Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

Equity Bottom-Up

<a href="https://www.smartkarma.com/entities/satrec-initiative-co-ltd" target="_blank" rel="noopener" data-smartkarma-citation="entities:11367:1">Satrec Initiative (099320 KS)</a> is the 5th company in our Korea Small Cap Gems series. Satrec Initiative has a market cap of 198 billion won. Satrec Initiative is one of the best small cap companies with specialized technologies in the space satellite systems in Korea.Satrec Initiative is one of the few satellite system development companies that has been able to export products to other countries such as the UAE, Malaysia, and Singapore. Satrec Iniative is planning to IPO two of its subsidiaries, including SIIS (SI Imaging Services) and SIA (SI Analytics). Satrec is in the midst of selecting the main underwriters to lead these IPOs. Satrec Initiative owns 62.5% of SIIS  and 89.2% of SIA.<div class="content-highlight">A key investment thesis on Satrec Initiative is the fact that this company has one of the best technologies for developing and producing satellite systems and related components in Korea. Valuations are not too demanding and they are currently trading at relatively lower end of the historical valuation multiples. We are including <a href="https://www.smartkarma.com/entities/satrec-initiative-co-ltd" target="_blank" rel="noopener" data-smartkarma-citation="entities:11367:1">Satrec Initiative (099320 KS)</a> in our model portfolio.</div>

Satrec Initiative (099320 KS) is the 5th company in our Korea Small Cap Gems series. Satrec Initiative has a market cap of 198 billion won. Satrec Initiative is one of the best small cap companies with specialized technologies in the space satellite systems in Korea.Satrec Initiative is one of the few satellite system development companies that has been able to export products to other countries such as the UAE, Malaysia, and Singapore. Satrec Iniative is planning to IPO two of its subsidiaries, including SIIS (SI Imaging Services) and SIA (SI Analytics). Satrec is in the midst of selecting the main underwriters to lead these IPOs. Satrec Initiative owns 62.5% of SIIS  and 89.2% of SIA.A key investment thesis on Satrec Initiative is the fact that this company has one of the best technologies for developing and producing satellite systems and related components in Korea. Valuations are not too demanding and they are currently trading at relatively lower end of the historical valuation multiples. We are including Satrec Initiative (099320 KS) in our model portfolio.

Korea Small Cap Gem #5: Satrec Initiative

New Tree Co is the third company we introduce in our "Korea Small Cap Gem" series. New Tree is one of the best up-and-coming companies in the "inner beauty" product segment, especially for eatable collagen products. They also have some outstanding health and diet food supplement products that should continue to thrive in the next few years.Millions of people in Korea often believe that eating foods that are rich in collagen such as 족발 (pigs’ feet) helps to beautify their skin. Other foods that help the body to produce collagen include bone broth, chicken, fish, egg whites, and citrus fruits. Because of the positive association with beautifying the skin and producing collagen, this is where the company's Evercollagen has achieved a big success.Valuation - We believe that the company's P/E multiples to rise to the 14 to 16x range over the next 12 months which would be closer to the industry average and as investors attach higher valuation multiple to this company, given the company's superior sales and net profit growth compared to its competitors. If we assume a 15x P/E based on the net profit of 22.6 billion won, this would suggest an implied market cap of 339 billion won (37,375 won per share), which would be a 32% upside from current levels (28,300 won per share).

New Tree Co is the third company we introduce in our "Korea Small Cap Gem" series. New Tree is one of the best up-and-coming companies in the "inner beauty" product segment, especially for eatable collagen products. They also have some outstanding health and diet food supplement products that should continue to thrive in the next few years.Millions of people in Korea often believe that eating foods that are rich in collagen such as 족발 (pigs’ feet) helps to beautify their skin. Other foods that help the body to produce collagen include bone broth, chicken, fish, egg whites, and citrus fruits. Because of the positive association with beautifying the skin and producing collagen, this is where the company's Evercollagen has achieved a big success.Valuation - We believe that the company's P/E multiples to rise to the 14 to 16x range over the next 12 months which would be closer to the industry average and as investors attach higher valuation multiple to this company, given the company's superior sales and net profit growth compared to its competitors. If we assume a 15x P/E based on the net profit of 22.6 billion won, this would suggest an implied market cap of 339 billion won (37,375 won per share), which would be a 32% upside from current levels (28,300 won per share).  

South Korea

Newtree Co.,Ltd develops and sells health care food. The Company manufactures and sells collagen health food, weight loss health products, stomach health food, and other products. Newtree markets its products worldwide.

Newtree Co Ltd (270870 KS)

Korea Small Cap Gem #5: Satrec Initiative

Satrec Initiative (099320 KS) is the 5th company in our Korea Small Cap Gems series. Satrec Initiative has a market cap of 198 billion won. Satrec...

Douglas Kim

Korea Small Cap Gem #3: New Tree Co

New Tree Co is the third company we introduce in our "Korea Small Cap Gem" series. New Tree is one of the best up-and-coming companies in the...

Douglas Kim