South Korea Archives | Page 40 of 127

Sep 24

Daily Brief South Korea: SK Inc, Korea Zinc, K Bank and more

By Smartkarma Daily Briefs | Daily Briefs, South Korea

In today’s briefing:

Why MBK’s Move into Local Hostile Takeover Scene Matters: Focus on SK Inc and Lotte Corp
What Are Locals Saying About Potential Allies to Choi Family in Fight for Korea Zinc?
K Bank IPO – Peer Comparison – Lags Its Main Peer on Most Fronts

Why MBK’s Move into Local Hostile Takeover Scene Matters: Focus on SK Inc and Lotte Corp

By Sanghyun Park

The new 100% mandatory tender offer rule could push buyers to lower premiums for major shareholders, potentially increasing hostile takeover attempts as costs get shared with minority shareholders.
It looks like MBK is eyeing this situation as a chance to redefine their strategy. This really shows how serious MBK is about the Korea Zinc deal.
Watch for top-tier assets available via hostile takeovers, particularly companies like SK Inc and Lotte Corp, where low shareholder stakes may lead to management conflicts.

What Are Locals Saying About Potential Allies to Choi Family in Fight for Korea Zinc?

By Douglas Kim

In this insight, we discuss three particular allies that could help the Choi family that have been highlighted by the local media including Hanwha, KIS, and Softbank.
The Hanwha Group is one of the largest shareholders of Korea Zinc. In addition, Hanwha Group Vice Chairman Kim Dong-Kwan has a close relationship with Korea Zinc Chairman Choi Yoon-Beom.
Korea Zinc is planning to hold an important press conference on the 24 September to reveal its position on the tender offer of Korea Zinc shares by MBK.

K Bank IPO – Peer Comparison – Lags Its Main Peer on Most Fronts

By Sumeet Singh

K Bank (279570 KS) plans to raise up to US$740m in its upcoming South Korean IPO.
K Bank is one of three Internet-only banks in Korea. It provides a full range of commercial banking products and services.
In our previous note, we have looked at the company’s past performance. In this note, we will undertake a peer comparison.

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Sep 23

Daily Brief South Korea: Korea Zinc, HLB Therapeutics , Webtoon Entertainment and more

By Smartkarma Daily Briefs | Daily Briefs, South Korea

In today’s briefing:

Korea Zinc’s Latest Shareholder Roll & MBK’s Triggers to Sweeten Tender Price
KOSDAQ150 Index Adhoc Rebalance: HLB Therapeutics Replaces Jeisys Medical
Webtoon Entertainment: A Weakening USD Will Give A Lift To 3Q Earnings, Founder Picked Up 42K Shares

Korea Zinc’s Latest Shareholder Roll & MBK’s Triggers to Sweeten Tender Price

By Sanghyun Park

MBK is watching for a 1 million share trading volume, as that may prompt neutral institutional investors to sell rather than participate in the tender, triggering a price hike.
MBK may raise the tender price to ₩900,000, a 35% jump, with a local pension fund CIO suggesting it’s the sweet spot for participation.
MBK believes securing the minimum target would give them 44% voting rights, enough to push their proposals, indicating they’ll go all-in for that 7% stake in this first attempt.

KOSDAQ150 Index Adhoc Rebalance: HLB Therapeutics Replaces Jeisys Medical

By Brian Freitas

HLB Therapeutics (115450 KS) will replace Jeisys Medical (287410 KS) in the KOSDAQ 150 Index (KOSDQ150 INDEX) next week.
Passive trackers will need to buy 1.8 days of ADV in HLB Therapeutics (115450 KS) and sell over 4 days of ADV in Jeisys Medical (287410 KS).
Recent ad hoc inclusions to the KOSDAQ 150 Index (KOSDQ150 INDEX) have jumped post announcement of index inclusion but have sold off after the inclusion.

