Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

Event-Driven

Celltrion Inc. produces and sells biosimilar products and also provides consignm ent processing service for other companies.  The Company's main product is Abata cept which is for arthritis treatment

<ul>
<li>In a recent discussion with a client, one of the questions that was raised was regarding the impact the local investors are having on the corporate governance reforms in Korea.</li>
<li>The number of local investors in the Korean stock market has jumped in the past few years from 5.3 million in 2017 to 14.4 million in 2022.</li>
<li>All in all, I think Korea is about 3-5 years behind Japan in various corporate governance reforms. So it has a lot of catching up to do.</li>
</ul>


In a recent discussion with a client, one of the questions that was raised was regarding the impact the local investors are having on the corporate governance reforms in Korea.
The number of local investors in the Korean stock market has jumped in the past few years from 5.3 million in 2017 to 14.4 million in 2022.
All in all, I think Korea is about 3-5 years behind Japan in various corporate governance reforms. So it has a lot of catching up to do.


Locals Driving Corporate Reforms and 10 Korean Companies Recently Announcing Share Cancellations

Douglas Research Advisory

LOCK&LOCK CO., LTD. produces and sells plastic food storage and outdoor airtight containers.  The Company also produces various materials such as ceramic ware, pot, glass, and other kitchen stuffs.

<ul>
<li>On 17 April, Affinity Equity Partners offered a tender offer of a 30% stake in Lock &amp; Lock at 8,750 won per share.</li>
<li>The tender offer period is from 18 April to 14 May.  The number of shares that are included in this tender offer is 13.14 million shares (30.33% of outstanding shares).  </li>
<li>Lock &amp; Lock's share price could trade higher close to the tender offer price of 8,750 won as the date as the end of the tender offer period approaches.</li>
</ul>


On 17 April, Affinity Equity Partners offered a tender offer of a 30% stake in Lock &amp; Lock at 8,750 won per share.
The tender offer period is from 18 April to 14 May.  The number of shares that are included in this tender offer is 13.14 million shares (30.33% of outstanding shares).  
Lock &amp; Lock's share price could trade higher close to the tender offer price of 8,750 won as the date as the end of the tender offer period approaches.


Lock & Lock: Affinity Equity Partners Offers a Tender Offer of a 30% Stake at 8,750 Won Per Share

Equity Capital Markets

Jeil Machine & Solution / Equity Capital Markets

Jeil M&S researches and develops better equipment and provide the best equipment based on the expertise accumulated in the pharmaceutical manufacturing business(GMP) and experiences.

<ul>
<li>Jeil M&amp;S reported excellent IPO bookbuilding results. Jeil M&amp;S's IPO price has been determined at 22,000 won per share (22% higher than the high end of the IPO price range).</li>
<li>A total of 2,164 institutional investors participated in this IPO book building. The demand ratio was 646 to 1. Samhyun will start trading on 30 April 2024. </li>
<li>Our base case valuation of Jeil M&amp;S is target price of 24,354 won per share, which is 11% higher than the IPO price.</li>
</ul>


Jeil M&amp;S reported excellent IPO bookbuilding results. Jeil M&amp;S's IPO price has been determined at 22,000 won per share (22% higher than the high end of the IPO price range).
A total of 2,164 institutional investors participated in this IPO book building. The demand ratio was 646 to 1. Samhyun will start trading on 30 April 2024. 
Our base case valuation of Jeil M&amp;S is target price of 24,354 won per share, which is 11% higher than the IPO price.


Jeil M&S IPO Bookbuilding Results Analysis

Equity Bottom-Up

Tesla Inc. operates as a multinational automotive and clean energy company. The Company designs and manufactures electric vehicles, battery energy storage from home to grid-scale, solar panels and solar roof tiles, and related products and services. Tesla owns its sales and service network and sells electric power train components to other automobile manufacturers.

