South Korea: SK Telecom, Samsung Biologics Co.,, ONE Store, Viva Republica and more

In today’s briefing:

KT Corp & SK Telecom: Potential Changes Driven by Foreign Buying

Foreign investors have continued to buy Korea telecom companies. The buying has pushed the foreign room lower. This will have implications for the stocks in MSCI and FTSE indices.
KT Corp (030200 KS)‘s foreign room has dropped below 15% and this could lead to the stock not being added to the MSCI Korea Index at the May SAIR.
SK Telecom (017670 KS)‘s foreign room has dropped significantly and further buying over the next week could see the stock deleted from the MSCI Korea Index at the May SAIR.

Samsung Biologics (207940 KS) has succeeded in a rights offering worth ₩3.2T to the existing shareholders. The subscription rate of the existing shareholders and the ESOP came out at 100.25%.
The size of immediately floatable shares is estimated at 1 million, representing 1.55% of SO and 22.82x ADTV. It is a size that will significantly impact the short-term flow.
There is a sufficient circumstantial probability that the 1M new stocks, currently at a 20% return, will lead to immediate profit realization after listing.

ONE Store (ONE KS) is looking to raise up to US$228m in its Korean IPO.
One Store is a mobile app market platform, formed by a cooperation between South Korea’s three telecom carriers, together with Naver Corp, an internet firm in South Korea.
Given the lack of direct comparables, one way to look at valuation would be to compare the firm to its historical asking valuations.

Viva Republica (Toss), one of the largest fintech companies in Korea, is expected to become the first decacorn in Korea in 2Q 2022.
Toss is expected to have a value range of 10 trillion won to 15 trillion won in the upcoming funding round in 2Q 2022.
Kakao Bank has P/S multiple of 20.2x in 2021. Applying this multiple on Viva Republica’s sales of 781 billion won, this would imply a valuation of 15.8 trillion won.

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