Webtoon Entertainment: A Weakening USD Will Give A Lift To 3Q Earnings, Founder Picked Up 42K Shares

By Andrei Zakharov

Webtoon Entertainment, a Korean the world’s largest digital comics platform, has successfully completed IPO and private placement in June.
The NAVER-backed storytelling platform has raised ~$359M and priced its IPO and concurrent private placement at $21.00 per share, at the top end of price range.
However, Webtoon Entertainment shares significantly underperformed with shares down ~48% below IPO offer price.

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Sep 22

Daily Brief South Korea: Samsung KODEX Samsung Group ETF, K Bank and more

By Smartkarma Daily Briefs | Daily Briefs, South Korea

In today’s briefing:

Unique Rebalancing Pattern & Unique Trading Angle of the KODEX Samsung Group ETF
K Bank IPO: The Bear Case

Unique Rebalancing Pattern & Unique Trading Angle of the KODEX Samsung Group ETF

By Sanghyun Park

This KODEX Samsung Group ETF sees 30% AUM outflows pre-rebalancing, with the same chunk flowing back in after, especially noticeable during December.
Over three years, local brokers sold stock baskets before rebalancing, causing notable price impacts. During this time, Samsung affiliates in the ETF delivered 3-4% returns.
ChatGPT said:ChatGPTThis isn’t typical NAV arbitrage; it’s likely an unhedged play. Nonetheless, given the consistent price impact and accessible stock futures, it’s worth considering.

K Bank IPO: The Bear Case

By Arun George

K Bank (279570 KS) is a Korean internet bank. It has launched an IPO to raise up to US$734 million.
In K Bank IPO: The Bull Case, we highlighted the key elements of the bull case. In this note, we outline the bear case.
The bear case rests on rising competitive intensity, the smallest deposit base among Internet banks, below-peer loan book growth, and a high-risk crypto play due to the Dunamu partnership.

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Sep 21

Daily Brief South Korea: Korea Zinc, HLB Therapeutics and more

By Smartkarma Daily Briefs | Daily Briefs, South Korea

In today’s briefing:

Young Poong Precision (036560 KS) Also Now Trading Through Terms
Details of MBK’s Four Major Concerns on Management of Korea Zinc
Will New KOSDAQ 150 Member HLB Therapeutics Show Webzen-Like Price Moves?

Young Poong Precision (036560 KS) Also Now Trading Through Terms

By David Blennerhassett

On the 13th September, MBK joined Young Poong (000670 KS) in seeking control of Korea Zinc (010130 KS) via Partial Tender Offers for KZ and Young Poong Precision (036560 KS).
This situation has been canvassed by analysts here at Smartkarma; with increasing expectation the Choi family makes a counterbid.
This insight analyses the fair value of YPP. No matter how you slice it, the Offer Price is punchy. Perhaps not punchier enough.

Details of MBK’s Four Major Concerns on Management of Korea Zinc

By Douglas Kim

In this insight, we discuss in detail MBK’s four major concerns on the management of Korea Zinc.
We believe that MBK has legitimate concerns on especially the three factors including poor investments, deteriorating profitability, and increase in equity capital/disposal of treasury shares.
If and when the 2 trillion won+ is raised, then it could lead to another tender offer and the four concerns highlighted in this insight become much more important.

Will New KOSDAQ 150 Member HLB Therapeutics Show Webzen-Like Price Moves?

By Sanghyun Park

Jeisys Medical’s getting booted from the KOSDAQ 150, and HLB Therapeutics is stepping in as the new addition. This change will officially hit the book on Wednesday, September 25.
HLB Therapeutics, with a ₩0.70T market cap and 87% float, is set for a 0.51% weight in KOSDAQ 150, triggering over 2 million shares in passive buying: 3.26x 30-day ADTV.
With today’s after-hours volume spike in HLB Therapeutics, we’re likely to see some price action from early movers spilling into Monday’s open, similar to what we saw with Webzen.