<ul>
<li>Tesla Motors (TSLA US) sold one car in January 2024 in South Korea. In comparison, Tesla sold 1,022 vehicles in December 2023 and 13,885 units in 2023.</li>
<li>The key reason for the sharp plunge in vehicle sales in January has been due to the government's slashing EV subsidies for vehicles with Chinese LFP based batteries.</li>
<li>Furthermore, many consumers avoided buying Tesla vehicles in January as they waited for the government's announcements of new EV subsidies. </li>
</ul>


Tesla Motors (TSLA US) sold one car in January 2024 in South Korea. In comparison, Tesla sold 1,022 vehicles in December 2023 and 13,885 units in 2023.
The key reason for the sharp plunge in vehicle sales in January has been due to the government's slashing EV subsidies for vehicles with Chinese LFP based batteries.
Furthermore, many consumers avoided buying Tesla vehicles in January as they waited for the government's announcements of new EV subsidies. 


Tesla Sold A Whopping One Car in January in South Korea

MegaStudyEdu Co., Ltd. offers online and offline educational programs to middle and high school students.  The Company provides college entrance test preparatory courses, e-learning, and college admission advisory services.

<ul>
<li>On 16 April, Megastudyedu Co, Ltd. (215200 KS) announced a major shareholder return plan, driving up its share price by 14.2% to 60,400 won. </li>
<li>Driven by this attractive shareholder return plan combined with improving fundamentals, we believe that Megastudy Education's shares could continue to outperform the market in the next several months. </li>
<li>The total shareholder returns including share buybacks/cancellation and dividends are 60% of the company's non-consolidated net profit from 2024 to 2026.</li>
</ul>


On 16 April, Megastudyedu Co, Ltd. (215200 KS) announced a major shareholder return plan, driving up its share price by 14.2% to 60,400 won. 
Driven by this attractive shareholder return plan combined with improving fundamentals, we believe that Megastudy Education's shares could continue to outperform the market in the next several months. 
The total shareholder returns including share buybacks/cancellation and dividends are 60% of the company's non-consolidated net profit from 2024 to 2026.


Megastudy Education: A Major Shareholder Return Policy in 2024-2026

Nearly 25 years of experience in analyzing hundreds of companies, especially in Asia. Deep expertise in the following sectors:
- Technology (E-commerce, SaaS, Internet)
- Consumer 
- Special Situations/Deep Value Plays
- Holdcos/Stubs
- Asian Unicorns/Private Companies

Douglas Kim
Korea/Asia, Events, IPOs
• Douglas Research Advisory

Jeil M&S IPO Bookbuilding Results Analysis

Jeil M&S reported excellent IPO bookbuilding results. The demand ratio was 646 to 1. Samhyun will start trading on 30 April 2024.

Douglas Kim

Tesla Sold A Whopping One Car in January in South Korea

Tesla's laying off more than 10% of its global workforce is likely to further negatively impact the major rechargeable battery names in Korea...

Douglas Kim

Megastudy Education: A Major Shareholder Return Policy in 2024-2026

Megastudy Education announced a major shareholder return plan which includes share buybacks/cancellation and dividends are 60% of the company's non...

Douglas Kim

Locals Driving Corporate Reforms and 10 Korean Companies Recently Announcing Share Cancellations

On 17 April, Celltrion Inc announced that it will buyback shares worth 75 billion won. Including 75 billion won of share repurchase last month,...

Douglas Kim

Lock & Lock: Affinity Equity Partners Offers a Tender Offer of a 30% Stake at 8,750 Won Per Share

On 17 April, Affinity Equity Partners offered a tender offer of a 30% stake in Lock & Lock at 8,750 won per share. The tender offer period is from...

Douglas Kim

Jeil M&S IPO Bookbuilding Results Analysis

Jeil M&S reported excellent IPO bookbuilding results. The demand ratio was 646 to 1. Samhyun will start trading on 30 April 2024.

Douglas Kim

Tesla Sold A Whopping One Car in January in South Korea

Tesla's laying off more than 10% of its global workforce is likely to further negatively impact the major rechargeable battery names in Korea...

Douglas Kim

Megastudy Education: A Major Shareholder Return Policy in 2024-2026

Megastudy Education announced a major shareholder return plan which includes share buybacks/cancellation and dividends are 60% of the company's non...

Douglas Kim