Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

Equity Capital Markets

Organic Tea Cosmetics Holding / Equity Capital Markets

Organic Tea Cosmetics Holding (900300 KS)

<ul><li>We expect the company to generate sales of 876.5 million RMB in 2016 (up 16.2% YoY) and 1,003.6 million RMB in 2017 (up 14.5% YoY). The company's sales increased 16.8% YoY to 422.3 million RMB in 1H16. We have assumed 28.8% operating margin and 20.4% net margin in 2017. The company's operating margin averaged 27.8% and net margin averaged 21.7% from 2013 to 1H16. </li><li>If we take the median P/E (2017) multiple of 13.4x of the comparable companies and apply it to the estimated net profit of 205.2 million RMB (34.3 billion won), this would suggest a valuation of 459 billion won. Applying a 30% discount to this amount would be 321 billion won.  Applying diluted shares of 57m would suggest 5,633 won per share, which would be 52% higher than the high end of the IPO price range of 3,700 won. </li><li>The company is one of the key beneficiaries of the two children policy in China.  <strong>  </strong></li><li>We recommend investors on taking this deal. </li></ul>

We expect the company to generate sales of 876.5 million RMB in 2016 (up 16.2% YoY) and 1,003.6 million RMB in 2017 (up 14.5% YoY). The company's sales increased 16.8% YoY to 422.3 million RMB in 1H16. We have assumed 28.8% operating margin and 20.4% net margin in 2017. The company's operating margin averaged 27.8% and net margin averaged 21.7% from 2013 to 1H16. If we take the median P/E (2017) multiple of 13.4x of the comparable companies and apply it to the estimated net profit of 205.2 million RMB (34.3 billion won), this would suggest a valuation of 459 billion won. Applying a 30% discount to this amount would be 321 billion won.  Applying diluted shares of 57m would suggest 5,633 won per share, which would be 52% higher than the high end of the IPO price range of 3,700 won. The company is one of the key beneficiaries of the two children policy in China.    We recommend investors on taking this deal. 

Organic Tea Cosmetics Holding IPO Preview (A Bargain Sale?): (Part 2)

South Korea

NeoPharm Co., Ltd. develops and manufactures skin care goods for dried skin and atopic dermatitis.  The Company's main products include skin cleaning cream, body lotion, and skin care cosmetics.

Price Gauge
52-week Range	0.00 - 0.00
Market Cap (USDm)	0.00
P/E	0.00
Dividend (Yield)	0.00

Neopharm Co Ltd (092730 KS)

Organic Tea Cosmetics Holding IPO Preview (A Bargain Sale?): (Part 2)

We expect the company to generate sales of 876.5 million RMB in 2016 (up 16.2% YoY) and 1,003.6 million RMB in 2017 (up 14.5% YoY). The company's...

Douglas Kim

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)