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Sep 20

Daily Brief South Korea: Samsung Fire & Marine Insurance, Korea Zinc and more

By Smartkarma Daily Briefs | Daily Briefs, South Korea

In today’s briefing:

Why Samsung Fire Is Shaping Up to Be the Hottest Dividend Play Ahead of the Value-Up Disclosure
Korea Investment Securities to Step up as the White Knight for Choi Family at Korea Zinc
Main Takeaways from Today’s MBK Press Briefing About the Korea Zinc Tender
Digging into the News Flow on KIS Jumping in as the White Knight for Choi in the Korea Zinc Deal

Why Samsung Fire Is Shaping Up to Be the Hottest Dividend Play Ahead of the Value-Up Disclosure

By Sanghyun Park

With the 15% ownership cap complicating buybacks, Samsung Fire’s more likely to roll out a dividend-focused value-up play instead.
They’ve flagged a mix of shareholder returns and investments, but the big question is how much will be funneled into returns this year.
If Samsung Fire hits a 50% shareholder return this year, DPS could jump to ₩23,000–₩25,000 with a 6.5% yield, potentially boosting the stock price by 20–30%.

Korea Investment Securities to Step up as the White Knight for Choi Family at Korea Zinc

By Douglas Kim

Hankyung Business Daily reported that Korea Investment Securities (KIS) is in a serious discussion with the Choi family of Korea Zinc to step up as a white knight.
KIS/Choi family are considering a plan to launch a counterbid against Jang family and MBK by investing around 2 trillion won+ along with other private equity funds.
It is probable that tender offer price of Korea Zinc could be raised by 15-25% due to a likely counterbid and current price trading 7% higher than tender offer price.

Main Takeaways from Today’s MBK Press Briefing About the Korea Zinc Tender

By Sanghyun Park

MBK’s funding plan for Korea Zinc involves using ₩1T from their 6th Buyout Fund and the rest via debt. This setup leaves room to potentially increase the tender price.
The key question is if there’s enough upside at this price. MBK’s silence on abandoning Youngpoong suggests they’re unlikely to fully bail on Korea Zinc even if the tender fails.
With MBK’s strategy leaked, institutions may hesitate, fearing less price drop risk, suggesting a proxy battle could heat up. We should consider spread trading and post-tender price moves.

Digging into the News Flow on KIS Jumping in as the White Knight for Choi in the Korea Zinc Deal

By Sanghyun Park

The key issue is if KIS can form a consortium. PEFs are saying the timeline is too tight and are concerned about the unclear exit strategy.
To make this work, PEFs need Choi’s 15.65% Korea Zinc stake as collateral, but much of it is already tied up, limiting cash-raising potential.
They’ll likely continue to leak news to boost the price and buy time. But this will also push MBK to sweeten their offer sooner.

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Sep 19

Daily Brief South Korea: Korea Zinc, Dongwon Industries, K Bank and more

By Smartkarma Daily Briefs | Daily Briefs, South Korea

In today’s briefing:

Trading Insights from Today’s Dramatic Developments in the Korea Zinc Event
Quiddity Leaderboard KOSPI 200 Dec 24: Up to 4 ADDs & 5 DELs Possible
K Bank IPO: The Bull Case
K Bank IPO – The Negatives – Ample Issues Along with Crypto Exposure & Lockup

Trading Insights from Today’s Dramatic Developments in the Korea Zinc Event

By Sanghyun Park

As of today, it’s clear Choi is struggling to secure white knights, pushing him to double down on political lobbying to stay in the game.
Choi’s aiming for the National Pension Service’s 7.57% voting rights, but with its legal neutrality, the chances of it caving to political pressure are slim.
MBK’s statement today shows confidence that Choi won’t get Fair Trade Commission approval, and that, like Hanwha and LG, Hyundai Motor won’t back him either.

Quiddity Leaderboard KOSPI 200 Dec 24: Up to 4 ADDs & 5 DELs Possible

By Travis Lundy

KOSPI 200 is a Korean blue-chip index that tracks the 200 largest and most-liquid names listed in the KOSPI section of the Korea Exchange (KRX).
In this insight, we take a look at the names leading the race to become ADDs and DELs during the upcoming semiannual review in December 2024.
We expect up to four ADDs and five DELs for the KOSPI 200 index during this index rebal event based on the latest available data. And we have a trade.

