Korea / Special Sits, Pairs, Index Rebalancing, Clepsydra Capital

Sanghyun Park

I investigate special situations, pairs, and index rebalancing trades in Korea.

Korea / Special Sits, Pairs, Index Rebalancing

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HK Inno.N (Formerly CJ Healthcare) IPO: Offering Detail & Valuation Issues

HK Inno.N Bookbuilding Results: Subscription/Lockup Orders in Detail

Clepsydra Capital

Investigate special situations, pairs, and index rebalancing trades in Korea.

Equity Capital Markets


Final Allocations

HK Inno.N's allocation results are now available at DART.
Here is the link to the allocation results at DART.
Institutional investors again took 55% of the total offering, retail took 25%, and the ESOP has fully subscribed to the 20% allocation.

We can find quite interesting outcomes from the institutional allocations. Most of the local hedge funds, which accounted for 25% of the subscription applications, were excluded from the final allocation. 
On the other hand, it is safe to say that local publicly-raised funds with long-term holding tendencies took all the institutional allocations.
Another interesting point here is that local pensions, which also have long-term holding tendencies, received almost no allocation. 
This will be discussed in more detail later, but the direct cause must be the low number of lockup applications. If so, it proves that there must have been virtually no pension funds participating in this bookbuilding among institutional investors in the category to which the local pensions belong.
That is, proprietary asset managers with relatively short-term holding tendencies, which are grouped in the same category as the local pensions, must have constituted the majority. Since HK Inno.N is a stock listing on the KOSDAQ, it seems that major pension funds such as the National Pension Service did not participate.












By investor type
Holding tendencies
Applications
Allocated, % of the offering


Local publicly raised funds
Long-term
46.05%
75.74%


Local brokerages/investment advisories
Short-term
1.94%
0.16%


Local pensions, funds managing proprietary assets, banks, and insurance companies
Long-term (pensions ) &amp; short-term (proprietary asset managers)
13.78%
1.04%


Local others (mostly discretionary investment companies - local hedge funds))
Mainly, short-term
25.72%
1.23%


Foreign (foreign IPO funds &amp; hedge funds)
Depends
0.76%
21.82%


Foreign others (mostly local hot money)
Short-term
11.75%
0.01%

Source: DART


Below is the final quantity allocated to each institution type, local retail investors, and the ESOP.









Allocation by type
Allocated, % of the offering
Final, % of the offering
Final, % of post-IPO SO


Institutional
55.00%
55.00%
19.25%


1. Local publicly raised funds
-
41.66%
14.58%


2. Local Br/IA
-
0.09%
0.03%


3. Local pension, etc.
-
0.57%
0.20%


4. Local others
-
0.68%
0.24%


5. Foreign
-
12.00%
4.20%


6. Foreign, other
-
0.00%
0.00%


Retail
25.00%
25.00%
8.75%


ESOP
20.00%
20.00%
7.00%


Total
100.00%
100.00%
35.00%

Source: DART



Lockups
The final lockup rate is 26.60%. Considering that the lockup application rate was 13% in the first place, it can be seen that the proportion of lockup was increased as much as possible. This is why local publicly-raised funds took 75% of all institutional allocations. Even in allocations to foreign institutions, the issuer's efforts to allocate to long-only funds as much as possible can be detected as suggested in the Foreign - Other allocation results. 













Lock-up, by orders
1. Local PO
2. Local Br/IA
3. Local pension, etc.
4. Local others
5. Foreign
6. Foreign, other
Total


6 months
16.70%
0.00%
0.08%
0.03%
0.00%
0.01%
16.81%


3 months
3.56%
0.00%
0.03%
0.08%
0.00%
0.00%
3.67%


1 month
5.65%
0.02%
0.06%
0.05%
0.00%
0.00%
5.78%


15 days
0.26%
0.00%
0.05%
0.02%
0.00%
0.00%
0.34%


No lockup
49.57%
0.14%
0.83%
1.05%
21.82%
0.00%
73.40%


Total
75.74%
0.16%
1.04%
1.23%
21.82%
0.01%
100.00%

Source: DART



Hence, the amount released to the market immediately after the listing is 22.88% of the outstanding shares.










Post-IPO lockup releases, as a % of SO
IPO shareholders
Major shareholder
Pre-IPO minority shareholders
Total


2 years
0.00%
49.16%
0.00%
49.16%


1 year
0.00%
0.00%
0.00%
0.00%


6 months
3.24%
0.00%
22.84%
26.08%


3 months
0.71%
0.00%
0.00%
0.71%


1 month
1.11%
0.00%
0.00%
1.11%


15 days
0.07%
0.00%
0.00%
0.07%


No lock-up
22.88%
-
-
22.88%

Source: DART




HK Inno.N Post-Listing Immediate Float Analysis

HK inno.N

HK Inno.N Post-Listing Immediate Float Analysis