In today’s briefing:
- Lee Jae-Yong’s Appeal Verdict: Unpacking the Drivers Behind Samsung Life’s Big Price Action
- KOSPI200 Index Rebalance Preview: 6 Potential Changes in June; LG CNS Listing Could Increase That
- LG CNS IPO: Trading Debut
- Daemyung Sono Group May Wage a Public Opinion War for T’Way Air
- LG CNS IPO Trading – Demand Aided by Domestics, Limited Lockup Undertaking
- Korea Small Cap Gem #32: Pulmuone
Lee Jae-Yong’s Appeal Verdict: Unpacking the Drivers Behind Samsung Life’s Big Price Action
- Once Samsung F&M burns treasury shares, Samsung Life’s stake hits 16.93%. If they avoid a subsidiary, they’ll need to dump ~817K shares. Today’s ruling makes that move much less likely.
- Samsung Life’s value-up announcement could be major, likely dropping around their earnings call on February 20, with solid intel backing this move.
- The balance of dividends vs. buybacks, plus Samsung Life’s 10% stake ceiling, will drive volatility for Samsung Electronics. Samsung Life’s value-up release, before Samsung Electronics’, will boost market clarity.
KOSPI200 Index Rebalance Preview: 6 Potential Changes in June; LG CNS Listing Could Increase That
- Halfway through the review period, there could be 6 changes for the Korea Stock Exchange KOSPI200 (KOSPI2 INDEX) in June. The LG CNS (LGCNSZ KS) listing could increase that number.
- The impact on the potential inclusions ranges from 2.1-26 days of ADV while the impact on the potential deletions varies from 5-11 days of ADV.
- The forecast adds have outperformed the forecast deletes over the last few months and the performance gap is near its widest point.
LG CNS IPO: Trading Debut
- LG CNS (LGCNSZ KS) priced its IPO at KRW61,900 per share to raise gross proceeds of US$820 million. The shares will start trading on 5 February.
- We previously discussed the IPO in LG CNS IPO: The Bull Case, LG CNS IPO: The Bear Case and LG CNS IPO: Valuation Insights.
- Since the prospectus’s release, the peers have marginally re-rated. The valuation remains undemanding at the IPO price, and bullish grey market prices suggest a strong debut.
Daemyung Sono Group May Wage a Public Opinion War for T’Way Air
- In the past two trading days, share prices of T’Way Air (091810 KS) and T’Way Holdings (004870 KS) are down 16.4% and 14.1%, respectively.
- According to Hankyung daily, Daemyung Sono Group Chairman Seo may choose to wage a public opinion war, instead of purchasing additional shares.
- If Daemyung Sono Group is unable to take over the management control of T’Way Air using this method, then a potential tender offer of T’Way Air is possible later on.
LG CNS IPO Trading – Demand Aided by Domestics, Limited Lockup Undertaking
- LG CNS (LGCNSZ KS) raised around US$825m in its Korea IPO. LG CNS is a South Korean information technology company.
- LG CNS is a South Korean information technology company. The firm primarily provides comprehensive digital transformation services and solutions backed AI, big data, and cloud.
- In this note, we will talk about the demand for the deal and other trading dynamics.
Korea Small Cap Gem #32: Pulmuone
- Pulmuone has benefited from improved sales and profitability of its US subsidiary, driven by higher demand for Korean foods and plant based/non-meat based foods such as tofu.
- The company has nearly 70% market share in the tofu segment in the US. It has gained meaningful economies of scale of its tofu product in the United States.
- Pulmuone currently has a market cap of 390 billion won. Using the consensus net profit estimate of 37.6 billion won, this would suggest a P/E of 10.3x.
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