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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Clepsydra Capital

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

Equity Capital Markets

<h2>Offering size</h2><p><a href="https://www.smartkarma.com/entities/sd-biosensor-inc" target="_blank" data-smartkarma-citation="entities:33333:1" rel="noopener">SD Biosensor (137310 KS)</a>, Korea's leading pure-play IVD (In Vitro Diagnostics) company, filed an IPO book yesterday for a KOSPI listing. The company offers 15.55M shares, representing <strong>16.67% of the total shares</strong>, of which <strong>55~75%</strong> will be institutional allocation.</p><table class="table table-striped">
<colgroup>
<col width="200">
<col width="200">
</colgroup>
<tbody>
<tr><td colspan="2" data-sheets-value='{"1":2,"2":"Overview"}'>Offering size</td></tr>
<tr>
<td>Ticker</td>
<td style="text-align: right;">137310</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Bourse"}'>Bourse</td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"KOSPI"}' data-sheets-numberformat='{"1":2,"2":"[$₩-412]#,##0","3":1}'>KOSPI</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Pre-IPO SO"}'><strong>Pre-IPO SO</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":93317753}' data-sheets-numberformat='{"1":2,"2":"#,##0","3":1}'><strong>93,317,753</strong></td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Offering"}'><strong>Offering</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":15552900}' data-sheets-numberformat='{"1":2,"2":"#,##0","3":1}'><strong>15,552,900</strong></td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":" - % of SO"}'><strong>- % of SO</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0.16666603620427936}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}'><strong>16.67%</strong></td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":" - Institutional allotment"}'>- Institutional allotment</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0.55}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}'>55.00~75.00%</td>
</tr>
<tr><td colspan="2">Source: </td></tr>
</tbody>
</table><h2>Split ratio</h2><p>This is a split offering at a ratio of <strong>66.67% (primary)</strong> and <strong>33.33% (secondary)</strong>. The 33.33% secondary belongs to the major shareholder, Cho Young-sik. As a result, this offering will see a capital increase rate of 11.11%. This IPO is free of any additional option: cornerstone, clawback, or greenshoe.</p><table class="table table-striped">
<colgroup>
<col width="200">
<col width="200">
</colgroup>
<tbody>
<tr><td colspan="2" data-sheets-value='{"1":2,"2":"Split"}'>Split</td></tr>
<tr>
<td data-sheets-value='{"1":2,"2":" - Primary %"}'><strong>Primary %</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0.6666666666666666}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}'><strong>66.67%</strong></td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":" - Secondary %"}'><strong>Secondary %</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0.3333333333333333}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}'><strong>33.33%</strong></td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Post-IPO SO"}'>Post-IPO shares outstanding</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":103686353}' data-sheets-numberformat='{"1":2,"2":"#,##0","3":1}'>103,686,353 shares</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Capital increase rate"}'><strong>Capital increase rate</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0.11111069080285292}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}'><strong>11.11%</strong></td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Dilution"}'>Dilution</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0.09999965955018207}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}'>10.00%</td>
</tr>
<tr><td colspan="2" data-sheets-value='{"1":2,"2":"Source: DART"}'>Source: DART</td></tr>
</tbody>
</table><h2>Schedule</h2><p><strong>The book opens on June 10</strong> for both local and overseas and runs until June 11. <strong>The allotment will be on June 14</strong> with a final offering price. The subscription follows on June 15.</p><table class="table table-striped">
<colgroup>
<col width="200">
<col width="200">
</colgroup>
<tbody>
<tr><td colspan="2" data-sheets-value='{"1":2,"2":"Timetable"}'>Timetable</td></tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Book open"}'><strong>Book opens</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":44357}' data-sheets-numberformat='{"1":5,"2":"yyyy. m. d","3":1}'><strong>2021. 6. 10</strong></td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Allotment"}'><strong>Allotment</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":44361}' data-sheets-numberformat='{"1":5,"2":"yyyy. m. d","3":1}'><strong>2021. 6. 14</strong></td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Subscription"}'><strong>Subscription</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":44362}' data-sheets-numberformat='{"1":5,"2":"yyyy. m. d","3":1}'><strong>2021. 6. 15</strong></td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Payment"}'>Payment</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":44365}' data-sheets-numberformat='{"1":5,"2":"yyyy. m. d","3":1}'>2021. 6. 18</td>
</tr>
<tr><td colspan="2" data-sheets-value='{"1":2,"2":"Source: DART"}'>Source: DART</td></tr>
</tbody>
</table><h2>Pricing</h2><p>The IPO book features three valuation peers: Seegene, Thermo Fisher Scientific, and Perkin Elmer. Their average FY2020 PER delivers 19.09x, implying <strong>a market cap of ₩11,755.0B</strong> for SD Biosensor. </p><table class="table table-striped">
<colgroup>
<col width="200">
<col width="150">
<col width="150">
<col width="150">
<col width="150">
</colgroup>
<tbody>
<tr>
