rise in Samsung Group, conditions for boosting SDS’s performance improve. They monitor Samsung’s moves to drive SDS’s stock upward, considering its reliance on Samsung’s revenue.
- Local pension funds actively adopting overweight positions in Samsung SDS underscore the importance of crafting strategies tailored to overweighting SDS within the broader Samsung Group context.
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