K Bank IPO: The Bull Case

By Arun George

K Bank (279570 KS) is a Korean internet bank. It has launched an IPO to raise up to US$734 million.
K Bank began operations in April 2017 as the first internet-only bank in Korea. KT Corp (030200 KS) and Woori Bank (000030 KS) are the two largest shareholders.
The bull case rests on rising market share, solid deposit growth, robust loan book growth, stable NIM, rising margins and a low NPL ratio.

K Bank IPO – The Negatives – Ample Issues Along with Crypto Exposure & Lockup

By Sumeet Singh

K Bank (279570 KS) plans to raise up to US$740m in its upcoming South Korean IPO.
K Bank is one of three Internet-only banks in Korea. It provides a full range of commercial banking products and services.
In this note, we talk about the not-so-positive aspects of the deal.

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Sep 18

Daily Brief South Korea: HK inno.N, Young Poong Precision, K Bank, Celltrion Inc, Samsung Electronics and more

By Smartkarma Daily Briefs | Daily Briefs, South Korea

In today’s briefing:

Korea Value-Up Index Drops on the 24th: Hunt for the Winners in the KOSDAQ Global Index
NAV Valuation of Young Poong Precision and A Case Study for Future Tender Offers in Korea
K Bank IPO Valuation Analysis
Celltrion Inc (068270 KS)– Is the Sell-Side’s Bullishness Justified?
K Bank IPO – The Positives – Fast Growth
Samsung Electronics (005930-KR): Quality Generative AI Play, Trading at a Discount

Korea Value-Up Index Drops on the 24th: Hunt for the Winners in the KOSDAQ Global Index

By Sanghyun Park

KOSDAQ stocks are expected to make up 10-15% of the Value-Up Index, with 10-15 names benefiting. Even with smaller passive funds, the impact on these stocks could be significant.
KOSDAQ Global Index criteria overlap with the Value-Up Index, and KRX’s push suggests many KOSDAQ Global stocks will also appear in the Value-Up Index.
In the past 30 days, the KOSDAQ Global Index dropped 5.14%, but 5 of the top 10 gainers either announced value-ups or received value-up picks from brokers.

NAV Valuation of Young Poong Precision and A Case Study for Future Tender Offers in Korea

By Douglas Kim

Our NAV valuation of Young Poong Precision suggests NAV of 325 billion won or NAV per share of 20,657 won which is 70% higher than current price.
Young Poong Precision tender offer could become one of the most important case studies for future tender offers in Korea.
The biggest component of the NAV is Young Poong Precision’s 1.85% stake in Korea Zinc which is worth 255 billion won (133% of its current market cap).

K Bank IPO Valuation Analysis

By Douglas Kim

Our base case valuation of K Bank is target price of 9,151 won per share, which is 4% lower than the low end of the IPO price range.
Given the lack of upside in our target price relative to the IPO price range, we would avoid in subscribing to the IPO.
Our base case valuation is based on 1.6x P/B multiple using the company’s equity post IPO (2.35 trillion won).

Celltrion Inc (068270 KS)– Is the Sell-Side’s Bullishness Justified?

By Avien Pillay

The biosimilar market is forecast to grow three to four times faster than the generic drug market over the next five years.
However, we believe that this high growth will not necessarily imply good profitability, given the early stage of the biosimilar market, complications and competition.
We also believe that the company’s guidance is too optimistic resulting in an expensive multiple. We prefer some room for error.

K Bank IPO – The Positives – Fast Growth

By Sumeet Singh

K Bank (279570 KS) plans to raise up to US$740m in its upcoming South Korean IPO.
K Bank is one of three Internet-only banks in Korea. It provides a full range of commercial banking products and services.
In this note, we talk about the positive aspects of the deal.