<td data-sheets-value='{"1":2,"2":"Valuation peers"}'>Valuation peers</td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"SD Biosensor"}' data-sheets-numberformat='{"1":2,"2":"[$₩-412]#,##0","3":1}' data-sheets-formula="=Terms!R[1]C[0]">SD Biosensor</td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"Seegene Inc"}' data-sheets-formula='=googlefinance(R[1]C[0], "name")'>Seegene Inc</td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"Thermo Fisher Scientific Inc."}' data-sheets-formula='=googlefinance(R[1]C[0], "name")'>Thermo Fisher Scientific Inc.</td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"PerkinElmer, Inc."}' data-sheets-formula='=googlefinance(R[1]C[0], "name")'>PerkinElmer, Inc.</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Earnings (in million): FY2020"}'>Earnings - FY2020</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":615636}' data-sheets-numberformat='{"1":2,"2":"₩#,##0.0","3":1}'><strong>₩615.6B</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":503147}' data-sheets-numberformat='{"1":2,"2":"₩#,##0.0","3":1}'>₩503.1B</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":6375}' data-sheets-numberformat='{"1":2,"2":"$#,##0.0","3":1}'>$6,375.0M</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":728}' data-sheets-numberformat='{"1":2,"2":"$#,##0.0","3":1}'>$728.0M</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Total shares (incl. stock options)"}'>Total shares (incl. stock options)</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":104892353}' data-sheets-numberformat='{"1":2,"2":"#,##0","3":1}'><strong>104,892,353</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":52225994}' data-sheets-numberformat='{"1":2,"2":"#,##0","3":1}'>52,225,994</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":393793362}' data-sheets-numberformat='{"1":2,"2":"#,##0","3":1}'>393,793,362</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":112061794}' data-sheets-numberformat='{"1":2,"2":"#,##0","3":1}'>112,061,794</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"EPS"}'>EPS</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":5869.217177347523}' data-sheets-numberformat='{"1":4,"2":"[$₩]#,##0","3":1}' data-sheets-formula="=R[-2]C[0]*1000000/R[-1]C[0]"><strong>₩5,869</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":9634.04}' data-sheets-numberformat='{"1":4,"2":"[$₩]#,##0","3":1}'>₩9,634</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":16.19}' data-sheets-numberformat='{"1":4,"2":"[$$]#,##0.00","3":1}'>$16.19</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":6.5}' data-sheets-numberformat='{"1":4,"2":"[$$]#,##0.00","3":1}'>$6.50</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Reference share price"}'>Reference share price</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":112067}' data-sheets-numberformat='{"1":4,"2":"[$₩]#,##0","3":1}'><strong>₩112,067</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":79000}' data-sheets-numberformat='{"1":4,"2":"[$₩]#,##0","3":1}'>₩79,000</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":456.92}' data-sheets-numberformat='{"1":4,"2":"[$$]#,##0.00","3":1}'>$456.92</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":135.48}' data-sheets-numberformat='{"1":4,"2":"[$$]#,##0.00","3":1}'>$135.48</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"PER"}'>PER</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":19.09}' data-sheets-numberformat='{"1":2,"2":"0.00x","3":1}' data-sheets-formula="=R[1]C[1]"><strong>19.09x</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"8.20x"}' data-sheets-numberformat='{"1":2,"2":"0.00x","3":1}'>8.20x</td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"28.22x"}' data-sheets-numberformat='{"1":2,"2":"0.00x","3":1}'>28.22x</td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"20.86x"}' data-sheets-numberformat='{"1":2,"2":"0.00x","3":1}'>20.86x</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Average PER"}'>Average PER</td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"-"}' data-sheets-numberformat='{"1":2,"2":"#,##0.00"}'><strong>-</strong></td>
<td colspan="3" style="text-align: center;" data-sheets-value='{"1":3,"3":19.09}' data-sheets-numberformat='{"1":2,"2":"#,##0.00"}'><strong>19.09x</strong></td>
</tr>
<tr><td colspan="5" data-sheets-value='{"1":2,"2":"Source: DART"}'>Source: DART</td></tr>
</tbody>
</table><p><strong>A 24.15~41.11% discount</strong> sets up an indicative price band of <strong>₩66,000~85,000</strong>, implying a market cap of ₩6.9~8.9T.</p><table class="table table-striped">
<colgroup>
<col width="200">
<col width="150">
<col width="150">
</colgroup>
<tbody>
<tr>
<td data-sheets-value='{"1":2,"2":"Pricing (₩B)"}'>Indicative price band</td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"Low"}'>Low</td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"High"}'>High</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Price (₩)"}'><strong>Price</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":66000}' data-sheets-numberformat='{"1":2,"2":"[$₩-412]#,##0","3":1}'><strong>₩66,000</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":85000}' data-sheets-numberformat='{"1":2,"2":"[$₩-412]#,##0","3":1}'><strong>₩85,000</strong></td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Base deal size"}'>Base deal size</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":1026.4914}' data-sheets-formula="=R[-1]C[0]*Terms!R8C2/1000000000">₩1,026.5B</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":1321.9965}' data-sheets-formula="=R[-1]C[0]*Terms!R8C2/1000000000">₩1,322.0B</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":" - Institutional allotment"}'>- Institutional allotment</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":564.5702700000002}' data-sheets-formula="=R[-1]C[0]*Terms!R12C2">₩564.6B</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":727.098075}' data-sheets-formula="=R[-1]C[0]*Terms!R12C2">₩727.1B</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Implied market cap"}'><strong>Implied market cap</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":6922.895298}' data-sheets-formula="=R[-3]C[0]*R[-11]C[0]/1000000000"><strong>₩6,922.9B</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":8915.850005}' data-sheets-formula="=R[-3]C[0]*R[-11]C[-1]/1000000000"><strong>₩8,915.9B</strong></td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":" - Discount"}'><strong>- Discount</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0.41106659409103485}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}' data-sheets-formula="=(R7C2-R[-4]C[0])/R7C2"><strong>41.11%</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0.24152515905663577}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}' data-sheets-formula="=(R7C2-R[-4]C[0])/R7C2"><strong>24.15%</strong></td>
</tr>
<tr><td colspan="3" rowspan="1" data-sheets-value='{"1":2,"2":"Source: DART"}'>Source: DART</td></tr>
</tbody>
</table>