Samsung Electronics (005930-KR): Quality Generative AI Play, Trading at a Discount

By Wium Malan, CFA

Samsung Electronics (005930 KS) is a leading beneficiary of the recovery in global Smartphone demand, and strength in Memory prices, driven by the proliferation of Gen AI demand.
Global Memory prices have recovered by up to +80%y/y driven by demand from hyperscaler customers for leading-technology DDR5, HBM, and other high-value-added memory products.
Samsung Electronics trades more than one standard deviation below its 5-year historic average trading range, a historically proved to be an excellent buying point.

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Sep 17

Daily Brief South Korea: Korea Zinc, Tapex Co and more

By Smartkarma Daily Briefs | Daily Briefs, South Korea

In today’s briefing:

Insights on the Odds of MBK Ramping up the Tender Price by 20%
Sung Woo IPO Preview

Insights on the Odds of MBK Ramping up the Tender Price by 20%

By Sanghyun Park

MBK can cut their target volume to 12% and, with 2 trillion won, raise the tender price to ₩800,000, leaving them a 20% cushion.
MBK’s tight schedule aims to hit the 6.98% target while minimizing price volatility and market risk by shortening the offer window.
MBK plans to sweeten the deal by about 20%, similar to Hankook, aiming for a 6.98% target with a 20% price hike from the start.

Sung Woo IPO Preview

By Douglas Kim

Sung Woo is getting ready to complete its IPO in KOSDAQ in October 2024. Founded in 1992, Sung Woo produces components for cylindrical rechargeable battery, energy storage system, and automotive.
The IPO price range is from 25,000 won to 29,000 won. According to the bankers’ valuation, the expected market cap is 376 billion won to 436 billion won.
The book building for the institutional investors will be conducted from 10 to 16 October. The lead underwriter of this IPO is Korea Investment & Securities.

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Sep 16

Daily Brief South Korea: Hyundai Rotem Company and more

By Smartkarma Daily Briefs | Daily Briefs, South Korea

In today’s briefing:

Global Index Korea: Hyundai Rotem Is the Only One Screened. Watch for a Possible LS Electric Repeat

Global Index Korea: Hyundai Rotem Is the Only One Screened. Watch for a Possible LS Electric Repeat

By Sanghyun Park

The cutoff market cap is around ₩3.6T, and Hyundai Rotem is the only stock that screens into the inclusion zone.
Hyundai Rotem might see a repeat of LS Electric’s pattern: heavy chasing towards screening and a big dive at the decision. Watch for aggressive momentum trades starting late September.
The stock with the lowest full market cap, Kum Yang, is at risk, but Celltrion Pharm is close behind. KT Corp’s exclusion might save Kum Yang or Celltrion Pharm.

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Sep 15

Daily Brief South Korea: K Bank and more

By Smartkarma Daily Briefs | Daily Briefs, South Korea

In today’s briefing:

K Bank IPO Preview
K-Bank’s IPO Details Out: Aggressive Pricing, but as a Crypto Play, It Might Surprise

K Bank IPO Preview

By Douglas Kim

K Bank finally provided its IPO prospectus which includes more details of the IPO than what the company already announced about the IPO several days ago.
Bankers used KakaoBank, SBI Sumishin Net Bank, and Bancorp Inc as comps. Average PBR of 2.56x was used to value K Bank.
Some investors will question the inclusion of overseas comps including SBI Sumishin Net Bank and Bancorp in the valuation of K Bank.

K-Bank’s IPO Details Out: Aggressive Pricing, but as a Crypto Play, It Might Surprise

By Sanghyun Park

Compared to its overseas peers, K-Bank’s high valuation still stands out due to a significant gap in net income size relative to market cap.
The offering structure, with 50% secondary sales and weak lock-up commitments, means post-IPO float could spike to around 40%, making a stock price bump unlikely.
K-Bank’s crypto-focused model might attract investors valuing it as a crypto play, potentially influencing IPO pricing and post-listing stock performance.

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South Korea Archives | Page 40 of 127 | Smartkarma

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