Offering sizeSD Biosensor (137310 KS), Korea's leading pure-play IVD (In Vitro Diagnostics) company, filed an IPO book yesterday for a KOSPI listing. The company offers 15.55M shares, representing 16.67% of the total shares, of which 55~75% will be institutional allocation.





Offering size

Ticker
137310


Bourse
KOSPI


Pre-IPO SO
93,317,753


Offering
15,552,900


- % of SO
16.67%


- Institutional allotment
55.00~75.00%

Source: 

Split ratioThis is a split offering at a ratio of 66.67% (primary) and 33.33% (secondary). The 33.33% secondary belongs to the major shareholder, Cho Young-sik. As a result, this offering will see a capital increase rate of 11.11%. This IPO is free of any additional option: cornerstone, clawback, or greenshoe.





Split

Primary %
66.67%


Secondary %
33.33%


Post-IPO shares outstanding
103,686,353 shares


Capital increase rate
11.11%


Dilution
10.00%

Source: DART

ScheduleThe book opens on June 10 for both local and overseas and runs until June 11. The allotment will be on June 14 with a final offering price. The subscription follows on June 15.





Timetable

Book opens
2021. 6. 10


Allotment
2021. 6. 14


Subscription
2021. 6. 15


Payment
2021. 6. 18

Source: DART

PricingThe IPO book features three valuation peers: Seegene, Thermo Fisher Scientific, and Perkin Elmer. Their average FY2020 PER delivers 19.09x, implying a market cap of ₩11,755.0B for SD Biosensor. 









Valuation peers
SD Biosensor
Seegene Inc
Thermo Fisher Scientific Inc.
PerkinElmer, Inc.


Earnings - FY2020
₩615.6B
₩503.1B
$6,375.0M
$728.0M


Total shares (incl. stock options)
104,892,353
52,225,994
393,793,362
112,061,794


EPS
₩5,869
₩9,634
$16.19
$6.50


Reference share price
₩112,067
₩79,000
$456.92
$135.48


PER
19.09x
8.20x
28.22x
20.86x


Average PER
-
19.09x

Source: DART

A 24.15~41.11% discount sets up an indicative price band of ₩66,000~85,000, implying a market cap of ₩6.9~8.9T.







Indicative price band
Low
High


Price
₩66,000
₩85,000


Base deal size
₩1,026.5B
₩1,322.0B


- Institutional allotment
₩564.6B
₩727.1B


Implied market cap
₩6,922.9B
₩8,915.9B


- Discount
41.11%
24.15%

Source: DART



SD Biosensor IPO: Offering Detail, Valuation Issue, & Index Fast Entry Possibilities